Download PLG Prospectus

PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PL Group” or “the Company”)
ISIN Code: ZAE000222949
JSE Code: PEM
PROSPECTUS
Prepared and issued in terms of the JSE Listings Requirements and the Companies Act, 2008
(No. 71 of 2008), as amended (“the Act”), relating to a Private Placement for subscription of
PL Group ordinary Shares by way of:
 an offer by the Company by way of a Private Placing of 100 000 000 shares at 100 cents
each and a Preferential Offer for subscription of 40 000 000 shares at 100 cents each,
totalling 140 000 000 ordinary no par value Shares in the issued share capital of the
Company at an issue price of 100 cents per ordinary Share; and
 the subsequent listing of up to 353 000 000 ordinary no par-value shares at 100 cents each
in PL Group on the Alternative Exchange (“AltX”) of the JSE in the Specialised Consumer
Services Sector.
Opening date of the Private Placement (comprising the
Thursday, 9 March 2017
Private Placing and Preferential Offer) and announced on
SENS at 09h00 on
Closing date of the Private Placement (comprising the
Friday, 24 March 2017
Private Placing and Preferential Offer) at 12h00 on*
Anticipated listing date on AltX at commencement of trade
Friday, 31 March 2017
at 9h00 on
*Shareholders wishing to subscribe for ordinary Shares in dematerialised form must advise their
Central Securities Depository Participant (“CSDP”) or broker of their acceptance of the
Private Placement of Shares in the manner and within the cut-off time stipulated by their
CSDP or broker.
In the event of an over-subscription in terms of the Private Placement, the Directors will adjust
the allocation of applicants on an equitable basis in accordance with paragraph 5.18 of the
JSE Listings Requirements. The Shares placed in terms of this Prospectus will rank pari passu
with the existing ordinary Shares in PL Group and rank equally as to voting, share in profits,
dividends and distributions.
At the date of closing of the Private Placement and assuming that the Private Placement is
fully subscribed, PL Group share capital will comprise 1 000 000 000 authorised ordinary Shares
of no par value and 353 000 000 issued ordinary Shares of no par value with stated capital of
R146.9 million (before write off of share issue expenses). There will be no convertible or
redeemable shares issued.
In the opinion of the Directors, an overall minimum subscription of R140 000 000 is required in
terms of the Private Placement. The listing will also be subject to meeting the minimum spread
requirements for companies listing on the AltX as detailed below.
The Company is required to meet the minimum spread requirement of at least 10% to be held
by the general public as defined in the JSE Listings Requirements in order to ensure
reasonable liquidity, which will amount to approximately R35 000 000 or 35 000 000 shares at
100 cents per share. In the event that this is not achieved, monies will be refunded to all
applicants.
The JSE has granted PL Group a listing in respect of up to 353 000 000 ordinary Shares on the
AltX under the abbreviated name “PL Group”, share code “PEM” and ISIN ZAE000222949. It is
anticipated that the listing of the Shares on AltX will become effective from the
commencement of business on or about Friday, 31 March 2017 or such later date as granted
by the JSE.
The Private Placement has not been underwritten as disclosed in paragraph 1.6 of this
Prospectus.
The Company does not have any Treasury Shares or debentures in issue.
Applications for ordinary Shares in PL Group must be for a minimum of 2 000 ordinary Shares
at 100 cents per share, amounting to R2 000, and in multiples of 100 ordinary Shares
thereafter. Fractions of Shares in PL Group will not be issued. The Shares in PL Group will be
tradable on the JSE in dematerialised form only and, as such, all investors who elect to
receive their ordinary Shares in PL Group in certificated form, will have to dematerialise their
certificated Shares should they wish to trade therein.
The Directors, whose names are given in paragraph 1.2 of this document, collectively and
individually accept full responsibility for the accuracy of the information given and certify
that to the best of their knowledge and belief there are no facts that have been omitted
which would make any statement false or misleading, that all reasonable enquiries to
ascertain such facts have been made and that the Prospectus contains all information
required by law and the JSE Listings Requirements.
The Designated Advisor, Auditors and Reporting Accountants, Attorney, Commercial Banker
and Transfer Secretaries, whose names are set out in this Prospectus, have given and have
not, prior to registration, withdrawn their written consents to the inclusion of their names in the
capacities stated.
An English copy of this Prospectus, accompanied by the documents referred to under
“Registration of Prospectus” in paragraph 4.2 of this Prospectus, was registered by the
Commissioner on 8 March 2017 in terms of Regulation 52(5) of the Companies Act, 2008 (No.
71 of 2008), as amended.
Designated Advisor
Arbor Capital Sponsors
Auditor and Reporting Accountants
Moore Stephens FRRS Incorporated
Attorney
Paul Barnard Incorporated
Independent Property Valuer
Johan Bosman Valuers and Appraisers
Date of issue: 9 March 2017
1
CORPORATE INFORMATION AND ADVISORS
Company secretary [Regulation 58(2)(b(iii)]
Business and Registered Office
Arbor Capital Corporate Services Proprietary
Limited
(Registration number 2016/120671/07)
Ground Floor, One Health Building
Woodmead North Office Park
54 Maxwell Drive
Woodmead, 2157
(Suite # 439, Private Bag X29, Gallo Manor, 2052)
Designated Advisor
111 9th Avenue
Fairland,
Gauteng, 2030
(PO Box 73723, Fairland, Gauteng, 2030)
Reporting accountants and auditor
[Regulation 58(2)(b(i)]
Arbor Capital Sponsors Proprietary Limited
(Registration number 2006/033725/07)
Ground Floor, One Health Building
Woodmead North Office Park
54 Maxwell Drive
Woodmead, 2157
(Suite # 439, Private Bag X29, Gallo Manor, 2052)
Group Bankers [Regulation 58(2)(b(ii)]
ABSA
(Registration Number 1986/004794/06)
Lower Level Cresta Shopping Centre
Cresta, 2194
Randburg, 2023
(PO Box 261001, Excom, 2023)
Moore Stephens FRRS Incorporated
(Registration Number 2006/018138/21)
Practice Number: 902317
18 Lakeview Crescent
Kleinfontein Lake,
Benoni, 1501
(PO Box 663, Benoni, 1500)
Transfer Secretaries
Link Market Services South Africa
Proprietary Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
Attorney [Regulation 58(2)(b(ii)]
Independent Property Valuer
Paul Barnard Incorporated
(Registration Number 2003/018464/21
Savanah Office Park, Cyad Building
Cnr 9th Avenue & Rugby Street
Weltervredenpark
Roodepoort, 1709
(PO Box 6154, Westgate, 1734)
Johan Bosman Valuers and Appraisers
Plot 80
Golf Avenue
Lusthof
Pretoria, 0002
(PO Box 18598, Pretoria North, 0116)
Place and date of incorporation
South Africa, 5 November 2013
2
IMPORTANT INFORMATION
The definitions and interpretations commencing on page 7 of this Prospectus apply to this
section on important Information.
FORWARD-LOOKING STATEMENTS
This Prospectus contains statements about the Company that are or may be forward-looking
statements. All statements, other than statements of historical fact are, or may be deemed to
be, forward-looking statements, including, without limitation, those concerning: strategy; the
economic outlook for the Group; growth prospects and outlook for operations, individually or
in the aggregate; and liquidity and capital resources and expenditure. These forward-looking
statements are not based on historical facts, but rather reflect current expectations
concerning future results and events and generally may be identified by the use of forwardlooking words or phrases such as "believe", "aim", "expect", "anticipate", "intend", "foresee",
"forecast”, “likely", "should", “budget” "planned", "may", "estimated", "potential" or similar
words and phrases.
Examples of forward-looking statements include statements regarding a future financial
position or future profits, cash flows, corporate strategy, estimates of capital expenditures,
acquisition strategy, future capital expenditure levels, and other economic factors, such as,
inter alia, interest rates.
By their nature, forward-looking statements involve risks and uncertainties because they
relate to events and depend on circumstances that may or may not occur in the future. The
Company cautions that forward-looking statements are not guarantees of future
performance. Actual results, financial and operating conditions, liquidity and the
developments within the industry in which the Company operates may differ materially from
those made in, or suggested by, the forward-looking statements contained in this Prospectus.
All these forward-looking statements are based on estimates and assumptions made by the
Company, all of which estimates and assumptions, although the Company believes them to
be reasonable, are inherently uncertain. Such estimates, assumptions or statements may not
eventuate. Many factors (including factors not yet known to the Company, or not currently
considered material) could cause the actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or
implied in those estimates, statements or assumptions.
Offerees should keep in mind that any forward-looking statement made in this Prospectus or
elsewhere is applicable only at the date on which such forward-looking statement is made.
New factors that could cause the business of the Company not to develop as expected may
emerge from time to time and it is not possible to predict all of them. Further, the extent to
which any factor or combination of factors may cause actual results to differ materially from
those contained in any forward-looking statement are not known. The Company has no duty
to, and does not intend to, update or revise the forward-looking statements contained in this
Prospectus after the date of this Prospectus, except as may be required by law.
FOREIGN PERSONS
This Prospectus has been prepared for the purposes of complying with the Companies Act
and the regulations published in terms thereof and the information disclosed may not be the
same as that which would have been disclosed if this Prospectus had been prepared in
accordance with the laws and regulations of any jurisdiction outside of South Africa.
3
The release, publication or distribution of this Prospectus in jurisdictions other than South Africa
may be restricted by law and therefore any persons who are subject to the laws of any
jurisdiction other than South Africa should inform themselves about, and observe any
applicable requirements. Any failure to comply with the applicable requirements may
constitute a violation of the securities laws of any such jurisdiction.
This Prospectus and any accompanying documentation is not intended to, and does not
constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any
securities in any jurisdiction in which it is illegal to make such an offer, invitation or solicitation,
or such offer, invitation or solicitation would require the Company to comply with filing and/or
other regulatory obligations. In those circumstances this Prospectus and any accompanying
documentation are sent for information purposes only and should not be copied or
redistributed.
Persons who are not resident in South Africa must satisfy themselves as to the full observance
of the laws of any applicable jurisdiction concerning their participation in the Private
Placement, including any requisite governmental or other consents, observing any other
requisite formalities and paying any transfer or other taxes due in such other jurisdictions. The
Company accepts no responsibility for the failure by any person to inform himself/herself
about, and/or to observe any applicable legal requirements in any relevant jurisdiction.
The distribution of this Prospectus in jurisdictions outside South Africa may be restricted by law
and persons who come into possession of it who are not in South Africa should seek advice
on and observe any such restrictions. Any failure to comply with such restrictions may
constitute a violation of applicable securities laws.
Neither the Shares nor the Prospectus have, nor will they be, registered under the US Securities
Act, 1933 or with the regulatory authority of any state or jurisdiction of the United States of
America or under the applicable laws of the United Kingdom, Canada, or Japan and may
not be offered, sold, pledged or otherwise transferred in the United States of America or to
any national, resident or subject of the United Kingdom, Canada, or Japan. Neither this
document nor any copy of it may be sent to or taken into the United States of America,
Canada, or Japan.
4
TABLE OF CONTENTS
Corporate information and advisors
Important information
Definitions and interpretations
Prospectus
Documents and consents available for inspection
Page
2
3
7
14
14
Section 1 - Information about the Company whose securities are being placed
1.1
Name, address and incorporation
15
1.2
1.3
Directors, other office holders, or material third parties
History, state of affairs and prospects of the Company
16
23
1.4
1.5
1.6
1.7
1.8
1.9
Share capital of the Company
Options or preferential rights in respect of Shares
Commissions paid or payable in respect of underwriting and share issues
Material contracts
Interests of Directors and promoters
Loans
36
37
38
38
41
43
1.10
1.11
1.12
1.13
Shares issued or to be issued other than for cash
Property acquired or to be acquired or disposed
Amounts paid or payable to promoters
Preliminary expenses and issue expenses
43
43
43
44
Section 2 - Information about the placed securities
2.1
Purpose of the Private Placement
2.2
Time and date of the opening and closing of the Private Placement
2.3
Particulars of the Private Placement
2.4
Minimum subscription
45
46
46
49
2.5
50
Shareholder information
Section 3 – Statements and Reports relating to the Private Placement
3.1
Statement as to adequacy of capital
3.2
Report by Directors as to material changes
3.3
Statement as to listing on a stock exchange
51
51
51
3.4
3.5
3.6
51
52
52
Report by auditor where business undertaking is to be acquired
Report by auditor where the Company will acquire a subsidiary
Reports by the auditor of the Company
Section 4 – Additional material information
4.1
Litigation statement
4.2
Experts‟ consents
4.3
Directors‟ responsibility statement
4.4
Vendors and controlling shareholders
53
53
53
53
5
Section 5 – Inapplicable or immaterial matters
54
Annexures
1
2
3A
3B
4A
4B
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Financial information required in terms of regulation 79 of the Companies
Act in respect of the Company and the Group
Report by the auditor in terms of regulation 79 of the Companies Act
Historical financial information of PL Group for the financial year ended
29 February 2016
Interim financial results for the six months ended 31 August 2016
55
Independent reporting accountants‟ report on the historical financial
information of PL Group for the year ended 29 February 2016
Independent reporting accountant‟s report on the historical financial
information of PL Group for the six months ended 31 August 2016
Pro forma financial information of PL Group
Independent reporting accountant‟s report on the pro forma financial
information of PL Group
Profit forecasts of PL Group for the years ending 31 December 2017 and
31 December 2018
Independent reporting accountant‟s report on the profit forecasts of
PL Group
Alterations to share capital and premium on Shares
Material borrowings, material loans receivable and inter-company loans
Other directorships held by Directors of PL Group
Subsidiary companies
Details of immovable property owned and leased from third parties
Curricula vitae of the Directors and key management of PL Group
Extracts from the PL Group MOI
105
King Code on Corporate Governance
Analysis of risks facing shareholders
Salient features of the Share Incentive Scheme
Summary Independent Valuer‟s Report
Terms of the service level agreement between Pembury Services and
PLG Schools
Share application form
155
176
178
185
213
6
58
60
99
108
110
115
117
123
125
127
130
133
134
136
145
214
DEFINITIONS AND INTERPRETATIONS
In this Prospectus and the annexures hereto, unless the context indicates otherwise,
references to the singular include the plural and vice versa, words denoting one gender
include the others, expressions denoting natural persons include juristic persons and
associations of persons and vice versa, and the words in the first column hereunder have the
meanings stated opposite them in the second column, as follows:
“Acquisition
Agreements”
agreements relating to Acquisition Properties, details of which are
disclosed in paragraph 1.3.2.2 and paragraph 1.7.2 of this Prospectus;
“Acquisition
Properties”
various properties from which PLG Schools operate, which are in the
process of being acquired by PLG Properties and will be rented out to
PLG Schools with a long-term inter-company lease, details of which
are set out in paragraph 1.3.2.2 of this Prospectus;
“Allens View
Acquisition
Agreement”
the agreement and addenda between the Allens View Vendor and
Macrodev or its nominee last dated 27 September 2016 for the
acquisition of the Allens View Property for a consideration of
R7 500 000, comprising deposits paid of R500 000 and the balance
payable by 1 July 2017;
“Allens View
Property”
ERF 640 Allen‟s Nek Ext. 35, held under Deed of Transfer No.
T12216/2004, which property houses PLG Allens View;
“Allens View
Vendor”
CJJ Grobler, identity number 500924 5015 082 of 1014 Landhuis Street,
Allens Nek, the vendor of the Allens View Property;
“Andrew
McLachlan”
Andrew Robert McLachlan, identity number 660829 5133 080, the Chief
Executive Officer of PL Group of 111 9th Avenue Fairland, Gauteng,
2030 and the founder and controlling shareholder of PL Group;
“Arbor Capital
Corporate
Services”
Arbor Capital Corporate Services Proprietary Limited, (Registration
number 2016/120671/07), a private company duly incorporated in
accordance with the laws of South Africa and the Company Secretary
to PL Group;
“Arbor Capital
Sponsors”
Arbor Capital Sponsors Proprietary Limited, (Registration number
2006/033725/07), a private company duly incorporated in
accordance with the laws of South Africa and the Designated Advisor
to PL Group;
“auditor” or
“independent
reporting
accountants” or
“Moore Stephens”
Moore
Stephens
FRRS
Incorporated
(Registration
number
2006/018138/21, Practice number 902317), the auditor and
independent reporting accountants to PL Group;
“Barry Moyo”
Barashia Moyo, identity number 520721 5812 088, an independent nonexecutive director of PL Group of 9 Jukskei Road, Kelland, Randburg,
2194 and Chairman of the Audit and Risk Committee;
“BBBEE Act”
the Broad-Based Black Economic Empowerment Act, 2003 (Act 53 of
2003), as amended;
7
“BEE” or BBBEE”
the economic empowerment of all black people, including women,
workers, youth, people with disabilities and people living in rural areas,
through diverse but integrated socio-economic strategies as defined
in the BBBEE Act;
“BEE Investors”
any company which is at least 51% black-owned, which applies for
Shares in accordance with the Preferential Offer, none of which are
known as at the Last Practicable Date;
“Board of
Directors” or “the
Board”
the present board of Directors of PL Group as detailed in paragraph
1.2 of this Prospectus;
“broker” or
“stockbroker”
any person registered as a “broking member (equities)” in terms of the
Rules of the JSE made in accordance with the provisions of the FMA;
“business day”
any day other than a Saturday, Sunday or gazetted national public
holiday in South Africa;
“certificated
Shareholders”
holders of certificated Shares;
“certificated
Shares”
issued ordinary Shares which have not been dematerialised, title to
which is represented by share certificates or other physical documents
of title;
“Christo Hechter”
Christo Hechter, identity number 620629 5077 082, a non-executive
Director of PL Group of No 30 Nashet Building Southern Circle
Greenhills, Randfontein;
“CIPC”
the Companies and Intellectual Property Commission;
“common
monetary area”
South Africa, the Republic of Namibia and the Kingdoms of Swaziland
and Lesotho;
“Companies Act”
or “the Act”
the Companies Act, 2008 (Act 71 of 2008), as amended;
“Company
Secretary”
Arbor Capital Corporate Services, being the Company Secretary of PL
Group;
“controlling
shareholders”
the controlling shareholders of PL Group before and after the Private
Placement, being Andrew McLachlan;
“CSDP”
a Central Securities Depository Participant, accepted as a participant
in terms of the FMA, appointed by an individual shareholder for
purposes of, and in regard to, the dematerialisation of documents of
title for purposes of incorporation into Strate;
"dematerialise"
the process whereby certificated shares are converted into electronic
format for purposes of Strate and are no longer evidenced by
documents of title, and "dematerialised shares" will have a
corresponding meaning;
“DBSA”
Development Bank of South Africa;
8
“Directors”
the Directors of the Company whose details are set out in paragraph
1.2 and Annexure 14 to this Prospectus;
“documents of
title”
share certificates, certified transfer deeds, balance receipts or any
other documents of title acceptable to PL Group in respect of Shares;
“Doxa Deo” or
“Doxa Deo
Educational Trust”
The Apolistic Faith Mission of South Africa Doxa Deo Tshwane
Congregation, the vendor of the Hartbeespoort property, which body
has entered into a finance lease agreement on a back-to-back basis
with PLG Schools whereby PLG Schools has undertaken to take over
the repayment of the loan to DBSA on the same terms and conditions;
“EBITDA”
earnings before interest, taxation, depreciation and amortisation;
“emigrant”
an emigrant from South Africa whose address is outside the common
monetary area;
“Exchange Control the Exchange Control Regulations, promulgated in terms of Section 9
Regulations”
of the Currency and Exchanges Act, 1933 (Act 9 of 1933), as
amended;
“FMA”
the Financial Markets Act, 2012 (Act 19 of 2012) as amended;
“Grant Waters”
Grantly Neal Waters, identity number 650715 5061 086 an independent
non-executive Director of PL Group of Kimberley Junior School, O‟Brien
Street, Monument Heights, Kimberley, 8301;
“Hartbeespoort
Property”
ERF 630 Xanadu Ext. 12, held under Deed of Transfer No. T020692/2008,
which property houses PLG Hartbeespoort;
“Hartbeespoort
Vendor”
Doxa Deo, of Corner Atterbury Road and Olympus Drive, Olympus
Pretoria;
“the Group” or “PL PL Group and its Subsidiaries from time to time;
Group”
“Headmaster or
Headmistress”
means headmaster or headmistress of a school;
“Independent
Property Valuer”
Johan Bosman Valuers & Appraisers, (Registration number 2450), being
the JSE approved independent property valuer in respect of the
Acquisition Properties, registered with the South African Council for the
Property Valuers Profession;
“IFRS”
International Financial Reporting Standards, which comprise standards
and interpretations approved by the International Accounting
Standards Board, International Financial Reporting Interpretations
Committee and International Accounting Standards, and Standing
Interpretations Committee interpretations approved by the
International Accounting Standards Committee;
“IT”
Information Technology;
“JSE”
Johannesburg Stock Exchange;
9
“JSE Limited”
the JSE Limited, (Registration number 2005/022939/06), a public
company duly registered and incorporated with limited liability in
accordance with the laws of South Africa and licensed as an
exchange under the FMA, which company operates the JSE;
“JSE Listings
Requirements”
the Listings Requirements of the JSE, as amended from time to time;
“King Code” or
“King III”
the King Report on Corporate Governance, 2009, which was released
on 1 September 2009 and came into effect on 1 March 2010;
“King IV”
the fourth edition of the King Report on Corporate Governance which
was published by the South African Institute of Directors on
1 November 2016;
“Last Practicable
Date”
the last practicable date prior to the finalisation of this Prospectus,
being 21 February 2017;
“Lou Brits”
Lourens Martinus Brits, identity number 460327 5013 081, an
independent non-executive director of PL Group of Unit 36, Nashet
Building, Southern Circle, Greenhills, Randfontein, and the Chairman of
the Board and a member of the Audit and Risk Committee;
“Listing”
the listing of the Company on the AltX of the JSE;
“Macrodev”
Macrodev CC (Registration number 2006/154251/23) a close
corporation company duly incorporated in accordance with the laws
of South Africa, which is 100% owned by Andrew McLachlan;
“Mellow Oaks
Acquisition
Agreement”
the agreement between the Mellow Oaks Vendor and PLG Properties
dated 16 July 2016 and addendum last dated 20 December 2016 for
the acquisition of the Mellow Oaks Property for a consideration of
R12 250 000;
“Mellow Oaks
Property”
Portion 480 (a portion of portion 12) of the Farm Wilgespruit 190/2004,
which property houses PLG Mellow Oaks;
“Mellow Oaks
Vendor” or “JH
van Dyk
Enterprises”
JH van Dyk Enterprises CC (Registration number 2002/025346/23), of
18 Elsie Road, Radiokop, the vendor of the Mellow Oaks Property, an
unrelated party to PL Group and its directors, the member of which is
Johan Hendrik Bachmeyer;
“MOI”
the Memorandum of Incorporation of the Company as amended from
time to time;
“non-resident”
a person whose registered address is outside the common monetary
area and who is not an emigrant;
“Northriding
Acquisition
Agreement”
the agreement between the Northriding Vendor and PL Group dated
24 October 2016 for the acquisition of the Northriding Property for a
consideration of R35 000 000;
“Northriding
Property”
Portion 612, Northwold Ext 612 Hunters Road, which property houses
PLG Northriding;
10
“Northriding
Vendor”
Zephan Properties;
“ordinary Shares”
or “Shares”
ordinary Shares in the share capital of the Company, having no par
value;
“own-name
registration”
registration in own-name of shareholders who hold/will hold ordinary
Shares which have been dematerialised and are recorded by a CSDP
on the sub-register kept by that CSDP in the name of such shareholder;
“Pembury
Services”
Pembury
Services
Proprietary
Limited,
(registration
number
2000/023467/07), a private company duly incorporated in
accordance with the laws of South Africa, wholly owned by Andrew
McLachlan and the company which has incurred pre-incorporation
costs on behalf of PL Group and PLG Schools and through which
company group administration services are rendered;
“PLG Schools”
Pembury
Schools
Proprietary
Limited,
(registration
number
2015/210968/07), a private company duly incorporated in
accordance with the laws of South Africa, being a wholly-owned
subsidiary of PL Group, through which the school operations are
conducted;
“PL Group” or “the Pembury Lifestyle Group Limited, (registration number 2013/205899/06),
Company”
a public company duly incorporated in accordance with the laws of
South Africa;
“PLG Properties”
PLG
Properties
Proprietary
Limited,
(registration
number
2016/036937/07), a private company duly incorporated in
accordance with the laws of South Africa, being a wholly-owned
subsidiary of PL Group, which company will own the properties in the
Group;
“PLG Retirement
Villages”
PLG Retirement Villages, (registration number 2016/044296/07), a
private company duly incorporated in accordance with the laws of
South Africa, being a wholly-owned subsidiary of PL Group, which
company is currently dormant;
“Preferential Offer” the placing of up to 40 000 000 Shares by PL Group to Directors,
employees, PLG Schools‟ parents, direct business associates, including
clients, suppliers and other parties with whom there exists a direct or
enduring contractual relationship (including the Property Vendors),
and BEE Investors, which Preferential Offer will be by means of a nontransferable application form bearing the name of the specific party
and stating a maximum number of securities that may be subscribed
for in that application;
“Private
Placement”
the Preferential Offer and the Private Placing as detailed in this
Prospectus;
“Private Placing”
the private placing of 100 000 000 Shares by way of a Prospectus to
individuals, institutions, companies, stockbrokers and other entities;
“Prospectus” or
“this Prospectus”
this bound document dated 3 March 2017, including all annexures
and enclosures thereto;
11
“Rand” or “R” or
“cents”
South African Rand or cents, the official currency of South Africa;
“Randfontein
Acquisition
Agreement”
the agreement between the Randfontein Vendor and PLG Properties
dated 19 September 2016 for the acquisition of the Randfontein
Property for a consideration of R5 500 000 with guarantees due by 31
March 2017, subject to the sub-division of the property and the listing
of PL Group on the JSE;
“Randfontein
Property”
A portion of portion 163 of the farm Elandsvlei 249, which property will
house the PLG Randfontein Academy, which will open in 2018;
“Randfontein
Vendor”
Connie Mulder Centre (Registration number NPO 001-078), of 9 Betty
Street, Wilbotsdal, Randfontein, a non-profit organisation and the
vendor of the Randfontein Property;
“Raslouw
Acquisition
Agreements”
the agreements and addenda between the Raslouw Vendors and PL
Group last dated 31 December 2016 for the acquisition of the Raslouw
Properties for a consideration of R13 150 000 and R3 500 000
respectively with guarantees due by 28 February 2017, failing which
the balance of the purchase price will bear 10.5% interest per annum
payable monthly in arrears until 31 December 2017;
“Raslouw
Properties”
comprising two properties known as Raslouw 1 and Raslouw 2, upon
which the PLG Raslouw College is situated;
“Raslouw Vendors” HJN van Rooyen, ID number 570507 5075 084 of 1492 Copperleaf
Estate, Centurion and RG Pietersen, ID number 710421 5025 089 of Plot
5212 Poole Avenue, Eersterust, being the vendors of the respective
Raslouw Properties, which vendors are not related parties to PL Group
or its directors;
“register”
the register of PL Group shareholders;
“REIT”
Real Estate Investment Trust;
“Riaan Van
Jaarsveld”
Adriaan Pieter Van Jaarsveld, identity number 620926 5040 080, the
executive Financial Director of PL Group of 111 9th Avenue Fairland,
Gauteng, 2030;
“SARB”
the South African Reserve Bank;
“SENS”
the Stock Exchange News Service of the JSE;
“shareholders”
the holders of issued ordinary Shares;
“Share Incentive
Scheme”
the Company‟s share incentive scheme approved by shareholders on
28 November 2016, implemented for the purpose of incentivising the
Company‟s Executives and employees, details of which are set out in
Annexure 16 of this Prospectus;
“South Africa” or
“the Republic”
the Republic of South Africa;
12
“Springs
Acquisition
Agreement”
the agreement between the Springs Vendor and PLG Properties dated
19 October 2016 for the acquisition of the Springs Property for a
consideration of R3 500 000, comprising a non-refundable deposit of
R200 000, subject to the balance of R3 300 000 being raised by way of
bond financing on or before 5 November 2017;
“Springs Property”
ERF 1729 Strubenvale Extension. 2 Township, held under Deed of
Transfer No. T23766/2009, which property houses PLG Springs;
“Springs Vendor”
or “Fifth Season”
Fifth Season Investments 99 Proprietary Limited (Registration number
2005/008325/07) of 4 Langlaagte Road, Springs, the vendor of the
Spring Property which vendor is not a related party to PL Group or its
directors;
“Strate”
the settlement and clearing system used by the JSE, managed by
Strate Proprietary Limited, (Registration number 1998/022242/07), a
private company duly incorporated in accordance with the laws of
South Africa;
“Subsidiaries”
PLG Schools, PLG Properties and PLG Retirement Villages, being
subsidiary companies of PL Group as at the Last Practicable Date, full
details of which are disclosed in Annexure 12 of this Prospectus;
“Transfer
Secretaries” or
“Link Market
Services”
Link Market Services South Africa Proprietary Limited, (registration
number 2000/007239/07), a private Company duly incorporated in
South Africa, being the transfer secretaries of PL Group as at the Last
Practicable Date;
“VAT”
Value-Added Taxation;
“Vendors”
the vendors of the Property Acquisitions, being the:
 Allens View Vendor
 Hartbeespoort Vendor
 Mellow Oaks Vendor
 Northriding Vendor
 Randfontein Vendor
 Raslouw Vendor
 Springs Vendor
 Willow View Vendor;
“Willow View
Acquisition
Agreement”
the agreement between the Willow View Vendor and PL Group dated
24 October 2016 for the acquisition of the Willow View Property for a
consideration of R34 000 000;
“Willow View
Property”
Portion 8 of the Farm Rietfontein, which property houses PLG Springs;
“Willow View
Vendor”
“Zephan
Properties”
Zephan Properties; and
Zephan Properties Proprietary Limited (Registration number
2003/020174/07), 1st Floor, Cedar Square Shopping Centre, Fourways,
the vendor of the Northriding Property and the Willow View Property,
owned indirectly by Nicolas Georgiou, an unrelated party to PL Group
or its directors.
13
PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PL Group” or “the Company”)
ISIN Code: ZAE000222949
JSE Code: PGL
PROSPECTUS
DOCUMENTS AND CONSENTS AVAILABLE FOR INSPECTION
In terms of Regulation 53 of the Companies Regulations and section 7G of the JSE Listings
Requirements, certified copies of the following documents will be available for inspection at
the registered office of the Company from the date of this Prospectus being Thursday,
9 March 2017 until the 10th Business Day following the closing of the Private Placement on
Friday, 24 March 2017:













the MOI and the MOI of the Subsidiaries;
the Share Incentive scheme;
the Prospectus, including the subscription form;
the report of the auditor in accordance with regulation 79 of the Companies Act as set
out in Annexure 2 of this Prospectus;
the independent reporting accountant‟s reports on the Group‟s historical financial
information as set out in Annexure 4A and Annexure 4B of this Prospectus;
the independent reporting accountants‟ report on the pro forma financial information of
the Group as set out in Annexure 6 of this Prospectus;
the independent reporting accountant‟s reports on the Group‟s profit forecast as set out
in Annexure 8 of this Prospectus;
the material contracts as detailed in Section 1, paragraph 1.7;
detailed valuation reports for each of the Acquisition Properties;
the signed summary valuation report as set out in Annexure 19 of this Prospectus;
the employment agreements with Executive Directors;
the written consent of each of the persons referred to in Section 1, paragraph 1.2.3 of this
Prospectus; and
the written power of attorney executed by each Director of the Company not signing the
Prospectus.
14
SECTION 1 – INFORMATION ABOUT THE COMPANY WHOSE SECURITIES ARE BEING PLACED
1.1
Name, address and incorporation
Company Name
Pembury Lifestyle Group Limited [Regulation 57(1)(a)]
Registration Number
2013/205899/06 [Regulation 57(1)(a)]
Business Address
111 9th Street [Regulation 57(1)(b)]
Fairland
Randburg
2030
(PO Box 73723, Fairland, Gauteng, 2170)
Registered Address
111 9th Street [Regulation 57(1)(b)]
Fairland
Randburg
2030
(PO Box 73723, Fairland, Gauteng, 2170)
Address of Transfer
Secretaries
Link Market Services South Africa Proprietary Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein
2001
(PO Box 4844, Johannesburg, 2000)
[Regulation 57(1)(b)(ii)]
Date and place of
Incorporation
5 November 2013 in South Africa [Regulation 57(1)(c)]
1.1.1 Details of the holding company of PL Group [Regulation 57(3)(a)]
PL Group does not have a holding company and is controlled by Andrew McLachlan.
1.1.2 Details of the subsidiary companies of PL Group [Regulation 57(3)(b)]
Details of the Company‟s subsidiaries are listed in Annexure 12.
15
1.2
Directors, other office holders, or material third parties [Regulation 58]
1.2.1 Directors of the Company [Regulation 58(2)(a), (3)(a)]
Executive
Andrew McLachlan (50)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Riaan van Jaarsveld (54)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Non-Executive
Lou Brits (70)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Christo Hechter (52)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Grant Waters (51)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Barry Moyo (64)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
South African
111 9th Street, Fairland, Randburg, 2030
5 November 2013
B.Sc Construction Management UOFS
Group CEO
Chief Executive Officer
No fixed term, with three months‟ notice period
South African
111 9th Street, Fairland, Randburg, 2030
1 October 2016
B. Com; B Com Hons CTA; CA (SA)
Financial Director
Group Financial Director
No fixed term, with three months‟ notice period
South African
111 9th Street, Fairland, Randburg, 2030
7 October 2016
BA
Businessman
Independent Non-Executive Chairman
No fixed term but subject to the provisions of the MOI in
terms of rotation of Directors
South African
111 9th Street, Fairland, Randburg, 2030
5 November 2013
B.Proc
Businessman
Non-Executive Director
No fixed term but subject to the provisions of the MOI
South African
111 9th Street, Fairland, Randburg, 2030
7 October 2016
D.E. (S.P) HDE (Ac.Spec.) Rhodes University
Educator
Independent Non-Executive Director
No fixed term but subject to the provisions of the MOI
South African
9 Jukskei Road, Kelland, Randburg, 2194
7 October 2016
M.A. Accounting and Finance-Lancaster University
(United Kingdom), B. A. Economics (Honours)-Ealing
College (United Kingdom), CA (Zimbabwe)
Financial and business consultant
Independent Non-Executive Director
No fixed term but subject to the provisions of the MOI
16
Key Management
Rob Wyatt-Minter (57)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Gerhardus Petrus Dippenaar
(54)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Dr Christoffel Ayers (66)
Nationality
Business address
Appointment date
Qualifications
Occupation
Position in Company
Term of office
Sheldon Nielson (39)
Nationality
Business address
Appointment date
Qualifications
Position in Company
Term of office
South African
630 Kubla Khan Drive, Xanadu Eco Park,
Hartbeespoort
1 October 2015
BEd Hons Educational Psychology, UKZN
BSc Mathematics and Psychology, 1st Class, UNISA
National Diploma (N6) in Mechanical Engineering,
Durban Institute of Technology
Higher Diploma in Education, Mathematics teaching,
UKZN
National Higher Certificate for Technicians (T4),
Mechanical Engineering, PMB Technical College
Teacher
Headmaster at PLG Hartbeespoort Academy
No fixed term, with three months‟ notice period
South African
290 Poole Avenue, Raslouw AH, Centurion
1 September 2016
B.Ed. (HONS) Educational Management, Law and
Policy
Mentoring, Guidance and Support for Teachers and
Trainers Certificate
Assessors Training
FDE – Randse Afrikaanse Universiteit
THDE – Goudstad Onderwys Kollege
Teacher
Headmaster at PLG Raslouw College
No fixed term, with three months‟ notice period
South African
48 Homestead Avenue, Randfontein
1 January 2017
D.Ed Curr. (RAU)
M.Ed Curr. (RAU)
B.Ed (UP)
Nat. Teachers‟ Dip. (Wits Tech)
Nat.Technical Dip. Mechanical (FET College)
Headmaster and consultant
Consultant
Not applicable
South African
111 9th Street, Fairland, Randburg, 2030
24 February 2014
IHT Hospitality Management
Operations Manager
Appointment in terms of standard employment contract
17
Cordelia Sachiti (30)
Nationality
Business address
Appointment date
Qualifications
Position in Company
Term of office
Jaquelize Nielson (31)
Nationality
Business address
Appointment date
Qualifications
Position in Company
Term of office
Heidi Hirner (48)
Nationality
Business address
Appointment date
Qualifications
Position in Company
Term of office
Raphael Rakarasika (46)
Nationality
Business address
Appointment date
Qualifications
Position in Company
Term of office
Zimbabwean
111 9th Street, Fairland, Randburg, 2030
19 July 2012
B Comm
Account Manager
Appointment in terms of standard employment contract
South African
111 9th Street, Fairland, Randburg, 2030
21 July 2014
B Sc
Financial Administration and Debtor Manager
Appointment in terms of standard employment contract
South African
111 9th Street, Fairland, Randburg, 2030
1 September 2015
B Art Communication
Marketing Manager
Appointment in terms of standard employment contract
South African
111 9th Street, Fairland, Randburg, 2030
8 January 2008
Financial Accounting
Senior Accounts Manager
Appointment in terms of standard employment contract
Abridged Curricula Vitae of the Group‟s Directors, as well as those of key
management, are set out in Annexure 14 of this Prospectus.
1.2.2
Name and business address of the Company Secretary [Regulation 58(b)(iii)]
Arbor Capital Corporate Services Proprietary Limited
Ground Floor, One Health Building
Woodmead North Office Park
54 Maxwell Drive
Woodmead, 2191
(Suite # 439, Private Bag X29, Gallo Manor, 2052)
1.2.3
Name and business addresses of the auditors, attorney and banker
1.2.3.1 Auditors: [Regulation 58(2)(b)(i)]
Moore Stephens FRRS Incorporated
Chartered Accountants (SA)
(Registration Number 2006/018138/21)
Practice Number: 902317
18 Lakeview Crescent
Kleinfontein Lake Office Park
Benoni, 1501
(PO Box 663, Benoni, 1500)
A copy of the letter from Moore Stephens consenting to be named as the Company‟s
auditors in the Prospectus is available for inspection as set out in the introduction.
18
1.2.3.2 Attorney [Regulation 58(2)(b)(ii)]
Paul Barnard Incorporated
(Registration Number 2003/018464/21
Savanah Office Park, Palm Building
Cnr 9th Avenue & Rugby Street
Weltervredenpark
Roodepoort, 1709
(PO Box 6154, Westgate, 1734)
A copy of the letter from Paul Barnard Incorporated consenting to be named as the
Company‟s attorney in the Prospectus is available for inspection as set out in the
introduction.
1.2.3.3 Bankers
ABSA
(Registration Number 1986/004794/06)
Lower Level Cresta Shopping Centre
Cresta
Randburg, 2194
(PO Box 261001, Excom, 2023)
A copy of the letter from ABSA Bank consenting to be named as the Company‟s
banker in the Prospectus is available for inspection as set out in the introduction.
1.2.4
Qualification, borrowing powers, appointment, voting powers and remuneration of
Directors of PL Group [Regulation 58(3)]
1.2.4.1 Directors’ remuneration [Regulation 58(3)(b)]
No emoluments were paid to Directors or any individuals holding a prescribed office
in PL Group or any of the Group companies during the year ended 29 February 2016.
Directors were previously remunerated by Macrodev as part of the retirement
business. During 2016, PL Group changed its year end from February to December
each year in order to align the year end with the school calendar.
The remuneration and fees paid to the Executive Directors of PL Group for the year
ended 31 December 2016 are set out below:
Executive
Andrew
McLachlan
Riaan van
Jaarsveld
Salary
Annual
Bonus
Fringe Allowances Retirement
Risk
Benefits
Received
Benefits Benefits
320 000
-
-
-
-
-
320 000
240 000
-
-
-
-
-
240 000
Total
660 000
-
-
-
-
-
660 000
19
Total
The anticipated remuneration and fees payable to the Executive Directors of
PL Group for the year ending 31 December 2017 are set out below:
Salary
Annual
Fringe Allowances Retirement
Bonus Benefits
Received
Benefits
Risk
Benefits
Executive
Andrew
McLachlan
Riaan van
Jaarsveld
Total
1 920 000
-
-
-
-
- 1 920 000
1 200 000
-
-
-
-
- 1 200 000
Total
3 120 000
-
-
-
-
- 3 120 000
Formal contracts of employment were concluded ahead of the listing. Andrew
McLachlan was previously not remunerated by the PL Group and was remunerated
by Pembury Services, which does not form part of the PL Group. His formal
employment commenced with effect from 1 November 2016. Riaan van Jaarsveld
was appointed in anticipation of the listing with effect from 1 October 2016 at a
salary/cost to company of R70 000 for two months. This has increased to R100 000 per
month from 1 December 2016. His employment contract also provided for the
allocation of 300 000 shares in PL Group, subject to him remaining with the Company
for one year after appointment. These shares have already been allocated to him by
Andrew McLachlan and will remain in trust until 1 October 2017.
There will be no other variation to the remuneration of Directors pursuant to the listing
of PL Group.
The above remuneration will be paid by PL Group or its Subsidiaries. No other benefits
are to be received by Directors from the Company.
Raphael Rakarasika resigned as a Director with effect from 7 October 2016 prior to
the listing of PL Group but remains employed by PL Group.
The fees for Non-executive Directors were approved by shareholders on 28 November
2016 as follows:
Fees
(Per Annum)
(R)
Non-executive Director
Lou Brits
210 000
Christo Hechter
Barry Moyo
Grant Waters
190 000
190 000
160 000
750 000
Total
The Non-executive Director fees are payable for serving on the board and
committees, attending the required meetings and performing the minimum duties
and responsibilities required of Non-executive Directors and committee members.
Fees of Non-executive Directors must be approved by shareholders in general
meeting as detailed in the extracts of the MOI as detailed in Annexure 15.
When Non-executive Directors are required to outsource, at their own cost,
committee functions and/or where material additional or unexpected time and effort
is required of such Directors, additional payments will be negotiated up-front at
market related rates and will be determined by a quorum of disinterested Directors.
The Non-executive Directors are not eligible to participate in the Share Incentive
Scheme.
20
1.2.4.2 Directors’ service contracts, terms of office and other provisions [Regulation 58(3)(a)]
A Director may not vote remuneration to himself or herself. A disinterested quorum of
Directors may determine another Director‟s remuneration.
No payments were made by PL Group or any of its associates, or accrued as
payable, or were proposed to be paid within the three years preceding the date of
this Prospectus, either directly or indirectly, in cash or securities or otherwise to:



the Directors in respect of management, advisory, consulting, technical,
secretarial fees or restraint payments;
a third party in lieu of Directors‟ fees; and
the Directors as an inducement to qualify them as Directors.
The Company has formal employment agreements with all of the Executive Directors
which provide for a three month notice period. The employment agreements are
available for inspection as detailed in this Prospectus.
One third of Non-executive Directors are subject to rotation each year as stipulated in
the MOI. The appointment of the new executive and Non-executive Directors has
been approved by shareholders on 28 November 2016 ahead of the listing. The
appointment of all Directors is subject to shareholder approval but Executive Directors
are not subject to rotation.
The Directors may from time to time appoint one or more Executive Directors, subject
to shareholder approval, for such term and at such remuneration as they may think fit,
and may revoke such appointment subject to the terms of any agreement entered
into in any particular case. A Director so appointed shall not be subject to retirement
in the same manner as the other Directors, but his or her appointment shall terminate
if he or she ceases for any reason to be a Director.
The MOI does not provide for an age limit for the retirement of Directors but has
provisions for the disqualification of Directors as detailed in Annexure 15 to this
Prospectus.
There are no other existing or proposed contracts with PL Group, written or verbal,
relating to the Directors and managerial remuneration and other fees.
The Company has introduced the Share Incentive Scheme for executives and
employees of the Group.
The salient features of the Share Incentive Scheme are set out in Annexure 18 to this
Prospectus.
1.2.4.3 Borrowing powers of the Company and the Subsidiaries exercisable by the Directors
[Regulation 58(3)(c)]
The relevant provisions of the MOI of PL Group relating to the borrowing powers
exercisable by the Directors are set out in Annexure 15 to this Prospectus.
Neither PL Group nor its Subsidiaries, has exceeded its borrowing powers during the
past three years. There are no exchange controls or other restrictions on the
borrowing powers of PL Group and its Subsidiaries.
21
1.2.4.4 Appointment, qualification and remuneration of Directors
The relevant provisions of the MOI of PL Group relating to qualification, appointment,
remuneration, voting powers, rotation/retirement, and interests in transactions of the
Directors are set out in Annexure 15 to this Prospectus. Remuneration in relation to
Directors is set out in paragraph 1.2.4.1 above.
1.2.4.5 Directors’ interest in transactions
Andrew McLachlan, though Macrodev or PL Group, had originally secured the
various Acquisition Properties. Thus, the Acquisition Agreements have subsequently
been nominated to, or signed in the name of PLG Properties ahead of the listing
without any premium on the original acquisition price being added by Macrodev.
Deposits and payments made for the Acquisition Properties will be repaid to
Macrodev or Pembury Services in due course. Details of the Acquisition Agreements
are set out in paragraph 1.7.2 of the Prospectus. A summary of properties acquired or
to be acquired by PLG Properties in terms of the Acquisition Agreements is set out in
paragraph 1.3.2.2 of the Prospectus.
Lou Brits and Christo Hechter have an interest in the acquisition of the Randfontein
Property. Both directors will receive a commission of R250 000 each upon the
successful transfer of the property into PLG Properties.
Other than as detailed above, the Directors do not have any interests in contracts
with PL Group as at the Last Practicable Date.
1.2.4.6 Directors’ Declarations
Other than Christo Hechter as separately disclosed below, in terms of the declarations
lodged by the Directors in accordance with Schedule 13 of the JSE Listings
Requirements, none of the Directors of PL Group or its Subsidiaries:







has been declared bankrupt or insolvent, or has entered into an individual
voluntary compromise arrangement;
is or was a Director with an executive function of any entity at the time of (or
within 12 months preceding) any business rescue, or any entity to commence
business rescue proceedings, application having been made for any entity to
begin business rescue proceedings, notices having been delivered in terms of
Section 129(7) of the Act, receiverships, compulsory liquidations, creditors‟
voluntary liquidations, administrations, company voluntary arrangements or any
compromise or arrangement with creditors generally or any class of creditors of
any company; where such person is or was a director, with an executive function
within such company at the time of, or within the 12 months preceding, any such
event(s);
is or has been a partner in a partnership at the time of, or within 12 months
preceding, any compulsory liquidation, administration or partnership voluntary
arrangements of any partnerships;
is or has been a partner in a partnership at the time of, or within 12 months
preceding, a receivership of any assets of such partnership;
has been publicly criticised by any statutory or regulatory authorities, including
recognised professional bodies or been disqualified by a court from acting as a
director of a company or from acting in the management or conduct of the
affairs of any company;
has committed and offence involving dishonesty;
has been removed from an office of trust on the grounds of misconduct and
involving dishonesty; and
22

subject to any court order declaring such person delinquent or placing him under
probation in terms of Section 162 of the Act and/or Section 47 of the Close
Corporations Act, 1984 (Act No. 69 of 1984).
Christo Hechter has declared that in 1999 he and his partner were suspended by the
Law Society in relation to a shortage on a trust account of approximately R30 000,
which matter was subsequently rectified. The suspension against his firm was lifted and
no further action was taken by the Law Society. He did not apply to be readmitted as
he had already started another business venture.
1.3.
HISTORY, STATE OF AFFAIRS AND PROSPECTS OF THE COMPANY [Regulation 59]
1.3.1 About the Company and the Private Placement
PL Group currently focuses mainly on providing accessible, affordable, private
education through its schools, with an intention to own the properties from which the
schools operate. In due course, the group will explore the potential acquisition of
retirement accommodation and services, subject to shareholder approval.
The Company operates as a holding company to three subsidiaries, namely:



PLG Schools, the education segment;
PLG Properties, the company which will own the group properties (dormant for
the period under review); and
PLG Retirement Villages, the retirement segment (currently dormant).
As the holding company, PL Group centrally manages the administration of the Group
subsidiaries and is responsible for the strategic direction thereof. Currently, the main
revenue driver of the group is the education segment, primarily comprising school and
boarding fees.
It is the intention of the Group to list the educational business first, including certain of
the school properties and, in due course and subject to shareholder approval, acquire
the retirement segment, which is currently owned by Macrodev.
The Company will list on the Alternative Exchange in the Specialised Consumer Services
sector of the JSE lists.
1.3.2 History of the Company [Regulation 59(3)(a)(i); 59(3)(a)(ii)]
PL Group was incorporated as a public company on 5 November 2013 and remained
dormant until PLG Schools commenced operations during 2015. The history of the
Pembury brand and the group is set out below:
1999
The Pembury brand was established in 1999, fundamentally providing rental
accommodation for the elderly. The first Pembury Lodge opened with only
5 residents and the retirement business has since grown to over 400 residents
across many lodges. Pembury has grown steadily over the years into other
areas of the hospitality industry and now owns several retirement lodges, which
are currently owned by Macrodev, which does not form part of PL Group.
Macrodev trades under the Pembury Retirement Lodges brand and the
acquisition of the retirement segment will be considered in 12 to 24 months.
The client-centred hospitality focus and the passion for people is what unites
these different businesses and differentiates Pembury and PLG Schools from
competitors.
23
The securing of the Willow View Property in 2014, which was not suited for a
retirement village, ultimately led to the formation of the first PLG school.
2014
PL Group diversified and expanded into the Education Sector in 2015 with
PLG Schools, bridging the fees gap between Government/State and
Independent Schools and the property PLG Willow View Academy was
secured.
2015
PL Group opened its first two schools, namely:
 PLG Willow View (launched);
 PLG Ballito Academy (launched).
2016
PL Group continued its expansion into the Education Sector with a further
acquisition of properties and launch of the following campuses, incorporating:
 PLG Mellow Oaks Academy (launched);
 PLG Northriding Academy (launched); and
 PLG Hartbeespoort Academy (acquired).
With regard to the PLG Ballito Academy, the town council refused special
consent for use of the property for education, despite zoning being
“Education, with special consent”. Despite extensions being granted by the
court, a decision was taken to close PLG Ballito Academy during mid-2016 to
remove uncertainty for parents and students. PLG Schools had its first group of
matriculants at PLG Ballito consisting of 27 candidates, who achieved a 96%
pass rate, with 67% achieving a university entrance.
2017
During 2016 additional properties were secured and the following schools
opened on 11 January 2017:
 PLG Raslouw College;
 PLG Springs Academy; and
 PLG Allens View Academy.
Marketing for PLG Randfontein Academy will begin during 2017 for the 2018
school year.
The retirement business and retirement lodges are not part of the current Group, but it is
the intention to acquire this business segment in due course. In the event that this
decision is taken, this will be a related party transaction and will require a separate
circular and shareholder approval at the time that the acquisition is concluded.
Andrew McLachlan, PL Group‟s founder and controlling shareholder, will be the related
party as he owns 100% of the retirement business and retirement lodges through
Macrodev and will be precluded from voting on the acquisition. The retirement
segment is expanded upon under future prospects.
PL Group is not B-BBEE certified. The Directors of the Company understand and fully
support the BEE framework and will endeavour to explore BEE related opportunities for
the Group in the near future. However, it is focussed on a much needed sector, being
affordable private education for all.
There are no government protection or investment encouragement laws that impact
on the Company or the Group. However, the schools must be registered with the
Department of Education.
24
The Group structure of PL Group is as follows:
Pembury Lifestyle
Group Limited
*
PLG
PLG
PLG
Schools
Properties
100%
100%
Retirement
Villages*
100%
subsidiary currently dormant and will potentially hold retirement assets in due course, subject
to shareholder approval
1.3.2.1 PLG Schools
PLG Schools identifies good locations and demographic environments for new private
schools, secures the resources required, markets and launches new schools. The
expertise of PLG Schools lies in creating and launching new schools, as opposed to
acquiring existing schools.
PLG Schools offers a co-ed learning environment from Pre-Primary to Matric with
English as the primary medium of instruction. PLG Schools follows the South African
Schools Curriculum (CAPS) with emphasis on building a sustainable foundation of
academic excellence. Certain PLG Schools do, however, include the Independent
Examination Board (IEB) matric examination.
PLG Schools bridges the financial gap between government school fees and elite
independent school fees, bringing the benefits of quality, private education to many
more families. Our vision is to make quality independent education accessible and
affordable to communities across the country.
PLG Schools is testing the introduction of tablets in some of our schools; the remaining
schools continue to use the physical textbooks. The schools will consider a way
forward with learner study materials once management has determined whether
textbook or tablet based learning is more effective for a majority of children, all of
whom have different learning styles.
The smaller classes and schools create the individual relationships that help to identify
a child‟s strengths and weaknesses. This is essential to effective teaching and nurturing
academic success.
The architecture of PLG Schools contributes to nurturing those individual relationships.
The school buildings and sites are unique, attractive and rich with the individual detail
that evokes a client experience of old fashioned, high quality, client-centred service,
rather than the impersonal and institutional churning of mass-production education.
25
At PLG Schools, management and teachers work to refine and develop pupils‟
communication, social and academic skills, self-discipline and respect for themselves,
their peers and their environment. The schools also aim to inspire children to have the
life-long love of learning that will equip them to follow their career passions and play a
meaningful role in their communities throughout their lives.
PLG Schools currently offers private education and associated services as follows:





Pre-primary school education;
Primary school education;
High school education;
Boarding facilities; and
Aftercare services.
PLG Schools intends expanding the scope of its educational facilities into technical
and training colleges over the next 2 years. The group has had to close its academy
based in Ballito at the end of 2016 due to the municipality refusing to allow the school
to continue. The zoning of the building included “Education, with special consent”
but despite a number of applications and a court process, the municipality has not
provided the special consent.
Number and location of the Campuses and Schools
In 2017, PLG Schools has seven PLG Schools Campuses (each comprising two or three
schools), with six campuses in Gauteng and one campus at Hartbeespoort in North
West, with a total of 19 schools on the seven campuses as follows:



7 pre-primary schools;
7 primary schools; and
5 high schools.
PLG Schools has been approached with a number of properties with good potential
for 2018 and 2019 and is targeting to open a minimum of three new campuses
comprising nine new schools, to open in January 2018, one of which has already
been secured, namely the Randfontein Property.
Management team
PLG Schools are centrally managed by the Board Executive Directors based at the
Group‟s head office in Fairland, Randburg. The head office appoints the headmaster
of each school and is involved with the appointment of heads of departments and
teachers, together with the headmaster, who normally sources CV‟s of the various
heads of department and teachers. This function will be moved to the board of
PLG Schools going forward.
Each school is fairly autonomous in determining the local structure that will best suit
the local market needs. However, business and communication processes between
schools and head office are uniform.



PLG Northriding Academy is managed by the Headmaster, with the assistance of
the Head of Nursery and Head of Pre-Primary.
PLG Willow View Academy is managed by the Headmaster and acting
Foundation Phase Head of Department. Whole school discipline is managed by
the guidance assistance team (1 teacher from each phase as well as the
Headmaster).
PLG Mellow Oaks Academy is managed by the Headmaster, and Heads of
Departments in the Pre-school, Junior Primary, Senior Primary and High School.
26


PLG Hartbeespoort Academy is managed by a Headmaster, Deputy
Headmaster, Head of Pre-Primary, Head of Foundation Phase and Head of
Intermediate Phase.
Three other schools (PLG Springs Academy, PLG Raslouw College and PLG Allens
View Academy) opened in January 2017. Headmasters and teaching staff have
been appointed.
Teachers
The teaching team of each school is selected by the Headmaster, who makes
selections that are in harmony with the identity and ethos of the school. Generally,
the school staff is composed of a majority of very experienced educators who mentor
a small complement of younger staff:




PLG Willow View Academy‟s teaching staff of 14 is composed of 10 South African
Council of Educators (“SACE”) registered graduates and four interns.
PLG Mellow Oaks teaching staff of 12 comprises 11 SACE registered graduates
and one intern.
PLG Northriding Academy teaching staff of 26 staff members, consists of
13 permanent SACE registered educators; two SACE registered interns (last year
of study) and nine assistants (nursery and pre-primary).
PLG Hartbeespoort Academy‟s complement of 24 full time staff are all SACE
registered graduates, with most having substantial teaching experience.
A summary of the operating schools is set out below:
PLG MELLOW OAKS ACADEMY CAMPUS
PLG Mellow Oaks is conveniently situated just off Hendrik Potgieter Road (M47), a
main artery through Roodepoort. It is set on a large tract of land in a tranquil
picturesque environment with rolling fields and trees and also has a chapel.
http://www.plgschools.co.za/schools/gauteng/plg-mellow-oaks-academy.html
Location
8 Van Staden Road, Aanwins AH, Ruimsig, Roodepoort
2017 Fees
R29 700 – R47 300 per annum
Schools at Campus
Pre-primary school, primary school and high school
Number of pupils
211 in 2016 and 335 as at 13 January 2017
Number of teachers
12 in 2016
Teacher/pupil ratio
18 pupils per teacher in 2016
Total capacity
1 680
Current capacity
400 (before the addition of new classrooms)
Capacity utilisation
12.5% of total capacity in 2016 and 21.1% in 2017
Other Services
Aftercare – R11 000 per annum in 2017
Curriculum
IEB Education
27
PLG NORTHRIDING ACADEMY CAMPUS
PLG Northriding is conveniently situated on the corner of Olievenhout and
Malibongwe Drive, a main artery through Northriding. Highly visible location with
adjacent land. Multi-level building with good views; ground floor has roofed wrap around verandas.
http://www.plgschools.co.za/schools/gauteng/northriding-academy.html
Location
Corner of Olievenhout and Malibongwe Drive, Northriding,
Randburg
2017 Fees
R28 600 – R47 300 per annum
Schools at Campus
Pre-primary school, primary school and high school
Number of pupils
178 in 2016 and 276 as at 13 January 2017
Number of teachers
12 in 2016
Teacher/pupil ratio
11 pupils per teacher
Total capacity
1 260
Current capacity
350 (before addition of new classrooms)
Capacity utilisation
14.1% of total capacity in 2016 and 23.1% in 2017
Other Services
Aftercare – R11 000 per annum in 2017
Curriculum
IEB Education
PLG WILLOW VIEW ACADEMY CAMPUS
PLG Willow View Academy is ideally situated close to OR Tambo International
Airport in a lovely serene country atmosphere, located next to a beautiful willowbordered lake. The school offers a boarding facility with en suite bathrooms.
http://www.plgschools.co.za/schools/gauteng/willow-view-academy.html
Location
31 R 1st Road, Bredell, Kempton Park
2017 Fees
2017 Boarding
R23 100 – R46 200 per annum
R38 500 per annum
Schools at Campus
Pre-primary school, primary school and high school
Number of pupils
193 in 2016 and 307 as at 13 January 2017
15 boarding pupils in 2016 and 24 expected in 2017
Number of teachers
14 (1 Sports Co-ordinator)
Teacher/pupil ratio
14 pupils per teacher in 2016
Total capacity
1 260
Current capacity
350 (before addition of new classrooms)
Capacity utilisation
15.2% of total capacity in 2016 and 25.7% in 2017
Other Services
Boarding facilities Monday to Friday
Aftercare – R7 700 per annum in 2017
Curriculum
CAPS Curriculum
28
PLG HARTBEESPOORT ACADEMY CAMPUS
PLG Hartbeespoort is situated in the lovely country side of the Hartbeespoort Dam
area amid beautiful mountains and wide open fields.
http://www.plgschools.co.za/schools/north-west/harties-academy.html
Location
630 Kubla Khan Drive, Xanadu Eco Park, Hartbeespoort
2017 Fees
2017 Boarding
R23 100– R49 500 per annum
R27 500 – R38 500 per annum
Schools at Campus
Pre-primary school, primary school and high school
Number of pupils
283 in 2016 and 439 as at 13 January 2017
8 boarding pupils in 2016 and 12 expected in 2017
Number of teachers
24 in 2016
Teacher/pupil ratio
1:12
Total capacity
1 680
Current capacity
500 (before addition of new classrooms)
Capacity utilisation
16.9% in 2016 and 27.6% expected in 2017
Other Services
Boarding facilities Mon – Fri or Mon – Sun
Aftercare - R 11 000 per annum in 2017
Curriculum
IEB Education
PLG ALLENS VIEW ACADEMY CAMPUS
PLG Allens View Academy is situated just off Jim Fouche Road, an artery from
Roodepoort into Randburg. The property is large and tranquil with good views from
the back of the property. Ample parking, a community hall and various buildings.
http://www.plgschools.co.za/new-schools-2017/plg-allens-view-academy.html
Location
1014 Landhuis Street, Allens Nek, Roodepoort
2017 Fees per year
R23 760 – R29 920 per annum
Schools at Campus
Pre-primary school and primary school
Number of pupils
Opened in January 2017 with 141 as at 13 January 2017
Number of teachers
7 in 2017
Teacher/pupil ratio
1:20 as at 13 January 2017
Total capacity
840
Current capacity
250 (before addition of new classrooms
Capacity utilisation
17.7% of total capacity expected in 2017
Other Services
Aftercare – R8 800 per annum in 2017
Curriculum
CAPS Curriculum
29
PLG RASLOUW COLLEGE CAMPUS
PLG Raslouw College is situated just off the R55, a main artery from Midrand to
Pretoria and is also easily accessible via Ruimte Road (R114). The country estate is
immaculate. Ample parking, a beautiful chapel with stained glass windows and
finishes and detailing of the highest quality.
http://www.plgschools.co.za/new-schools-2017/plg-raslouw-college.html
Location
290 Poole Avenue, Raslouw AH, Centurion
2017 Fees
R23 100 – R40 370 per annum
Schools at Campus
Pre-primary school, primary school and high school
Number of pupils
Opened in January 2017 with 171 as at 13 January 2017
Number of teachers
7 in 2017
Teacher/pupil ratio
1:24 as at 13 January 2017
Total capacity
1 260
Current capacity
300 (before addition of new classrooms)
Capacity utilisation
14.3% of total capacity expected in 2017
Other Services
Aftercare – R10 340 per annum in 2017
Curriculum
IEB Curriculum
PLG SPRINGS ACADEMY CAMPUS
PLG Springs is situated just off Welgedacht Road in Springs, an artery from central
Springs into the suburbs. It is surrounded by newly built residential estates. It has
large grounds and a large built area that includes a large theatre hall that doubles
as an indoor sports court. This building has many quaint nostalgic features.
http://www.plgschools.co.za/new-schools-2017/plg-springs-academy.html
Location
4 Lang Laagte Road, Springs
2017 Fees per year
R20 900 – R27 500
Schools at Campus
Pre-primary school and primary school
Number of pupils
Opened in January 2017 with 141 as at 13 January 2017
Number of teachers
7 in 2017
Teacher/pupil ratio
1:20 as at 13 January 2017
Total capacity
560
Current capacity
250 (before addition of new classrooms)
Current capacity
utilisation
26.6% of total capacity expected in 2017
Other Services
Aftercare – R7 700 per annum in 2017
Curriculum
CAPS Curriculum
30
1.3.2.2 PLG Properties
PLG Properties is a property investment company that, upon listing, will directly invest
capital raised in property situated in prime locations South Africa, which house the
school operations.
Since PLG Properties will not be charging rentals to third parties and will be charging
rental to PLG Schools, the Company will not be a property entity or a REIT in terms of
Section 13 of the JSE Listings Requirements although it will hold property through which
the school operations are conducted. The rental income and expense will be
eliminated on consolidation.
Pembury Lifestyle Group‟s business model includes identifying good locations and
demographic environments for new private schools, acquiring viable properties which
can be converted and used for schooling in such locations, and marketing and
launching new schools. The expertise of PL Group lies in creating and launching new
schools, as opposed to acquiring existing schools.
As per the business model described above, it is PL Group‟s intention to acquire the
Acquisition Properties using the minimum capital raised of R140 000 000 to settle the
outstanding consideration value due for these acquisitions.
PLG Properties has hand-picked select property throughout South Africa in prime
areas and prefers properties in areas that are:



newer, newly developed or experiencing rejuvenation;
demonstrating steady growth; and
experiencing high residential growth with a high proportion of young families with
good incomes.
The acquisition of each property is subject to a strict investment policy based on
strong cash flows and solid property fundamentals.
PLG Properties has secured PLG Schools as a quality tenant for all of the properties
with a long-term lease. PLG Schools is an ideal long term tenant; its business is
demand driven, grows annually and has clients that use its education services for
many years.
A summary of properties acquired or to be acquired by PLG Properties in terms of the
Acquisition Agreements is listed below. These properties are all currently occupied by
PLG Schools:
Property
Raslouw 1 and 2
Springs(1)
Hartbeespoort(2)
Allens View(3)
Mellow Oaks
Randfontein
Willow View
Northriding
TOTAL
Purchase
Balance Vendor
Price Deposits
Owed Loans
R’000
R’000
R’000
R’000
16 650
700
15 950
R3 500
200
3 300
22 000
2 500
19 500
7 500
500
7 000
12 250
1 000
11 250
6 000
1 000
5 000
34 000
34 000 10 500
35 000
35 000 13 500
136 900
5 900 131 000 24 000
31
Net Cash Independent
Owed
Valuation
R’000
R’000
15 950
28 100
3 300
9 000
19 500
40 000
7 000
15 000
11 250
23 500
5 000
12 500
23 500
32 500
21 500
36 200
107 000
196 800
Notes
1. Springs - the acquisition agreement provides for the payment of occupational
rent until November 2017 is, with the balance payable in November 2017.
2. Hartbeespoort – the acquisition agreement is in the name of PLG Schools and
may be transferred into PLG Properties in due course. The property has been
capitalised as a finance lease in the 2016 financial year end. PLG Schools has
taken over the loan payments to DBSA as part of the acquisition agreement with
Doxa Deo.
3. Allen’s View – the balance is payable in August 2017.
4. Willow View/Northriding – the Willow View/Northriding vendor has agreed to
provide R24 000 000 of loan funding, should this be required.
5. Deposits – the deposits totalling R5 900 000 were paid by Pembury Services on
behalf of PLG Properties and are thus payable to Pembury Services, which
related party loan, amounted to approximately R11 800 000 at 31 December
2016. The loan does not bear interest, has no set terms of repayment and has
been subordinated. Pembury Services has agreed to subscribe for 10 000 000
shares at R1.00 per Share in order to further capitalise the Company.
6. Zoning – The properties detailed above have appropriate or higher level of
zoning or have received temporary consent (PLG Mellow Oaks and PLG Springs)
from the council, with advice that consent will be forthcoming. The town planner
is working on obtaining final consent, but the consent to operate as a school has
already been secured.
In summary, acquisition agreements have been entered into for all of the properties
included in the table. The agreements have been entered into by PLG Properties
(previously known as Kygotime (Pty) Limited) and the various property vendors. The
exception is Hartbeespoort, which currently sits in PLG Schools by way of a finance
lease. However, DBSA loan will be settled on listing and the property will be transferred
into PLG Properties. It is expected that the Properties will be transferred into PLG
Properties by the end of April 2017.
It is the intention that all the above amounts will be settled from proceeds from the
listing. A comparison between the purchase price of each property and the
valuation is set out below:
Purchase
Price
R’000
16 650
R3 500
22 000
7 500
12 250
6 000
34 000
35 000
136 900
Independent
Valuation
R’000
28 100
9 000
40 000
15 000
23 500
12 500
32 500
36 200
196 800
Increase/
(decrease) in
value
R’000
11 450
6 500
18 000
7 500
11 250
6 500
(1 500)
1 200
59 900
Property
Raslouw 1 and 2
Springs(1)
Hartbeespoort(2)
Allens View(3)
Mellow Oaks
Randfontein
Willow View(4)
Northriding(4)
TOTAL
Notes:
1. Springs - Agreement provides for occupational rent of R30 000 per month until
November 2017, when the balance of the purchase price is payable;
2. Hartbeespoort – the acquisition agreement is in the name of PLG Schools and may
be transferred into PLG Properties in due course. The property has been
capitalised as a finance lease in the 2016 financial year end. PLG Schools has
taken over the loan payments to DBSA as part of the acquisition agreement with
Doxa Deo.
32
3. Allen’s View – the balance of the purchase price is payable in August 2017, with
occupational rent of R72 916 per month.
4. Willow View/Northriding – the Willow View/Northriding vendor has agreed to
provide R24 000 000 of loan funding, should this be required.
Prior to their purchase, the properties were underperforming, and thus the vendors
accepted relatively low offers for the respective properties. However, under their new
use as schools, other than Willow View and Northriding which acquisition prices are
market related, the property values have increased significantly.
The above property acquisitions will result in a once off fair value gain in accordance
with IFRS, of which R18 000 000, before provision for taxation, was recognised in the
year ended 29 February 2016 showing a net gain after taxation of R14 660 332.
A fair value gain of R43 400 000, before provision for taxation, and an impairment of
R1 500 000 will be recognised during the year ending 31 December 2017.
The properties have been independently valued for the purpose of this Prospectus,
further details of which are set out in Annexure 19.
1.3.2.3 PLG Retirement Villages
PLG Retirement Villages is currently dormant.
PL Group will consult with its shareholders regarding the potential acquisition of the
retirement business and assets which are housed in Macrodev approximately
24 months after the listing of the education and property interests, depending on
investor sentiment. This acquisition will be subject to shareholder approval due to
Macrodev being a related party to PL Group.
Shareholders are referred to Future Prospects below for further details of the Pembury
Retirement Village business.
1.3.3 Corporate governance [Regulation 54(1) (b) (i); 54(1)(b)(ii)]
The Company‟s statement on Corporate Governance has been included as Annexure
16 to this Prospectus.
1.3.4 Material changes [Regulation 59(3)(b)]
There has been no material change in the financial or trading position of PL Group or its
Subsidiaries that has occurred since the reviewed interim period ended 31 August 2016
as set out in Annexure 3B, other than the securing of additional properties for the three
new PLG Schools campuses opening in January 2017 and in the ordinary course of
business.
PL Group and the Subsidiaries have only been incorporated from 2013 and the growth
since incorporation is detailed in paragraph 1.3.2 above. Other than the opening of
new schools and acquisition of associated properties, there has been no material
change in the business of PL Group or the Subsidiaries during the past five years or
changes in the nature of the business.
There has been no change in control of PL Group or its Subsidiaries during the past five
years.
33
1.3.5 Directors opinions regarding the prospects [Regulation 59(3)(c)]
The Directors of the Company believe that the Group has excellent prospects based
on the following:









PL Group has an experienced, well-balanced, innovative and well-motivated
management team;
Difficulties in the public education sector provides opportunity for growth in
private education;
Executive team has proven project management and execution skills to deliver
on the expansion of the business;
Research indicates that there is adequate market demand for quality and
affordable schooling in South Africa;
PLG Schools is experiencing high growth rates off a low occupancy base and a
number of approaches relating to excellent properties, well suited for conversion
into schools;
PLG Schools aims to have 40 schools by 2020 and is focussed on delivering
quality, affordable education in well located areas, addressing a real need in
South Africa;
The business is centrally managed and the head office function controls the
finances, with the schools being able to focus on education;
PLG Properties has been able to source properties at prices well below the
traditional cost of establishing or acquiring a private school and PLG Schools is
nimble, able to roll out new schools within a year of securing properties;
The listing will provide additional access to capital to enable the group to grow
more quickly than remaining private or having to rely on bank funding.
In addition to the above, and subject to investor sentiment and shareholder approval,
PL Group intends to diversify into the retirement segment, more details of which are
provided below.
Pembury Retirement Villages
The Pembury retirement village business was started in 1999 by Andrew McLachlan,
the founder of PL Group.
The initial operating entity (which is not currently part of the group that will be listing) is
housed in Macrodev and trades under the Pembury brand.
Pembury owns a number of popular retirement lodges in prime locations in Melrose,
Sandton, Bryanston, Fairland, Magaliesburg and Plettenberg Bay.
The first Pembury Lodge opened with only five residents and has grown to
accommodate over 400 residents across the existing lodges. As occupancy levels
increased in the current lodges, new opportunities were identified to open the next
lodge mainly in the Northern suburbs of Johannesburg. This was done by identifying
and converting suitable properties to retirement lodges, which is often more cost
effective than building a new lodge.
Pembury Lodges provides elderly South African residents with fully serviced Retirement
Lodges, Villages and Healthcare. Pembury Lodges accommodate residents according
to their needs, from independent living to frail care with 24-hour nursing services.
34
Pembury Lodges believes in quality of life and encourages residents to participate in
recreational and physical activities as well as supplying healthy and nutritious meals.
Residents also have access to health and beauty facilities and daily domestic help.
Ultimately Pembury Lodges delivers a valuable service to retired individuals by
providing them with a nurturing and caring home environment, peace of mind and
good quality of retired life.
Pembury Lodges‟ mission is to create a homely environment where residents can relax
and enjoy all the comforts they are used to without any of the concerns of day-to-day
living. Pembury Lodges strives through its facilities to encourage a carefree retirement
for over 50′s with general assistance and specialised healthcare available at every
level. Pembury Lodges continuously strives to become a national name in retirement
accommodation by focusing on growth prospects across all cities and towns in South
Africa.
Currently, Pembury Lodges operates six retirement facilities and aims to increase its
portfolio to 16 properties in due course. The most notable transformation to the
Pembury Lodges‟ portfolio is the introduction of retirement villages. The Company has
identified the development of villages as a game changer that will represent a large
proportion of the revenue and growth of Pembury Lodges going forward.
1.3.6 State of affairs of the Company and any subsidiary [Regulation 59(3)(d)]
Details relating to the historical performance and state of affairs of the Company are
set out in Annexure 1 and have been reported on in accordance with Regulation 79 of
the Companies Act in Annexure 2 to this Prospectus.
It is noted that the holding company, PL Group, was established as a holding company
for the purpose of the listing and has not operated until it acquired the shareholding in
PLG Schools, PLG Properties and PLG Retirement Villages during 2016 ahead of the
listing.
The main operations have been conducted through PLG Schools and are contained in
in the audited group Annual Financial Statements for PL Group for the year ended
29 February 2016 and the reviewed interim results for the six months ended 31 August
2016, which are set out in Annexure 3A and Annexure 3B respectively. The historical
information has been reported on by the Reporting Accountants, whose reports are set
out in Annexure 4A and Annexure 4B accordingly.
PLG Properties and PLG Retirement Villages did not operate for the year ended
29 February 2016.
Additional details pertaining to material subsidiaries are disclosed in Annexure 12 of this
Prospectus.
1.3.7 Principal immovable properties [Regulation 59(3)(e)]
Details of the immovable properties owned or to be acquired by PL Group are set out
in Annexure 13 of this Prospectus. Details of immovable property leased from third
parties are also disclosed in Annexure 13 of this Prospectus.
A summary valuation report is also set out in Annexure 19 of this Prospectus.
35
1.3.8 Commitments for the purchase, construction or installation of buildings, plant, or
machinery [Regulation 59(3)(f)]
PL Group, through PLG Properties, currently has commitments for the purchase of
various buildings which will be leased to PLG Schools, details of which are set out in
paragraph 1.3.2.2 above. Details of these properties are set out in Annexure 13 of this
Prospectus.
1.3.9 Company particulars and dividend policy [Regulation 59(3)(g)]
Information about the Company and Group‟s history for the year ended
29 February 2016 from date of incorporation can be found in Annexure 1 and Annexure
3A of this Prospectus respectively.
The Company has not historically declared interim and final dividends and does not
have a formal dividend policy as at the date of this Prospectus.
From the year ended 31 December 2018, the Board will consider a formal dividend
pay-out policy of at least 10% of headline earnings of the consolidated group of
companies, unless the Board is of the opinion that a lower dividend is to be declared
because of the necessity to apply the Group‟s cash resources to any planned
acquisitions or that it is in the interest of the Group to build up cash reserves for
foreseeable unfavourable market or economic conditions.
The Board has not determined any fixed dates on which dividends or entitlement to
dividends arises, but will consider both interim and final dividend declarations. There is
no arrangement in which future dividends are waived or agreed to be waived.
The Company will hold all monies due to shareholders in trust but subject to the laws of
prescription.
1.4.
SHARE CAPITAL OF THE COMPANY [Regulation 60]
1.4.1 The authorised and issued share capital of the Company as at the Last Practicable
Date is as follows: [Regulation 60(a)(i)]
Authorised share capital
1 000 000 000 ordinary Shares of no par value
Issued stated share capital
203 000 000 ordinary Shares of no par value
1.4.2 The authorised and issued share capital of the Company on the date of listing,
assuming that the Private Placement of 140 000 000 new Shares is fully subscribed and
noting that a portion of the shareholder loan will be capitalised through the issue of
10 000 000 Shares at an issue price of 100 cents per share, will be as follows:
Authorised share capital
1 000 000 000 ordinary Shares of no par value
Issued stated share capital
353 000 000 ordinary Shares of no par value
36
The remaining authorised and unissued Shares, after the Private Placement, will be
under the control of the Directors of the Company, subject to the provisions of the MOI,
the Act and the JSE Listings Requirements.
There are no treasury Shares held as at the Last Practicable Date.
All of the authorised and unissued Shares (including those to be issued in terms of the
Prospectus) are of the same class and rank equally in every respect, including rights to
dividends, profits or capital, rights on liquidation or distribution of capital assets. In
accordance with the Act, issued Shares must be fully paid up and the securities to be
listed are freely transferable. [Regulation 60(a)(ii)]
Any variation of rights attaching to the ordinary Shares will require the consent of
shareholders in general meeting in accordance with the MOI of PL Group.
There have been no previous offers of Shares by PL Group to members of the public.
1.4.3 Alterations to the share capital [Regulation 60(b)]
Details of any alterations to the share capital of the Company from the date of
incorporation of the Company are set out in Annexure 9 to this Prospectus.
1.4.4 Issues of the Company’s Shares
Details of the issue of Shares from the date of incorporation of the Company are set out
in Annexure 9 to this Prospectus.
1.4.5 Voting rights
The MOI of the Company provides that, subject to any restrictions as to voting
attached to any Shares by or in accordance with the MOI and the JSE Listings
Requirements, every person present in person or by proxy, and entitled to vote at any
general meeting shall, on a show of hands, have only one vote but, upon a poll, each
such person shall have one vote for every share held or represented by him.
Any variation in rights attaching to Shares will require the consent of the holders of not
more than three-fourths of the issued Shares of that class, or with the sanction of a
resolution passed in the same manner as a special resolution of the Company at a
separate general meeting of the holders of the Shares of that class.
Annexure 15 to this Prospectus contains the relevant extracts from PL Group‟s MOI.
1.4.6 Loan capital and debentures
As at the date of this Prospectus, PL Group has no loan capital outstanding. In addition,
the Company has no debentures in issue at the Last Practicable Date.
1.5
OPTIONS OR PREFERENTIAL RIGHTS IN RESPECT OF SHARES [Regulation 61]
As at the Last Practicable Date, the Company had no contract or arrangement or
proposed contract or arrangement, whereby any option or preferential right of any
kind was proposed to be given to any person(s) to subscribe for any securities of the
Company or any securities of the Company‟s subsidiaries.
The Company has approved the Share Incentive Scheme as detailed in Annexure 18.
37
Fractions of Shares in PL Group will be treated in terms of the JSE Listings Requirements,
as amended from time to time. [Regulation 61(1)]
1.6
COMMISSIONS PAID OR PAYABLE IN RESPECT OF UNDERWRITING AND SHARE ISSUES
[Regulation 62]
No consideration such as commissions, discounts or other payments have been paid by
the Company in the preceding three years nor have any brokerages been granted in
respect of the issue or sale of any securities.
No commissions are payable in respect of the Prospectus as commission to any person
for subscribing or agreeing to subscribe or procuring or agreeing to procure
subscriptions for any securities in the Company other than as detailed in paragraph
1.13 of this Prospectus.
1.7
MATERIAL CONTRACTS [Regulation 63(1)(a), (b)]
1.7.1 Existing and/or proposed contracts
A list of existing contracts and/or proposed contracts relating to Directors‟ and
managerial remuneration, royalties and secretarial and technical fees payable by the
Company or any subsidiary of the Company are as follows:



Employment contracts have been concluded with all Executive Directors and
provide for a notice period of three months. These are standard employment
contracts and will not be varied on listing. The next annual review date for
employment contracts will be during 2017;
Arbor Capital Corporate Services has been appointed as Company Secretary of
PL Group and will be compensated a monthly retainer fee of R20 000 post listing
for such services; and
A management agreement has been entered into with Pembury Services, which
company provides administration services at the head office for an annual fee of
R1 632 000 for the 10 months ended 31 December 2016, R2 154 240 for the year
ending 31 December 2017 and R2 369 664 for the year ending 31 December
2018. The administration costs are based on a proportionate cost sharing of the
head office function, which also provides administration services for the
retirement business, which is not part of the PL Group. The services include
marketing, finance and other administration costs.
The Company has not been a party to any other material management agreements,
restraint of trade agreements or any other agreement in terms of which any royalty or
management fee is payable.
The Company has not entered into any agreement relating to the payment of
technical fees to the date of this Prospectus.
1.7.2 Material contracts
Material agreements entered into by, or in respect of, the Group, otherwise than in the
ordinary course of business, within the three years prior to the date of the Prospectus
are as follows:

the acquisition of unregistered portions of remainder of Portion 163 of the Farm
Elandsvlei 249 IQ Elandsvlei frail, being the current location of PLG Randfontein
Academy, which will open in 2018, for R5 500 000, excluding VAT from the
Randfontein Vendor in terms of the Randfontein Acquisition Agreement;
38







the acquisitions from the Raslouw Vendors of Portion 2 of Holding 54 for
R13 150 000, excluding VAT and the remainder of Holding 54, Raslouw Agricultural
Holdings for R3 500 000, being the current location of PLG Raslouw College which
opened in January 2017 and on which transfer duty will be payable in terms of
the Raslouw Acquisition Agreements;
the acquisition from the Spring Vendor of ERF 1729, Strubenvale EXT. 2, Springs,
being the current location of PLG Springs Academy which opened in January
2017, for a purchase consideration of R3 500 000, including VAT in terms of the
Springs Acquisition Agreement;
the acquisition from the Willow View Vendor of Portion 8 of the Farm Rietfontein
31 IR, Bredell Kempton Park, being the current location of Willow View Academy,
for a purchase consideration of R34 000 000, excluding VAT in terms of the Willow
View Acquisition Agreement;
the acquisition from the Allens View Vendor of ERF 640, Allensnek EXT. 35,
Roodepoort being the current location of PLG Allens View Academy which
opened in January 2017, for a purchase consideration of R7 500 000 in terms of
the Allens View Acquisition Agreement;
the acquisition from the Mellow Oaks Vendor of Portion 480 (a portion of portion
12) of the Farm Wilgespruit 190-IQ, Roodepoort being the current location of
PLG Mellow Oaks Academy for a purchase consideration of R12 250 000,
excluding VAT in terms of the Mellow Oaks Acquisition Agreement;
the acquisition from the Hartbeespoort Vendor of ERF 630, Xanadu EXT, 12 being
the current location of PLG Hartbeespoort Academy for a purchase
consideration of R22 000 000, which purchase price will increase by 8% per
annum in the event that the purchase consideration is not settled by 1 April each
year commencing from 1 April 2017; and
the acquisition from the Northriding Vendor of ERF 612, Portion 0, Northwold EXT.
13, Randburg, being the current location of PLG Northriding Academy for a
purchase consideration of R35 000 000, excluding VAT in terms of the Northriding
Acquisition Agreement.
The acquisition agreements with the Willow View Vendor and Northriding Vendor,
namely Zephan Properties, each contain a clause that requires PL Group to allot and
issue shares 5 days after the listing of the Company, totalling 24 000 000 shares, at the
issue price being R1.00 per share, as security for the two vendor loans, totalling
R24 000 000. Andrew McLachlan has issued a written undertaking to PL Group and
Zephan Properties that he will place 24 000 000 of his personal shares into trust as
security, in lieu of the Company. The Company has amended these two agreements
to reflect the above substitution of security. Thus, there will not be any further issue of
shares in relation to these acquisition agreements and Andrew McLachlan will take
over any remaining loan on the same terms and conditions as Zephan Properties.
The above properties are currently leased by PLG Schools. Commitments to purchase
the properties are in place in terms of the Acquisition Agreements and deposits have
been paid as detailed in paragraph 1.3.2.2 above. PL Group intends to proceed with
the transfer of the properties soon after listing, using the capital raised to settle the
balance of the respective purchase consideration, where after the Acquisition
Properties will be transferred into the name of PLG Properties. The Acquisition Properties
have not been ceded or pledged to any other parties.
39
A table summarising details of the above agreements is set out below:
Property
Raslouw 1
Raslouw 2
Springs
Hartbeespoort
(Note 1)
Allens View
Mellow Oaks
Randfontein
Willow View
(Note 2)
Northriding
(Note 2)
TOTAL
Effective
date of Consideration Goodwill
acquisition
R
R
Date of R13 150 000
transfer
Date of
R3 500 000
transfer
Date of
R3 500 000
transfer
Date of R22 000 000
transfer
Date of
R7 500 000
transfer
Date of R12 250 000
transfer
Date of
R6 000 000
transfer
Date of R34 000 000
transfer
Date of R35 000 000
transfer
R136 900 000
-
Nature
of Interest
Property
held 100%
Property
held 100%
Property
held 100%
Property
held 100%
Property
held 100%
Property
held 100%
Property
held 100%
Property
held 100%
Property
held 100%
Details of
Vendors
HJN Van
Rooyen
RG Pietersen
Fifth Season
Doxa Deo
CJJ Grobler
JH Van Dyk
Enterprises
Connie Mulder
Centre
Zephan
Properties
Zephan
Properties
Notes:
1. With regard to the Doxa Deo (Hartbeespoort) property, PLG Schools has assumed
all the obligations for the loan with DBSA on a back-to-back basis with Doxa Deo
and will continue to service the loan until such time as the DBSA loan is settled. The
loan is repayable by 2025 in monthly instalments of R87 000 and bears interest at
15%. The loan is secured by the property. In the event that the minimum
subscription is achieved, the DBSA loan will be settled in full.
2. The Willow View/Northriding vendor, namely Zephan Properties, has agreed to a
portion of the purchase consideration to be settled by way of two loans amounting
to R24 000 000 repayable after 24 months from date of signature of the
agreements, which loans will bear interest at 15% for the first 24 months and 18%
thereafter, in the event that the loans are not settled through the proceeds of the
Private Placement. The loans will be secured by the Willow View and Northriding
properties and the acquisition agreements provide for security of 24 000 000 Shares
to be allotted and issued at the listing price of R1.00. As this is not permitted in terms
of the JSE Listings Requirements, Andrew McLachlan has tendered 24 000 000
Shares as security and will take over the vendor loans on the same terms and
conditions, in the event that the Shares are transferred to Zephan Properties. Other
than as stated, no loans or finance were associated with the above acquisitions.
3. The date of transfer is expected to be approximately two months from the date
that guarantees are issued but can vary from property to property.
No book debts have been guaranteed nor any warranties given.
No restraints of trade or other restrictions have been placed on the vendors nor are
they considered necessary.
No agreements have been made in respect of accrued liabilities for tax.
Other than the above, there are no other contracts entered into that contain an
obligation or settlement that is material to PL Group or its subsidiaries at the Last
Practicable Date.
40
1.8
INTERESTS OF DIRECTORS AND PROMOTERS [Regulation 64(2)(a), (b)]
1.8.1 Directors’ interest in transactions
No consideration has been paid or been agreed to be paid to any Director or related
party or another company in which a Director has a beneficial interest or of which such
director is also a director, nor to any partnership, syndicate or other association of
which the director is a member to:
 induce the Director to become a director; or
 to qualify as a director; or
 for services rendered by the Director or by a company, partnership, syndicate or
other association in connection with the promotion or formation of the Company.
Andrew McLachlan, the founder of the Group and owner of Macrodev and Pembury
Services has had a number of transactions with PL Group as detailed in the related
party notes in Annexure 3A. Pembury Services provides administration services as
detailed in paragraph 1.7.1 above and as set out in Annexure 20.
Lou Brits and Christo Hechter have an interest in the acquisition of the Randfontein
Property. Both directors will receive a commission of R250 000 each upon the successful
transfer of the property into PLG Properties.
No other director, including a director who has resigned during the last 18 months, had
any material beneficial interests, whether direct or indirect, in transactions that were
effected by PL Group or its Subsidiaries.
1.8.2 Directors’ interest in securities [Regulation 60(a)(iii)]
As at the Last Practicable Date, the aggregate direct and indirect interests of the
Directors of PL Group and their associates in the issued share capital of the Company
(being 203 000 000 Shares), including former directors who have resigned in the past
18 months, before the Private Placement are indicated below:
Director
Andrew McLachlan
Riaan van Jaarsveld
Lou Brits
Christo Hechter
Grant Waters
Barry Moyo
Raphael Rakarasika*
Total
*
Direct
beneficial
178 216 700
300 000
3 000 000
3 000 000
100 000
100 000
50 000
184 766 700
Indirect
beneficial
-
Total
178 216 700
300 000
3 000 000
3 000 000
100 000
100 000
50 000
184 766 700
Percentage
(%)
87.79%
0.15%
1.48%
1.48%
0.05%
0.05%
0.02%
91.02%
resigned ahead of listing due to board restructure, but remains as a key employee
Associates
Joan Mary McLachlan
Minor child
Total
Direct
beneficial
12 000 000
70 000
12 070 000
Indirect
beneficial
-
Total
12 000 000
70 000
12 070 000
Percentage
(%)
5.91%
0.03%
5.94%
Andrew McLachlan is the controlling shareholder of PL Group prior to, and subsequent
to, the listing.
41
Riaan van Jaarsveld‟s employment contract provided for the allocation of 300 000
shares in PL Group, subject to him remaining with the Company for one year after
appointment. These shares have been allocated to him by Andrew McLachlan and
will remain in trust until 1 October 2017. In the event that Riaan van Jaarsveld leaves
PL Group before this date, the 300 000 shares will revert to Andrew McLachlan.
The aggregate direct and indirect interests of the Directors and their associates,
including former directors, of PL Group in the issued share capital of the Company after
the Private Placement being 353 000 000 Shares (assuming the Private Placement is fully
subscribed) are indicated below:
Director
Andrew McLachlan
Riaan van Jaarsveld
Lou Brits
Christo Hechter
Grant Waters
Barry Moyo
Raphael Rakarasika*
Total
*
Direct
Beneficial
188 216 700
300 000
3 000 000
3 000 000
100 000
100 000
50 000
194 766 700
Indirect
beneficial
-
Total
188 216 700
300 000
3 000 000
3 000 000
100 000
100 000
50 000
194 766 700
Percentage
(%)
53.32%
0.08%
0.85%
0.85%
0.03%
0.03%
0.01%
55.17%
resigned ahead of listing due to board restructure, but remains as a key employee
Associates
Joan Mary McLachlan
Minor child
Total
Direct
beneficial
12 000 000
70 000
12 070 000
Indirect
beneficial
-
Total
12 000 000
70 000
12 070 000
Percentage
(%)
3.40%
0.0%
3.42%
There have been no other changes to the above information up until the Last
Practicable Date.
In terms of paragraph 21.3(g) of the JSE Listings Requirements, 50% of the shares held by
the controlling shareholder and Directors will be held in trust by the Company‟s auditors
until the publication of the audited financial results for the year ending
31 December 2018, after which half will be released and the remaining balance one
year thereafter. The relevant securities may only be released after notifying the JSE of
the intention to so release.
The Designated Advisor will hold 3 000 000 shares in PL Group at the date of listing, of
which 50% thereof will be locked up in accordance with the JSE Listings Requirements
for companies listed on the AltX as described above for the directors of PL Group.
None of the directors, including a director who has resigned during the last 18 months,
had any material beneficial interests, whether direct or indirect, in transactions that
were effected by PL Group or its Subsidiaries, other than as disclosed in paragraph 1.8.1
of this Prospectus.
There are no non-beneficial direct or indirect interests held by Directors.
There are no promoters who have received fees or will receive any fees in relation to
the promotion or formation of the Company.
42
1.9
LOANS [Regulation 65]
1.9.1 Material loans made to the Company and the Group [Regulation 65(2) (a)]
Details of material loans made to the Company and the Group, as well as inter-group
borrowings, are set out in Annexure 10 to this Prospectus.
1.9.2 Material loans made by the Company or the Group
[Regulation 65(2)(b)]
Details of material loans made by the Company are set out in Annexure 10 to this
Prospectus.
1.9.3 Contingent liabilities, material capital commitments and material inter-company
balances
As at the Last Practicable Date, the Company and the Group had no contingent
liabilities, material capital commitments or material inter-company balances, other
than the amounts due in relation to the Property Acquisitions and inter-company
balances as detailed in Annexure 10.
1.10 SHARES ISSUED OR TO BE ISSUED OTHER THAN FOR CASH [Regulation 66]
The Company has issued 3 000 000 shares to Arbor Capital Sponsors on 28 November
2016 for services rendered in connection with the listing of PL Group in terms of the
letter of appointment, of which 50% of the shares are to be held in trust in accordance
with paragraph 21.3(g) of the JSE Listings Requirements.
Other than the above issue of shares, none of the Company‟s Shares have been issued
other than for cash in the three years immediately preceding the date of this
Prospectus and no other agreement has been entered into in terms of which the
Company‟s Shares will be issued other than for cash.
There have also been no repurchases by the Company of its Shares in the three years
immediately preceding the date of this Prospectus.
Similarly, the Subsidiaries have not issued or repurchased its shares during the three
years immediately preceding the date of this Prospectus.
1.11 PROPERTY ACQUIRED OR TO BE ACQUIRED OR DISPOSED [Regulation 67]
As at the Last Practicable Date, the Company is in the process of acquiring immovable
property as detailed in paragraph 1.3.7 and paragraph 1.7.2 above.
Neither the Company nor the Group has disposed of, and does not propose to dispose
of any immovable property or fixed assets to third parties.
1.12 AMOUNTS PAID OR PAYABLE TO PROMOTERS [Regulation 68]
No directors or promoters have any material beneficial interest in the Company‟s
promotion during current or immediately preceding financial year or during an earlier
financial year remaining outstanding or unperformed. Neither the Company nor its
Subsidiaries have paid any amount (whether in cash or in securities), nor given any
benefit to any promoters or any partnership, syndicate or other association of which a
promoter was a member within the three years preceding the Last Practicable Date or
in relation to the Private Placement.
43
1.13 PRELIMINARY EXPENSES AND ISSUE EXPENSES [Regulation 69]
The following expenses and provisions are expected, or have been provided for in
connection with the preparation of this Prospectus, the MOI and the Share Incentive
Scheme. All the fees payable to the parties below are exclusive of VAT.
Service
Legal advisors
Designated advisor
Registration of Prospectus
Documentation fees
Listing fee
Auditors and reporting accountants
Financial statement preparation
Printing and publishing
General provision
Sub-total
Capital raising fees
Total
Service provider
Paul Barnard Incorporated
Arbor Capital Sponsors
CIPC
JSE
JSE
Moore Stephens
Levitt Kirson
To be advised
Arbor Capital Sponsors
R
100 000
975 000
10 000
103 211
25 582
600 000
80 000
85 000
36 789
2 015 582
3 500 000
5 515 582
There are no preliminary expenses in the three years preceding the issue of this
Prospectus in PL Group.
A special resolution was passed by Pembury Services whereby Pembury Services
committed to confer the pre-incorporation or start- up costs to Pembury Schools
amounting to R2 424 778. Further details are set out in Annexure 3A.
A capital raising fee of 2.5% is payable on the raising of the R140 000 000 to Arbor
Capital Sponsors, who may share this fee with third parties such as stock brokers, in
order to ensure a successful placing.
Of the above estimated expenses, R2 015 582 has been estimated to be related to the
preparation of the Prospectus and listing costs and will have an effect on the
Statement of Comprehensive Income, whilst the balance of R3 500 000 has been
allocated to the cost of issuing shares and raising capital and will be set off against
stated capital.
44
SECTION 2 – INFORMATION REGARDING THE PLACED SECURITIES [REGULATION 56]
2.1
Purpose of the Private Placement [Regulation 70]
The rationale for the listing of PL Group on the AltX is set out below:
 to raise capital to use for:
o the settlement of property vendor obligations of approximately R87 million;
o the reduction of debt, such as the back-to back funding with DBSA through the
Hartbeespoort Acquisition;
o working capital; and
o planned capital expenditure on school sites over the 2017 year;
 to have access to additional capital for future growth and acquisitions;
 to acquire new sites;
 to afford investors a further opportunity to invest in the education sector and, in due
course to invest in the retirement sector;
 to provide the Group with a platform to improve its business profile and visibility;
 to increase the liquidity of the shares of the Company and widen our investor base;
 to grow into new markets in South Africa and the rest of Africa; and
 to offer shares option and incentives to employees and future employees.
In addition, PLG Schools operates in a demand driven market and listed competitors in
the Education Sector are considered desirable investments. It is thus envisaged that
the listing of PL Group will attract considerable investor appetite upon the Company‟s
listing.
The Group as it stands as an education business before acquiring the various properties
does not immediately need working capital and does not have current funding
requirements as the group, through its founder, has secured the various properties over
the past two years through which the current school operations are conducted and he
has continued to fund the improvements and operations. However, it is the intention to
raise as much capital as possible on listing in order to fast track the transfer of the
Acquisition Properties as well as the acquisition and roll out of additional educational
facilities, thereby reducing the reliance on the founder. Loan funding of R24 000 000
has also been secured by the Group as part of the Willow View Acquisition Agreement
and the Northriding Acquisition Agreement.
A minimum capital amount will be raised in order to ensure that the Company meets
the shareholder spread requirements of the JSE. In addition to the above, the
Company aims to secure the transfer of the Acquisition Properties, despite underlying
lease agreements or agreements for monthly payments or occupational rent being in
place.
This minimum amount has been set at R140 000 000, as certain Acquisition Property
Vendors have contracted to provide vendor loans for a portion of the purchase
consideration, in the amount of R24 000 000.
A minimum subscription of R140 000 000 has accordingly been set as further detailed in
paragraph 2.4 below.
As at the date of this Prospectus, PL Group is not listed on any Stock Exchange.
45
2.2
Time and date of the opening and closing of the Private Placement [Regulation 71]
2017
2.3
Date on which the Private Placement (comprising the Private
Placing and Preferential Offer) contemplated in this
Prospectus will be open at 09h00 on
Thursday, 9 March
Date on which the abridged prospectus will be released on
SENS
Thursday, 9 March
Date on which the Private Placement (comprising the Private
Placing and Preferential Offer) contemplated in this
Prospectus will close at 12h00 on
Friday, 24 March
Date on which shareholders will be advised of their allocations
Monday, 27 March
Date on which funds will be debited from shareholders‟
accounts or payments made into the Company‟s bank
account
Tuesday, 28 March
Date on which the results of the Private Placement will be
released on SENS
Wednesday,
29 March
Date on which shares will reflect in shareholders‟ accounts
Friday, 31 March
Listing of securities on the JSE at 9h00 on
Friday, 31 March
Particulars of the Private Placement [Regulation 72]
2.3.1 Issue price of the ordinary Shares in this Private Placement
The Company‟s capital structure and alterations to the share capital since
incorporation and preceding the date of this Prospectus are set out in Annexure 9.
The Directors have resolved, via the required resolutions, authorisations and approvals,
to issue 140 000 000 ordinary shares of no par value at 100 cents per share in terms of
the Private Placement of which 40 000 000 ordinary shares of no par value at 100 cents
will be made available for the Preferential Offer. The Directors consider this price to be
justified by the prospects of the Company and the Group.
2.3.2 What the Private Placement comprises
The Private Placement comprises:
 a Preferential Offer of 40 000 000 ordinary shares of no par value at 100 cents each;
and
 a further 100 000 000 shares of no par value at 100 cents per share by way of a
Private Placing.
Participants eligible for the Preferential Offer are set out in the definitions contained in
this Prospectus. To the extent that the Preferential Offer is not fully taken up, applicants
for the Private Placing will be able to participate in the Preferential Offer.
Applications for the subscription may only be made on the forms which are enclosed
with this Prospectus. Applications are irrevocable and may not be withdrawn once
received by PL Group. Application forms must be completed in accordance with the
provisions of this Prospectus and the instructions as set out in the application form.
Applications must be for a minimum of 2 000 Shares and in multiples of 100 thereafter.
46
In the event of an over-subscription, the formula for the basis of allotment will be
calculated in such a way that a person will not, in respect of his application, receive an
allocation of a lesser number of securities than any other subscriber who applied for the
same number or a lesser number of securities and will be determined by the Directors
on an equitable basis in line with the JSE Listings Requirements.
Shares will be tradable on the JSE in dematerialised form only and as such, all
shareholders who elect to receive certificated Shares will first have to dematerialise
their certificated Shares should they wish to trade therein. Applicants are advised that it
takes between one and ten days to dematerialise certificated Shares depending on
the volumes being processed by Strate and Link Market Services at the time of
dematerialisation.
Disadvantages of holding shares in certificated form include:
 The current risks associated with the holding of shares in certificated form, including
the risk of loss, in respect of tainted scrip, remain; and
 When a shareholder, holding certificated shares wishes to transact on the JSE, such
shareholder will be required to appoint a CSDP or a stockbroker to dematerialise the
relevant ordinary shares prior to a stockbroker being able to transact in such shares.
Such dematerialisation can take up to ten days. A certificated shareholder will have
no recourse in the event of delays occasioned by the validation process or the
acceptance or otherwise of the certificated shares by a CSDP.
Application for dematerialised shares where the applicant has a CSDP or broker:
 Applications may only be made on the relevant application form attached to this
Prospectus. Photocopies or other reproductions may be rejected.
 The application form must be completed and delivered to the applicant‟s duly
authorised CSDP or broker, as the case may be, at the time and on the date
stipulated in the agreement governing their relationship with their CSDP or broker:
 The brokers will collate all their respective applications and forward the instruction to
the brokers‟ nominated CSDPs;
 The CSDPs will collate all the applications received from brokers and/or applicants
and notify the Transfer Secretaries; and
 Payment will be effected against delivery of shares.
Applications for certificated shares:
 Applications for certificated shares are no longer permitted in terms of the FMA.
Applicants that do not have a CSDP or a Stockbroker can be assisted by Link Market
Services to open an account.
Payment may only be made by cheque, banker‟s draft or electronic transfer. Postal
orders or cash will not be accepted. The cheque or banker‟s draft must be attached
to and submitted with the relevant application form. Cheques must be crossed “not
negotiable”, “not transferable” and made payable in favour of “PL Group”. Applicants
will be obliged to provide such documentary or other information as may be required
on demand in order to satisfy the requirements of the Financial Intelligence Centre Act
38 of 2001, failing which an application may be rejected at the discretion of the
Directors of the Company.
47
Application forms must be lodged with Link Market Services South Africa Proprietary
Limited so as to be received by no later than 12h00 on Friday, 24 March 2017:
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
NO LATE APPLICATIONS WILL BE ACCEPTED.
Each envelope should contain only one application form and must be clearly marked
“PL Group Issue”. No receipts will be issued for applications and remittances.
Applications will only be regarded as complete when the relevant cheque/banker‟s
draft/electronic funds transfer has been paid. All capital raised is payable in the
currency of South Africa and will be deposited with ABSA Bank Limited immediately
upon receipt by the Company, and will be utilised to pay for the costs of this
Prospectus. Should any cheque or banker‟s draft be dishonoured, the Directors of the
Company may, in their absolute discretion, regard the relevant application as revoked
and take such other steps in regard thereto as they may deem fit.
Shares may not be applied for in the name of a minor, deceased estate or partnership.
No documentary evidence of capacity to apply need accompany the application
form, but the Directors reserve the right to call upon any applicant to submit such
evidence for noting, which evidence will be returned at the applicant‟s risk. Shares will
be allocated in certificated form if the application form is received by the Transfer
Secretaries directly from the applicant and no duly completed custody mandate
accompanies such form.
PL Group Shares will trade on the JSE utilising the Strate settlement procedure. The
principal features of Strate are:
 Trades executed on the JSE must be settled within three business days;
 Penalties apply for late settlement;
 An electronic record of ownership replaces share certificates and physical delivery
of share certificates; and
 All investors are required to appoint either a broker or a CSDP to act on their behalf
and to handle their settlement requirements.
2.3.3 Issue of Shares
All Shares offered in terms of this Prospectus will be allotted and issued at the expense
of PL Group under the provisions of the FMA.
All Shares offered in terms of this Prospectus will be allotted subject to the provisions of
PL Group‟s MOI and will rank pari passu in all respects with existing Shares.
PL Group will use the “certified transfer deeds and other temporary documents of title”
procedure approved by the JSE and only “block” certificates will be issued for Shares
allotted in terms of this Prospectus or deposited with the CSDP.
For applicants who subscribe for dematerialised Shares, their duly appointed CSDP or
broker will receive the dematerialised Shares on their behalf on transfer of the
applicant‟s consideration for the Shares by the duly appointed CSDP or the broker to
the transfer secretaries.
48
2.3.4 Exchange Control Regulations
The following summary is intended as a guide and is therefore not comprehensive. If
you are in any doubt hereto, please consult your professional advisor.
"In terms of the Exchange Control Regulations of the Republic of South Africa:
 A former resident of the Common Monetary Area who has emigrated, may use
emigrant blocked funds to subscribe for Shares in terms of this Prospectus;
 All payments in respect of subscriptions for Shares by an emigrant, using emigrant
blocked funds, must be made through the Authorised Dealer in foreign exchange
controlling the blocked assets;
 Any Shares issued pursuant to the use of emigrant blocked funds, will be credited to
their blocked share accounts at the Central Securities Depository Participant
controlling their blocked portfolios;
 Shares subsequently re-materialised and issued in certificated form will be endorsed
“Non-Resident” and will be sent to the Authorised Dealer in foreign exchange
through whom the payment was made; and
 If applicable, refund monies payable in respect of unsuccessful applications or
partly successful applications, as the case may be, for Shares in terms of this
Prospectus, emanating from emigrant blocked accounts, will be returned to the
Authorised Dealer in foreign exchange through whom the payments were made, for
credit to such applicants‟ blocked accounts.
Applicants resident outside the Common Monetary Area should note that, where
Shares are subsequently re-materialised and issued in certificated form, such share
certificates will be endorsed “Non-Resident” in terms of the Exchange Control
Regulations.”
2.4.
Minimum subscription [Regulation 73]
In the opinion of the Directors, a minimum subscription of R140 000 000 is required. This
will be applied as follows:
Use of minimum subscription:
Payment of Willow View/Northriding Vendor
Payment of Raslouw Vendors
Payment of Mellow Oaks Vendor
Payment of Allens View Vendor
Payment of Randfontein Vendor
Payment of Springs Vendor
Sub-total to be paid to property vendors, including commission
Settlement of DBSA loan through Doxa Deo (31 August 2016
balance)
Settlement of trade and other payables (R9 906 932 at 31 August
2016), listing costs and commission of R500 000 in relation to the
Randfontein acquisition
Increase in cash and cash equivalents, available for construction of
new classrooms and facilities (planned over 2017) and additional
working capital
Total
R
45 000 000
15 950 000
11 250 000
7 000 000
5 000 000
3 300 000
87 500 000
20 954 178
13 006 932
18 538 890
140 000 000
Certain of the costs associated with listing have already been settled as at the Last
Practicable Date.
49
The Company is also required to meet the minimum spread requirement of at least
10% to be held by the general public as defined in the JSE Listings Requirements, which
will amount to approximately R35 000 000 or 35 000 000 shares at 100 cents per share.
The Private Placing will include, inter alia, retail investors, stockbroking firms, hedge and
small-cap funds and asset managers in order to ensure liquidity. The controlling
shareholder, Andrew McLachlan, has also agreed to capitalise R10 000 000 of the
related party loan from Pembury Services through the issue of 10 000 000 shares at R1.00
per share. Thus, the total offer will be 150 000 000 new shares at R1.00 per share
(comprising the R140 000 000 minimum subscription and the R10 000 000 capitalisation
of the related party loan).
In the event that the shareholder spread, and the minimum subscription, is not
achieved, monies will be refunded to all applicants. The Company has 0.5% shares
held by the general public as defined in the JSE Listings Requirements at the Last
Practicable Date.
The Company expects to raise the full amount offered in this Prospectus and achieve
the spread of shareholders required.
All amounts raised will be utilised to settle the property vendor obligations, expand the
existing properties (primarily construction of additional classroom) as the pupil numbers
grow, reduce the related party loans by R10 000 000 and provide for the further working
capital of the Company and the Group, as stated in the pro forma financial statements
in the Prospectus.
2.5
Shareholder information
No shareholder, other than a director and his associate, holds more than 5%, at the Last
Practicable Date.
Prior to the implementation of the Private Placement and Preferential Offer and as at
the Last Practicable Date, the following shareholders (including directors and their
associates) beneficially held, directly or indirectly, 5% or more of the issued share
capital of the Company:
Before the Private Placement (based on 203 000 000 shares in issue)
Shareholder
Andrew McLachlan
Joan Mary McLachlan
Total
Number of Shares
%
178 216 700
87.79%
12 000 000
5.91%
190 216 700
93.70%
Following the implementation of the Private Placement and Preferential Offer (based
on 353 000 000 shares in issue), the following shareholders are anticipated to hold
beneficially, directly or indirectly, 5% or more of the issued share capital of the
Company:
Shareholder
Number of Shares
%
Andrew McLachlan
188 216 700
53.32%
Total
188 216 700
53.32%
50
SECTION 3 – STATEMENTS AND REPORTS RELATING TO THE PRIVATE PLACEMENT [REGULATION 56]
3.1
Statement of adequacy of capital [Regulation 74]
From 2017, four of the seven campuses are already profitable or will break-even and
will generate positive cash flow. PLG Northriding Academy and PLG Willow View
Academy have high occupational rent but once the respective properties are
acquired, these schools will also become profitable and generate positive cash flow.
Only PLG Raslouw College, which was opened in January 2017, is projected to incur a
loss for the year ending 31 December 2017 and will thus require funding support from
PL Group.
Accordingly, the Directors of the Company are of the opinion that the working capital
of PL Group both before and pursuant to the Property Acquisitions and the Private
Placement, is sufficient for the Group‟s present requirements, that is, for a period of at
least the next 12 months from the date of issue of this Prospectus.
Arbor Capital Sponsors, the Company‟s designated advisor, has confirmed that it has
obtained written confirmation from the Directors that the working capital available to
the Group is sufficient to meet the requirements of the Group for at least the next
12 months from the date of issue of this Prospectus. The designated advisor is satisfied
that this confirmation has only been given after due and careful enquiry by the
Directors.
3.2
Report by Directors as to material changes [Regulation 75]
The financial information of PL Group for the year ended 29 February 2016 is set out fully
in Annexure 1 and Annexure 3A of this Prospectus and the reviewed information for the
six months ended 31 August 2016 is set out in Annexure 3B.
Save as disclosed in this Prospectus, there have been no other material changes in the
financial and trading position of the Company and the Group since 31 August 2016
and the date of this Prospectus.
3.3
Statement as to listing on a stock exchange [Regulation 76]
The Company‟s Shares are not listed on any stock exchange at the Last Practicable
Date. In anticipation of the Listing, the Company has submitted an application for its
Shares to be listed on the JSE with effect from the commencement of business on
Friday, 31 March 2017. The JSE has approved the listing of PL Group, subject to the
Company achieving the minimum subscription and the spread of public shareholders
required in terms of the JSE Listings Requirements relating to AltX.
3.4
Report by the auditor when a business undertaking is to be acquired [Regulation 77]
No proceeds of this Private Placement or any part of the proceeds of the issue of
securities or any other funds are to be applied directly or indirectly in the purchase of
any business undertaking.
51
3.5
Report by the auditor when the Company will acquire a subsidiary [Regulation 78]
This Private Placement to the public does not coincide, directly or indirectly, with the
acquisition by the Company, or its Subsidiaries, of securities in or of the business
undertaking of any other company, in consequence of which that company or
business undertaking will become a subsidiary of or part of the business of PL Group.
3.6
Reports by the auditor of the Company [Regulation 79]
In terms of Regulation 79 of the Companies Act, the auditor is required to prepare a
report on the profits and losses, dividends and assets and liabilities of the Company and
the Group. In this regard, Annexure 1 and Annexure 2 of this Prospectus sets out the
financial information and the auditor‟s report in respect of the financial information
required.
52
SECTION 4 – ADDITIONAL MATERIAL INFORMATION [Regulation 56]
The following additional disclosures are made in respect of the Company and Group in
accordance with section 6 of the JSE Listings Requirements:
4.1
Litigation statement
There are no legal or arbitration proceedings, including any proceedings that are
pending or threatened, of which the Company and Group is aware that may have or
have had in the last 12 months, a material effect on the Company‟s or the Group‟s
financial position.
4.2
Experts’ consents
Each of the parties listed under Corporate Information on page 3 has consented in
writing to act in the capacities stated and to their names appearing in this Prospectus
and have not withdrawn their consent prior to the publication of this Prospectus.
The independent reporting accountants have consented in writing to have their reports
appear in the Prospectus in the form and context as they appear and have not
withdrawn their approval prior to the publication of this Prospectus.
The independent property valuer has consented in writing to have his summary report
appear in the Prospectus in the form and context as it appears and has not withdrawn
his approval prior to the publication of this Prospectus.
4.3
Directors’ responsibility statement
The Directors of the Company, whose names are given in Section 1, paragraph 1.2 of
this Prospectus, collectively and individually, accept full responsibility for the accuracy
of the information provided in this Prospectus and certify that to the best of their
knowledge and belief there are no facts relating to the Company and Group that
have been omitted which would make any statement relating to the Company or
Group false or misleading, that all reasonable enquiries to ascertain such facts have
been made and that this Prospectus contains all information relating to the Company
or Group required by law and the JSE Listings Requirements.
4.4
Vendors and controlling shareholders
The controlling shareholder of PL Group is Andrew McLachlan. Details of the individual
shares and percentages held are set out in paragraph 1.8.2 of this Prospectus.
There has been no change in controlling shareholder or trading objects of the
Company in the past five years.
There are no vendors associated with the listing of PL Group.
53
SECTION 5 – INAPPLICABLE OR IMMATERIAL MATTERS [REGULATION 56]
The following paragraphs of the Companies Regulations dealing with the requirements for a
Prospectus are not applicable to this Prospectus:
[52(2), 55, 57(2), 58(3)(d), 59(2)(a), 60(c), 61, 62, 65(2)(b), 66, 68, 69(a), 69(b), 70(b), 72(2),
72(3), 74(b), 75, 77, 78 and 80]
By order of the Board
Andrew McLachlan
Chief Executive Officer
Registered office
111 9th Street
Fairland
2030
(PO Box 73723, Fairland, Gauteng, 2170)
SIGNED AT FAIRLAND ON 3 MARCH 2017 ON BEHALF OF ALL THE DIRECTORS OF PEMBURY
LIFESTYLE GROUP LIMITED
54
ANNEXURE 1
FINANCIAL INFORMATION REQUIRED IN TERMS OF REGULATION 79 OF THE COMPANIES ACT IN
RESPECT OF THE COMPANY AND GROUP
In terms of Regulation 79 of the Companies Act, this Annexure 1 includes the consolidated
historical profits of the Company and Group as well as the dividends paid for the years ended
29 February 2016 and 28 February 2015 and its consolidated statement of financial position as
at 29 February 2016 and 28 February 2015.
Group
Net loss before taxation
Net loss after taxation
Dividends paid
Year
ended
29 February 2016
(7 525 275)
(5 483 531)
-
Year
ended
28 February 2015
-
Company
Net profit before taxation
Net profit after taxation
Dividends paid
Year
ended
29 February 2016
-
Year
ended
28 February 2015
-
Period
ended
28 February 2014
-
Period
ended
28 February 2014
-
The main operating subsidiary, namely PLG Schools, only commenced operations during the
year ended 29 February 2016, with the other two subsidiaries remaining dormant. The group
had no operations for the year ended 28 February 2015 and the period from incorporation to
28 February 2014.
55
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Group
Figures in Rand
ASSETS
Non-Current Assets
Property, plant and equipment
Goodwill
Deferred tax
Year ended
Year ended
29 February 2016 28 February 2015
Period ended
28 February 2014
30 949 318
26 215 560
2 692 014
2 041 744
-
-
1 468 062
1 446 152
21 910
100
100
Total Assets
32 417 380
100
100
EQUITY AND LIABILITIES
Equity
Stated capital
Accumulated loss
(5 483 531)
100
(5 483 431)
100
-
100
-
Liabilities
Non-Current Liabilities
Financial liability
Finance lease liabilities
Loan from related party
28 425 909
777 017
20 079 638
7 569 254
-
-
9 474 902
1 082 431
1 055 715
7 336 756
-
-
Total Liabilities
37 900 811
-
-
Total Equity and Liabilities
32 417 380
100
100
200 000 000
200 000 000
200 000 000
(2.74)
(4.08)
0.00005
0.00005
0.00005
0.00005
Current Assets
Trade and other receivables
Cash and cash equivalents
Current Liabilities
Financial liability
Finance lease liabilities
Trade and other payables
Number of shares in issue (Post
sub-division)
Net asset value per share (cents)
Net tangible asset value per
share (cents)
56
Company
Year ended
29 February 2016
Year ended
28 February 2015
Period ended
28 February 2014
100
100
100
100
-
100
100
100
100
100
100
100
-
100
100
-
100
100
-
Liabilities
Non-Current Liabilities
-
-
-
Current Liabilities
Trade and other payables
-
-
-
Total Liabilities
-
-
-
100
100
100
200 000 000
200 000 000
200 000 000
0.00005
0.00005
0.00005
0.00005
0.00005
0.00005
Figures in Rand
ASSETS
Non-Current Assets
Investment in subsidiary
Current Assets
Cash and cash equivalents
Total Assets
EQUITY AND LIABILITIES
Equity
Stated capital
Accumulated loss
Total Equity and Liabilities
Number of shares in issue (Post
sub-division)
Net asset value per share (cents)
Net tangible asset value per
share (cents)
57
ANNEXURE 2
AUDITORS REPORT ON THE FINANCIAL INFORMATION OF PEMBURY LIFESTYLE GROUP LIMITED IN
TERMS OF REGULATION 79 OF THE COMPANIES ACT
“2 March 2017
The Directors
111 9th Street
Fairland
2030
Dear Sirs
AUDITORS REPORT ON THE FINANCIAL INFORMATION OF PEMBURY LIFESTYLE GROUP LIMITED
(“PL GROUP”) IN TERMS OF REGULATION 79 OF THE COMPANIES ACT
We have agreed to provide a report on PL Group‟s financial information included in
Annexure 1 of the Prospectus to be issued on or about, 3 March 2017 (“the Prospectus”) for
purposes of complying with Regulation 79 of the Companies Act 71 of 2008 (“the Act”). In
terms of Regulation 79 of the Act, a company issuing a prospectus is required to provide
financial information comprising of the following:
 The profits and losses for the three financial years preceding the date of the Prospectus;
 The rates of the dividends, if any, paid by the Company in respect of each class of
securities of the company in respect of each of the three financial years immediately
preceding the issue of the Prospectus; and
 The assets and liabilities as at the last date to which the annual financial statements were
made out
(collectively “the regulation 79 financial information”).
Moore Stephens FRRS Incorporated is the appointed auditor of PL Group.
We have audited the annual financial statements of PL Group for the year ended
29 February 2016. We have expressed an unqualified audit opinion in respect of PL Group‟s
annual financial statements for the aforementioned period. Our audit was conducted in
accordance with International Standards on Auditing and the financial statements prepared
in accordance with International Financial Reporting Standards. We have not performed any
audit procedures subsequent to our audit opinions in respect of the year ended 29 February
2016. On 31 August 2016 PL Group changed its financial year end from Februay to
December.
Extraction of financial information
The regulation 79 financial information detailed in Annexure 1 is an extraction from PL Group‟s
annual financial statements for the year ended 28 February 2016. As a result of the
Regulation 79 financial information being an extraction from annual financial statements we
can report the following:
 The financial information is free from material misstatement and has been prepared on a
basis consistent with the Act;
 The trade debtors and creditors as at 29 February 2016 include no material amount that is
not a trade account;
 The provision for doubtful debts at 29 February 2016 appear to be adequate;
58
 Intercompany profits in the group have been eliminated;
 No dividends were paid to any class of securities in respect of any of the preceding three
financial years before the year ending 29 February 2016;
 No annual financial statements were made out by or for the company in respect of any
part of the three years before the year ending 29 February 2016.
Material changes in the assets and liabilities
In accordance with Regulation 79 (4)(b)(v), Moore Stephens FRRS Incorporated is required to
include a statement in its report, as to whether there have been any material changes in the
assets and liabilities of PL Group since the date of the latest available financial statements.
Our engagement was undertaken in accordance with the International Standards on
Related Services applicable to agreed-upon procedures engagements. The procedures
were performed solely to assist you in complying with regulation 79 (4)(b)(v) of the
Companies Act. The following procedures were performed:
 Review the latest available management accounts of PL Group;
 Review minutes of the board of Directors of PL Group since the financial year end; and
 Obtain a letter of representation from PL Group‟s management confirming that there
have been no significant changes to the financial position of the Group since the financial
year end.
Based on the aforementioned procedures, nothing has come to our attention that would
indicate that there has been a material change in the assets and liabilities of PL Group since
its last financial year end.
Because the above procedures do not constitute either an audit or a review made in
accordance with International Standards on Auditing or International Standards on Review
Engagements, we do not express any assurance on the procedures.
Had we performed additional procedures or had we performed an audit or review of the
financial statements in accordance with International Standards on Auditing or International
Standards on Review Engagements, other matters might have come to our attention that
would have been reported to you.
Our report is solely for the purpose of complying with Regulation 79 (4)(b)(v) and for your
information. This report relates only to the items specified above, and does not extend to any
financial statements of PL Group.
We hereby consent to the inclusion of this letter in its entirety in the Prospectus to be issued on
or about 3 March 2017.
Yours faithfully
Moore Stephens FRRS Incorporated
Chartered Accountants (SA)
Registered Auditors
Per L.B. Roberts
Director
Moore Stephens House,
18 Lakeview Crescent, Kleinfontein Lake, Benoni, 1501,
(PO Box 663, Benoni, 1500)”
59
ANNEXURE 3A
HISTORICAL FINANCIAL INFORMATION OF PL GROUP FOR THE YEAR ENDED 29 FEBRUARY 2016
This annexure contains a report on the historical financial information of PL Group. The
information is taken from the audited annual financial statements which were prepared in
the manner required by the Act, where applicable, and in accordance with IFRS and were
audited and reported on without qualification by Moore Stephens for the year ended
29 February 2016. The information has been extracted from the annual financial statements
of PL Group. The information presented in this Annexure 3A is the responsibility of the Directors
of PL Group.
Moore Stephens has been appointed as the independent reporting accountants in
accordance with the JSE Listings Requirements and its special purpose audit report on the
audited financial information is contained in Annexure 4A to this Prospectus. There are no
facts or circumstances that are material to an appreciation of the state of affairs, financial
position, changes in equity, results of operations and cash flows of the Group that have not
been dealt with in the financial information.
The executive committee comprises of Andrew McLachlan (Chief Executive Officer) and
Riaan van Jaarsveld (Financial Director) and has been formed ahead of the listing in January
2017. The executive committee has made all management decisions since formation and
ahead of the listing. Prior to the appointment of the Financial Director, Andrew McLachlan
made all management decisions.
Other than the securing of additional properties in order to open up the three new
PLG Schools campuses in 2017, there has been no material change in the nature of the
business of the Group since 29 February 2016 up to the Last Practicable Date.
No adjustments were required to be made to the financial information of PL Group used in
preparing the report of historical financial information in relation to retrospective application
of changes in accounting policies or retrospective correction of fundamental errors.
Review of activities Main business and operations
PL Group focuses mainly on providing accessible, affordable, private education to preprimary, primary and high school students. The Company operates as a holding company to
three subsidiaries, namely:
 PLG Schools, the education segment;
 PLG Properties, the school property company; and
 PLG Retirement Villages, the retirement segment (dormant).
As the holding company, PL Group centrally manages the administration of the three Group
subsidiaries and is responsible for the strategic direction thereof. The main revenue driver of
the group is the education segment, primarily comprising school and boarding fees.
The year end of the Company is 31 December each year. This was changed from the last
day of February on 31 August 2016.
The state of affairs of the Company are fully set out in the attached special purpose financial
statements and do not in our opinion require any further comment.
60
Statement of financial position
The statement of financial position reflects the assets and liabilities of the PL Group as at
29 February 2016, being the first year end of the Group. The Hartbeespoort Property
acquired under a financial lease, has been adjusted to the independent valuation of
R40 000 000 at year end.
Statement of Comprehensive Income
The statement of Comprehensive Income reflects the results of the first year of operations of
the PL Group for the year ended 29 February 2016.
Statement of Changes in Equity
The Statement of Changes in Equity reflects the loss for the year under review, being the first
year of operations.
Statement of Cash Flows
The Statement of Cash Flows reflects that the cash required in operations was funded
primarily from related party loans.
Authorised and issued share capital
The authorised share capital is 1 000 000 000 ordinary shares of no par value and 200 000 000
issued shares of no par value.
In anticipation for the Listing, 100 ordinary shares were sub-divided into 200 000 000 shares of
no par value by way of a special resolution passed on 28 November 2016. On the same day,
the issue of 3 000 000 shares to Arbor Capital Sponsors was approved in terms of the letter of
appointment. No additional shares have been, or have been committed to be, issued after
the Last Practicable Date, other than the Shares to be issued as part of the Private
Placement.
There are no convertible securities in issue at the Last Practicable Date.
There were no share or option schemes in existence in the Group as at the Last Practicable
Date other than the recently approved Share Incentive Scheme introduced ahead of the
Listing. Extracts of the salient features of the Share Incentive Scheme are set out in
Annexure 18.
Dividends [Regulation 79(1)(b)]
No dividends have been declared from the period between 29 February 2016 and the Last
Practicable Date.
Holding Company
The Company does not have a holding company and is controlled by Andrew McLachlan.
Interest in Subsidiaries
Details regarding the Company‟s subsidiaries are disclosed in Annexure 12 of this Prospectus.
Going concern review
The financial statements have been prepared on the basis of accounting policies applicable
to a going concern. This basis presumes that funds will be available to finance future
operations and that the realisation of assets and settlement of liabilities, contingent
obligations and commitments will occur in the ordinary course of business.
The ability of the Group and Company is to continue as a going concern is dependent on a
number of factors. The most significant of these is that the directors continue to procure
funding for the on-going operations for the Group and the Company and to restore
profitability.
61
The group has obtained a letter of support from the founder and majority shareholder for at
least the next twelve months from the date of the financial statements. The cash flow
forecast indicates that the schools will have positive cash flows in the next two years based
on the fact that the schools are reaching 50% occupancy levels.
The Chief Executive Officer is confident that the profitability will be restored due to the fact
that the schools were not operational for a full financial year and were not running at full
capacity. Two out of the five schools only traded for two months during the financial year
which had a significant impact on the costs and start-up costs were incurred in the amount
of R2 424 778. In the current year, the group had to provide for doubtful debts in the amount
of R951 843. Management intends on implementing strict controls over the debtors and has
started with a debtor recovery plan which include debt recovery agents for older debt
while a stringent policy on attendance for short term defaulters are enforced. Furthermore,
management will be opening three new schools in January 2017 and the number of new
registrations of students has already exceeded management‟s expectations as included in
their profit and cash flow forecasts. Costs will be centrally monitored closely and
management intends to invest in an aggressive marketing strategy to ensure sufficient
growth in student numbers for existing and new schools. This together with the debt recovery
and cost control focus will ensure that the new entities reach breakeven much quicker.
The land and buildings were purchased at a discount and were revalued at 31 August 2016
to R40 million, which increases the reserves of the entity, after tax, by R13 968 000. Therefore,
the assets, fairly valued, exceed the liabilities and the entity is technically solvent. In addition
to this the related party loan in the amount of R7 569 254 was subordinated in favour of
other creditors until such time as the assets fairly valued exceeds the liabilities.
Management is confident that there is no uncertainty in terms of the going concern
assumption. Accordingly, the Directors have adopted the going concern basis in the
preparation of the financial statements.
Events after the reporting period
Save for the private placement set out in this Prospectus, the Directors are not aware of any
matter or circumstance arising since the end of the financial year that has a material impact
on the financial statements other than the expected adjustment for the fair value of the
properties to be acquired, net of a provision for deferred taxation at capital gains tax rates.
Borrowing limitations
In terms of the MOI of the Company, the Directors may exercise all the powers of the
Company to borrow money, as they consider appropriate. Furthermore, the Directors shall
procure that the aggregate principal amount at any one time outstanding in respect of
moneys borrowed or raised by the Company and all the Subsidiaries shall not exceed, to the
extent applicable, the aggregate amount authorised.
Directors
Andrew McLachlan and Christo Hechter were the only directors of the Company as at
29 February 2016. Subsequent to year-end, new director appointments were made.
Accordingly, the Directors of the Company as at the date of approval of the financial
statements set out below were:






Andrew McLachlan;
Riaan van Jaarsveld;
Lou Brits;
Christo Hechter;
Grant Waters; and
Barry Moyo.
62
Interest in Subsidiaries acquired post year end
The Company has not acquired an interest in any new Subsidiaries after year end.
Special and other resolutions
Shareholders passed the following special resolutions at a General Meeting held on
28 November 2016 ahead of the listing of the Company:
 Adoption of a new MOI in order to ensure compliance of the MOI with the JSE Listings
Requirements;
 Increase in authorised share capital;
 Subdivision of shares ahead of the Listing.
Other than the above, there have been no other changes to the share capital from the date
of incorporation of the Company.
In addition to the above, the following ordinary and special resolutions were passed:
 It was resolved that financial assistance in terms of section 44 and 45 of the Companies
Act be approved for all group companies. The Directors are satisfied that all criteria as per
section 44 and section 45 of the Companies Act were met;
 Non-executive Directors‟ remuneration for the period commencing 1 October 2016 was
approved;
 Approval of an employee share incentive scheme;
 Authority to repurchase shares was approved in accordance with the JSE Listings
Requirements; and
 A general authority to issue shares for cash was approved in accordance with the JSE
Listings Requirements in anticipation of the intended listing on the JSE.
Auditors
Moore Stephens has been appointed as the auditor and will continue in office in
accordance with section 90 of the Act.
Liquidity and solvency
The Directors have performed the required liquidity and solvency tests as and when required
by the Companies Act.
63
Consolidated Statement of financial position
Figures in Rand
ASSETS
Non-Current Assets
Property, plant and equipment
Goodwill
Deferred tax
Current Assets
Trade and other receivables
Cash and cash equivalents
Total Assets
Notes
4
5
6
8
9
Group
Year ended
Year ended
29 February 2016
28 February 2015
30 949 318
26 215 560
2 692 014
2 041 744
-
1 468 062
1 446 152
21 910
32 417 380
100
100
100
100
-
EQUITY AND LIABILITIES
Equity
Stated capital
Accumulated loss
10
(5 483 431)
100
(5 483 531)
Liabilities
Non-Current Liabilities
Financial liability
Finance lease liabilities
Loan from related party
11
12
13
28 425 909
777 017
20 079 638
7 569 254
-
9 474 902
1 082 431
1 055 715
7 336 756
37 900 811
-
Total Equity and Liabilities
32 417 380
100
Number of shares in issue
Net asset value per share (cents)
100
(5 483 431)
100
100
Current Liabilities
Financial liability
Finance lease liabilities
Trade and other payables
Total Liabilities
11
12
14
64
Consolidated Statement of Comprehensive Income
Figures in Rand
Revenue
Operating Expenses
Loss before interest, taxation,
depreciation and amortisation
Interest
Interest received
Finance costs
Loss before taxation
Taxation
Net loss after taxation
Notes
18
16
Group
Year ended
Year ended
29 February 2016
28 February 2015
12 836 116
(19 840 494)
(7 004 378)
(520 897)
2 001
(522 898)
(7 525 275)
2 041 744
(5 483 531)
-
Total comprehensive loss for the year
attributable to:
Owners of the parent
Non-controlling interest
(5 483 531)
(5 483 531)
-
-
Net loss for the year attributable to:
Owners of the parent
Non-controlling interest
(5 483 531)
(5 483 531)
-
-
17
18
Loss per share (cents)
Basic loss per share
Diluted loss per share
19
19
(5 483 531)
(5 483 531)
-
Headline loss per share (cents)
Basic headline loss per share
Diluted headline loss per share
19
19
(5 483 531)
(5 483 531)
-
65
Consolidated Statement of Changes in Equity
Group
Figures in Rand
Balance at 1 March 2014
Loss for the year
Balance at 28 February 2015
Loss for the year
Total contributions by and distributions to
owners of Group recognised directly in
equity
Balance as at 29 February 2016
Stated capital
100
Accumulated loss
-
Non-controlling
interest
-
Total equity
100
-
(5 483 531)
-
(5 483 531)
100
(5 483 531)
-
(5 483 431)
Note 10
66
Consolidated Statement of Cash Flows
Figures in Rand
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash used in operations
Interest received
Finance costs
Net cash from operating activities
Notes
20
Group
Year ended
Year ended
29 February 2016 28 February 2015
11 703 391
(12 669 691)
(966 300)
2 001
(522 898)
(1 487 197)
-
1 534 055
(25 048)
1 509 107
-
21 910
21 910
-
Cash flows from investing activities
Cash flows from financing activities
Proceeds from related party loan
Repayment of finance lease
Net cash from financing activities
Total cash movement for the year
Total cash at end of the year
9
Accounting policies
1.
Presentation of annual financial statements
Pembury Lifestyle Group Limited is a public Company incorporated in the Republic of South
Africa. The principle activities are the provision of independent education within South Africa.
The audited financial statements have been prepared in accordance with International
Financial Reporting Standards, and the Companies Act No 71 of 2008, as amended. The
audited financial statements have been prepared on the historical cost basis, and
incorporate the principal accounting policies set out below. They are presented in South
African Rands. The consolidated and separate financial statements have been prepared on
a historical cost basis, unless stated otherwise and incorporate the principal accounting
policies set out below. They are presented in South African Rands.
1.1
Basis of preparation
The annual financial statements of the Group and the Company have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB), including IFRIC interpretations, the SAICA
Financial Reporting Guidelines as issued by the Accounting Practises Committee, financial
pronouncements as issued by the Financial Reporting Council (FRSC) and the requirements of
the South African Companies Act 71 of 2008.
The Group and Company have applied the principles in accordance with IFRS from when it
commenced trading before having been incorporated.
These financial statements for the year ended 29 February 2016 are the first for the Group and
the Company has prepared in accordance with IFRS. Refer to Note 1.16 for information on
how the Group and Company have adopted IFRS.
1.2
Segmental 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 chief executive officer that makes strategic decisions.
The basis of segmental reporting has been set out in note 2.
1.3
Consolidation
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Group and
Company and all investees which are controlled by the Group and Company.
The Group and Company has control of an investee when it has power over the investee; it is
exposed to or has rights to variable returns from involvement with the investee; and it has the
ability to use its power over the investee to affect the amount of the investor's returns.
The results of subsidiaries are included in the consolidated financial statements from the
effective date of acquisition to the effective date of disposal.
Adjustments are made when necessary to the financial statements of subsidiaries to bring
their accounting policies in line with those of the Group and Company.
All intra-Group transactions, balances, income and expenses are eliminated in full on
consolidation.
68
Non-controlling interests in the net assets of consolidated subsidiaries are identified and
recognised separately from the Group's interest therein, and are recognised within equity.
Losses of subsidiaries attributable to non-controlling interests are allocated to the noncontrolling interest even if this results in a debit balance being recognised for non-controlling
interest.
Transactions which result in changes in ownership levels, where the Group and Company has
control of the subsidiary both before and after the transaction, are regarded as equity
transactions and are recognised directly in the statement of changes in equity.
The difference between the fair value of consideration paid or received and the movement
in non-controlling interest for such transactions is recognised in equity attributable to the
owners of the parent.
Where a subsidiary is disposed of and a non-controlling shareholding is retained, the
remaining investment is measured to fair value with the adjustment to fair value recognised in
profit or loss as part of the gain or loss on disposal of the controlling interest.
Business combinations
The Group and Company accounts for business combinations using the acquisition method
of accounting. The cost of the business combination is measured as the aggregate of the fair
values of assets given, liabilities incurred or assumed and equity instruments issued. Costs
directly attributable to the business combination are expensed as incurred, except the costs
to issue debt which are amortised as part of the effective interest and costs to issue equity
which are included in equity.
Contingent consideration is included in the cost of the combination at fair value as at the
date of acquisition. Subsequent changes to the assets, liability or equity which arise as a result
of the contingent consideration are not affected against goodwill, unless they are valid
measurement period adjustments.
The acquiree's identifiable assets, liabilities and contingent liabilities which meet the
recognition conditions of IFRS 3 Business combinations are recognised at their fair values at
acquisition date, except for non-current assets (or disposal Group) that are classified as heldfor-sale in accordance with IFRS 5 Non-current assets held-for-sale and discontinued
operations, which are recognised at fair value less costs to sell.
Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree
where there is a present obligation at acquisition date.
On acquisition, the Group and Company assesses the classification of the acquiree's assets
and liabilities and reclassifies them where the classification is inappropriate for Group and
Company purposes. This excludes lease agreements and insurance contracts, whose
classification remains as per their inception date.
Non-controlling interests arising from a business combination, which are present ownership
interests, and entitle their holders to a proportionate share of the entity's net assets in the
event of liquidation, are measured either at the present ownership interests' proportionate
share in the recognised amounts of the acquiree's identifiable net assets or at fair value. The
treatment is not an accounting policy choice but is selected for each individual business
combination, and disclosed in the note for business combinations. All other components of
non-controlling interests are measured at their acquisition date fair values, unless another
measurement basis is required by IFRS's.
69
In cases where the Group and Company held a non-controlling shareholding in the acquiree
prior to obtaining control, that interest is measured to fair value as at acquisition date. The
measurement to fair value is included in profit or loss for the year. Where the existing
shareholding was classified as an available-for-sale financial asset, the cumulative fair value
adjustments recognised previously to other comprehensive income and accumulated in
equity are recognised in profit or loss as are classification adjustment.
Goodwill is determined as the consideration paid, plus the fair value of any shareholding held
prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable
assets and liabilities of the acquiree.
Goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is
assessed to be impaired, that impairment is not subsequently reversed.
Goodwill arising on acquisition of foreign entities is considered an asset of the foreign entity. In
such cases the goodwill is translated to the functional currency of the Group and Company
at the end of each reporting period with the adjustment recognised in equity through to
other comprehensive income.
Business combinations under common control are accounted for at book value at acquisition
date.
1.4
Property, plant and equipment
Property, plant and equipment are tangible assets which the Group and Company holds for
its own use or for rental to others and which are expected to be used for more than one year.
An item of property, plant and equipment is recognised as an asset when it is probable that
future economic benefits associated with the item will flow to the Group and Company, and
the cost of the item can be measured reliably.
Property, plant and equipment are initially measured at cost. Cost includes all of the
expenditure which is directly attributable to the acquisition or construction of the asset,
including the capitalisation of borrowing costs on qualifying assets and adjustments in respect
of hedge accounting, where appropriate.
Expenditure incurred subsequently for major services, additions to or replacements of parts of
property, plant and equipment are capitalised if it is probable that future economic benefits
associated with the expenditure will flow to the Group and Company and the cost can be
measured reliably. Day to day servicing costs is included in profit or loss in the year in which
they are incurred the year in which they are incurred.
Property, plant and equipment is subsequently stated at cost less accumulated depreciation
and any accumulated impairment losses.
Land and buildings are subsequently stated at revalued amount, being the fair value at the
date of revaluation less any subsequent accumulated depreciation and subsequent
accumulated impairment losses.
Revaluations are made with sufficient regularity such that the carrying amount does not differ
materially from that which would be determined using fair value at the end of the reporting
interim.
When an item of property, plant and equipment is revalued, the gross carrying amount is
adjusted consistently with the revaluation of the carrying amount. The accumulated
depreciation at that date is adjusted to equal the difference between the gross carrying
amount and the carrying amount after taking into account accumulated impairment losses.
70
When an item of property, plant and equipment is revalued, any accumulated depreciation
at the date of the revaluation is eliminated against the gross carrying amount of the asset.
Any increase in an asset‟s carrying amount, as a result of a revaluation, is recognised in other
comprehensive income and accumulated in the revaluation reserve in equity. The increase is
recognised in profit or loss to the extent that it reverses a revaluation decrease of the same
asset previously recognised in profit or loss.
Any decrease in an asset‟s carrying amount, as a result of a revaluation, is recognised in profit
or loss in the current year. The decrease is recognised in other comprehensive income to the
extent of any credit balance existing in the revaluation reserve in respect of that asset. The
decrease recognised in other comprehensive income reduces the amount accumulated in
the revaluation reserve in equity.
The revaluation reserve related to a specific item of property, plant and equipment is
transferred directly to retained income when the asset is derecognised.
The revaluation reserve related to a specific item of property, plant and equipment is
transferred directly to retained income as the asset is used. The amount transferred is equal to
the difference between depreciation based on the revalued carrying amount and
depreciation based on the original cost of the asset, net of deferred tax.
Depreciation of an asset commences when the asset is available for use as intended by
management. Depreciation is charged to write off the asset's carrying amount over its
estimated useful life to its estimated residual value, using a method that best reflects the
pattern in which the asset's economic benefits are consumed by the Group and Company.
Leased assets are depreciated in a consistent manner over the shorter of their expected
useful lives and the lease term. Depreciation is not charged to an asset if its estimated
residual value exceeds or is equal to its carrying amount. Depreciation of an asset ceases at
the earlier of the date that the asset is classified as held for sale or derecognised.
The useful lives of items of property, plant and equipment have been assessed as follows:
Item
Depreciation method
Average useful life
Straight line
Straight line
Straight line
Straight line
Straight line
Straight line
50 years
10 years
6 years
6 years
15 years
20 years
Buildings
Motor vehicles
Equipment
Computer equipment
Furniture and fittings
Leasehold improvements
The residual value, useful life and depreciation method of each asset are reviewed at the
end of each reporting year. If the expectations differ from previous estimates, the change is
accounted for prospectively as a change in accounting estimate.
The depreciation charge for each year is recognised in profit or loss unless it is included in the
carrying amount of another asset.
Impairment tests are performed on property, plant and equipment when there is an indicator
that they may be impaired. When the carrying amount of an item of property, plant and
equipment is assessed to be higher than the estimated recoverable amount, an impairment
loss is recognised immediately in profit or loss to bring the carrying amount in line with the
recoverable amount.
71
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its continued use or disposal. Any gain or loss arising
from the recognition of an item of property, plant and equipment is included in profit or loss
when the item is derecognised. Any gain or loss arising from the recognition of an item of
property, plant and equipment is determined as the difference between the net disposal
proceeds, if any, and the carrying amount of plant and equipment at fair value.
1.5
Investment in and loans to subsidiaries
Company annual financial statements
In the Company‟s separate financial statements, investments in and loans to subsidiaries and
associates are carried at cost less any accumulated impairment.
The cost of an investment in a subsidiary is the aggregate of:
 The fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the company; plus
 Any costs directly attributable to the purchase of the subsidiary.
An adjustment to the cost of a business combination contingent on future events is included
in the cost of the combination if the adjustment is probable and can be measured reliably.
1.6
Financial instruments
Classification
The Group and Company classifies financial assets and financial liabilities into the following
categories:
 Loans and receivables; and
 Financial liabilities measured at amortised cost.
Classification depends on the purpose for which the financial instruments were obtained /
incurred and takes place at initial recognition. Classification is re-assessed on an annual basis.
Initial recognition and measurement
Financial instruments are recognised initially when the Group and Company becomes a party
to the contractual provisions of the instruments.
The Group and Company classifies financial instruments, or their component parts, on initial
recognition as a financial asset, a financial liability or an equity instrument in accordance with
the substance of the contractual arrangement.
Financial instruments are measured initially at fair value.
For financial instruments which are not at fair value through profit or loss, transaction costs are
included in the initial measurement of the instrument.
Subsequent measurement
Loans and receivables are subsequently measured at amortised cost, using the effective
interest method, less accumulated impairment losses.
Financial liabilities at amortised cost are subsequently measured at amortised cost, using the
effective interest method.
72
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the investments
have expired or have been transferred and the Group and Company has transferred
substantially all risks and rewards of ownership.
Financial liabilities are derecognised when the obligation under the liability is discharged or
cancelled or expire. When an existing liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised
in the statement of profit or loss
Impairment of financial assets
At each reporting date the Group and Company assesses all financial assets, other than
those at fair value through profit or loss, to determine whether there is objective evidence
that a financial asset or Group of financial assets has been impaired.
For amounts due to the Group and Company, significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy and default of payments are all considered
indicators of impairment.
Impairment losses are recognised in profit or loss.
Reversals of impairment losses are recognised in profit or loss.
Where financial assets are impaired through use of an allowance account, the amount of the
loss is recognised in profit or loss within operating expenses. When such assets are written off,
the write off is made against the relevant allowance account. Subsequent recoveries of
amounts previously written off are credited against operating expenses.
Loans to (from) related parties
These include loans to and from related parties and are recognised initially at fair value plus
direct transaction costs.
Loans to related parties are classified as loans and receivables.
Loans from related parties are classified as financial liabilities measured at amortised cost.
Loans to shareholders
These financial assets are classified as loans and receivables.
Trade and other receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently
measured at amortised cost using the effective interest rate method. Appropriate allowances
for estimated irrecoverable amounts are recognised in profit or loss when there is objective
evidence that the asset is impaired. Significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency
in payments (more than 30 days overdue) are considered indicators that the trade
receivable is impaired. The allowance recognised is measured as the difference between the
asset‟s carrying amount and the present value of estimated future cash flows discounted at
the effective interest rate computed at initial recognition.
73
The carrying amount of the asset is reduced through the use of an allowance account, and
the amount of the loss is recognised in profit or loss within operating expenses. When a trade
receivable is uncollectable, it is written off against the allowance account for trade
receivables. Subsequent recoveries of amounts previously written off are credited against
operating expenses in profit or loss.
Trade and other receivables are classified as loans and receivables.
Trade and other payables
Trade payables are initially measured at fair value, and are subsequently measured at
amortised cost, using the effective interest rate method.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other shortterm highly liquid investments that are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value. These are initially and subsequently
recorded at amortised cost.
1.7
Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the
amount already paid in respect of current and prior periods exceeds the amount due for
those periods, the excess is recognised as an asset.
Current tax liabilities (assets) for the current and prior periods are measured at the amount
expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable temporary differences, except to the
extent that the deferred tax liability arises from the initial recognition of an asset or liability in a
transaction which at the time of the transaction, affects neither accounting profit nor taxable
profit (tax loss).
A deferred tax asset is recognised for all deductible temporary differences to the extent that
it is probable that taxable profit will be available against which the deductible temporary
difference can be utilised. A deferred tax asset is not recognised when it arises from the initial
recognition of an asset or liability in a transaction at the time of the transaction, affects
neither accounting profit nor taxable profit (tax loss).
A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that
it is probable that future taxable profit will be available against which the unused tax losses
can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to
the period when the asset is realised or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of the reporting period.
Tax expenses
Current and deferred taxes are recognised as income or an expense and included in profit or
loss for the period, except to the extent that the tax arises from:
 a transaction or event which is recognised, in the same or a different period, to other
comprehensive income; or
 a business combination.
74
Current tax and deferred taxes are charged or credited to other comprehensive income if
the tax relates to items that are credited or charged, in the same or a different period, to
other comprehensive income.
Current tax and deferred taxes are charged or credited directly to equity if the tax relates to
items that are credited or charged, in the same or a different period, directly in equity.
1.8
Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership. A lease is classified as an operating lease if it does not transfer
substantially all the risks and rewards incidental to ownership.
Finance leases - lessee
Finance leases are recognised as assets and liabilities in the statement of financial position at
amounts equal to the fair value of the leased property or, if lower, the present value of the
minimum lease payments. The corresponding liability to the lessor is included in the statement
of financial position as a finance lease obligation.
The discount rate used in calculating the present value of the minimum lease payments is the
interest rate implicit in the lease.
The lease payments are apportioned between the finance charge and reduction of the
outstanding liability. The finance charge is allocated to each period during the lease term so
as to produce a constant periodic rate on the remaining balance of the liability.
Operating leases - lessee
Operating lease payments are recognised as an expense on a straight-line basis over the
lease term. The difference between the amounts recognised as an expense and the
contractual payments are recognised as an operating lease asset. This liability is not
discounted.
Any contingent rents are expensed in the period they are incurred.
1.9
Stated 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.
Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
1.10 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 and sick 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 absence occurs.
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.
75
1.11 Revenue
When the outcome of a transaction involving the rendering of services can be estimated
reliably, revenue associated with the transaction is recognised by reference to the stage of
completion of the transaction at the end of the reporting period. The outcome of a
transaction can be estimated reliably when all the following conditions are satisfied:
 the amount of revenue can be measured reliably;
 it is probable that the economic benefits associated with the transaction will flow to the
Company;
 the stage of completion of the transaction at the end of the reporting period can be
measured reliably; and
 the costs incurred for the transaction and the costs to complete the transaction can be
measured reliably.
When the outcome of the transaction involving the rendering of services cannot be
estimated reliably, revenue shall be recognised only to the extent of the expenses recognised
that are recoverable.
Revenue is measured at the fair value of the consideration received or receivable and
represents the amounts receivable for goods and services provided in the normal course of
business, net of trade discounts and volume rebates, and value added tax.
Tuition fees are recognised over the period that tuition is provided.
Enrolment fees, aftercare and registration fees are recognised on initial registration. Reregistration fees are recognised in the year to which the re-registration relates.
Interest is recognised, in profit or loss, using the effective interest rate method.
1.12 Significant judgements and sources of estimation uncertainty
In preparing the annual financial statements, management is required to make estimates and
assumptions that affect the amounts represented in the annual financial statements and
related disclosures. Use of available information and the application of judgement are
inherent in the formation of estimates. Actual results in the future could differ from these
estimates which may be material to the annual financial statements. Significant judgements
include:
Trade receivables and loans and receivables
The Group and Company assesses its trade receivables and loans and receivables for
impairment at the end of each reporting period. In determining whether an impairment loss
should be recorded in profit or loss, the Group and Company makes judgements as to
whether there is observable data indicating a measurable decrease in the estimated future
cash flows from a financial asset.
Useful lives and residual values
The estimated useful lives for property, plant and equipment are set out in note 1.3. Estimated
useful lives and residual values are reviewed annually, taking in cognisance of the forecasted
commercial and economic realities and through benchmarking of accounting treatments in
the education industry where the assets are used.
Impairment of assets
Goodwill and property, plant and equipment are assessed annually for impairment. These
impairment calculations include the use of estimates of future cash flows as well as the
determination of discount rates at which the cashflows are discounted.
76
Fair values in business combinations
Management uses valuation techniques to determine the fair value of assets and liabilities
acquired in a business combination. Fair value of property, plant and equipment is
determined by using external valuations as well as rental return on property. Client lists
(learner enrolments) are valued through a net present value model of the contribution from
the enrolments at the school based on their estimated future enrolment period.
Although a comprehensive valuation exercise is performed for each business combination,
the Group applies initial accounting for its business combinations, which will allow the Group
a period of one year after the acquisition date to adjust the provisional amounts recognised
for a business combination.
1.13 Fair value measurement
The fair value is 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, regardless
of whether that price is directly observable or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, the Group takes into account the
characteristics of the asset or liability if the market participants would take those
characteristics into account when pricing the asset or liability at the measurement date. Fair
value for measurement and/or disclosure purposes in these financial statements is determined
on such a basis.
In addition, for financial reporting purposes, fair value measurements are categorised into
Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
 Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
 Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
 Level 3 inputs are unobservable inputs for the asset or liability.
1.14 Pre-incorporation costs
A special resolution was passed by PLG Schools whereby PLG Schools approved the preincorporation or start- up costs incurred by Pembury Services for costs incurred prior to the
incorporation of PLG Schools.
Pre-incorporation costs consist of expenditure incurred to set up the business, up to the date
of incorporation that is not capital in nature. The relevant costs are accounted for when a
contractual obligation arises.
1.15 Statement of cash flows
The statement of cash flows is prepared on the direct method, whereby the major classes of
gross cash receipts and gross payments are disclosed.
For the purposes of the statement of cash flow, cash and cash equivalents comprise cash on
hand and deposits held on call with banks net of bank overdrafts, all which are available for
use by the Group and Company unless otherwise stated.
Investing and financing operations that do not require the use of cash and cash equivalents
are excluded from the statement of cash flows.
All other borrowing costs are recognised as an expense in the period in which they are
incurred.
77
1.16 First-time adoption of International Financial Reporting Standards
The consolidated financial statements, for the year ended 29 February 2016, are the first for
the Group and Company. They have been prepared in accordance with IFRS as this is the
Group and Company‟s first year of trading.
Accordingly, the Group and Company has prepared financial statements that comply with
IFRS applicable as at 29 February 2016. Due to these annual financial statements being the
first ever consolidated financial statements being prepared by the Group, the Group'
opening statement of financial position is zero and no transitional adjustments need to be
made by the Group in an effort to restate from a previously adopted financial reporting
framework to IFRS. For this reason, it will not be necessary to show reconciliations from
amounts as per a previously adopted financial reporting framework to IFRS.
78
Notes to the Annual Financial Statements
2.
Segmental information
The reportable segment, which represent the structure used by the chief operating decision maker, to make key operating decisions and
assesses performance are set out below:
Reportable segment
The reportable segments identified and reported on are the individual schools namely:
PLG Ballito Academy;
PLG Hartbeespoort Academy;
PLG Mellow Oaks Academy;
PLG Northriding Academy; and
PLG Willow View Academy.
Segmental revenue, total assets, total liabilities and results
The Director assesses the performance of the operating segments based on the measure of operating profit. The segment
provided to the Director is presented below:
PLG
PLG
PLG
PLG
Total
Ballito Willow View
Hartbeesboort Mellow Oaks
Northriding
Revenue
12 836 116
5 341 718
2 549 032
1 972 289
1 721 790
1 251 287
Operating expenses
(17 268 242)
(7 660 479)
(4 077 401)
(1 588 959)
(1 482 078)
(1 839 685)
Pre-incorporation expenses
(2 424 777)
(836 621)
(1 209 857)
(3 570)
EBITDA
(6 856 903)
(3 155 383)
(2 738 225)
383 330
239 711
(591 968)
Finance costs
(522 899)
(1 348)
(1 079)
(518 161)
(699)
(1 613)
Interest income
2 001
91
73
702
588
546
Depreciation and
amortisation
(147 474)
(68 987)
(41 481)
(23 745)
(5 414)
(7 847)
Profit/(Loss)
(7 525 276)
(3 225 626)
(2 780 711)
(157 874)
234 186
(600 883)
Total assets
Total liabilities
32 417 380
(37 900 811)
1 910 102
(4 018 483)
1 468 931
(3 037 095)
25 842 475
(25 145 792)
447 647
(606 305)
706 479
(1 036 897)
information
Head
Office
(619 639)
(374 729)
(994 368)
(994 368)
2 041 744
(4 056 042)
The Group‟s operating segments are determined by reference to the level of operating results regularly reviewed by the Chief operating
decision maker to make decisions about resources to be allocated and for which discrete financial information is available. Operating
segments which exhibit similar long-term financial performance and have similar economic characteristics are amalgamated. The
revenue earned by the Schools segments are derived from educational services. Each school is identified to be an operating segment.
The major sources of revenue are school fees, boarding fees, registration fees and sundry income. Taxation is assessed by the Chief
operating decision maker at a total Group level and not considered separately at a segmental level. There was no inter-segmental
revenue.
79
3.
New standards and interpretations
3.1
Standards and interpretations not yet effective
IFRS 2 Share-based Payment
Classification and Measurement of Share-based Payment Transactions: A collection of three
distinct narrows cope amendments dealing with classification and measurement of sharebased payments.
The amendments address:
 the effects of vesting conditions on the measurement of a cash-settled share-based
payment;
 the accounting requirements for a modification to the terms and conditions of a sharebased payment that
changes the classification of the transaction from cash-settled to
equity-settled; and
 classification of share-based payment transactions with net settlement features.
Amended the definitions of "vesting conditions" and "market conditions" and added
definitions for "performance condition" and "service condition."
The effective date of the amendment is for years beginning on or after 01 January 2018.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the amendment will have a material impact on the Group and Company's
consolidated financial statements.
The Group and Company has chosen not to early adopt the following standards and
interpretations, which have been published and are mandatory for the Group and
Company‟s accounting periods beginning on or after 01 March 2016 or later periods:
IAS 19 Employee Benefits
Annual Improvements 2012-2014 Cycle: Clarification of the requirements of to determine the
discount rate in a regional market sharing the same currency (for example, the Eurozone).
The effective date of the amendment is for years beginning on or after 01 January 2016.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the amendment will have a material impact on the Group and Company's
consolidated financial statements.
IFRS 14 Regulatory Deferral Accounts
IFRS 14 permits first-time adopters to continue to recognise amounts related to its rate
regulated activities in accordance with their previous GAAP requirements when they adopt
IFRS. However, to enhance comparability with entities that apply IFRS and do not recognise
such amounts, the Standard requires that the effect of rate regulation must be presented
separately from other items. An entity that already presents IFRS financial statements is not
eligible to apply the Standard.
The effective date of the amendment is for years beginning on or after 01 January 2016.
The standard has no impact on the financial statements.
80
IFRS 12 Disclosure of Interest in Other Entities
Investment Entities: Applying the Consolidation Exception: Narrow-scope amendments to IFRS
10, IFRS 12 and IAS 28 introduce clarifications to the requirements when accounting for
investment entities. The amendments also provide relief in particular circumstances, which will
reduce the costs of applying the Standards.
The effective date of the amendment is for years beginning on or after 01 January 2016.
The standard has no impact on the financial statements.
IAS 28 Investment in Associates and Joint Ventures
Investment Entities: Applying the Consolidation Exception: Narrow-scope amendments to IFRS
10, IFRS 12 and IAS 28 introduce clarifications to the requirements when accounting for
investment entities. The amendments also provide relief in particular circumstances, which will
reduce the costs of applying the Standards.
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28): Narrow scope amendment to address an
acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011),
in dealing with the sale or contribution of assets between an investor and its associate or joint
venture- classification of share-based payment transactions with net settlement features.
The effective date of the amendment is for years beginning on or after 01 January 2016.
The standard has no impact on the financial statements.
Amendment to IFRS 11 Joint Arrangements
Amendments adding new guidance on how to account for the acquisition of an interest in a
joint operation that constitutes a business which specify the appropriate accounting
treatment for such acquisitions.
The effective date of the amendment is for years beginning on or after 01 January 2016.
The standard has no impact on the financial statements.
IAS 41 Agriculture Bearer Plants
Amendment to IAS 16 and IAS 41 which defines bearer plants and includes bearer plants in
the scope of IAS 16 Property, plant and Equipment, rather than IAS 41, allowing such assets to
be accounted for after initial recognition in accordance with IAS16.
The effective date of the amendment is for years beginning on or after 01 January 2016.
The standard has no impact on the financial statements.
IAS 27 Consolidated and Separate Financial Statements
Amendments to IAS 27 will allow entities to use the equity method to account for investments
in subsidiaries, joint ventures and associates in their separate financial statements.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
The effective date of the amendment is for years beginning on or after 01 January 2016.
It is unlikely that the amendment will have a material impact on the Group and Company's
consolidated financial statements.
81
Amendment to IAS 24: Related Party Disclosures: Annual improvements project
The definition of a related party has been amended to include an entity, or any member of a
group of which it is a part, which provides key management personnel services to the
reporting entity or to the parent of the reporting entity ("management entity"). Disclosure is
required of payments made to the management entity for these services but not of
payments made by the management entity to its directors or employees.
The effective date of the amendment is for years beginning on or after 01 July 2014.
The Group and Company has adopted the amendment for the first time in the 2016 annual
financial statements.
IAS 7 Statement of Cash Flow
Disclosure Initiative: Amendments requiring entities to disclose information about changes in
their financing liabilities. The additional disclosures will help investors to evaluate changes in
liabilities arising from financing activities, including changes from cash flows and non-cash
changes (such as foreign exchange gains or losses). The effective date of the amendment is
for years beginning on or after 01 January 2017.
It is unlikely that the amendment will have a material impact on the Group and Company's
consolidated financial statements.
The Group and Company has adopted the amendment for the first time in the 2016 annual
financial statements.
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
Annual Improvements 2012-2014 Cycle: Amendments clarifying that a change in the manner
of disposal of a non-current asset or disposal group held for sale is considered to be a
continuation of the original plan of disposal, and accordingly, the date of classification as
held for sale does not change. The amendment clarifies that non-current assets held for
distribution to owners should be treated consistently with non-current assets held for sale. It
further specifies that if a non-current asset held for sale is reclassified as a non-current asset
held for distribution to owners or vice versa, that the change is considered a continuation of
the original plan of disposal.
The effective date of the Group and Company is for years beginning on or after 01 January
2016.
It is unlikely that the amendment will have a material impact on the Group and Company's
consolidated financial statements.
Amendment to IFRS 7: Financial Instruments
Annual Improvements 2012-2014 Cycle:
Amendment clarifying under what circumstances an entity will have continuing involvement
in a transferred financial asset as a result of servicing contracts.
Annual Improvements 2012-2014 Cycle:
Amendment clarifying the applicability of previous amendments to IFRS 7 issued in December
2011 with regard to offsetting financial assets and financial liabilities in relation to interim
financial statements prepared under IAS 34.
The effective date of the Group and Company is for years beginning on or after 01 January
2016.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
82
It is unlikely that the amendment will have a material impact on the Group‟s consolidated
financial statements.
IAS 1 Presentation of Financial Statement
The amendment provides new requirements when an entity presents subtotals in addition to
those required by IAS 1 in its annual financial statements. It also provides amended guidance
concerning the order of presentation of the notes in the annual financial statements, as well
as guidance for identifying which accounting policies should be included. It further clarifies
that an entity's share of comprehensive income of an associate or joint venture under the
equity method shall be presented separately into its share of items that a) will not be
reclassified subsequently to profit or loss and b) that will be reclassified subsequently to profit
or loss.
The effective date of the Group and Company is for years beginning on or after 01 January
2016.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the amendment will have a material impact on the Group‟s consolidated
financial statements.
IAS 34 Interim Financial Reporting
The amendment allows an entity to present disclosures required by paragraph 16A either in
the interim annual financial statements or by cross reference to another report, for example,
a risk report, provided that other report is available to users of the annual financial statements
on the same terms as the interim annual financial statements and at the same time.
The effective date of the Group and Company is for years beginning on or after 01 January
2016.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the amendment will have a material impact on the Group‟s consolidated
financial statements.
IFRS 9 Financial Instruments
IFRS 9 issued in November 2009 introduced new requirements for the classification and
measurements of financial assets. IFRS 9 was subsequently amended in October 2010 to
include requirements for the classification and measurement of financial liabilities and for
derecognition, and in November 2013 to include the new requirements for general hedge
accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a)
impairment requirements for financial assets and b) limited amendments to the classification
and measurement requirements by introducing a "fair value through other comprehensive
income" (FVTOCI) measurement category for certain simple debt instruments.
83
Key requirements of IFRS 9:
 All recognised financial assets that are within the scope of IAS 39 Financial Instruments:
Recognition and Measurement are required to be subsequently measured at amortised
cost or fair value. Specifically, debt investments that are held within a business model
whose objective is to collect the contractual cash flows, and that have contractual cash
flows that are solely payments of principal and interest on the outstanding principal are
generally measured at amortised cost at the end of subsequent reporting periods. Debt
instruments that are held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets, and that have contractual
terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on outstanding principal, are measured at FVTOCI. All
other debt and equity investments are measured at fair value at the end of subsequent
reporting periods. In addition, under IFRS 9, entities may make an irrevocable election to
present subsequent changes in the fair value of an equity investment (that is not held for
trading) in other comprehensive income with only dividend income generally recognised
in profit or loss.
 With regard to the measurement of financial liabilities designated as at fair value through
profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial
liability that is attributable to changes in the credit risk of the liability is presented in other
comprehensive income, unless the recognition of the effect of the changes of the liability's
credit risk in other comprehensive income would create or enlarge an accounting
mismatch in profit or loss. Under IAS 39, the entire amount of the change in fair value of a
financial liability designated as at fair value through profit or loss is presented in profit or
loss.
 In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss
model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss
model requires an entity to account for expected credit losses and changes in those
expected credit losses at each reporting date to reflect changes in credit risk since initial
recognition. It is therefore no longer necessary for a credit event to have occurred before
credit losses are recognised.
The new general hedge accounting requirements retain the three types of hedge
accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has
been introduced to the types of transactions eligible for hedge accounting, specifically
broadening the types of instruments that qualify for hedging instruments and the types of
risk components of non-financial items that are eligible for hedge accounting. In addition,
the effectiveness test has been replaced with the principal of an "economic relationship".
Retrospective assessment of hedge effectiveness is also no longer required. Enhanced
disclosure requirements about an entity's risk management activities have also been
introduced.
The effective date of the standard is for years beginning on or after 01 January 2018.
The effective date has not yet been established as the project is currently incomplete. The
IASB has communicated that the effective date will not be before years beginning on or after
01 January 2018. IFRS 9 may be early adopted. If IFRS 9 is early adopted, the new hedging
requirements may be excluded until the effective date.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the standard will have a material impact on the Group‟s consolidated
financial statements.
84
IFRS 15 Revenue from Contracts with Customers
IFRS 15 supersedes IAS 11 Construction contracts; IAS 18 Revenue; IFRIC 13 Customer Loyalty
Programmes; IFRIC 15 Agreements for the construction of Real Estate; IFRIC 18 Transfers of
Assets from Customers and SIC 31 Revenue - Barter Transactions Involving Advertising Services.
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services. An entity
recognises revenue in accordance with that core principle by applying the following steps:





Identify the contract(s) with a customer;
Identify the performance obligations in the contract;
Determine the transaction price;
Allocate the transaction price to the performance obligations in the contract; and
Recognise revenue when (or as) the entity satisfies a performance obligation.
IFRS 15 also includes extensive new disclosure requirements.
The effective date of the standard is for years beginning on or after 01 January 2018.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the standard will have a material impact on the Group's consolidated
financial statements.
Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and
Amortisation
The amendment clarifies that a depreciation or amortisation method that is based on
revenue that is generated by an activity that includes the use of the asset is not an
appropriate method. This requirement can be rebutted for intangible assets in very specific
circumstances as set out in the amendments to IAS 38.
The effective date of the amendment is for years beginning on or after 01 January 2016.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the amendment will have a material impact on the Group‟s consolidated
financial statements.
IFRS 16 Leases
New standard that introduces a single lessee accounting model and requires a lessee to
recognise assets and liabilities for all leases with a term of more than 12 months, unless the
underlying asset is of low value. A lessee is required to recognise a right-of-use asset
representing its right to use the underlying leased asset and a lease liability representing its
obligation to make lease payments. A lessee measures right-of-use assets similarly to other
non-financial assets (such as property, plant and equipment) and lease liabilities similarly to
other financial liabilities. As a consequence, a lessee recognises depreciation of the
right-of-use asset and interest on the lease liability, and also classifies cash repayments of the
lease liability into a principal portion and an interest portion and presents them in the
statement of cash flows applying IAS 7 Statement of Cash Flows.
85
IFRS 16 contains expanded disclosure requirements for lessees. Lessees will need to apply
judgement in deciding upon the information to disclose to meet the objective of providing a
basis for users of financial statements to assess the effect that leases have on the financial
position, financial performance and cash flows of the lessee.
IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly,
a lessor continues to classify its leases as operating leases or finance leases, and to account
for those two types of leases differently.
IFRS 16 also requires enhanced disclosures to be provided by lessors that will improve
information disclosed about a lessor's risk exposure, particularly to residual value risk.
The new standard supersedes:
a) IAS 17 Leases;
b) IFRIC 4 Determining whether an arrangement contains a lease;
c) SIC-15 Operating lease - Incentives; and
d) SIC-27 Evaluating the substance of transactions involving the legal form of a lease.
The effective date of the standard is for years beginning on or after 01 January 2019.
The standard might have a long-term impact on all long-term leases entered into for all
premises.
IFRS 10 Consolidated financial statements
Investment Entities: Applying the Consolidation Exception: Narrow-scope amendments when
accounting for investment entities. The amendments also provide relief in particular
circumstances, which will reduce the costs of applying the Standards.
The effective date of the Group and Company is for years beginning on or after 01 January
2016.
The Group and Company expects to adopt the standard for the first time in the first annual
financial period after the effective date.
It is unlikely that the amendment will have a material impact on the Group‟s consolidated
financial statements.
IAS 12 Income taxes
Recognition of deferred tax assets for unrealised losses (Amendments to IAS 12): Narrowscope amendment to clarify the requirements on recognition of deferred tax assets for
unrealised losses on debt instruments measured at fair value.
The effective date of the amendment is for years beginning on or after 01 January 2017.
86
4.
Property, plant and equipment
Cost/
valuation
5 539 327
15 568 492
2 517 695
262 456
151 793
331 697
1 991 574
26 363 034
Figures in Rand
Land
Buildings
Furniture and fittings
Motor vehicles
Office equipment
Computer equipment
Leasehold improvements
Total
Reconciliation of property, plant and equipment – 2016
Opening
Figures in Rand
balance
Additions
Land
5 539 327
Buildings
15 568 492
Furniture and fittings
2 517 695
Motor vehicles
262 456
Office equipment
151 793
Computer equipment
331 697
Leasehold improvements
1 991 574
Total
26 363 034
Group 2016
Accumulated
depreciation
(78 799)
(4 314)
(3 959)
(28 622)
(31 780)
(147 474)
Accumulated
depreciation
(78 799)
(4 314)
(3 959)
(28 622)
(31 780)
(147 474)
Net carrying amount of leased assets
Land
Buildings
Motor vehicles
Carrying
value
5 539 327
15 568 492
2 438 896
258 142
147 834
303 075
1 959 794
26 215 560
Carrying
value
5 539 327
15 568 492
2 438 896
258 142
147 834
303 075
1 959 794
26 215 560
5 539 327
15 568 492
258 142
21 365 961
The above assets were encumbered in terms of a finance lease, refer to note 11.
Details of properties:
Land and buildings situated at Erf 630 Xanadu Extension 12 Township, Registration Division
JQ Province of North West Held by Deed of Transfer: T020692/2008
- Purchase price:
21 107 819
Registers containing the information required by Regulation 25(3) of the Companies
Regulations, 2011 are available for inspection at the registered office of the Group.
5.
Goodwill
Figures in Rand
Goodwill
Cost/valuation
2 692 014
Group 2016
Accumulated
amortisation
-
Carrying value
2 692 014
Reconciliation of goodwill - 2016
Figures in Rand
Goodwill
Opening balance
-
Additions
2 692 014
87
Total
2 692 014
Pembury Schools purchased Hartbeespoort school (Xanadu) held by Doxa Deo Educational
Trust, with the effective date 1 January 2016. The goodwill arose due to the consideration
paid being higher than the fair value of the assets and liabilities.
As at the signature date and the effective date the seller is and will be the sole and
beneficial owner of the business.
Pembury schools purchased Hartbeespoort school as a going concern with effect from the
effective date as one indivisible transaction.
6.
Deferred tax
Group 2016
R
Deferred tax liability
Property, plant and equipment
Finance lease liability
Prepayments
Total deferred tax liability
(108 541)
(3 049)
(87 760)
(199 350)
Deferred tax asset
Deferred income
Provision for bad debts
Increase in tax loss available for set off against future taxable income
Total deferred tax asset
Deferred tax liability
Deferred tax asset
Total net deferred tax asset
Reconciliation of deferred tax asset
At beginning of the year
Deductible temporary difference movement on property, plant and
equipment
Deductible temporary difference movement on finance lease liability
Deductible temporary difference movement on prepayments
Taxable temporary difference movement on provision for bad debts
Taxable temporary difference movement on deferred income
Tax loss available for set off against future taxable income
995 299
199 887
1 195 186
1 045 908
2 241 094
(199 350)
2 241 094
2 041 744
(108 541)
(3 049)
(87 760)
199 887
995 299
1 045 908
2 041 744
Deferred tax asset is recognised for unused tax losses to the extent that probable future
taxable profit will be available against which the unused tax losses can be utilised.
Recognition of deferred tax asset
The deferred tax asset consists of taxable reversible temporary differences in the amount R995
836. The remaining balance of R1 045 908 consists of losses made due to the first year of
trading and setup costs incurred. The majority of the loss consist of the pre-incorporation costs
incurred the amount of R2 424 778.
The asset was recognised after management‟s assessment of their profit forecast which
indicated taxable future income and that it is probable that future taxable profit will be
available against which the unused tax losses and unused tax credits can be utilised.
88
7.
Investment in subsidiary
Company
% Holding
Carrying amount
100
100
Pembury Lifestyle Group Limited
The carrying amount of the subsidiary is shown net of impairment losses. The subsidiary is
incorporated in the Republic of South Africa. There are no impairment losses of investments in
subsidiary to date.
8.
Trade and other receivables
Group 2016
R
2 084 567
(951 843)
313 428
1 446 152
Trade receivables
Provision for doubtful debts
Prepaid expenses
No trade and other receivables were pledged as security.
Credit periods may vary based on special payment agreements reached with parents of
learners but as a standard all fees should be settled within 30 days.
No credit insurance is taken out by the Group and Company.
The net carrying values of receivables are considered to be a closer approximation of their
fair values. The Fair value has been estimated by the amount that is expected to flow into the
entity.
Due to the short-term nature of trade and other receivables their carrying amounts
approximate their fair values.
Credit quality of trade and other receivables:
The credit quality of trade and other receivables that are neither past nor due nor impaired
can be assessed by reference to external credit ratings (if available) or to historical
information about counterparty default rates. The credit quality exposure is high.
There are no trade and other receivables past due but not impaired within the Group.
Trade receivables with renegotiated terms of payment or with acceptable payment history
are not considered to be impaired.
Trade and other receivables impaired:
As of 29 February 2016, trade and other receivables of R951 843 were impaired and provided
for.
89
9.
Cash and cash equivalents
Cash and cash equivalents consist of:
Group 2016
R
17 193
4 717
21 910
Cash on hand
Bank balances
The carrying amount of cash and cash equivalents approximates its fair values.
Credit quality of cash at bank and short term deposits, excluding cash on hand
The credit quality of cash at bank and short term deposits, excluding cash on hand that are
neither past due nor impaired can be assessed by reference to external credit ratings.
Credit Rating
R
AAA
10.
4 717
Stated capital
Authorised
1 000 ordinary shares with no par value
11.
1 000
Issued
100 ordinary shares with no par value
100
Reconciliation of number of shares issued
Opening balance
Issued during the year
Closing balance
100
100
Financial liability
Group 2016
R
Held at amortised cost
Doxa Deo Educational Trust
The above loan is unsecured, interest free and R1 million of the loans was
in relation to the purchase consideration and this is repayable on or
before 31 July 2016, the remainder of the outstanding balance has no set
repayment terms.
Debentures
The debentures are unsecured, interest free and repayable when pupils
leave the school.
1 082 431
777 017
1 859 448
Non-current liabilities at amortised cost
Current liabilities at amortised cost
777 017
1 082 431
1 859 448
90
12.
Finance lease liabilities
Group 2016
R
Minimum lease payments due
- within one year
- in second to fifth year inclusive
- later than five years
Less: future finance charges
Present value of minimum lease payments
Present value of minimum lease payments
- within one year
- in second to fifth year inclusive
- later than five years
Non-current liabilities
Current liabilities
3 602 223
15 818 953
41 360417
60 781 593
(39 646 240)
21 135 353
1 055 715
1 670 200
18 409 438
21 135 353
20 079 638
1 055 715
21 135 353
The property was bought through a finance lease agreement. Minimum lease payments of
R219 708 are payable monthly in arrears at an interest rate of 12.18% per annum.
The vehicle finance lease formed part of the business combination transaction. The initial
repayment terms were five years, the remaining repayment terms are five months after year
end, and interest is linked to prime and the monthly instalment is R7 869.
The above finance lease liabilities were secured over motor vehicles, land and buildings with
a carrying value of R21 365 961 refer to note 4.
13.
Loan from related party
Group 2016
7 569 254
Pembury Services Proprietary Limited
The above loan is unsecured, interest free and has no fixed terms of repayment, other than
the fact that it will not be payable for the next twenty-four months.
Non-current liabilities
7 569 254
Fair value of loans from related party
The net carrying value of the loan is considered to be a closer approximation of its fair value.
The loan has been subordinated in favour of all creditors until such time as the assets fairly
valued exceeds its liabilities.
91
14.
Trade and other payables
Group 2016
R
97 389
3 554 640
204 100
2 019 702
1 335 829
125 096
7 336 756
Accruals
Income received in advance
Other payables
SARS liability
Trade payables
Unearned deposits
The Group has credit risk policies in place to ensure that all payables are paid within the
agreed terms.
The net carrying values of payables are considered to be a closer approximation of their fair
values.
Due to the short-term nature of trade and other payables their carrying amounts
approximates their fair values.
15.
Revenue
Group 2016
R
12 836 116
Rendering of services
The amount included in revenue consists of the following:
School fees
Boarding fees
Caregiver fees
Therapy
Hostel fees
Sundry income
Discount allowed
16.
9 644 594
2 162 400
508 481
437 639
139 979
9 088
(66 065)
12 836 116
Operating loss
Operating loss for the year is stated after accounting for the following:
Group 2016
R
Operating lease charges
Premises
Accrued amounts
Depreciation on property, plant and equipment
Employee costs
Pre-incorporation costs
92
2 697 295
147 474
8 969 686
2 424 778
17.
Finance costs
Interest expense
Finance leases
18.
93 520
429 378
522 898
Taxation
Group 2016
R
Major components of the tax income
Deferred
Originating and reversing temporary differences
(995 836)
(1 045 908)
2 041 744
Reconciliation of the tax expense
Reconciliation between accounting profit and tax expense
Accounting loss
Tax at the applicable rate of 28%
(7 525 275)
(2 107 077)
Tax effect of adjustments on taxable income
Interest on SARS
Fines and penalties
24 844
40 519
(2 041 744)
Group
The estimated tax loss available for set off against future taxable income is R3 735 386.
Company
No provision has been made for 2016 tax as the group has no taxable income.
19.
Earnings per share
Basic earnings per share was based on a loss of R5 555 559 and a weighted average number
of ordinary shares of 100.
Group 2016
R
Reconciliation of loss for the period to basic earnings (loss)
Loss for the period attributable to equity holders
Diluted earnings per share
In the determination of diluted earnings per share, profit or loss
attributable to the equity holders and the weighted average number of
ordinary shares are adjusted for the effects of all dilutive potential ordinary
shares.
From continuing operations (cents per share)
Diluted earnings per share was based on a loss of R 5 555 559 and a
weighted average number of ordinary shares of 100.
93
(5 483 531)
(5 483 531)
Reconciliation of basic earnings to earnings used to determine diluted
earnings per share:
Basic earnings (loss)
(5 483 531)
Headline earnings and diluted headline earnings per share
Headline earnings (loss) per share (cents per share)
Diluted headline earnings (loss) per share (cents per share)
(5 483 531)
(5 483 531)
Reconciliation between earnings and headline earnings:
Basic earnings (loss) attributable to owners
Reconciliation between diluted earnings and diluted headline earnings:
Diluted earnings (loss) attributable to owners
20.
Group 2016
R
(7 525 275)
147 474
(2 001)
522 898
(1 446 152)
7 336 755
(966 300)
Related Parties
Relationships
Shareholders and directors in common
22.
(5 483 531)
Cash used in operations
Loss before taxation
Adjustments for:
Depreciation
Interest received
Finance costs
Changes in working capital:
Trade and other receivables
Trade and other payables
21.
(5 483 531)
Pembury Services
Proprietary
Limited
Related party balances
Loan accounts – Owing to related parties
Pembury Services Proprietary Limited
7 569 254
Related party transactions
Rent paid to related parties
Pembury Services Proprietary Limited
2 683 832
Pre-incorporation costs
Pembury Services Proprietary Limited
2 424 778
Directors’ emoluments
No emoluments were paid to the director or any individuals holding a prescribed office
during the year ended 29 February 2016.
23.
Non-cash financing and investing activities
During the period under review the Group did engage in non-cash investing and financing
activities. The Group acquire assets under finance lease agreements at a cost of R21 365 961.
94
24.
Commitments and Contingencies
There were no commitments or contingencies during the year.
25.
Comparatives
Group
Comparative information has been disclosed for the year ended 28 February 2015, although
this is the Group's first year of trading. The subsidiary Pembury Schools only traded for eight
months during the year.
Company
No comparative information has been disclosed as the Company has not been trading.
26.
Financial assets by category
The accounting policies for financial instruments have been applied to the line items below:
Group 2016
Financial assets held at
amortised cost
1 132 725
21 910
1 154 635
Figures in Rand
Trade and other receivables
Cash and cash equivalents
Total
27.
Total
1 132 725
21 910
1 154 635
Financial liabilities by category
The accounting policies for financial instruments have been applied to the line items below:
Group 2016
Financial liabilities at
amortised cost
21 135 353
1 859 448
7 569 254
3 452 920
34 016 975
Figures in Rand
Finance lease liabilities
Financial liabilities
Loans from related parties
Trade and other payables
Total
28.
Total
21 135 353
1 859 448
7 569 254
3 452 920
34 016 975
Risk management
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.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in
notes 10, 11 & 12 cash and cash equivalents disclosed in note 8, and equity as disclosed in
the statement of financial position.
In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to
reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing
ratio.
95
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 statement of
financial position) less cash and cash equivalents. Total capital is calculated as 'equity' as
shown in the statement of financial position plus net debt.
The Group‟s strategy is to maintain a gearing ratio of around 50%.
There are no externally imposed capital requirements.
There have been no changes to what the entity manages as capital, the strategy for capital
maintenance or externally imposed capital requirements from the previous year.
Financial risk management
The Group‟s activities expose it to a variety of financial risks: market risk (including fair value
interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
Liquidity Risk
The Group‟s risk to liquidity is a result of the funds available to cover future commitments. The
Group manages liquidity risk through an on-going review of future commitments and credit
facilities.
Currently no overdraft facilities exist and the Group is operated on a cash basis and thus it has
a low gearing.
Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.
Funding was carefully controlled with no external borrowings.
Less than 1
year
Figures in Rand
Loan from related party
Trade and other receivables
Trade and other payables
Financial liability
Finance lease liability
Total
1 446 152
(7 336 755)
(1 082 431)
(1 055 715)
(8 028 749)
Between 2 and 5
years
(7 569 254)
(777 017)
(20 079 638)
(28 425 909)
Interest Rate Risk
As the Group has no significant interest-bearing assets, the Group‟s income and operating
cash flows are substantially independent of changes in market interest rates. The Group
analyses its interest rate exposure on a dynamic basis.
Various scenarios are simulated taking into consideration refinancing, renewal of existing
positions and alternative financing. Based on these scenarios, the Group calculates the
impact on profit and loss of a defined interest rate shift. The scenarios are run only for liabilities
that represent the major interest-bearing positions. Based on the simulations performed, the
impact on post-tax profit of a 2% shift would be a maximum increase or decrease R218 635
respectively. The simulation is done on a quarterly basis to verify that the maximum loss
potential is within the limit given by the management.
Cash flow interest rate risk
Financial instrument
Finance lease liability
Current
interest rate
12.18%
96
Due in less
than 1 year
1 055 715
Due in
2 to 5 years
20 079 638
Credit Risk
Credit risk is managed on a Group basis. Credit risk consists mainly of cash deposits, cash
equivalents and trade debtors. The Company only deposits cash with major banks with high
quality credit standing and limits exposure to any one counter-party.
Trade receivables comprise a widespread customer base. Management evaluated credit risk
relating to customers on an on-going basis. If customers are independently rated, these
ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit
quality of the customer, taking into account its financial position, past experience and other
factors. Individual risk limits are set based on internal or external ratings in accordance with
limits set by the board. The utilisation of credit limits is regularly monitored.
No credit limits were exceeded during the reporting period, and management does not
expect any losses from non-performance by these counterparties.
Financial assets exposed to credit risk at year end were as follows:
Financial Instrument
Group 2016
Cash and cash equivalents
Trade and other receivables
Property, plant and equipment subject to lease agreements
29.
21 910
1 132 725
22 158 142
Going concern
We draw attention to the fact that at 29 February 2016, the Group and Company had
accumulated losses of R5 483 531 and that the Group and Company's total liabilities exceed
its assets by R5 483 531.
The consolidated financial statements have been prepared on the basis of accounting
policies applicable to a going concern. This basis presumes that funds will be available to
finance future operations and that the realisation of assets and settlement of liabilities,
contingent obligations and commitments will occur in the ordinary course of business.
The ability of the Group and Company is to continue as a going concern is dependent on a
number of factors. The most significant of these is that the directors continue to procure
funding for the on-going operations for the Group and the Company and to restore
profitability. The group has obtained a letter of support from the founder and majority
shareholder for at least the next twelve months from the date of the financial statements. The
cash flow forecast indicates that the schools will have positive cash flows in the next two
years based on the fact that the schools are reaching 50% occupancy levels.
The directors are confident that the profitability will be restored due to the fact that the
schools were not operational for a full financial year and were not running at full capacity.
Two out of the five schools only traded for two months during the financial year which had a
significant impact on the costs and start-up costs were incurred in the amount of R2 424 778.
In the current year the group had to provide for doubtful debts in the amount of R951 843.
Management intends on implementing strict controls over the debtors and has started with a
debtor recovery plan which include debt recovery agents for older debt while a stringent
policy on attendance for short term defaulters are enforced. Furthermore, management will
be opening three new schools in January 2017 and the number of new registrations of
students have already exceeded management‟s expectations as included in their profit and
cash flow forecasts.
97
Costs will be centrally monitored closely and management intends to invest in an aggressive
marketing strategy to ensure sufficient growth in student numbers for existing and new
schools. This together with the debt recovery and cost control focus will ensure that the new
entities reach breakeven much quicker.
The land and buildings were purchased at a discount and were revalued at 31 August 2016
to R40 million, which increases the reserves of the entity, after tax, by R13 968 000. Therefore
the assets, fairly valued, exceed the liabilities and the entity is technically solvent. In addition
to this the related party loan in the amount of R7 569 254 was subordinated in favour of other
creditors until such time as the assets fairly valued exceeds the liabilities.
Management is confident that there is no uncertainty in terms of the going concern
assumption.
30.
Events after the reporting period
In August 2016, a decision was taken to close down the Ballito School. The decision has no
material impact on the Financial Statements at 29 February 2016.
The Xanadu Property (known as Hartbeespoort property) was re-valued by an independent
valuer after year end to R40 million on 31 August 2016.
31.
Business combinations
Group 2016
R
Aggregated business combinations
Property, plant and equipment
Trade and other receivables
Financial liability
Finance lease liabilities
Loan from related party
Trade and other payables
Bank overdraft
Total identifiable net assets
Goodwill
Consideration financed
1 120 828
331 443
(777 017)
(52 582)
(136 340)
(138 265)
(40 081)
307 986
2 692 014
3 000 000
Effectively on 1 January 2016, Pembury Schools acquired Hartbeespoort School (Xanadu)
held by Doxa Deo Trust. Goodwill of R2 692 014 arose from acquisition of the Hartbeespoort
School (Xanadu) as a going concern. Goodwill is not deductible for income tax purposes.
Through inspection of the interim figures it was noted that the business acquisition was
performing exceptionally well, producing the highest revenue of Pembury Schools and
having a net profit position as at the abovementioned date.
98
ANNEXURE 3B
REVIEWED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2016
This annexure contains a report on the interim financial information of PL Group. The information is
taken from the reviewed financial statements for the six months ended 31 August 2016, which were
prepared in the manner required by the Act, where applicable, in accordance with IFRS and were
reviewed and reported on without qualification by Moore Stephens.
The information has been extracted from the interim Financial Statements of PL Group, which were
prepared using the same accounting policies as the prior year ended 29 February 2016 as set out in
Annexure 3A. The information presented in this Annexure 3B is the responsibility of the Directors of
PL Group.
Moore Stephens has been appointed as the independent reporting accountants in accordance
with the JSE Listings Requirements and its special purpose review report on the reviewed financial
information is contained in Annexure 4B to this Prospectus. There are no facts or circumstances that
are material to an appreciation of the state of affairs, financial position, changes in equity, results of
operations and cash flows of Pembury Schools that have not been dealt with in the financial
information.
The executive committee comprises of Andrew McLachlan (Chief Executive Officer) and Riaan van
Jaarsveld (Group Financial Director) and has been formed ahead of the listing in November 2016.
The executive committee has made all management decisions since formation and ahead of the
listing. Prior to the appointment of the Financial Director, Andrew McLachlan made all the
management decisions.
Other than the securing of additional properties in order to open up the three new PLG Schools
campuses in 2017, there has been no material change in the nature of the business of the Group
since 31 August 2016 up to the Last Practicable Date.
No adjustments were required to be made to the financial information of PL Group used in
preparing the report of historical financial information in relation to retrospective application of
changes in accounting policies or retrospective correction of fundamental errors.
Review of activities
Main business and operations
PL Group focuses mainly on providing accessible, affordable, private education to pre-primary,
primary and high school students. The Company operates as a holding company to three
subsidiaries, namely:
 PLG Schools, the education segment;
 PLG Properties, the school property company (dormant for the period under review); and
 PLG Retirement Villages, the retirement segment (dormant).
As the holding company, PL Group centrally manages the administration of the three Group
subsidiaries and is responsible for the strategic direction thereof. The main revenue driver of the
group is the education segment, primarily comprising school and boarding fees.
The year end of the Company is 31 December each year. This was changed from the last day of
February on 31 August 2016.
99
The state of affairs of the Company are fully set out in the attached special purpose financial
statements and do not in our opinion require any further comment, other than the information set
out below.
Statement of financial position
At 31 August 2016, the Group's investment in property, plant and equipment amounted to
R26 215 260 of which R1 120 828 was acquired through a business combination, R4 134 485 was
capitalised at fair value on the date of incorporation and land and buildings of R21 107 819 was
acquired through a finance lease. This resulted in an increase in non-current and current finance
lease liabilities.
PLG Schools purchased Hartbeespoort School (Xanadu) as a going concern, held by Doxa Deo
Educational Trust, with the effective date 1 January 2016. The goodwill arose due to the
consideration paid being higher than the fair value of the assets and liabilities.
Statement of Comprehensive Income
Revenue of R20 635 210 was achieved for the six months ended 31 August 2016, with the
PLG Schools segment showing a small loss and certain schools recording an operating profit.
Finance costs of R1 417 297 were incurred and PL Group showed a loss after taxation of R2 396 725.
Gains on property revaluation amounted to R18 892 181, with income taxation of R4 231 849,
showing a net gain after taxation of R14 660 332.
In August 2016, a decision was taken to close down the Ballito School. The decision has no material
impact on the Financial Statements at 31 August 2016.
Statement of Changes in Equity
The revaluation reserve increased due to the net gain on the revaluation of property of R14 660 332.
A loss after taxation of R2 396 725 was recorded for the period.
Statement of Cash Flows
Cash used in operating activities amounted to R2 134 373, which was primarily financed through
loans from related parties.
100
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2016
Group
31 August
2016
R
Assets
Non-Current Assets
Property, plant and equipment
Goodwill
Current Assets
Trade and other receivables
Cash and cash equivalents
Total Assets
48 399 453
45 707 439
2 692 014
3 513 514
3 506 297
7 217
51 912 967
Equity and Liabilities
Equity
Stated capital
Reserve
Accumulated loss
Liabilities
Non-Current Liabilities
Loan from related party
Financial liability
Finance lease liabilities
Deferred tax
Current Liabilities
Financial liability
Finance lease liabilities
Trade and other payables
6 780 176
100
14 660 332
(7 880 256)
33 706 471
11 163 596
747 017
20 054 597
1 741 261
11 426 320
619 807
899 581
9 906 932
Total Liabilities
45 132 791
Total Equity and Liabilities
51 912 967
Number of shares in issue
Net asset value per share (cents)
Net tangible asset value per share (cents)
100
6 780 176
4 088 162
101
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Revenue
Other income
Operating expenses
Loss before interest, taxation, depreciation and amortisation
Depreciation
Loss before interest and taxation
Interest received
Finance costs
Loss before taxation for the six months
Taxation
Loss after taxation for the six months
Group
6 months ended
31 August
2016
R
20 635 210
5 910
(21 871 131)
(1 230 011)
(202 274)
(1 432 285)
2 903
(1 417 297)
(2 846 679)
449 954
(2 396 725)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains and losses on property revaluation
Income tax relating to items that will not be reclassified
Total items that will not be reclassified to profit or loss
Other comprehensive income for the six months net of taxation
Total comprehensive income for the six months
18 892 181
(4 231 849)
14 660 332
14 660 332
12 263 607
Total comprehensive income for the six months attributable to:
Owners of the parent
Non-controlling interest
12 263 607
-
Net loss for the six months attributable to:
Owners of the parent
Non-controlling interest
(2 396 725)
-
Loss per share (cents)
Basic loss per share
Diluted loss per share
Headline loss per share (cents)
Basic headline loss per share
Diluted headline loss per share
(2 396 725)
(2 396 725)
(2 396 725)
(2 396 725)
Weighted average shares in issue
100
102
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Balance at 01 March 2016
Loss for the six months
Other comprehensive income
Total contributions by and
distributions to owners of Group
recognised directly in equity
Balance at 31 August 2016
Stated
capital
R
100
-
Revaluation
reserve
R
14 660 332
Accumulated
loss
R
(5 483 531)
(2 396 725)
-
Total
equity
R
(5 483 431)
(2 396 725)
14 660 332
100
14 660 332
(7 880 256)
(6 780 176)
CONSOLIDATED STATEMENT OF CASH FLOWS
Group
6 months ended
31 August
2016
R
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash used in operations
Interest received
Finance costs
Net cash from operating activities
18 575 065
(19 295 045)
(719 980)
2 903
(1 417 296)
(2 134 373)
Cash flows from investing activities
Acquisition of property, plant and equipment
(800 963)
Cash flows from financing activities
Proceeds from related party loan
Repayment of financial liability
Repayment of finance lease
Net cash from financing activities
3 594 342
(492 624)
(181 175)
2 920 543
Total cash movement for the period
Cash at the beginning of the 6 months
Total cash at end of the period
(14 693)
21 910
7 217
103
Segmental Information
The reportable segments, which represents the structure used by the chief operating decision maker, to make key operating decisions and
assesses performance, are set out below:
Reportable segment
The reportable segments identified and reported on are the individual schools namely:





PLG Ballito Academy;
PLG Hartbeespoort Academy;
PLG Mellow Oaks Academy;
PLG Northriding Academy; and
PLG Willow View Academy.
Segmental revenue, total assets, total liabilities and results
The Directors assesses the performance of the operating segments based on the measure of operating profit. The segment information
provided to the Directors is presented below:
Revenue
Other income
Operating expenses
EBITDA
Finance costs
Interest income
Depreciation and
amortisation
Profit/(Loss)
Total assets
Total liabilities
Total
20 635 210
5 910
(21 871 131)
(1 230 011)
(1 417 296)
2 903
Ballito
4 842 859
(5 609 497)
(766 637)
(1 723)
53
PLG
Willow View
3 471 275
(4 039 264)
(567 988)
(290)
68
PLG
Hartbeesboort
5 418 767
5 910
(4 865 270)
559 407
(1 281 774)
1 088
PLG
Mellow Oaks
3 835 374
(2 732 678)
1 102 696
(1 118)
845
PLG
Northriding
3 066 934
(3 795 565)
(728 630)
(3 695)
849
Head
Office
(828 858)
(828 858)
(128 696)
-
(202 274)
(2 846 679)
(48 364)
(816 672)
(47 421)
(615 631)
(67 879)
(789 158)
(16 123)
1 086 301
(22 487)
(753 964)
(957 554)
51 912 967
(45 132 791)
1 927 964
(4 149 791)
1 725 264
(1 980 116)
44 600 332
(25 348 668)
2 013 613
(967 286)
1 289 664
(2 639 180)
356 130
(10 047 750)
The Group‟s operating segments are determined by reference to the level of operating results regularly reviewed by the Chief operating
decision maker to make decisions about resources to be allocated and for which discrete financial information is available. Operating
segments which exhibit similar long-term financial performance and have similar economic characteristics are amalgamated. The revenue
earned by the Schools segments are derived from educational services. Each school is identified to be an operating segment. The major
sources of revenue are school fees, boarding fees, registration fees, and sundry income. Finance costs and taxation are assessed by the Chief
operating decision maker at a total Group level and not considered separately at a segmental level. There is no inter-segmental revenue.
104
ANNEXURE 4A
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF
PL GROUP FOR THE YEAR ENDED 29 FEBRUARY 2016
“2 March 2017
The Directors
Pembury Lifestyle Group Limited
111 9th Street
Fairland
2030
Dear Sirs
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF
PEMBURY LIFESTYLE GROUP LIMITED (“PL GROUP”) FOR THE YEAR ENDED 29 FEBRUARY 2016
At your request and for the purposes of the Prospectus to be dated on or about 3 March 2017 (“the
Prospectus”), we present our audit report on the historical financial information for the year ended
29 February 2016, in compliance with the JSE Listings Requirements.
Opinion
I have audited the historical financial information of PL Group Limited set out in Annexure 3A of the
Prospectus, which comprise the Consolidated Statement of Financial Position as at 29 February 2016,
and the Statement of Profit or Loss and Other Comprehensive Income, Statement of Changes in
Equity and Statement of Cash Flows for the year then ended, and notes to the Financial Statements,
including a summary of significant accounting policies.
In my opinion, the historical financial information present fairly, in all material respects, for the
purposes of the Prospectus, the financial position of PL Group Limited and its subsidiary companies
as at 29 February 2016, and its financial performance and cash flows for the year then ended in
accordance with International Financial Reporting Standards and the requirements of the
Companies Act 71 of 2008 (Amended) and the JSE Listing requirements.
Basis for opinion
I conducted my audit in accordance with International Standards on Auditing. My responsibilities
under those standards are further described in the Reporting Accountant‟s Responsibilities for the
Audit of the historical financial information section of my report. I am independent of the company
in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct
for Registered Auditors (IRBA Code) and other independence requirements applicable to
performing audits of financial statements in South Africa. I have fulfilled my other ethical
responsibilities in accordance with the IRBA Code and in accordance with other ethical
requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the
International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants
(Parts A and B). I believe that the audit evidence I have obtained is sufficient and appropriate to
provide a basis for my opinion.
105
Directors Responsibility for the historical financial information
The Directors are responsible for the preparation, contents and presentation of the Prospectus and
the fair presentation of the historical financial information in accordance International Financial
Reporting Standards (“IFRS”) and International Financial Reporting Interpretations Committee
(“IFRIC”) interpretations issued and effective at the time of preparing these financial statements and
the requirements of the Companies Act 71 of 2008 (Amended) as amended and for such internal
control as the directors determine is necessary to enable the preparation of historical financial
information that are free from material misstatement, whether due to fraud or error.
In preparing the historical financial information, the directors are responsible for assessing the
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 company or to cease operations, or have no realistic alternative but to do so.
Reporting Accountant’s Responsibility
My objectives are to obtain reasonable assurance about whether the historical financial information
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with International Standards on Auditing
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 historical financial
information.
As part of an audit in accordance with International Standards on Auditing, I exercise professional
judgement and maintain professional scepticism throughout the audit. I also:
 Identify and assess the risks of material misstatement of the historical financial information,
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 my 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 company‟s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the director.
 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 company‟s ability to continue as a
going concern. If I conclude that a material uncertainty exists, I am required to draw attention in
my auditor's report to the related disclosures in the historical financial information or, if such
disclosures are inadequate, to modify my opinion. My conclusions are based on the audit
evidence obtained up to the date of my auditor's report. However, future events or conditions
may cause the company to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the historical financial information,
including the disclosures, and whether the historical financial information 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 historical financial information.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
106
I communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that I
identify during my audit.
Report on other legal and regulatory requirements
In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, I
report that Moore Stephens FRRS Incorporated has been the auditor of Pembury Lifestyle Group
Limited for 1 year.
Consent
We consent to the inclusion of this report and the reference to our opinion in the Prospectus in the
form and context in which it appears.
Yours faithfully
Moore Stephens FRRS Incorporated
Chartered Accountants (SA)
Registered Auditors
Per L.B. Roberts
Director
Moore Stephens House,
18 Lakeview Crescent, Kleinfontein Lake, Benoni, 1501
(PO Box 663, Benoni, 1500)
107
ANNEXURE 4B
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF
PL GROUP FOR THE SIX MONTHS ENDED 31 AUGUST 2016
“2 March 2017
The Directors
Pembury Lifestyle Group Limited
111 9th Street
Fairland, 2030
Dear Sirs
INDEPENDENT REVIEWER’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF PEMBURY
LIFETSYLE GROUP LIMITED (“PL GROUP”) FOR THE SIX MONTHS ENDED 31 AUGUST 2016.
We have reviewed the historical financial information of PL Group, set out in Annexure 3B, which
comprise the statement of financial position as at 31 August 2016 and the statement of profit or loss
and other comprehensive income, statement of changes in equity and statement of cash flows for
the six months then ended.
Directors' Responsibility for the Historical Financial Information
The company‟s directors are responsible for the preparation and fair presentation of these historical
financial information in accordance with International Financial Reporting Standards, The JSE Listing
requirements and the requirements of the Companies Act, 71 of 2008, and for such internal control
as the directors determine necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Independent Reviewer’s Responsibility
Our responsibility is to express a conclusion on the historical financial information. We conducted our
review in accordance with International Standards on Review Engagements (ISRE) 2410, “Review of
Interim Financial Information Performed by the Independent Auditor of the Entity.” ISRE 2410 requires
us to conclude whether anything has come to our attention that causes us to believe that the
historical financial information, taken as a whole, are not prepared in all material respects in
accordance with the applicable financial reporting framework. This Standard also requires us to
comply with relevant ethical requirements.
A review of historical financial information in accordance with ISRE 2410 is a limited assurance
engagement. The independent reviewer performs procedures, primarily consisting of making
inquiries of management and others within the entity, as appropriate, and applying analytical
procedures, and evaluates the evidence obtained.
A review is substantially less in scope than an audit conducted in accordance with International
Standards on Auditing and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not
express an audit opinion.
108
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the historical
financial information do not present fairly, in all material respects the financial position of PL Group
Limited as at 31 August 2016, and its financial performance and cash flows for the interim then
ended for the purposes of the Prospectus, in accordance with International Financial Reporting
Standards and in the manner required by the Companies Act of South Africa and the JSE Listings
Requirements.
Moore Stephens FRRS Incorporated
Chartered Accountants (SA)
Registered Auditors
Per: L.B. Roberts
Director
Moore Stephens House, 18 Lakeview Crescent, Kleinfontein Lake,
Benoni, 1501
109
ANNEXURE 5
PRO FORMA FINANCIAL INFORMATION OF PL GROUP
The pro forma financial information is the responsibility of the Directors and has been prepared for
illustrative purposes only and because of its nature may not fairly present the Group‟s financial
position, changes in equity, results of operations or cash flows. The pro forma financial effects are
based on the assumption that the Private Placement and the Listing occurred on 31 August 2016 for
statement of financial position purposes and 1 March 2016 for statement of comprehensive income
purposes and are based on the reviewed results for the six months ended 31 August 2016.
The pro forma financial effects have been prepared in accordance with the JSE Listings
Requirements, IFRS, the accounting policies to be adopted by the Group and the SAICA guide on
pro forma financial information.
The independent reporting accountants‟ report on the pro forma financial information is set out in
Annexure 6 to this Prospectus.
110
Pro Forma statement of financial position as at 31 August 2016
Acquisition
Fair value
31 August of Properties adjustment
2016
(A)
(B)
Column 1
Column 2
Column 3
R
R
Assets
Non-current assets
48 399 453
114 900 000
41 900 000
Property, plant and
equipment
45 707 439
114 900 000
41 900 000
Goodwill
2 692 014
Current assets
3 513 514
Trade and other receivables
3 506 297
Cash and cash equivalents
7 217
Total assets
51 912 967
114 900 000
41 900 000
Equity and liabilities
Capital and reserves
6 780 176
32 514 400
Stated capital (Note 5)
100
Reserve
14 660 332
33 678 400
Accumulated loss
(7 880 256)
- (1 164 000)
Non-current liabilities
33 706 471
114 900 000
9 385 600
Loan from related party
11 163 596
3 400 000
Financial liability
747 017
24 000 000
Finance lease liabilities
20 054 597
Owed to property vendors
87 500 000
Deferred tax
1 741 261
9 385 600
Current liabilities
11 426 320
Financial liability
619 807
Finance lease liabilities
899 581
Trade and other payables
9 906 932
Total equity and liabilities
51 912 967
114 900 000
41 900 000
Fully diluted shares in issue
(assuming sub-division)
Net asset value per share
(cents)
Pro Forma
after
(A) and (B)
Column 4
R
Minimum
Subscription
(C)
Column 5
R
Pro Forma
31 August
2016
Column 6
R
Balance of
Private
placement
Column 7
R
Pro Forma
31 August
2016
Column 8
R
205 199 453
-
205 199 453
-
205 199 453
202 507 439
2 692 014
3 513 514
3 506 297
7 217
208 712 967
18 538 890
18 538 890
18 538 890
202 507 439
2 692 014
22 052 404
3 506 297
18 546 107
227 251 857
-
202 507 439
2 692 014
22 052 404
3 506 297
18 546 107
227 251 857
39 294 576
100
48 338 732
(9 044 256)
157 992 071
14 563 596
24 747 017
20 054 597
87 500 000
11 126 861
11 426 320
619 807
899 581
9 906 932
208 712 967
136 900 000
136 900 000
(107 554 597)
(20 054 597)
(87 500 000)
(10 806 513)
(899 581)
(9 906 932)
18 538 890
176 194 576
136 900 100
48 338 732
(9 044 256)
50 437 474
14 563 596
24 747 017
11 126 861
619 807
619 807
227 251 857
10 000 000
10 000 000
(10 000 000)
(10 000 000)
-
186 194 576
146 900 100
48 338 732
(9 044 256)
40 437 474
4 563 596
24 747 017
11 126 861
619 807
619 807
227 251 857
200 000 000
-
-
200 000 000
143 000 000
343 000 000
10 000 000
353 000 000
0.03
-
-
0.20
-
0.51
-
0.53
111
Notes:
1. Column 1 is extracted from the reviewed results for the six months ended 31 August 2016, which includes the acquisition of the Hartbeespoort
Property and business.
2. Column 2 shows the acquisition of the Acquisition Properties at cost extracted from the Acquisition Agreements detailed in paragraph 1.7.2,
the associated liabilities, excluding the Hartbeespoort Property. The related party loan has been provided by Pembury Services, which
company has paid for deposits on the various Acquisition Properties. This will have a once off effect on PL Group. The acquisition properties
are classified as owners occupied on consolidation in terms IAS 16 and is therefore accounted for as property, plant and equipment. The
revaluation method is applied for land and buildings and the properties are therefore subsequently measured at fair value.
3. Column 3 shows the effect of the fair value adjustments (using Level 3 inputs in accordance with the fair value hierarchy of IFRS 13) based on
the independent valuations performed as summarised in Annexure 19, including an impairment of R1 500 000 on one property, and
adjustment for deferred taxation at capital gains tax rates at 80% of 28%. This will have a once off effect on PL Group.
4. Column 4 shows the pro forma Statement of Financial Position after the acquisition of the Acquisition Properties before settling of amounts
owed to the Vendors.
5. Column 5 shows effect of the minimum subscription of 140 000 000 shares at R1.00 per share, the listing costs settled through the issue of shares
which includes the issue of 3 000 000 shares to Arbor Capital on 28 November 2016 in accordance with IFRS 2 and capital raising fees,
settlement of amounts owed to the Vendors, settlement of trade creditors and the balance to cash and cash equivalents. The settlement of
liabilities and costs will have a once off effect on PL Group. The proceeds from the minimum subscription will not be used to settle the related
party loan from Pembury Services.
6. Capital raising fees at 2.5% on R140 000 000 amounting to R3 500 000 have been assumed to reduce Stated Capital. This will have a once-off
effect on PL Group.
7. Column 6 shows the pro forma Statement of Financial Position after the minimum subscription.
8. Column 7 shows the additional placement of 10 000 000 shares at R1.00 per shares, on which no capital raising fees will be applicable, which
are assumed to reduce the related party loans. This will have a once off effect on PL Group.
9. Column 8 shows the pro forma Statement of Financial Position after the capital raise, the settlement of liabilities and the payment of capital
raising fees.
112
Pro Forma Statement of comprehensive income as at 31 August 2016
Revenue
Other income
Operating Expenses
Operating loss
Impairment of property
(Loss) before interest and
taxation
Interest
Interest received
Finance costs
Loss before taxation
Taxation
Net profit/(loss) after
taxation
Gains on property
revaluation
Income tax relating to
items that will not be
reclassified
Total items that will not be
reclassified to profit and
loss
Other comprehensive
income for the six months,
net of taxation
Total comprehensive
income for the six months
Fully diluted shares in issue
Loss per share (cents)
Headline loss per share
(cents)
31 August
2016
Column 1
R
20 635 210
5 910
(22 073 405)
(1 432 285)
-
Acquisition of
Properties
And
Minimum
Subscription
(A)
Column 2
R
(86 372)
(86 372)
(1 500 000)
Pro forma
after (A)
Column 3
R
20 635 210
5 910
(22 159 777)
(1 518 657)
(1 500 000)
Full private
placement
Column 4
R
-
at 31 August
2016
Column 5
R
20 635 210
5 910
(22 159 777)
(1 518 657)
(1 500 000)
(1 432 258)
(1 414 394)
2 903
(1 417 297)
(2 846 679)
449 954
(1 586 372)
(511 400)
(511 400)
(2 097 772)
503 376
(3 018 657)
(1 925 794)
2 903
(1 928 697)
(4 944 451)
953 330
-
(3 018 657)
(2 000 794)
2 903
(1 928 697)
(4 944 451)
953 330
(2 396 725)
(1 594 396)
(3 991 121)
-
(3 991 121)
18 892 181
43 400 000
62 292 181
-
62 292 181
(4 231 849)
(9 721 600)
(13 953 449)
-
(13 953 449)
14 660 332
33 678 400
48 338 732
-
48 338 732
14 660 332
33 678 400
48 338 732
-
48 338 732
12 263 607
32 084 004
44 347 611
-
44 347 611
200 000 000
(1.20)
143 000 000
-
343 000 000
(1.16)
10 000 000
-
353 000 000
(1.13)
(1.20)
-
(1.16)
-
(1.13)
113
Pro forma
Notes:
1. Column 1 is extracted from the reviewed interim results for the six months ended 31 August 2016,
which includes the acquisition of the Hartbeespoort Property.
2. Column 2 assumes that the minimum subscription is raised at the beginning of the period and is
applied to:
 reduce all property vendor obligations (other than the R24 000 000 property vendor loan);
 to reduce all existing interest bearing liabilities at 1 March 2016; and
 that the R24 000 000 property vendor loan was raised with effect from 1 March 2016 at an
interest rate of 15% as per the Acquisition Agreements;
 that R2 015 582 of the listing costs are not deductible against stated capital,
 that an impairment of property arises as a result of the purchase price of the Willow View
Property being greater than the amount at which it was valued. For taxation purposes, capital
gains tax on the impairment was calculated at an effective rate of 22.4%; and
 applying taxation at a notional interest rate at 28%.
No interest received has been assumed on positive bank balances.
Other than the impairment and the listing costs, the above will have a continuing effect on the
Group.
3. Column 2 - Issue expenses relating to the listing of PL Group total R2 015 582 as detailed in
Paragraph 1.13 of this Prospectus, which adjustment is shown against operating expenses. These
fees include R400 000, which were settled though the issue of 3 000 000 shares. The IFRS 2 fair
value of services per invoice is at R400 000 and as per letter of engagement. This will have a
once-off effect on the group. It should be noted that the capital raising fees of R3 500 000 have
been set off against stated capital and does not have an impact on the statement of
comprehensive income.
4. Column 2 - An adjustment to operating expenses, reducing lease costs and accounting for costs
associated with ownership of the properties, has been reflected as per the table below:
R
(2 967 154)
Rental reduced
Increased insurance
61 305
Increased rates
95 500
Increased rates assumed for three properties
VAT leakage at 14% on inter-company rental assumed from 1 March 2016
(incurred on inter-group rental charge from PLG Properties as PLG Schools
revenue is VAT exempt so the VAT cannot be deducted)
135 574
745 565
(1 929 210)
5.
6.
7.
8.
9.
This will have a continuing effect. The information is based on actual costs related to the
properties. The Hartbeespoort property is excluded from the VAT leakage calculation as this
property is currently owned by PLG Schools and thus there will be no VAT leakage.
Column 2 - A notional taxation rate of 28% per annum is assumed.
Column 2 – Other Comprehensive Income has been adjusted for fair value gains on the property
acquisitions, excluding Hartbeespoort, net of deferred taxation calculated at capital gains tax
rate of 22.4%, represent the once off fair value adjustment made based on Level 3 inputs in
accordance with the fair value hierarchy of IFRS 13.
Column 3 shows the pro forma Statement of Comprehensive Income after the acquisition of the
properties, the minimum subscription and the issue of 143 000 000 new shares.
Column 4 assumes that the balance of the Private Placement is raised at the beginning of the
period and reduces the related party loans. However, this has no impact other than the issue of
10 000 000 Shares as the related party loans do not bear interest. This will have a once off effect
on the Group.
Column 5 shows the pro forma Statement of Comprehensive Income after the acquisition of the
properties and the full Private Placement
114
ANNEXURE 6
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PRO FORMA FINANCIAL INFORMATION OF
PL GROUP
“2 March 2017
The Directors
Pembury Lifestyle Group Limited
111 9th Street
Fairland
2030
Dear Sirs
INDEPENDENT ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF THE PRO FORMA
FINANCIAL INFORMATION OF PEMBURY LIFESTYLE GROUP LIMITED (“PL GROUP”)
Introduction
We have completed our assurance engagement to report on the compilation of the pro forma
financial information of PL Group by the Directors. The pro forma financial information, as set out in
Annexure 5 to be issued by the PL Group on or about 3 March 2017 (“the Prospectus”), consists of
the pro forma statement of financial position, the pro forma statement of comprehensive income
and related notes. The pro forma financial information has been compiled on the basis of the
applicable criteria specified in the JSE Listings Requirements.
The pro forma financial information has been compiled by the Directors to illustrate the impact of
the Preferential offer, Private Placement and Listing on the Group‟s financial position as at 31 August
2016, and the Group‟s financial performance for the period then ended, as if the transactions had
taken place at 31 August 2016 for purposes of the pro forma statement of financial position and at
1 March 2016 for purposes of the pro forma statement of comprehensive income.
As part of this process, information about the Group‟s financial position and financial performance
has been extracted by the Directors from the Group‟s financials for the six months ended 31 August
2016, on which a review report has been published.
Directors’ Responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information on the basis of the
applicable criteria specified in the JSE Listings Requirements and the SAICA Guide on Pro forma
Financial Information (“Applicable Criteria”) described in Annexure 5 of the Prospectus.
Reporting Accountant’s Responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has
been compiled, in all material respects, by the Directors on the basis of the Applicable Criteria
based on our procedures performed.
We conducted our engagement in accordance with International Standard on Assurance
Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus, issued by the International Auditing and Assurance
Standards Board. This standard requires that we comply with ethical requirements and plan and
perform our procedures to obtain reasonable assurance about whether the pro forma financial
information has been compiled, in all material respects, on the basis of the Applicable Criteria.
115
For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the pro forma financial information,
nor have we, in the course of this engagement, performed an audit or review of the financial
information used in compiling the pro forma financial information.
As the purpose of pro forma financial information included in a prospectus is solely to illustrate the
impact of a significant corporate action or event on unadjusted financial information of the group
as if the corporate action or event had occurred or had been undertaken at an earlier date
selected for purposes of the illustration, we do not provide any assurance that the actual outcome
of the event or transaction would have been as presented.
A reasonable assurance engagement to report on whether the pro forma financial information has
been compiled, in all material respects, on the basis of the applicable criteria involves performing
procedures to assess whether the applicable criteria used in the compilation of the pro forma
financial information provides a reasonable basis for presenting the significant effects directly
attributable to the corporate action or event, and to obtain sufficient appropriate evidence about
whether:
 the related pro forma adjustments give appropriate effect to those criteria; and
 the pro forma financial information reflects the proper application of those adjustments to the
unadjusted financial information.
Our procedures selected depend on our judgment, having regard to our understanding of the
nature of the Company, the corporate action or event in respect of which the pro forma financial
information has been compiled, and other relevant engagement circumstances.
Our engagement also involves evaluating the overall presentation of the pro forma financial
information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Opinion
In our opinion, the pro forma financial information has been compiled, in all material respects, on
the basis of the applicable criteria specified by the JSE Listings Requirements and described in
Annexure 5 of the Prospectus.
Consent
This report on the pro forma financial information is included solely for the information of the
PL Group shareholders. We consent to the inclusion of our report on the pro forma financial
information, and the references thereto, in the form and context in which they appear in the
Prospectus.
Yours faithfully
Moore Stephens FRRS Incorporated
Chartered Accountants (SA)
Registered Auditors
Per L.B. Roberts
Director
Moore Stephens House,
18 Lakeview Crescent, Kleinfontein Lake, Benoni, 1501
(PO Box 663, Benoni, 1500)”
116
ANNEXURE 7
PROFIT FORECASTS OF PL GROUP FOR THE YEARS ENDING 31 DECEMBER 2017 AND 31 DECEMBER 2018
The profit forecasts of PL Group are presented for the year ending 31 December 2017 and the year
ending 31 December 2018. The preparation of the profit forecasts is the responsibility of the Directors
of PL Group and the profit forecasts are set out below. The accounting policies applied in arriving at
the estimate and forecast incomes are consistent in all respects with IFRS and with those accounting
policies applied in the historic information presented in this Prospectus.
The profit forecasts have been prepared for illustrative purposes only, to provide information on what
the directors believe will be the financial performance of PL Group for the periods ending
31 December 2017 and 31 December 2018. The nature of the profit forecast may not fairly present
PL Group‟s financial position, changes in equity, and results of operations or cash flow information
after the Private Placement. The forecast financial information has been prepared in accordance
with paragraph 8.40 of the JSE Listing Requirements.
31 December
2017
68 558 960
(69 161 737)
31 December
2018
135 617 381
(106 644 002)
(602 778)
(765 968)
(1 368 745)
(4 986 268)
(6 355 103)
1 779 404
(4 575 610)
33 678 400
43 400 000
(9 721 600)
29 102 790
28 973 379
(1 459 631)
27 513 748
(9 518 011)
17 995 737
(5 038 806)
12 956 931
12 956 931
Total comprehensive loss for the year attributable to:
Owners of the parent
Non-controlling interest
29 102 790
-
12 956 931
-
Net (loss)/profit for the year attributable to:
Owners of the parent
Non-controlling interest
(4 575 610)
-
12 956 931
-
Net (loss)/profit after taxation
Headline earnings adjustment – impairment of property
Headline (loss)/earnings
(4 575 610)
1 500 000
(3 075 610)
12 956 931
12 956 931
353 000 000
(1.30)
(0.87)
353 000 000
3.67
3.67
Revenue
Operating expenses
(Loss)/Profit before interest, taxation depreciation and
amortisation
Amortisation
Depreciation
(Loss)/Profit before interest and tax
Interest received
Interest paid
(Loss)/Profit before taxation
Taxation
Net (loss)/profit after taxation
Other comprehensive income
Revaluation of properties to fair value
Deferred taxation
Total comprehensive income
Share in issue (assuming fully diluted)
(Loss)/Earnings per share (cents)
Headline (loss)/earnings per share (cents)
117
Assumptions:
The assumptions utilised in the profit forecast and which are considered by management to be
significant or are key factors on which the results of the Company will depend, are disclosed below.
The assumptions disclosed are not intended to be an exhaustive list. There are other routine
assumptions which are not listed. The actual results achieved during the forecast period may vary
from the forecast and the variations may or may not be material. The main key driver of the
forecast is the number of students. The student metrics are set out below:
Capacity per School (before and after capex spend)
Willow View
Hartbeespoort
Mellow Oaks
Northriding
Raslouw
Allen‟s View
Springs
Three campuses planned for 2018
Randfontein (Campus 1)
Campus 2
Campus 3
Total
Current Capacity
350
500
400
350
300
250
250
Total Capacity
1 260
1 680
1 680
1 260
1 260
840
560
2 400
1 260
1 260
1 260
11 060
Number of Pupils per School
2016
2017
2018
Willow View
191
324
535
Hartbeespoort
283
463
727
Mellow Oaks
210
354
574
Northriding
178
291
409
Raslouw
0
180
308
Allen‟s View
0
149
233
Springs
0
149
233
Randfontein (Campus 1)
0
0
193
Campus 2
0
0
193
Campus 3
0
0
193
Total
862
*1 910
3 599
* Number of students at 13 January 2017 = 1 810, with parent interviews continuing in January 2017
Pupils as a % of Total Capacity
2016
2017
2018
Willow View
15.16%
25.71%
42.43%
Hartbeespoort
16.85%
27.56%
43.30%
Mellow Oaks
12.50%
21.07%
34.14%
Northriding
14.13%
23.10%
32.49%
Raslouw
0.00%
14.29%
24.44%
Allen‟s View
0.00%
17.74%
27.79%
Springs
0.00%
26.61%
41.68%
Randfontein (Campus 1)
0.00%
0.00%
15.32%
Campus 2
0.00%
0.00%
0.00%
Campus 3
0.00%
0.00%
0.00%
Total
10.09%
22.37%
29.21%
The capacity percentage per school is calculated by dividing the pupil numbers by the school‟s
total capacity. The number of classrooms will be expanded in accordance with pupil growth.
118
Learner numbers to period ended 13 January 2017:
0-3
Gr
Gr Gr R
Gr
Gr
yrs. RRR
RR
1
2
PLG Willow View
19
12
53
52
PLG Hartbeespoort
25
47
48
41
9
PLG Mellow Oaks
6
31
40
61
44
PLG Northriding
12
37
35
43
45
15
PLG Raslouw
7
20
21
30
3
PLG Allens View
25
25
25
48
PLG Springs
11
33
32
43
TOTAL
12
33 155 212 283 303
Gr
3
38
62
Gr
4
24
41
Gr
5
16
42
Gr
6
21
22
Gr
7
18
27
Gr
8
20
43
Gr
9
17
20
Gr
10
6
12
35
29
14
3
8
189
27
18
22
9
6
147
20
15
18
6
4
121
17
7
6
4
77
11
10
8
74
20
10
22
115
9
46
14
32
Gr
11
11
11
Gr
12
-
TOTAL
307
439
335
276
171
141
141
1 810
Learner numbers projected for 2018:
0-3
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
Gr
TOTAL
%
yrs. RRR
RR
R
1
2
3
4
5
6
7
8
9
10
11
12
Increase
PLG Willow View
13
38 104
49
38
41
33
49
27
74
23
12
11
10
535
74%
13
PLG Hartbeespoort
49
71
87
79 100
61
46
54
61
37
15
13
14
727
65%
38
PLG Mellow Oaks
46
574
71%
49
54
87
61
46
36
34
15
42
51
28
13
12
PLG Northriding
15
72
54
74
46
23
28
15
13
13
13
409
49%
44
PLG Raslouw
29
29
27
32
32
24
24
16
16
16
10
10
10
5
308
81%
29
PLG Allens View
29
29
27
32
24
24
16
16
8
233
66%
29
PLG Springs
29
29
27
32
24
24
16
16
8
233
66%
29
Sub-total existing
76
48
47
15
3 006
66%
267 231 304 433 331 287 238 184 179 175 191
PLG Randfontein
18
27
24
20
20
15
15
10
10
10
6
193
100%
18
PLG Campus 2
18
27
24
20
20
15
15
10
10
10
6
193
100%
18
PLG Campus 3
18
27
24
20
20
15
15
10
10
10
6
193
100%
18
TOTAL
15 321 285 385 505 391 347 283 229 209 205 221
94
48
47
15
3 599
99%
The largest growth in the existing schools is expected in the pre-primary and primary schools, particularly from Grade RRR, Grade RR and Grade
1 pupils, being new school entrants, based on the growth experienced from the first school year of 2015, to 2016 and the pupil numbers at the
beginning of 2017. It is assumed that most of the pupils will remain at the schools and will be promoted to the next grade. It is then assumed
that as the schools become more established, more classes will be offered in the different grade levels. It is noted that the number of pupils
increased by 110% from 862 pupils at the end of 2016, excluding PLG Ballito, to 1 810 pupils as at 13 January 2017. Furthermore, this growth is
supported by the shortage of places in Government schools, particularly for Grade 1 and Grade 8 pupils. Additional growth is expected due to
the planned launch of 3 new campuses in 2018, one of which has already been secured, namely Randfontein. Excluding the new campuses,
growth is forecast at 66% on the previous year. The first group of matriculants were at PLG Ballito, which school was closed in 2016 as detailed
earlier. Typically, new schools are launched with high school up to Grade 9 and then they grow into Grades 10 to 12 thus the next new
matriculants will be in 2018.
209
Additional assumptions are as follows:
1. The current market conditions in the industry in which the business operates are not expected to
change substantially. At present, there is a huge demand for affordable private education and a
shortage of places in Government schools.
2. The forecast for the year ending 31 December 2017 is based on the 7 campuses, comprising
19 schools, namely PLG Willow View, PLG Mellow Oaks, PLG Northriding, PLG Hartbeespoort and
newly opened PLG Springs, PLG Allens View and PLG Raslouw. Budgeted student numbers for the
period ending December 2017 is 1 910 students, with 1 810 students confirmed as at 13 January
2017.
3. The majority of revenue, being school fees, is assumed to be earned on a monthly basis, with the
exception of December, each year.
4. Revenue is comprised of school fees, administration and registration fees, aftercare fees, boarding
fees, sundries levies and other fees. School fees represent around 85% of the revenue for the 2017
year and 86% of the revenue for the 2018 year. After care fees represent around 4.5% of the
revenue for the 2017 year and 4% of the revenue for the 2018 year. Boarding fees (2%), nonrefundable entrance fees (4.8%) and sundries levies (3.7%) make up the balance. Revenue is shown
net of discounts allowed, which are assumed at 2% of schools‟ fees per annum.
5. Revenue has been projected per campus, based on the number of schools on the campus, as well
as the growth in the expected number of pupils each year as seen in the pupil metrics above. The
school fees for 2017 are based on the actual published prices, while an increase of 8% per annum,
being the average education inflation in South Africa, is applied for 2018.
6. In 2018, three new campuses have been included in the revenue projection, being
PLG Randfontein Academy and two additional planned campuses. Properties have been
identified for these two campuses but property negotiations will only commence later in 2017 after
the listing. The forecast number of students in 2018 was taken into account when the capex for 2017
was planned. The minimum placement includes provision for capital expenditure during the year
ending 31 December 2017.
7. Indications are that pupil numbers of 1 910 expected for 2017, as set out in the pupil metrics table
above, will be exceeded based on existing pupil numbers of 1 810 at 13 January 2017 and
continuing parent interviews during January 2017. Pupil numbers primarily increase each year from
Grade 000 and Grade 1, being new entrants to the school system. The schools are at a low level of
capacity as the primary business model of PLG Schools is to start up new schools, thus growing off a
low base. The capacity of each school and the percentage occupancy is set out in the tables
above, with growth in pupil numbers, particularly from Grade RRR to Grade 1, being new school
entrants and the planned opening of three new campuses in 2018, being the key driver of growth in
the forecasts. High student intake has also been experienced in the past for Grade 8 school
entrants that need to find a high school. The growth in student numbers is also off a low base. It has
been assumed that the majority of pupils remain at the schools and are promoted to the following
grade, leaving space at the lower grade levels for new school entrants.
8. The revenue has been forecast per pupil, per grade, per school and details of the fee ranges per
school are set out in paragraph 1.3.2.1 of the Prospectus. School fees range from R20 900 per
annum for Grade 000 at the PLG Spring Academy up to R49 500 for Grade 10 for 2017 at
PLG Hartbeespoort Academy. As evidenced by the learner numbers as at 13 January 2017, the
majority of fees are initially earned and forecast from the lower grade levels. Boarding fees range
from R27 500 to R38 500 per annum for 2017 with approximately 50 boarders between PLG Willow
View and PLG Hartbeespoort. Revenue also consists of non-refundable registration fees of R3 000
per pupil. All fees have been assumed to increase by 8% per annum in 2018, being the average
education inflation rate.
9. Due to the nature of the business, there is no cost of sales.
120
10. Salaries make up ±50% of total operational expenses in 2017 and ±60% of total operational
expenses in 2018. Major items of expenditure are set out below:
Salary and wage costs
Rental costs/leasing charges
Municipal charges (including municipal rates and
taxes, electricity and water)
Property related costs (the main elements of which
are repairs & maintenance, insurance and security)
Listing and related fees (higher in 2017 due to the
once-off listing costs, thereafter for on-going listing
costs)
Audit fees
Bad debts provision (at 3.5%)
Directors‟ remuneration
Head office administration
Impairment of property
VAT leakage (incurred on inter-group rental charge
from PLG Properties as PLG Schools revenue is VAT
exempt so the VAT cannot be deducted)
31 December
2017
35 773 056
3 872 497
31 December
2018
64 400 210
586 092
5 427 235
8 295 917
4 130 337
6 862 595
2 614 085
1 350 000
2 399 564
4 110 000
2 154 240
1 500 000
715 286
1 485 000
4 746 608
4 521 000
2 369 664
-
1 355 071
4 703 356
11. Rental expense is included for the first 4 months of the year ending 31 December 2017. However,
upon consolidation of the various properties into the Group following the listing, rent expense will be
cancelled out at a Group level. VAT leakage costs on the intra-group rental have been forecast at
14% of the expected rental charge from 1 May 2017 onwards. VAT Input has been deducted from
the calculated VAT costs in the form of municipal charges, insurance costs and legal fees
calculated at 14%.
12. Listing costs amount to R2 015 582, excluding VAT, as detailed in Paragraph 1.13 of the Prospectus,
excluding capital raising fees, which will be set off against stated capital. A portion of the above
listing costs include R400 000, which was settled through the issue of shares, in accordance with
IFRS 2 based on the fair value of the services received and in terms of the letter of engagement.
13. In 2017, the DBSA loan is projected to be repaid by 30 April 2017 assuming that the Private
Placement is fully subscribed. Interest on the R24 000 000 vendor loan has been assumed at 15% per
annum for 8 months of the year ending 31 December 2017 and for the full year for 31 December
2018. Interest on R20 000 000 for new properties to be acquired for Campus 2 and Campus 3 has
been assumed at 50% of the estimated acquisition cost of R20 000 000 at a rate of 12.5% per annum
commencing from 1 July 2017 assuming that properties will be secured by the middle of 2017.
Interest on planned capital expenditure of R23 000 000 has been assumed at 50% of the estimated
cost of R23 000 000 at a rate of 12.5% per annum, commencing from 1 July 2017 assuming that
properties will be secured by the middle of 2017. The balance of the funding has been assumed to
be settled from funds raised on listing and cash generated from operations. In addition, certain of
the campuses have already become profitable in 2016 (PLG Hartbeespoort and PLG Mellow Oaks),
with most other campuses approaching breakeven during 2017, with the exception of PLG Raslouw.
Accordingly, the Company is comfortable that it will be able to service its debt (noting that
occupational rent will no longer be payable, which will further improve the EBITDA per campus).
Furthermore, it should be noted that the Group will also enjoy the continued support from Pembury
Services, where necessary.
14. Other comprehensive income is comprised of non-distributable reserve and a deferred tax
component calculated at the Capital Gains Tax Rate, both of which arise from the revaluation of
the various properties.
15. A notional company taxation rate of 28% per annum is assumed.
121
16. Provision for bad debts is calculated at 3.5% of the respective revenue figures.
17. Expenses are calculated based on the best estimates of management, taking into account current
needs of the schools. Where it is not possible to estimate the actual expense, an inflation rate of
7% per annum is applied, taking into account the general inflation rate and increase in student
numbers.
Factors under direct influence of directors
Factors 2 to 12 as stated above can be influenced by director actions.
Factors that are exclusively outside the influence of directors
Factors 1, 15 and 16 as stated above are outside the influence of directors.
122
ANNEXURE 8
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE PROFIT FORECASTS OF PL GROUP
“2 March 2017
The Directors
Pembury Lifestyle Group Limited
111 9th Street
Fairland
2030
Dear Sirs
INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE PROFIT FORECAST OF PEMBURY
LIFESTYLE GROUP LIMITED (“PL GROUP”)
We have examined the profit forecasts of PL Group for the periods ending 31 December 2017 and
31 December 2018 respectively as set out in Annexure 7 of the Prospectus of PL Group to be dated on
or about 3 March 2017 (“the Prospectus”).
Directors’ responsibility
The directors are responsible for the forecast, including the assumptions set out in Annexure 7 on which
it is based, and for the financial information from which it has been prepared. This responsibility, arising
from compliance with the Listings Requirements of the JSE Limited, includes: determining whether the
assumptions, barring unforeseen circumstances, provide a reasonable basis for the preparation of the
forecast; whether the forecast has been properly compiled on the basis stated; and whether the
forecast is presented on a basis consistent with the accounting policies of the Company or Group in
question.
Reporting accountants’ responsibility
Our responsibility is to provide a limited assurance report on the forecast prepared for the purpose of
complying with the Listings Requirements of the JSE Limited and for inclusion in the Prospectus to PL
Group shareholders. We conducted our assurance engagement in accordance with the International
Standard on Assurance Engagements applicable to the Examination of Prospective Financial
Information. This standard requires us to obtain sufficient appropriate evidence as to whether or not:
 management‟s best-estimate assumptions on which the estimate and forecast are based are not
unreasonable and are consistent with the purpose of the information;
 the estimate and forecast are properly prepared on the basis of the assumptions;
 the estimate and forecast are properly presented and all material assumptions are adequately
disclosed; and
 the estimate and forecast are prepared and presented on a basis consistent with the accounting
policies of the Company in question for the period concerned.
123
In a limited assurance engagement, the evidence-gathering procedures are more limited than for a
reasonable assurance engagement and, therefore, less assurance is obtained than in a reasonable
assurance engagement. We believe our evidence obtained is sufficient and appropriate to provide a
basis for our limited assurance conclusion.
Conclusion
Based on our examination of the evidence obtained, nothing has come to our attention that causes us
to believe that:
 The assumptions, barring unforeseen circumstances, do not provide a reasonable basis for the
preparation of the forecast;
 The forecasts have not been properly compiled on the basis stated;
 The forecasts have not been properly presented and all material assumptions are not adequately
disclosed; and
 The forecasts are not presented on a basis consistent with the accounting policies of PL Group.
Actual results are likely to be different from the estimate and forecast, since anticipated events
frequently do not occur as expected and the variation may be material; accordingly, no assurance is
expressed regarding the achievability of the estimate and forecast.
Consent
We consent to the inclusion of this report, which will form part of the Prospectus, to be issued on or
about 3 March 2017 in the form and context in which it appears.
Moore Stephens FRRS Incorporated
Chartered Accountants (SA)
Registered Auditors
Per L.B. Roberts
Director
Moore Stephens House,
18 Lakeview Crescent, Kleinfontein Lake, Benoni, 1501
(PO Box 663, Benoni, 1500)”
124
ANNEXURE 9
ALTERATIONS TO SHARE CAPITAL AND PREMIUM ON SHARES
Details shares issued from date of incorporation are set out below:
Details
Subscribers to the
memorandum
Shares in issue prior to subdivision of Shares
Sub-division of shares ahead
of listing at a ratio of
2 000 000:1 and conversion
to shares of no par value
Issue of shares in settlement
of costs
Number of
Shares
Par value
(cents)
100
No par value
3 November
2015
200 000 000
No par value
28 November
2016
3 000 000
No par value
28 November
2016
To be
determined in
accordance
with IFRS 2
Date
Issue Price
(cents)
100
In issue before the Private
Placement
203 000 000
Private Placement of
140 000 000 Shares
140 000 000
No par value
31 March 2017
100
10 000 000
No par value
31 March 2017
100
Capitalisation of
shareholder loan
In issue after the Private
Placement (maximum level)
353 000 000
The share capital of the Company has been sub-divided on a ratio of 2 000 000 shares for 1 share
ahead of the listing in order to restructure the share capital ahead of the Listing. The issued share
capital prior to the sub-division was 100 shares. The sub-division ratio and the issue price for the Private
Placement were determined based on a valuation obtained by the Directors of PL Group ahead of
the listing.
In addition, on 28 November 2016, shareholders have approved a general authority to issue shares for
cash, limited to a maximum of 50% of the issued share capital of the Company on the day of listing of
the Company, in anticipation of listing on the JSE, which provides for the issue of Shares at a maximum
discount of 10% to the 30-day volume-weighted average share price traded on the JSE. This resolution
has been passed in accordance with the JSE Listings Requirements.
125
The appropriate resolutions, authorisations and approvals have been made by the Board in relation to
the securities to be issued.
Other than the above, there have been no repurchase of shares or special resolutions passed by the
Company to change its share capital other than for the adoption of a new MOI in order to ensure
compliance of the MOI with the JSE Listings Requirements.
126
ANNEXURE 10
MATERIAL BORROWINGS, MATERIAL LOANS RECEIVABLE AND INTER-COMPANY LOANS
As at 31 October 2016, being the last month end prior to the Last Practicable Date, PL Group had the
following material borrowings, loans receivable and inter-Company loan commitments:
MATERIAL BORROWINGS
As at 31 October 2016, being the month end prior to the Last Practicable Date, the Group had the
following material borrowings and inter-company loans:
Amount
(R)
Company
Secured
PLG Schools
Lender
Doxa Deo
(back to
back with
DBSA)
22 000 000
PLG Schools
HJN van
Rooyen
13 150 000
PLG Schools
RG Pietersen
3 300 000
PLG Schools
Fifth Season
3 300 000
Repayment
terms
Security
Monthly repayments Hartbeespoort
are equal to the
Property
monthly capital on
the bonds registered
over the
Hartbeespoort
Property with DBSA
and ABSA
An initial deposit of
Raslouw 1
R500 000 (paid) and
Property
the balance to be
paid on the transfer
date
An initial deposit of
R200 000 (paid) and
the balance to be
paid on the transfer
date
An initial deposit of
R200 000 (paid) and
the balance to be
paid on the transfer
date
127
Raslouw 2
Property
Springs
Property
Interest rate/
Occupation rent
Occupational
rent is equal to
the interest
portion of the
amounts owing
to DBSA and
ABSA
Occupational
rent of R80 000
per month is
payable until
28 February
2017, and
R300 000 per
month
thereafter
Occupational
rent of R20 000
per month is
payable
Occupational
rent of R30 000
per month
PLG Schools
GJJ Grobler
PLG Schools
JH van Dyk
Enterprises
CC
PLG Schools
Connie
Mulder
Centre
Zephan
Properties
PLG Schools
7 000 000
Two deposits of
R250 000, paid on
15 June 2016 and 15
July 2016 respectively.
R7 000 000 payable
on 1 July 2017
12 250 000
R70 000 per month
5 500 000 The full purchase price
is payable on the
transfer date
34 000 000
R23 500 000 to be
settled after listing
Allens View
Property
Mellow Oaks
Property
Randfontein
Property
Willow View
Property
A vendor loan of
R13 500 000 to be
repaid within 24
months of the
signature date, being
24 October 2016
PLG Schools
Zephan
Properties
35 000 000
R21 500 000 to be
settled after listing
Northriding
Property
A vendor loan of
R10 500 000 to be
repaid within 24
months of the
signature date, being
24 October 2016
Unsecured
PLG Schools
PLG Schools
Pembury
Services
Pembury
Services
9 532 410
149 578
No fixed terms, in
course of business
Repayable on Listing
12.5% per
annum
Occupational
rent of R72 916
per month
R30 000 per
month.
Occupational
rent of R100 000
per month from
1 December
2016 to transfer
date
N/A
Occupational
rent of R340 000
per month
15% per annum
on the vendor
loan for 24
months,
increasing to
18% thereafter
Occupational
rent of R350 000
per month
15% per annum
on the vendor
loan for 24
months,
increasing to
18% thereafter
None
None
None
None
It is intended that Pembury Services or its nominee will subscribe for 10 000 000 shares at R1.00 per share
(or part thereof) as part of the Private Placement. In the event of the Private Placement being fully
subscribed, the amount owed will be repaid from cash generated from operations of the Group.
128
The amounts which require payment within the next 12 months will be financed out of the Company‟s
existing cash on hand or through cash flow generated by the Company.
Most of the above borrowings arose through the purchase of the various Acquisition Properties. The
Pembury Services borrowings arose in the ordinary course of business to start and grow the business,
funding the working capital requirements and deposits on some of the above properties.
As at the Last Practicable Date, the above borrowings do not carry any rights as to conversion into
securities in the Company nor does the Company have any convertible and/or redeemable
preference shares or debentures.
LOANS RECEIVABLE FROM THIRD PARTIES OR DIRECTORS
There were no loans receivable with any third parties as at the Last Practicable Date.
There are no loans receivable that are owed by a director, manager or associate of PL Group as at
the Last Practicable Date.
129
ANNEXURE 11
OTHER DIRECTORSHIPS HELD BY THE DIRECTORS OF PL GROUP
The directorships held by the Directors of PL Group for the past five years are set out below:
Director/Entity
Andrew McLachlan
Macrodev
Pembury Lodges
Pembury Schools
PLG Retirement Villages
PLG Properties
Pembury Services
Downkew
Pembury Lifestyle Group
R And J Foods
Hostprops 1064
Pickor Six
Smart Tax Services
Trinity Village Gym
Enterprise Status
Director Status
In Business
In Business
In Business
In Business
In Business
In Business
In Business
In Business
AR Final deregistration
Deregistration Process
Deregistration Process
AR Final deregistration
AR Final deregistration
Active
Active
Active
Active
Active
Active
Resigned
Active
Active
Resigned
Active
Resigned
Active
Lou Brits
Elite Kontant Uitlenings Enterprises 11
Elite Kontant Uitlenings Enterprises Iii
Brits En Human Boukontrakteurs
Elite Kontant Uitlenings Enterprises No 1
L And D Consultants
Le-Cor Bou En Ontwikkellaars
Dalou Beleggers En Ontwikkellaars
Netdeal Health And Quality Services
Elite Kontant Uitlenings Enterprises Vi
Lou Brits Investments
Human And Brits Developers
Agteroorsit Boerdery
Blue Dot Properties 1331
Blue Circle Printing
Billabonic Health And Quality Services
Vaal Eiendomme
Nonyana River Estate
Finsbury South Developments
Foilvest Sixteen
Crosscheck Information Bureau
Elite Group
Deregistration Final
Deregistration Final
Conversion
AR Final deregistration
Conversion
AR Final deregistration
Conversion
Conversion
Deregistration Final
AR Final deregistration
AR Final deregistration
Conversion
AR Final deregistration
Deregistration Final
Deregistration Process
In Business
In Business
AR Final deregistration
AR Final deregistration
In Business
In Business
Active
Active
Active
Active
Active
Resigned
Active
Active
Active
Active
Resigned
Active
Active
Active
Resigned
Resigned
Resigned
Resigned
Resigned
Resigned
Resigned
130
Loudal Investments
Ikwezi Insurance Solutions
Dotcom Trading 224
Agteroorsit Boerdery
Big Bucks Financial Services
Paradigm Investments 909
Paradigm Investments 909
Up To Date Financial Services
Pembury Services
Elite Group Management
Dataforce Trading 10 Housing Consortium
Dataforce Trading 10 Housing Consortium
Dataforce Trading 10
Dataforce Trading 10
Expectra Financial Services
Yeoman Security Systems
Thuto-Kgolo Trading
Ikwezi Insurance Solutions Consulting Holdings
Commodum Management Consultants Holdings
Expectra Micro Lending Finance
MS Varachia Holdings Company
CW Human Property Group
Dalou Beleggers En Ontwikkellaars
Solum Property Group
Botshelo General Trading Enterprises
Micro Lending Administration Software
Randfontein Publicity Association
Elite Group Two
Botshelo Building Contractors And Developers
Before The Wind Investments 156
The Debt Solver
Dataforce Housing Consortium
Netdeal Health And Quality Services
AR Final deregistration
Deregistration Process
In Business
Conversion
AR Final deregistration
In Business
In Business
AR Final deregistration
In Business
AR Final deregistration
In Business
In Business
In Business
In Business
AR Final deregistration
AR Final deregistration
In Business
AR Final deregistration
AR Final deregistration
AR Final deregistration
In Business
In Business
In Business
In Business
In Business
AR Final deregistration
In Business
In Business
In Business
AR Final deregistration
In Business
AR Final deregistration
In Business
Active
Resigned
Resigned
Active
Active
Active
Resigned
Active
Resigned
Active
Active
Resigned
Active
Resigned
Resigned
Resigned
Active
Resigned
Resigned
Resigned
Resigned
Resigned
Active
Resigned
Active
Resigned
Resigned
Resigned
Active
Active
Active
Active
Active
Christo Hechter
Morafic Estate Agents
Skyprops 1069
Morafic Property Brokers
Morafic Legal Services
Comonite
Pembury Lifestyle Group
Leano Lecha
Dotcom Trading 224
Pembury Services
Jet Nails
Morafic Property Group
Morafic Property Group
Trackstar Trading 272
Deregistration Final
Deregistration Process
AR Final deregistration
AR Final deregistration
In Business
In Business
Deregistration Process
In Business
In Business
AR Final deregistration
In Business
In Business
AR Final deregistration
Active
Active
Active
Active
Active
Active
Active
Resigned
Resigned
Resigned
Active
Resigned
Resigned
131
Special Weapon And Tactics Debt Collecting Services
Dataforce Trading 10
Solum Property Group
Jet Bronze
RSA Mining And Exploration
RSA Equipment Imports
Stetson's Star Diners
Morafic Racing Stables
Stetson's Horse Feeds
Star Diners International
Tooters Restaurant
Three Diamonds Trading 68
Morafic Foundation
AR Final deregistration
In Business
In Business
AR Final deregistration
Deregistration Process
Deregistration Final
AR Final deregistration
AR Final deregistration
AR Final deregistration
AR Final deregistration
AR Final deregistration
AR Final deregistration
AR Final deregistration
Resigned
Resigned
Active
Resigned
Resigned
Resigned
Resigned
Resigned
Active
Active
Active
Resigned
Active
Riaan van Jaarsveld, Grant Waters and Barry Moyo hold no other directorships as at the Last
Practicable Date.
132
ANNEXURE 12
SUBSIDIARY COMPANIES
Additional details of PL Group‟s subsidiaries as at the Last Practicable Date are listed below:
Name of
Subsidiary
PLG
Schools
PLG
Properties
PLG
Retirement
Villages
Registration
number, date
and place of
incorporation
2015/210968/07
Incorporated in
July 2015 in
South Africa
2016/036937/07
Incorporated in
July 2016 in
South Africa
2016/044296/07
Incorporated in
July 2016 in
South Africa
Holding
Company
Ownership
in
Subsidiary
100%
100%
100%
Main
Business
Provider of
pre-primary
to matric
education
Property
investments
business
Leasing of
residential
retirement
lodges
Authorised
and Issued
Share
capital
Authorised:
R100 divided
into 100
ordinary
shares at R1
each
133
Directors
Andrew
McLachlan
Issued: 100
ordinary
shares at R1
each
R100 divided
into 100
ordinary
shares at R1
each
July 2016
Andrew
McLachlan
Issued: 100
ordinary
shares at R1
each
R100 divided
into 100
ordinary
shares at R1
each
July 2016
Andrew
McLachlan
Issued: 100
ordinary
shares at R1
each
None of the subsidiaries listed above are listed on the JSE.
Date on
Which
Company
became
subsidiary
July 2015
ANNEXURE 13
DETAILS OF IMMOVABLE PROPERTY OWNED AND LEASED FROM THIRD PARTIES
Details of immovable property owned or immovable property leased from third parties are set out
below, noting that the Company intends to acquire all the properties below and is paying
occupational rental or in terms of a finance lease:
Landlord
(Note 1)
JH van Dyk
Enterprises
Connie
Mulder
Centre
C Grobler
Type of
premises
School
School
School/
Conference
Doxa Deo
(Note 3)
Zephan
Prop
School
School/
Conference
Zephan
Prop
School
H van
Rooyen
RG
Pietersen
Springs
School/
Conference
School/
Conference
School/
Conference
Location
8 Van Staden
Road
Roodepoort
Sydney Carter
Street
Randfontein
1014 Landhuis
Street
Allens Nek
Roodepoort
630 Kubla Khan
Drive
Xanadu
Hartbeespoort
31R 1st Road
Kempton Park
Malibongwe
Drive
Northriding
Randburg
290 Poole
Avenue
Raslouw
Centurion
290 Poole
Avenue
Raslouw
Centurion
4 Langlaagte
Road
Springs
Expiry
date
Lessee
(Note 2)
Monthly
payment
(Rand)
Area
(m2)
Escalation
and
frequency
On
transfer
On
transfer
PLG
Schools
R100 000
47 728
8% yearly
PLG
Schools
R60 000
11 750
8% yearly
PLG
Schools
R83 000
14 715
8% yearly
R230 000
101 177
8% yearly
R340 000
85 653
8% yearly
PLG
Schools
R350 000
7 430
8% yearly
PLG
Schools
R80 000
11 893
8% yearly
PLG
Schools
R35 000
10 000
8% yearly
PLG
Schools
R30 000
12 441
8% yearly
On
transfer
On
transfer
On
transfer
On
transfer
PLG
Schools
PLG
Schools
On
transfer
On
transfer
On
transfer
Notes:
1. The properties are all to be transferred to PLG Properties after listing, which is estimated to take
approximately two months after lodging of guarantees.
2. After listing and transfer of the properties, the landlord will be PLG Properties, which will continue to
lease the properties to PLG Schools.
3. It is the intention to settle the DBSA loan, which is currently being paid by PLG Schools in terms of the
agreement with Doxa Deo.
134
In terms of the Properties Acquisition, subject to the payment of the Property Vendors, PL Group will
hold nine properties which will be rented intra-group to PLG Schools, details of which are set out below:
Landlord
PLG
Properties
Type of
premises
School (PLG
Mellow Oaks)
PLG
Properties
School (PLG
Randfontein)
PLG
Properties
School/
Conference
(PLG Allens
View)
School (PLG
Hartbeespoort
)
PLG
Properties
PLG
Properties
PLG
Properties
PLG
Properties
PLG
Properties
PLG
Properties
School/
Conference
(PLG Willow
View)
School (PLG
Northriding)
School/
Conference
(PLG Raslouw)
School/
Conference
(PLG Raslouw)
School/
Conference
(PLG Springs)
Area
(m2)
47 728
Escalation
and
frequency
8% yearly
11 750
8% yearly
2028
R105 000
(rental to be paid
from 2018 onwards)
R125 000
14 715
8% yearly
2027
R340 000
101
177
8% yearly
Expiry
Location date
8 Van Staden 2027
Road
Roodepoort
Monthly
Rental
(Rand)
R200 000
Sydney Carter
Street
Randfontein
1014 Landhuis
Street
Allens Nek
Roodepoort
630 Kubla Khan
Drive
Xanadu
Hartbeespoort
31R 1st Road
Kempton Park
2029
2027
R275 000
85 653
8% yearly
Malibongwe Drive
Northriding
Randburg
290 Poole Avenue
Raslouw
Centurion
290 Poole Avenue
Raslouw
Centurion
4 Langlaagte
Road
Springs
2027
R305 000
7 430
8% yearly
2028
R235 000
11 893
8% yearly
2027
Included in
Above Raslouw
figure
R75 000
10 000
8% yearly
12 441
8% yearly
2028
The date of the acquisition of the properties will be the date of transfer of the properties. The properties
will be leased to PLG Schools.
The consideration for the Acquisition Properties is R136 900 000, of which R5 900 000 has already been
paid. The deposits totalling R5 900 000 were paid by Pembury Services on behalf of PLG Properties and
are thus payable to Pembury Services. The loan from Pembury Services has no set terms of repayment
and has been subordinated. Pembury Services has agreed to subscribe for 10 000 000 Shares at R1.00
in order to capitalise the majority of the related party loans. The funds raised from the listing will not be
used to repay any remaining balance to Pembury Services.
It is the intention that R107 000 000 will be settled in cash from the proceeds of the Private Placement
and R24 000 000 of vendor debt will be utilised.
The properties have been independently valued for the purpose of this Prospectus, further details of
which are set out in Annexure 19.
135
ANNEXURE 14
CURRICULA VITAE OF THE DIRECTORS AND KEY MANAGEMENT OF PL GROUP
ANDREW MCLACHLAN
Education Qualification
B.Sc Construction Management, UOFS
Work Record
 PL Group
 Macrodev Properties
 Demac Construction
1999 – Current
1994-1998
1991-1993
Executive Summary
Andrew is an entrepreneur and founder of Pembury Lifestyle Group. As a student, Andrew
recognised the demand for rental housing and his naturally clear vision, confidence and courage
lead him to acquire and build residential properties, developing a personal property portfolio
whilst learning to find and develop business opportunities. Andrew founded Pembury in
Johannesburg in 1999, starting out with lower end units and eventually achieved his vision of
expanding the Pembury retirement portfolio nationwide.
A committed family man, Andrew‟s interest in education has grown with his own children and as
he recognised the potential of the demand for such businesses. His deep knowledge of efficient
property management, his innate passion for the client –centred world of hospitality and keen
demand-focused business sense has informed the PLG Schools brand, which serves the growing
South African demand for education that is affordable, accessible and in which learners receive
the individual attention and mentorship that will result in their own success and growth.
Andrew established the first PLG school in 2014 after identifying a property that was well suited to
being converted into a school. He grew this to two campuses in 2015 and five campuses in 2016,
of which one comprised the acquisition of an existing school at Hartbeespoort, which was running
at large losses and was facing closure. Since it was acquired, PLG Hartbeespoort Academy has
grown substantially in student numbers and is expected to show an operating profit for the year
ended 31 December 2016.
During the past two years, Andrew has learnt a great deal about education and the establishment
and running of schools and has opened three new campuses in 2017, growing PLG Schools to
seven campuses consisting of 19 schools. Andrew has actively head-hunted top teachers and
appointed them as PLG Headmasters, ensuring the successful running of each campus by assisting
with school management. Subsequently, the number of pupils has grown by 500% over two years.
Andrew will continue to work with Headmasters, teachers, pupils and parents to develop,
implement and assess academic programs and learning environments.
136
RIAAN VAN JAARSVELD
Education Qualification
B. Com; B Com Hons; CTA
Professional Qualification
CA (SA)
Work Record
 PL Group- Financial Director (FD)
 BCX (Telkom Group) -General Manager Finance-Nigeria
 Blue Financial services ALTX listed-COO East Africa
 Absa Barclays group CFO- FD; NBC Tanzania
 WSZAR network- CEO; Worldsites; Internet company
 MTN-CFO MTN Cameroon / Nigeria
 Transnet Group- Senior Manager Finance Alliance Air; Uganda
Current
2016
2012-2015
2004-2012
2001-2003
1999-2001
1989-1999
Executive Summary
Riaan has considerable corporate experience in top management of multinational companies;
with exposure to a variety of industries, including the banking, airline, telecoms, microfinance and
IT industries, and has operated in various countries, (especially African countries). His banking and
service industry exposure has made him very familiar with IFRS, US GAAP and SOX and his regional
experience in different countries ensures that he is very familiar with company law and
international tax requirements (Great Britain, Uganda, Tanzania, Rwanda, Nigeria, Cameroon,
Namibia, Mozambique, Angola and South Africa). He has 10 years‟ experience in the banking
and micro finance industry and has excellent system experience of known public and private
companies. He has exposure to governance projects, franchising and marketing (especially
SME‟s).
Between 1999 and 2004, Riaan was a partner in Gold Nursery School (t/a Rainbow‟s End) which
accommodated 200 children.
In 2013, Riaan became a partner in another nursery school based in Randburg known as Kosi Kasi.
The school is registered for 100 children. Under Riaan‟s guidance, the number of children has
grown from 38 in 2013 to 89 in 2016. Riaan was responsible for various accounting, marketing and
administrative functions.
LOU BRITS
Education Qualification
B.A. Unisa
Work Record
 Botshelo Developers
 Elite Group
 Municipal Manager – Various Municipalities
Current
1996-2007
1979-1995
Executive Summary
Lou Brits is a businessman of distinction with experience detailing from project management,
property development and administration. As a professional Chief Executive Manager at several
Local Municipalities for many years, he had to liaise with not only senior business people from the
private sector but also members of Parliament, Cabinet Ministers and other senior Government
Officials. He also had to advise the Municipal Council on all matters relating to Local Government
issues. Lou made the transformation to the private sector with great success. His strong points are
marketing, financial and administration management.
137
He is one of the pioneers of the Micro Lending industry. As Managing Director of the Elite Group of
companies he has been the main driving force in the success of all the companies within the
group. His excellent administrative abilities and leadership over the years secured Elite‟s position in
a very competitive market. The Company was ultimately bought by a JSE listed company.
He is currently the owner of numerous properties and businesses and a sought-after director for
major business groups.
Lou was elected to the College Council of the Randfontein Technical College in January 1993 and
served until December 1995. This included a period as Deputy Chairman of the Council between
January 1994 and December 1994. He was actively involved in developing strategies to achieve
the mission and goals of the college, setting departmental objectives, assessments and policies
and communicating these to the various stakeholders.
CHRISTO HECHTER
Education Qualification
B.Proc
Work Record
 Solum Property Group
 Morafic Property Group
 Hechter Attorneys
 Truter Crous & Wiggill Attorneys
 Van Deventer & Maree Attorneys
Current
2000 - 2008
1996 -1999
1989 - 1996
1985 - 1989
Executive Summary
Christo was an attorney and has practiced in a variety of legal fields. Through his legal
background, Christo became involved in the property development industry and has been
involved in the successful completion of a number of property developments throughout South
Africa. Christo is a Director of Solum Property Group and still acts as consultant to property
developers and legal firms.
Education is one of Christo‟s passions and he has served on school governing bodies since 2010.
Christo served on the governing body of Rapportryer Primary Schools in Randfontein for four and a
half years, four years of which he served as chairman. He currently serves as the vice chairman of
the Riebeeckrand High School governing body and has done so for the past two and a half years.
As such, he is involved in various management, administrative and financial activities, as well as
liaising with the Department of Education.
138
GRANT WATERS
Education Qualification
D.E. (S.P). HDE (Ac.Spec.) Rhodes University
Work Record
 Kimberley Junior School
 St Patrick's CBC
 Kimberley Junior School
 Spoornet Adult Basic Education
 Macrodev
 Herlear Primary School
Current
1997 - 1999
1996 -1996
1995 - 1995
1994 - 1995
1990 - 1993
Executive Summary
Grant is a well-qualified teacher who graduated from Rhodes University. Grant has 25 years
teaching experience. He has built up many skills and experience from his years teaching in
government schools, including Herlear Primary School and Kimberley Junior School, where he is
currently employed. He has maintained these numerous skills in all aspects of running a school and
in making key decision-making processes both in and outside of the classroom.
BARRY MOYO
Education Qualification
M.A. Accounting and Finance-Lancaster University (United Kingdom)
B.A. Economics (Honours)-Ealing College (United Kingdom)
Professional Qualification
Chartered Accountant (Zimbabwe)
Work Record
 Financial and business consultant
 Sentech SOC Ltd
 Development Bank of Southern Africa/South African Institute of Chartered
Accountants Municipalities Project
 ABSA
 Transnet Limited
 Rotek Industries (Pty) Ltd
 Nedcor Bank -Management Services Division
 National Breweries Limited
 Lever Brothers/Cheesebrough Ponds (Pvt.) Ltd.
Current
2011 - 2013
2007 - 2010
2005 - 2006
2002 - 2004
1994 –2002
1993 - 1994
1988 - 1993
1986 - 1988
Executive Summary
Barry has over 30 years of extensive experience in finance, operational and strategic
management in diverse industries (Financial Services, Telecommunication, Manufacturing and
beverage sector). He also has expertise in Risk Management, Governance and Compliance.
Barry is a founding member of the board of trustees of the Masiyephambili School Trust. The trust
owns Masiyephambili Junior School and Masiyephambili College, both of which are located in
Bulawayo, Zimbabwe. These are private schools which were built from scratch by the trustees. The
junior school was built and started operations in 1991, while the college was built in the mid-2000s.
Barry served actively on the board of trustees from the inception of the project in 1990 until the
mid-2000s.
139
KEY MANAGEMENT
ROB WYATT MINTER
Education Qualification
BEd Hons Educational Psychology, UKZN
BSc Mathematics and Psychology, 1st Class, UNISA
National Diploma (N6) in Mechanical Engineering, Durban Institute of Technology
Higher Diploma in Education, Mathematics teaching, UKZN
National Higher Certificate for Technicians (T4), Mechanical Engineering, PMB Technical College
Work Record
 PLG Hartbeespoort
Oct 2015 – Current
 Treverton College Mooi River
Jul 2008 – Sept 2015
 Clifton College Durban
Jan 2003 – Jul 2008
 Swindon Road Technical College
Jan 1982 – Apr 1992
Executive Summary
Rob has over 35 years of teaching experience and, prior to joining PL Group as headmaster of
PLG Hartbeespoort Academy in 2015, he was a teacher and deputy headmaster of Treverton
College in Kwa-Zulu Natal for over 7 years, which also had boarding facilities. Prior to joining
Treverton, Rob taught for a number of years at both Clifton College Durban and Swindon Road
Technical College.
Rob also has a good mind for business and is working alongside the CEO on operations, with the
intention to appoint him to the PLG Schools Board in due course. Rob is a valuable resource to the
PL Group, bringing a wealth of education experience.
GERHARDUS PETRUS DIPPENAAR
Education Qualification
National Higher Certificate Hoërskool Vorentoe
B.Ed. (HONS) Educational Management, Law and Policy
Mentoring, Guidance and Support for Teachers and Trainers Certificate
Assessors Training
FDE – Randse Afrikaanse Universiteit
THDE – Goudstad Onderwys Kollege
Work Record
 PLG Raslouw College
1 September 2016 - Current
 Orient Islamic School
May 2013 – Dec 2015
 Bishop Bavin School St George‟s
2005 - 2013
 Krugersdorp High School
1992 – 2004
 Hoërskool Louis Trichardt
1989 - 1991
Executive Summary
Gerhard has been appointed to the board of PLG Schools as Chief Operating Officer, along with
Andrew McLachlan and Riaan van Jaarsveld. Gerhard has over 28 years of teaching experience
of which six years was as a Principal. He comes with experience in supervising staff, securing
resources, transforming school cultures and successful implementation of teaching policies. Prior to
joining PL Group as headmaster of PLG Raslouw College, he was Executive Headmaster of Orient
Islamic School in Kwa-Zulu Natal. Gerhard also has a good mind for business and will be a
valuable resource on the PLG Schools board, bringing a wealth of education experience. His
believes strongly all children can learn in a successful learning environment created through
setting high expectations, clear goals and in collaboration with parents and educators.
140
His balanced approach to each aspect of life, including spiritual, family, business, social and
health are fundamental to his personal life values and ethos. As a leader, his creative flair for
solutions to challenges is supported by a background of formal and informal study and broad life
experience. Gerhard‟s ability to read scenario development and prepare constructive and
in-depth plans based on fact, has been extremely valuable to the teams he has been a part
of. By nature, Gerhard‟s drive for solutions is fair, constructive and progressive. His leadership style
is inclusive, and h e can be resolute and strong where needed, in the midst of critical decisionmaking processes.
As the headmaster of PLG Raslouw College, Gerhard is a true visionary with sound morale
character, an able administrator an efficient organizer, competent manager and a role model for
his students and society.
DR CHRISTOFFEL FRANCOIS AYERS
Education Qualification
D.Ed Curr. (RAU)
M.Ed Curr. (RAU)
B.Ed (UP)
Nat. Teachers‟ Dip. (Wits Tech)
Nat.Technical Dip. Mechanical (FET College)
Work Record
 Principal at Randfontein Christian Academy
 Director of C AND B Consultancy Services (Pty) Ltd
 Principal of Aranda Learnership College
 Deputy Chief Education Specialist at Western College for Further
Education and Training
 Principal at Western College for Further Education and Training
 Head of Department – PL3
 High School Teacher
 Artisan Fitter and Turner
Jan 2016 - Current
Sept 2015 - Current
Oct 2008 – Aug 2015
Apr 2003 – Sept 2008
Apr 1993 – Mar 2003
Jan 1985 – Mar 1993
Jan 1978 – Jul 1980
Jan 1972 – Dec 1977
Executive Summary
Chris has been appointed as a specialist consultant to PLG Schools, bringing with him over 38 years
of experience in education as a lecturer, middle management and principal within the school and
FET college domain.
He is well known within various educational circles, including the National Department of
Education, Higher Education and Training, private colleges, school sectors, SETAs and Umalusi and
has experience in liaising with senior decision makers within these sectors. Chris also has vast
experience in project management and was integral in establishing and managing a private
FET college with a specific focus on learnership training in the textile, clothing and leather
industries. He also has extensive experience in the implementation of learnerships within the FP&M
SETA sector. In 2006, Chris was invited to speak at an IVETA conference in Moscow and he is
regularly invited to speak about opportunities involving learnerships at various Trade Conferences
International events in South Africa. Chris boasts over 16 years of experience as a national
moderator for the National Department of Education and has acted as a registered assessor and
moderator within the FP&M SETA, Services SETA and W&R SETA for more than nine years.
Chris currently serves as the principal of the Randfontein Christian Academy, while simultaneously
running his own consultancy firm. He is also a Board member of the Association for Private
Providers in Education Training and Development (APPETD).
141
SHELDON NIELSON
Education Qualification
IHT Hospitality Management
Position in the Company
Operations Manager
Work Record
 PL Group
 Spur
 Seasons Sport & Spa
 Orion Hotels
 Southern Sun – Ridge Hotel & Casino
 Southern Sun – Hemmingway‟s Hotel & Casino
2014 - current
2010 - 2014
2009 – 2010
2007 - 2009
2001 - 2007
Executive Summary
Sheldon Nielson gained most of my work experience working in the hospitality industry for the last
18 years. He has filled various management and operational roles in top class Restaurants and
Hotels in varied locations, including establishments like: Spur, Seasons Sport and Spa, Orion Hotels,
Protea Hotels and the Southern Sun group. My key industry knowledge includes topics like general
management, staff management, customer service, financial controls, Human Resources and
food and beverage management. He has attended numerous training courses during his career
to sharpen his skills and keep up to date with the latest trends.
CORDELIA SACHITI
Education Qualification
B Comm
Position in the Company
Account Manager
Work Record
 PL Group
 Catalyst Accounting
 Mathosa and Associates
 Praise Petroleum
Current
2011-2012
2009-2010
2008-2009
Executive Summary
Cordelia Sachiti has gathered her work experience through loyal service at a firm of auditors and
accountants, working in the insurance sector. Since joining Pembury Lifestyle Group, she has
worked on accounts for various businesses and her responsibilities have grown steadily. Cordelia is
currently responsible for managing accounts at all the PLG Schools, a position that relies on her
detail orientation, analysis and logical thinking. Her strength is her ability to organize and
synthesize information. Cordelia is highly motivated and is currently working towards her
CTA through Unisa.
142
JAQUELIZE NIELSON
Education Qualification
B Sc Botany and Zoology
Position in the Company
Financial Administration and Debtor Manager
Work Record
 PL Group
 JN Photography
 Platinum Life
 Presto Electrical
 Fourways Action Sports
 Lubegistix CC
 Cullinghurst Stud (United Kingdom)
2014 – Current
2011 – Current
2011 – 2014
2009 - 2010
2007 – Current
2005 – 2006
2004 - 2005
Executive Summary
Jaqui Nielson has deployed her science degree into practical skills in a variety of business
environments. She has used her data analysis training, people skills and creativity in fields as varied
as contracting, photography, contracting, sports and logistics. Through her education, Jaqui has
developed a structured, disciplined and analytical approach to managing business
processes. Jaqui is a keen sportswoman and brings a lively sense of teamwork to work groups and
encourages co-operative effort against competition. She first joined Pembury Lifestyle Group as
an assistant manager at a retirement lodge and her clear-cut approach, persuasive
communication and active approach to managing her responsibilities has brought her to our
head office, where she is an ideal Financial Administration and Debtors manager.
HEIDI HIRNER
Education Qualification
B Art Communication
Position in the Company
Marketing Manager
Work Record
 Pembury Lifestyle Group
 Flower Foundation Retirement Homes
 HG Property (originally Heidi‟s Home Rentals)
 IBM Software (Contractor)
 IBM Business continuity and recovery services (Contractor)
 Sumitomo Corporation
 Gillette (Contractor)
 Atlanta Wholesalers
Current
2012 - 2015
2005 - Current
2002 – 2004
2000 - 2002
1998 – 2000
1996 - 1998
1993 - 1996
Executive Summary
Heidi Hirner has considerable experience in administration, logistics, contract management and
marketing in varied industries and in businesses of different sizes, from owner run small businesses to
large corporates. Her first exposure to corporate marketing was as an assistant to the marketing
manager of the software division of IBM – a brand that is ranked amongst the world‟s most
valuable and recognisable. This offered a unique opportunity to learn how worldwide marketing
and communication plans are developed and deployed on a world-wide basis into many
different markets.
These experiences gave her sufficient knowledge to start her own modest and successful small
business from scratch, as sole director - an endeavour which supported her during her mid-life
university studies and continues to grow steadily.
143
Upon achieving her degree with specialisations in Communication and Psychology, she
developed her marketing skills further by honing her selling and need identifications skills in
retirement environment. Her communication and specialised knowledge in child and adolescent
psychology and adulthood and aging have made her well-suited to understanding the needs of
people in the people-centred world of retirement and education services. She uniquely blends
the general skills of marketing management with the public health techniques of program
development.
RAPHAEL RAKARASIKA
Education Qualification
Financial Accounting
Position in the Company
Senior Accounts Manager
Work Record
 PL Group
 Assetown Investments
 Star Africa Corporation Limited
 OK Stores
2008 - current
2006 - 2007
1993 – 2006
1992 - 1993
Executive Summary
Raphael gained most of his work experience working in the Hospitality and Retail industries for the
last 24 years. He has filled various accounting roles in top companies including Star Africa
Corporation Limited and OK Stores. His key industry knowledge includes topics like Financial
Management, Understanding of the industry, Cultural awareness, Communication skills, Customer
service and Language skills. He has attended numerous training courses including Financial
accounting, Communication, Marketing, Bookkeeping and Accounting, and Sage Pastel training
courses during his career to sharpen his skills and keep up to date with the latest trends.
144
ANNEXURE 15
EXTRACTS FROM THE PL GROUP MOI
Below is an extract from the Company‟s MOI approved by the JSE and shareholders which numbering
is as appears in the full MOI.
6.
6.1
6.2
6.3
6.4
ISSUE OF SHARES AND VARIATION OF RIGHTS
The Company is authorised to issue –
6.1.1 such number of ordinary Shares, of the same class, as set out in Schedule 1 hereto, each
of which ranks pari passu in respect of all rights and entitles the holder to –
6.1.1.1 vote at any annual general meeting or general meeting, or as contemplated
in clause 20.2, in person or by proxy, on any matter to be decided by the
Shareholders of the Company and to 1 (one) vote in respect of each ordinary
Share in the case of a vote by means of a poll;
6.1.1.2 participate proportionally in any distribution made by the Company; and
6.1.1.3 receive proportionally the net assets of the Company upon its liquidation;
6.1.2 such number of each of such further classes of Shares, if any, as are set out in Schedule
1 hereto subject to the preferences, rights, limitations and other terms associated with
each such class set out therein.
6.1.3 No further securities ranking in priority to, or pari passu with, existing preference shares, of
any class, shall be created without a special resolution passed at a separate general
meeting of such preference shareholders.
The Company may from time to time by special resolution as contemplated in clause 6.3
below, effect the following changes –
6.2.1 the creation of any class of shares;
6.2.2 the variation of any preferences, rights, limitations and other terms attaching to any
class of shares;
6.2.3 the conversion of one class of share into one or more other classes;
6.2.4 the change of the name of the Company;
6.2.5 increase the number of authorised Shares of any class of the Company‟s Shares;
6.2.6 consolidate and reduce the number of the Company's issued and authorised Shares of
any class;
6.2.7 subdivide its Shares of any class by increasing the number of its issued and authorised
Shares of that class without an increase of its capital;
and such powers shall only be capable of being exercised by the Shareholders by way of a
special resolution of the Shareholders.
The creation, authorisation and classification of Shares, the subdivision or consolidation of
Shares, amendments to the numbers of authorised Shares of each class, the conversion of one
class of Shares into one or more other classes of Shares, the conversion of Shares from par value
to no par value, the change in name of the Company and variations to the preferences, rights,
limitations and other terms associated with any class of Shares as set out in this Memorandum of
Incorporation may be changed only by an amendment of this Memorandum of Incorporation
by way of a special resolution of the Shareholders in a separate meeting and in accordance
with the JSE Listings Requirements and subject to the provisions and limitations of clause 22.1.3
of this Memorandum of Incorporation.
If a fraction of a Share comes into being as a result of any corporate action such fraction will
be subject to compliance with the JSE Listings Requirements‟ rounding convention.
145
6.5
No Shares may be authorised in respect of which the preferences, rights, limitations or any other
terms of any class of Shares may be varied in response to any objectively ascertainable
external fact or facts as provided for in sections 37(6) and 37(7) of the Act.
6.6
The Board has control over all unissued shares per class and may, subject to clause 6.9 and
clause 6.10, resolve to issue Shares of the Company at any time and, where applicable, list such
Shares on the applicable JSE market (“listing”) if:
6.6.1 the issue is within a class, and to the extent that such Shares have been authorised by or
in terms of this Memorandum of Incorporation, but not yet issued; and
6.6.2 the issue, and where applicable, listing, is in respect of a corporate action requiring JSE
approval of a circular or application letter to ensure compliance with the JSE Listing
Requirements, only after obtaining such approval by the JSE that all JSE Listing
Requirements have been met; or
6.6.3 the issue, and where applicable, listing, is in respect of a corporate action requiring JSE
approval of a circular and application letter to ensure compliance with the JSE Listing
Requirements and shareholder approval of one or more resolutions relating thereto in
accordance with the JSE Listings Requirements, only after obtaining all such approvals;
All issues of Shares for cash, including grants / issues of options and/or convertible securities,
must be effected in accordance with the JSE Listings Requirements.
All Securities of the Company for which a listing is sought on the JSE must, notwithstanding the
provisions of section 40(5) of the Act, be issued as fully paid up and must be freely transferable,
unless otherwise required by statute.
Unissued equity securities shall be offered to existing shareholders, pro rata to their
shareholdings, unless such securities are to be issued for an acquisition of assets. However, the
MOI must provide that shareholders in general meeting may authorise the Directors to issue
unissued securities, and/or grant options to subscribe for unissued securities, as the Directors in
their discretion deem fit, provided that such corporate action(s) has/have been approved by
the JSE and are subject to the Listings Requirements.
Notwithstanding the provisions of clauses 6.6 and 6.9 of this Memorandum, any issue of Shares,
Securities convertible into Shares, or rights exercisable for Shares in a transaction, or a series of
integrated transactions shall, in accordance with the provisions of section 41(3) of the Act,
require the approval of the Shareholders by special resolution if the voting power of the class of
Shares that are issued or are issuable as a result of the transaction or series of integrated
transactions will be equal to or exceed 30% (thirty percent) of the voting power of all the Shares
of that class held by Shareholders immediately before that transaction or series of integrated
transactions.
Except to the extent that any such right is specifically included as one of the rights, preferences
or other terms upon which any class of Share is issued or as may otherwise be provided in this
Memorandum of Incorporation in accordance with the JSE Listings Requirements, no
Shareholder shall have any pre-emptive or other similar preferential right to be offered or to
subscribe for any additional Shares issued by the Company.
6.7
6.8
6.9
6.10
6.11
22
22.1
VOTES OF SHAREHOLDERS
Subject to any special rights or restrictions as to voting attached to any Shares by or in
accordance with this Memorandum of Incorporation and the JSE Listings Requirements, at a
Shareholders‟ meeting of the Company –
22.1.1 every person present and entitled to exercise voting rights shall be entitled to 1 (one)
vote on a show of hands, irrespective of the number of voting rights that person would
otherwise be entitled to exercise;
22.1.2 on a poll any person who is present at the meeting, whether as a Shareholder or as
proxy for a Shareholder, has the number of votes determined in accordance with the
voting rights associated with the Securities held by that Shareholder; and
146
the holders of Securities other than ordinary Shares, such as preference shares, but
specifically excluding any special shares created for the purposes of black economic
empowerment in terms of the BEE Act and BEE Codes in compliance with the JSE
Listings Requirements (“BEE Shares”), shall not be entitled to vote on any resolution at a
meeting of Shareholders, except in accordance with paragraph 22.1.3.1 below. In
instances where preference shares and BEE Shares have been issued and, such
shareholders are permitted to vote at general/annual meetings, provided that their
votes may not carry any special rights or privileges and they shall be entitled to one
vote for each share they hold, provided that their total voting right at such a
general/annual general meeting may not exceed 24.99% of the total voting rights of
all shareholders at such meeting.
22.1.4 the holders of such preference shares shall have the right to vote at any
general/annual general meeting of the Company –
22.1.4.1 during any special period, as provided for in 22.1.4.3 below, during which any
dividend, any part of any dividend on such preference shares or any
redemption payment thereon remains in arrears and unpaid; and/or
22.1.4.2 in regard to any resolution proposed for the winding-up of the Company or
the reduction of its capital;
22.1.4.3 the period referred to in paragraph 22.1.4.1 above shall be the period
commencing on a day not being more than six months after the due date of
the dividend or redemption payment in question or, where no due date is
specified, after the end of the financial year of the Company in respect of
which such dividend accrued or such redemption payment became due.
22.1.4.4 if there are listed cumulative and/or listed non-cumulative preference shares
in the capital of the Company, no further securities ranking in priority to, or
pari passu with, existing preference shares, of any class, shall be created
without a special resolution passed at a separate general meeting of such
preference shareholders.
22.1.5 Voting shall be conducted by means of a polled vote in respect of any matter to be
voted on at a meeting of Shareholders if a demand is made for such a vote by –
22.1.6 at least 3 (three) persons having the right to vote on that matter, either as Shareholders
or as proxies representing Shareholders; or
22.1.7 a Shareholder who is, or Shareholders who together are, entitled, as Shareholders or
proxies representing Shareholders, to exercise at least 10% (ten percent) of the voting
rights entitled to be voted on that matter; or
22.1.8 the chairperson of the meeting.
At any meeting of the Company a resolution put to the vote of the meeting shall be decided
on a show of hands, unless a poll is (before or on the declaration of the result of the show of
hands) demanded in accordance with the provisions of clause 22.2 of this Memorandum and
unless a poll is so demanded, a declaration by the chairperson that a resolution has, on a show
of hands, been carried or carried unanimously or by a particular majority or defeated, and an
entry to that effect in the book containing the minutes of the proceedings of the Company,
shall be conclusive evidence of the fact, without proof of the number or proportion of the votes
recorded in favour of or against such resolution. The demand for a poll may be withdrawn.
If a poll is duly demanded, it shall be taken in such manner as the chairperson directs, and the
result of the poll shall be deemed to be the resolution of the meeting at which the poll was
demanded. In computing the majority on the poll, regard shall be had to the number of votes
to which each Shareholder is entitled.
In the case of an equality of votes, whether on a show of hands or on a poll, the chairperson of
the meeting at which the show of hands takes place, or at which the poll is demanded, shall
not be entitled to a second or casting vote.
22.1.3
22.2
22.3
22.4
147
22.5
22.6
22.7
22.8
26
26.1
26.2
A poll demanded on the election of a chairperson (as contemplated in clause 20.5.2) or on a
question of adjournment shall be taken forthwith. A poll demanded on any other question shall
be taken at such time as the chairperson of the meeting directs. The demand for a poll shall
not prevent the continuation of a meeting for the transaction of any business other than the
question upon which the poll has been demanded.
A person who is entitled to more than 1 (one) vote, does not have to exercise all his or her votes
and does not have to exercise all his or her votes in the same manner.
Where there are joint registered holders of any Share, any 1 (one) of such persons may exercise
all of the voting rights attached to that Share at any meeting, either personally or by proxy, as if
he or she were solely entitled thereto. If more than 1 (one) of such joint holders is present at any
meeting, personally or by proxy, the person so present whose name stands first in the Securities
Register in respect of such Share shall alone be entitled to vote in respect thereof.
The board of any company or the controlling body of any other entity or person that holds any
Securities of the Company may authorise any person to act as its representative at any
meeting of Shareholders of the Company, in which event the following provisions will apply –
22.8.1 the person so authorised may exercise the same powers of the authorising company,
entity or person as it could have exercised if it were an individual holder of Shares; and
22.8.2 the authorising company, entity or person shall lodge a resolution of the Directors of
such company or controlling body of such other entity or person confirming the
granting of such authority, and certified under the hand of the chairperson or
secretary thereof, with the Company before the commencement of any Shareholders'
meeting at which such person intends to exercise any rights of such Shareholder,
unless excused from doing so by the chairperson of such meeting.
COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS
Number of Directors
26.1.1 In addition to the minimum number of Directors, if any, that the Company must have to
satisfy any requirement in terms of the Act to appoint an audit committee and a social
and ethics committee, the Board must comprise at least 4 (four) Directors and the
Shareholders shall be entitled, by ordinary resolution, to determine such maximum
number of Directors as they from time to time shall consider appropriate.
26.1.2 All Directors appointed to fill a casual vacancy or if proposed directly by Shareholders
shall be elected by an ordinary resolution passed by Shareholders at a general or
annual general meeting of the Company or in accordance with a resolution passed in
terms of section 60 of the Companies Act, in line with the provisions of the JSE Listings
Requirements from time to time.
Appointment and nomination of Directors
26.2.1 In any election of Directors –
26.2.1.1 the election is to be conducted as a series of votes, each of which is on the
candidacy of a single individual to fill a single vacancy, with the series of
votes continuing until all vacancies on the Board have been filled; and
26.2.1.2 in each vote to fill a vacancy –
26.2.1.2.1 each vote entitled to be exercised may be exercised once; and
26.2.1.2.2 the vacancy is filled only if a majority of the votes exercised
support the candidate.
26.2.2 Subject to the provisions of clauses 26.4.1.1 and29, the Company shall only have
elected Directors and there shall be no ex offıcio Directors appointed or any person
named in this Memorandum of Incorporation able to nominate any person for
appointment as a Director. The appointment of all Directors shall be subject to
shareholder approval at any general or annual general meeting, provided the meeting
is not conducted in terms of Section 60 of the Act, unless permitted by the JSE Listings
Requirements as amended from time to time. The elected Directors may appoint
alternate Directors in accordance with the Act
148
26.3
Eligibility, resignation and retirement of Directors
26.3.1 Apart from satisfying the qualification and eligibility requirements set out in section 69 of
the Act, a person need not satisfy any eligibility requirements or qualifications to
become or remain a Director or a Prescribed Officer of the Company.
26.3.2 No Director shall be appointed for life or for an indefinite period and the Directors shall
rotate in accordance with the following provisions of this clause 26.3.2:26.3.2.1 at each annual general meeting referred to in clause 20.2, 1/3 (one third) of
the Non-Executive Directors for the time being, or if their number is not
3 (three) or a multiple of 3 (three), the number nearest to 1/3 (one third), but
not less than 1/3 (one third), shall retire from office, provided that if a Director
is appointed as an Executive Director or as an employee of the Company in
any other capacity, he or she shall not, while he or she continues to hold that
position or office, be subject to retirement by rotation and he or she shall not,
in such case, be taken into account in determining the rotation or retirement
of Directors provided the meeting is not conducted in terms of section 60 of
the Act, unless permitted by the JSE Listings Requirements as amended from
time to time;
26.3.2.2 the Directors to retire in every year shall be those who have been longest in
office since their last election, but as between persons who were elected as
Directors on the same day, those to retire shall, unless they otherwise agree
among themselves, be determined by lot;
26.3.2.3 a retiring Director shall be eligible for re-election;
26.3.2.4 The Board shall provide the Shareholders with a recommendation in the
notice of the meeting at which the re-election of a retiring Director is
proposed, as to which retiring Directors are eligible for re-election, taking into
account that Director's past performance and contribution.
26.4
Powers of the Directors
26.4.1 The Board has the power to –
26.4.1.1 appoint or co-opt any person as Director, whether to fill any vacancy on the
Board on a temporary basis, as set out in section 68(3) of the Act, or as an
additional Director provided that such appointment must be confirmed by
the Shareholders, in accordance with clause 26.1.1, at the next annual
general meeting of the Company, as required in terms of section 70(3)(b)(i) of
the Act; and
26.4.1.2 exercise all of the powers and perform any of the functions of the Company,
as set out in section 66(1) of the Act,
and the powers of the Board in this regard are only limited and restricted as contemplated in
this clause 26
26.4.2 The Directors may at any time and from time to time by power of attorney appoint any
person or persons to be the attorney or attorneys and agent(s) of the Company for such
purposes and with such powers, authorities and discretions (not exceeding those vested
in or exercisable by the Directors in terms of this Memorandum of Incorporation) and for
such period and subject to such conditions as the Directors may from time to time think
fit. Any such appointment may, if the Directors think fit, be made in favour of any
company, the shareholders, Directors, nominees or managers of any company or firm,
or otherwise in favour of any fluctuating body of persons, whether nominated directly or
indirectly by the Directors. Any such power of attorney may contain such provisions for
the protection or convenience of persons dealing with such attorneys and agents as
the Directors think fit. Any such attorneys or agents as aforesaid may be authorised by
the Directors to sub-delegate all or any of the powers, authorities and discretions for the
time being vested in them.
149
26.4.3 Save as otherwise expressly provided herein, all cheques, promissory notes, bills of
exchange and other negotiable or transferable instruments, and all documents to be
executed by the Company, shall be signed, drawn, accepted, endorsed or executed,
as the case may be, in such manner as the Directors shall from time to time determine.
26.4.4 All acts performed by the Directors or by a committee of Directors or by any person
acting as a Director or a member of a committee shall, notwithstanding that it shall
afterwards be discovered that there was some defect in the appointment of the
Directors or persons acting as aforesaid, or that any of them were disqualified from or
had vacated office, be as valid as if every such person had been duly appointed and
was qualified and had continued to be a Director or member of such committee.
26.4.5 If the number of Directors falls below the minimum number fixed in accordance with this
Memorandum of Incorporation, the remaining Directors must as soon as possible and in
any event not later than 3 (three) months from the date that the number falls below
such minimum, fill the vacancy/ies in accordance with this clause 26.4.1.1 or convene a
general meeting for the purpose of filling the vacancies, and the failure by the
Company to have the minimum number of Directors during the said 3 (three) month
period does not limit or negate the authority of the Board or invalidate anything done
by the Board while their number is below the minimum number fixed in accordance with
this Memorandum of Incorporation.
26.4.6 The Directors in office may act notwithstanding any vacancy in their body, but if after
the expiry of the 3 (three) month period contemplated in clause 26.4.4 their number
remains below the minimum number fixed in accordance with this Memorandum of
Incorporation, they may, for as long as their number is reduced below such minimum,
act only for the purpose of filling vacancies in their body in terms of section 68(3) of the
Act or of summoning general meetings of the Company, but not for any other purpose.
26.5
Directors' interests
26.5.1 A Director may hold any other office or place of profit under the Company (except that
of auditor) or any subsidiary of the Company in conjunction with the office of Director,
for such period and on such terms as to remuneration; appointment; and expenses (in
addition to the remuneration or fees to which he may be entitled as a Director) and
otherwise as a disinterested quorum of the Directors may determine.
26.5.2 A Director of the Company may be or become a Director or other officer of, or
otherwise interested in, any company promoted by the Company or in which the
Company may be interested as shareholder or otherwise, provided that the
appointment and remuneration and expenses in respect of such other office must be
determined by a disinterested quorum of Directors.
26.5.3 Each Director and each alternate Director, Prescribed Officer and member of any
committee of the Board (whether or not such latter persons are also members of the
Board) shall, subject to the exemptions contained in section 75(2) and the qualifications
contained in section 75(3), comply with all of the provisions of section 75 of the Act in
the event that they (or any person who is a related person to them) has a personal
financial interest in any matter to be considered by the Board.
26.5.4 The Directors shall not, for as long as the Securities of the Company is listed on the JSE,
have the power to propose any resolution to Shareholders to ratify an act of the
Directors that is inconsistent with any limit imposed by the Act or this Memorandum of
Incorporation on the authority of the Directors to perform such an act on behalf of the
Company in the event that such a resolution would lead to ratification of an act that is
contrary to the JSE Listings Requirements, unless the Directors have obtained the prior
approval of the JSE to propose such a resolution to Shareholders.
150
27
27.1
27.2
27.3
27.4
DIRECTORS' MEETINGS
Save as may be provided otherwise herein, the Directors may meet together for the despatch
of business, adjourn and otherwise regulate their meetings as they think fit.
The Directors may elect a chairperson and a deputy chairperson and determine the period for
which each is to hold office. The chairperson, or in his absence the deputy chairperson, shall be
entitled to preside over all meetings of Directors. If no chairperson or deputy chairperson is
elected, or if at any meeting neither is present or willing to act as chairperson thereof within 10
(ten) minutes of the time appointed for holding the meeting, the Directors present shall choose
1 (one) of their number to be chairperson of such meeting.
In addition to the provisions of section 73(1) of the Act, any Director shall at any time be entitled
to call a meeting of the Directors.
The Board has the power –
27.4.1 as contemplated in section 74 of the Act, to consider any matter and/or adopt any
resolution other than at a meeting and, accordingly, any decision that could be voted
on at a meeting of the Board may instead be adopted by the written consent of a
majority of the Directors, given in person or by Electronic Communication, provided that
each Director has received notice of the matter to be decided. Furthermore, any such
resolution, inserted in the minute book, shall be as valid and effective as if it had been
passed at a meeting of Directors. Any such resolution may consist of several documents
and shall be deemed to have been passed on the date on which it was signed by the
last Director who signed it (unless a statement to the contrary is made in that resolution)
27.4.2 to conduct a meeting entirely by Electronic Communication, or to provide for
participation in a meeting by Electronic Communication, as set out in section 73(3) of
the Act, provided that, as required by such section, the Electronic Communication
facility employed ordinarily enables all persons participating in the meeting to
communicate concurrently with each other without an intermediary and to participate
reasonably effectively in the meeting;
27.4.3 to determine the manner and form of providing notice of its meetings contemplated in
section 73(4) of the Act, provided that –
27.4.3.1 The notice period for the convening of any meeting of the Board and the
means of giving the notice will be determined by the Board, provided that
any such prior determination may be varied, depending on the
circumstances and reasons for the Directors‟ meeting in question.
27.4.3.2 No meeting of the Board may be convened without notice to all of the
Directors subject to clause 30.5.
27.4.3.3 If all of the Directors acknowledge actual receipt of the notice, are present at
a meeting or waive notice of the meeting, the meeting may proceed even if
the Company failed to give the required notice of that meeting or if there
was a defect in the giving of the notice.
and the powers of the Board in respect of the above matters are not limited or restricted by
this Memorandum of Incorporation.
151
27.5
27.6
27.7
The quorum requirement for a Directors' meeting (including an adjourned meeting) to begin,
the voting rights at such a meeting, and the requirements for approval of a resolution at such a
meeting are as set out in section 73(5) of the Act and accordingly –
27.5.1 if all of the Directors of the Company –
27.5.1.1 acknowledge actual receipt of the notice convening a meeting; or
27.5.1.2 are present at a meeting; or
27.5.1.3 waive notice of a meeting,
the meeting may proceed even if the Company failed to give the required notice of
that meeting or there was a defect in the giving of the notice;
27.5.2 a majority of the Directors must be present at a meeting before a vote may be called at
any meeting of the Directors;
27.5.3 each Director has 1 (one) vote on a matter before the Board;
27.5.4 a majority of the votes cast in favour of a resolution is sufficient to approve that
resolution;
27.5.5 in the case of a tied vote –
27.5.5.1 the chairperson may not cast a deciding vote in addition to any deliberative
vote; and
27.5.5.2 the matter being voted on fails.
Resolutions adopted by the Board –
27.6.1 must be dated and sequentially numbered; and
27.6.2 are effective as of the date of the resolution, unless any resolution states otherwise.
The Company must keep minutes of the meetings of the Board, and any of its committees, and
include in the minutes any declaration given by notice or made by a Director as required by
section 75 of the Act and every resolution adopted by the Board. Any minutes of a meeting, or
a resolution, signed by the chairperson of the meeting, or by the chairperson of the next
meeting of the Board or by the Company Secretary, are evidence of the proceedings of that
meeting, or the adoption of that resolution, as the case may be.
28
28.1
DIRECTORS' COMPENSATION AND FINANCIAL ASSISTANCE
The Company may pay fees to the Directors for their services as Directors in accordance with a
special resolution approved by the Shareholders within the previous 2 (two) years, as set out in
section 66(8) and (9) of the Act, and the power of the Company in this regard is not limited or
restricted by this Memorandum of Incorporation.
28.2
Any Director who 28.2.1 serves on any executive or other committee; or
28.2.2 devotes special attention to the business of the Company; or
28.2.3 goes or resides outside South Africa for the purpose of the Company; or
28.2.4 otherwise performs or binds himself to perform services which, in the opinion of the
Directors, are outside the scope of the ordinary duties of a Director,
may be paid such extra remuneration or allowances in addition to or in substitution of the
remuneration to which he may be entitled as a Director, as a disinterested quorum of the
Directors may from time to time determine.
28.3 The Directors may also be paid all their travelling and other expenses necessarily incurred by
them in connection with 28.3.1 the business of the Company; and
28.3.2 attending meetings of the Directors or of committees of the Directors of the Company.
28.3.3 Performing extra services that may require the said director to reside abroad or to be
specifically occupied about the Company‟s business.
28.3.4 Such a director may be entitled to receive such remuneration as is determined by a
disinterested quorum of Directors, which may be either in addition to or in substitution for
any other remuneration payable.
152
28.4 The Board may, as contemplated in and subject to the requirements of section 45 of the Act,
authorise the Company to provide financial assistance to a Director, Prescribed Officer or other
person referred to in section 45(2), and the power of the Board in this regard is not limited or
restricted by this Memorandum of Incorporation.
29
29.1
29.2
29.3
30
30.1
30.2
31
31.1
31.2
EXECUTIVE DIRECTORS
The Directors may from time to time appoint 1 (one) or more Executive Directors for such term
and at such remuneration as a disinterested quorum of Directors may think fit, and may revoke
such appointment subject to the terms of any agreement entered into in any particular case. A
Director so appointed shall not be subject to retirement in the same manner as the other
Directors, but his or her appointment shall terminate if he or she ceases for any reason to be a
Director. The appointment of Directors is subject to shareholder approval.
Subject to the provisions of any contract between himself or herself and the Company, an
Executive Director shall be subject to the same provisions as to disqualification and removal as
the other Directors of the Company.
The Directors may from time to time entrust to and confer upon an Executive Director for the
time being such of the powers exercisable in terms of this Memorandum of Incorporation by the
Directors as they may think fit, and may confer such powers for such time and to be exercised
for such objects and purposes, and upon such terms and conditions, and with such restrictions,
as they think expedient; and they may confer such powers either collaterally with or to the
exclusion of and in substitution for all or any of the powers of the Directors in that behalf, and
may from time to time revoke, withdraw, alter or vary all or any of such powers.
INDEMNIFICATION OF DIRECTORS
The Company may –
30.1.1 advance expenses to a Director or directly or indirectly indemnify a Director in respect
of the defence of legal proceedings, as set out in section 78(4) of the Act;
30.1.2 indemnify a Director in respect of liability as set out in section 78(5) of the Act; and/or
30.1.3 purchase insurance to protect the Company or a Director as set out in section 78(7) of
the Act,
and the power of the Company in this regard is not limited, restricted or extended by this
Memorandum of Incorporation.
The provisions of clause 30.1 shall apply mutatis mutandis in respect of any Prescribed Officer or
member of any committee of the Board, including the audit committee, or any former Director,
former Prescribed Officer or former member of any committee of the Board.
BORROWING POWERS
Subject to the provisions of clause 31.2 and the other provisions of this Memorandum of
Incorporation, the Directors may from time to time 31.1.1 borrow for the purposes of the Company such sums as they think fit; and
31.1.2 secure the payment or repayment of any such sums, or any other sum, as they think fit,
whether by the creation and issue of Securities, mortgage or charge upon all or any of
the property or assets of the Company.
The Directors shall procure (but as regards subsidiaries of the Company only insofar as by the
exercise of voting and other rights or powers of control exercisable by the Company they can
so procure) that the aggregate principal amount at any one time outstanding in respect of
moneys so borrowed or raised by –
31.2.1 the Company; and
153
31.2.2 all the subsidiaries for the time being of the Company (excluding moneys borrowed or
raised by any of such companies from any other of such companies but including the
principal amount secured by any outstanding guarantees or surety ships given by the
Company or any of its subsidiaries for the time being for the indebtedness of any other
company or companies whatsoever and not already included in the aggregate
amount of the moneys so borrowed or raised),
shall not exceed, to the extent applicable, the aggregate amount at that time authorised to
be borrowed or secured by the Company or the subsidiaries for the time being of the
Company (as the case may be).
32
32.1
32.2
32.3
COMMITTEES OF THE BOARD
The Board may –
32.1.1 appoint committees of Directors and delegate to any such committee any of the
authority of the Board as contemplated in section 72(1) of the Act; and/or
32.1.2 include in any such committee persons who are not Directors, as contemplated in
section 72(2)(a) of the Act,
and the power of the Board in this regard is not limited or restricted by this Memorandum of
Incorporation.
The authority of a committee appointed by the Board as contemplated in section 72(2)(b) and
(c) of the Act is not limited or restricted by this Memorandum of Incorporation.
The Board shall further appoint such committees as it is obliged to do in terms of the Act and,
for as long as the Company's Securities are listed on the JSE, such committees as are required
by the JSE Listings Requirements, having such functions and powers as are prescribed by the
Act and/or the JSE Listings Requirements, as the case may be.
154
ANNEXURE 16
KING CODE ON CORPORATE GOVERNANCE
The Directors of PL Group endorse the King Code and recognise their responsibility to conduct the
affairs of PL Group with integrity and accountability in accordance with generally accepted corporate
practices. This includes timely, relevant and meaningful reporting to its shareholders and other
stakeholders, providing a proper and objective perspective of PL Group.
Upon listing of the Company on AltX, PL Group will be obliged to comply with paragraph 3.84 of the
JSE Listings Requirements which deals with certain aspects corporate governance matters extracted
from the King Code. Accordingly, in anticipation of listing, these aspects of corporate governance
have been introduced within the Group and the King Code will be applied, where practical and
reasonable throughout PL Group and its Subsidiaries going forward in accordance with the JSE Listings
Requirements for companies listed on the AltX. The Directors have, accordingly, established
procedures and policies appropriate to PL Group business in keeping with its commitment to best
practices in corporate governance. These procedures and policies will be reviewed by the Directors
from time to time.
The Directors of PL Group will adopt the principals of the code, being fairness, accountability,
responsibility and transparency.
The formal steps taken by the Directors are as follows:
Directors and Company Secretary
The Board
The board of Directors shall meet regularly and disclose the number of meetings held each year in its
annual report, together with the attendance at such meetings. A formal record shall be kept of all
conclusions reached by the board on matters referred to it for discussion. Should the board require
independent professional advice, such advice will be sought by the board at the Company‟s
expense.
All Directors have access to the advice and services of Arbor Capital Corporate Services, who fulfils
the role of Company Secretary. The Board is of the opinion that Arbor Capital Corporate Services has
the requisite attributes, experience and qualifications to fulfil his commitments effectively. This
assessment is based on the experience, qualifications, competency of the employees of the Company
Secretary, also considering the fact that Arbor Capital Corporate Services provides outsource
company secretarial services to other AltX and Main Board listed companies. The appointment or
dismissal of the Company Secretary shall be decided by the Board as a whole and not one individual
director.
Directors are expected to maintain their independence when deciding on matters relating to strategy,
performance, resources and standards of conduct. On first appointment, all directors will be expected
to undergo appropriate training as to the Company‟s business, strategic plans and objectives, and
other relevant laws and regulations. This will be performed on an on-going basis to ensure that
Directors remain abreast of changes in regulations and the commercial environment.
The Board is responsible for relations with stakeholders, as well as being accountable to them for the
performance of the Company, and reporting thereon in a timely and transparent manner.
155
In accordance with AltX Listings Requirements, the Directors are required to attend a four day Directors
Induction Programme. All the directors have completed the Programme.
Chairman and Chief Executive Officer
The offices of Chairman and Chief Executive Officer are separated with Andrew McLachlan
appointed as Chief Executive Officer and Lou Brits as the Independent Non-Executive Chairman.
Board balance
The board shall include both executive and Non-executive Directors in order to maintain a balance of
power and ensure independent unbiased decisions and that no one individual has unfettered powers
of decision-making. The board of Directors of PL Group consists of the following directors:
Executive
 Andrew McLachlan (Chief Executive Officer); and
 AP (Riaan) van Jaarsveld (Group Financial Director).
Independent Non-Executive Directors
 Lourens Martinus Brits (Chairman);
 Barashia (Barry) Moyo; and
 Grant Waters.
Non-Executive Director(s)
 Christo Hechter.
Supply of information
The board will meet on a regular basis where possible, but at a minimum of every three months. The
Directors will be briefed properly in respect of special business prior to board meetings and information
will be provided timeously to enable them to give full consideration to all the issues being dealt with.
Furthermore, management shall supply the board with the relevant information needed to fulfil its
duties. Directors shall make further enquiries where necessary, and thus shall have unrestricted access
to all Company information, records, documents and property. Not only will the board look at the
quantitative performance of the Company, but also at issues such as customer satisfaction, market
share, environmental performance and other relevant issues. The Chairman must ensure that all
Directors are briefed adequately prior to board meetings.
Delegation of duties
Directors have the authority to delegate certain of their duties, either externally or internally, in order
that they perform their duties fully. The Chief Executive Officer shall review these delegations and
report on this to the board.
Appointments to the Board
Any member of the board can nominate a new appointment to the board, which will be considered
at a board meeting. The nominated Director‟s expertise and experience will be considered by the
board as a whole in a formal and transparent manner, as well as any needs of the board in
considering such appointment. In accordance with the AltX Listings Requirements a nomination
committee is not required and the size of the Company does not warrant the establishment of a
nomination committee. A general meeting of the Directors shall have the power from time to time to
appoint anyone as a director, either to fill a vacancy, or as an additional director. The Company‟s MOI
does not provide for a maximum number of directors, but does provide for shareholders, by way of
ordinary resolution, to determine a maximum number of directors from time to time as they deem
appropriate. Any interim appointments will be subject to approval at the Company‟s next general or
annual general meeting.
156
Directors’ remuneration
Remuneration policy
The remuneration policy in place is to remunerate Executive Directors primarily on a Basic Salary
structure with Company benefits, short term incentives through Bonuses as well as Long term incentives
by way of share Incentives.
King III sets out the basis and codes of good practice for governance of executive remuneration, on
which this Remuneration Policy is based.
Objectives
The objectives of The Remuneration Policy are to:
 Define general guidelines for the Company‟s remuneration of Non-Executive, Executive Directors
and Senior Executives;
 Ensure that the right calibre of Executives and Senior Executives is retained, motivated and
attracted for individual performances and contribution to the Company;
 Remunerate Directors and Executives fairly and responsibly; and
 Align the interest of Executive Directors and Senior Executives with the interest of shareholders and
the business strategy of the Company.
Executive Directors and Senior Executives
Executive Directors‟ and Senior Executives‟ remuneration comprise of:




Basic Salary;
Benefits;
Bonuses - Short term incentives; and
Share Incentives – Long term incentives.
Basic Salary
Basic salary is a fair salary based on the industry norms and Company performance. The basic salaries
are reviewed on an annual basis.
Benefits
Benefits will comprise of fringe benefits, allowances and retirement benefits.
Bonuses
Bonuses are discretionary cash based annual performance rewards determined by performance
scorecards having regard to the financial targets of the Company and personal targets of the
Executive Directors and Senior Executives.
The bonuses will further take into account the trading conditions and financial year-end results of the
Company.
Share Incentives
Share Incentives will be awarded in terms of the Share Incentive Scheme adopted by the Company
and is equity based.
Financial targets are approved by the Board annually in advanced taking cognisance of operational
targets for the Company with respect to:




Growth rate;
Operating profit;
Return on capital; and
Cash flow.
157
Non-Executive Directors
Non-Executive Directors remuneration will comprise of:
 Directors Fees; and
 Additional fees.
Directors Fees
Directors‟ fees are payable in the form of a retainer for attendances at Board and Committee
meetings and work associated therewith.
Additional Fees
Additional fees are payable for additional time spent on behalf of the Company based on market
related rates.
Service contracts and compensation
PL Group has entered into normal service contracts with all of its Executive Directors. All Non-executive
Directors are subject to retirement by rotation and re-election by PL Group shareholders at least once
every three years in accordance with the MOI.
Remuneration Committee
A remuneration committee is yet to be established. The Board has assessed the need for such a
committee and is satisfied that it is not currently required. This position will be assessed on an annual
basis and should a need arise, a remuneration committee will be established.
Accountability and audit
Incorporation
The Company is duly incorporated in South Africa and operates in conformity with its MOI and all laws
of South Africa.
Financial reporting
The board is responsible for the Group‟s systems of internal financial and operational control, as well as
for maintaining an appropriate relationship with the Company‟s auditors. The board is responsible for
presenting a balanced and understandable assessment of the Company‟s financial position with
respect to all financial and price sensitive reports on the Company.
Internal control
The Directors shall conduct an annual review of the Company‟s internal controls, and report their
findings to shareholders. This review will cover financial, operational and compliance controls, as well
as a review of the risk management policies and procedures of the Company.
Audit and risk committee
A combined Audit and Risk Committee has been established, whose primary objective is to provide
the Board with additional assurance regarding the efficacy and reliability of the financial information
used by the Directors, to assist them in discharging their duties. The committee is required to provide
comfort to the board that adequate and appropriate financial and operating controls are in place,
that significant business, financial and other risks have been identified and are being suitably
managed, that the financial director has the appropriate expertise and experience and that
satisfactory standards of governance, reporting and compliance are in operation. The committee will
set the principles for recommending the use of the external auditors for non-audit services.
158
The following non-executive Directors have been appointed to the combined PL Group Audit and Risk
Committee:
 Barry Moyo (Independent non-executive Chairman);
 Lou Brits (Independent non-executive Director); and
 Christo Hechter (Non-executive Director).
The Audit and Risk Committee will meet a minimum of two times per annum to consider and approve
interim and year end results. However, it is expected to meet at least three times per annum.
External auditors
The auditors of the Group are Moore Stephens and they have performed an independent and
objective audit of the Group‟s financial statements. The statements are prepared in terms of the
International Financial Reporting Standards (“IFRS”). Interim reports are not audited.
Code of ethics
PL Group subscribes to the highest ethical standards and behaviour in the conduct of its business and
related activities.
Social, Ethics and Transformation Committee
In compliance with the Companies Act, the following persons have been appointed to the Social,
Ethics and Transformation Committee:
 Christo Hechter (Chairman);
 Andrew McLachlan (Member); and
 Riaan van Jaarsveld (Member).
Relations with shareholders
It is the plan of PL Group to meet with its shareholders and investment analysts, and to provide
presentations on the Company and its performance.
The Board shall ensure that shareholders are supplied with all the necessary information in order that
they may make considered use of their votes, and assess the corporate governance of the Company.
Dealing in securities
The Board has established procedures regarding the legislation which regulates insider trading,
whereby there is a closed period from the date of the financial year end to the earliest publication of
the preliminary report, the abridged report or the provisional report in the case of results for a full period
and from the date of the interim period end to the date of the publication of the first and second
interim results as the case may be, which periods are known as closed periods. In accordance with
the JSE Listings Requirements, no director or the Company Secretary or their associates shall deal in the
securities of the Company during a closed or prohibited period as well as whilst the Company is
trading under a cautionary.
159
All Directors and the Company Secretary shall obtain clearance to deal from the Chairman of the
Company prior to dealing, and the Company Secretary shall keep a register of such clearances in
terms of the JSE Listings Requirements.
The Company Secretary or such person as may be nominated by him from time to time shall keep a
record of all dealings by Directors in the securities of the Company.
Company Secretary
The Company has appointed Arbor Capital Corporate Services to act as the Company Secretary. The
Board of Directors has considered and satisfied itself on the competence, qualifications and
experience of the Company Secretary. The Directors will assess the on-going competency of the
Company Secretary on an annual basis and in compliance with section 3.84(i) of the JSE Listing
Requirements. Moreover, the Board confirms that there is an arm‟s length relationship between itself
and the Company Secretary and this position will be assessed on an annual basis.
All Directors have access to the advice and services of the Company Secretary Arbor Capital
Corporate Services who has extensive experience in company secretarial work. The Board is of the
opinion that the Company Secretary has the requisite attributes, experience and qualifications to fulfil
its commitments effectively.
Financial Director
The financial director, Riaan van Jaarsveld, is the full time Executive Director. The Audit and Risk
Committee has confirmed his experience and expertise at the Audit and Risk Committee meeting held
on 28 November 2016 and has issued a confirmation thereof to the JSE. Riaan will assume the formal
responsibilities required of him in terms of JSE Listings Requirements and the Companies Act.
King III Checklist
A company listed on the AltX is only required to apply or explain its compliance in line with Chapter 2
of King III. However, PL Group has elected to assess its compliance with the 75 principles of King III as
set out below. The new King IV was introduced on 1 November 2016 and is to replace King III. As at the
Last Practicable Date, there were no changes made to the JSE Listings Requirements relating to the
compliance with King IV. PL Group will endeavour to comply with any governance requirements that
are introduced in the JSE Listings Requirements in relation to King IV as and when required.
Principles contained in King III not complied with and the reasons for non-compliance
The Board endorses the principles contained in the King III Report on Corporate Governance and
confirms its commitment to those principles where, in the view of the board, they apply to the business.
Compliance is monitored regularly and the board has undertaken an internal review process in
determining compliance. Where areas of non-compliance or partial compliance have been
identified, these have been listed below, together with the reasons therefore, as is required by King III. It
should be noted that compliance with King III was not a requirement of a private company and thus
many of the principles are only now being introduced.
160
King III Ref
Principle 1.1
Principle 1.2
Principle 1.3
Principle 2.1
Principle 2.2
King III Principle
Comply/
Commentary
Partially
Comply/
Do Not
comply
CHAPTER 1 - ETHICAL LEADERSHIP AND CORPORATE CITIZENSHIP
The Board of Directors of the
Comply
The Board is considered the
Company (the Board) provides
guardian of the values and
effective leadership based on an
ethics of the group and has
ethical foundation.
established a board charter at
its first board meeting prior to
the listing of the Company. In
addition, a Social and Ethics
Committee has been
established and terms of
reference have been
adopted. The Board is
committed to effective
leadership based on an
ethical and moral foundation.
The Board ensures that the
Comply
The social, ethics committee
Company is and is seen to be a
has been established and will
responsible corporate citizen.
report to the Board and
shareholders and will reflect PL
Group‟s commitment to
responsible corporate
citizenship.
The Board ensures that the
Comply
The Board is responsible for
Company‟s ethics are managed
ensuring that the Company
effectively.
protects, enhances and
contributes to the wellbeing of
the economy, society and
natural environment.
CHAPTER 2 - BOARDS AND DIRECTORS
The Board acts as the focal point
Comply
The Board will ensure that the
for and custodian of corporate
Company applies the
governance.
governance principles
contained in King III and
continues to further entrench
and strengthen
recommended practices
through the Group‟s
governance structures,
systems, processes and
procedures.
The Board appreciates that
Comply
The Board, as a whole and
strategy, risk, performance and
through its Committees, will
sustainability are inseparable.
approve and monitor the
implementation of the
strategy and business plan of
the Company, will set
objectives, review key risks
161
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
Principle 2.3
The Board provides effective
leadership based on an ethical
foundation.
Comply
Principle 2.4
The Board ensures that the
Company is and is seen to be as a
responsible corporate citizen.
Comply
Principle 2.5
The Board ensures that the
Company‟s ethics are managed
effectively
Comply
Principle 2.6
The Board has ensured that the
Company has an effective and
independent audit committee.
Comply
Principle 2.7
The Board is responsible for the
governance of risk.
Comply
Principle 2.8
The Board is responsible for
information technology (IT)
Do not
comply
162
Commentary
and will evaluate
performance against the
background of economic,
environmental and social
issues relevant to the
Company and global
economic conditions.
The Board is considered the
guardian of the values and
ethics of the group and will
establish a board charter at its
first board meeting after the
listing of the Company.
The Social and Ethics
Committee has been
established and will report to
the board and shareholders
and will reflect PL Group‟s
commitment to responsible
corporate citizenship.
The Board is responsible for
ensuring that the Company
protects, enhances and
contributes to the wellbeing of
the economy, society and
natural environment.
The Board has recently
appointed an Audit and Risk
Committee ahead of its listing
comprising three independent
Non-executive Directors and is
thus considered independent
and has established Audit and
Risk Committee Terms of
Reference. The board
considers that it has an
effective and independent
Audit and Risk Committee.
The effectiveness of the
Committee will be evaluated
annually by the Directors.
The Board is responsible for the
governance of risk and the
Audit and Risk Committee will
assist the Board with this
responsibility.
An IT Governance Framework,
including processes,
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
governance.
Principle 2.9
The Board ensures that the
Company complies with
applicable laws and considers
adherence to non-binding rules,
codes and standards.
Comply
Principle 2.10
The Board should ensure that there
is an effective risk-based internal
audit.
Do not
comply
Principle 2.11
The Board should appreciate that
stakeholder perceptions affect a
Company‟s reputation.
Comply
Principle 2.12
The Board should ensure the
integrity of the Company‟s
integrated report.
Partially
Comply
Principle 2.13
The Board reports on the
effectiveness of the Company‟s
internal controls.
Partially
Comply
163
Commentary
procedures and structures,
has not been adopted by the
Board. This will be considered
in due course.
The Audit and Risk committee,
together with the Social and
Ethics Committee and
Company Secretary, will
review the adequacy and
effectiveness of the Group‟s
procedures on an on-going
basis to ensure compliance
with legal and regulatory
responsibilities.
This was not done historically
as an unlisted company. The
Company currently does not
have an internal audit
function as it is not deemed
cost effective by the Audit
and Risk Committee due to
the size and centralised
control of finances of the
Company. The need for this
function will be reviewed by
the Audit and Risk Committee
on an on-going basis.
The Company engages with
its stakeholders on multiple
levels and this allows the
Company to manage issues
effectively and timeously and
reduces the likelihood of
reputational risks.
The Board will be responsible
for the integrity of the
integrated report. This was not
previously a requirement as an
unlisted but will fully comply
with the Company‟s first
integrated annual report.
This was not done historically
as an unlisted company. The
Company currently does not
have an internal audit
function as it is not deemed
cost effective by the Audit
and Risk Committee due to
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
Principle 2.14
The Board and its Directors should
act in the best interests of the
Company.
Comply
Principle 2.15
The Board will consider business
rescue proceedings or other
turnaround mechanisms as soon
as the company may be
financially distressed as defined in
the Companies Act, 71 of 2008.
Comply
Principle 2.16
The Board has elected a chairman
Comply
164
Commentary
the size of the Company. The
need for this function will be
reviewed by the Audit and
Risk Committee at every
meeting.
The Board will report on the
effectiveness of internal
controls in the annual report.
Directors are mindful of their
fiduciary duties and their duty
to act in accordance with
applicable legislation. Records
of Directors‟ financial interests
are kept and updated on an
on-going basis. The Board as
a whole acts as a steward of
the Company and each
Director acts with
independence of mind in the
best interests of the Company
and its stakeholders. In its
deliberations, decisions and
actions, the Board is sensitive
to the legitimate interests and
expectations of the
Company‟s stakeholders.
The Board is aware of the
requirements of the
Companies Act regarding
business rescue. The Company
will establish a risk
management process that will
evaluate controllable and
non-controllable risks
continuously, as well as threats
and opportunities to ensure
that the Company is
operating optimally and is not
in distress. In connection with
the issuance of the Interim
and Provisional Results
management has been
requested to table a solvency
and liquidity memorandum,
the content of which will be
considered and confirmed by
the Board on a regular basis.
The Chairman of PL Group is
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
of the board who is an
independent non-Executive
Director. The CEO of the company
does not also fulfil the role of
chairman of the Board.
Principle 2.17
The Board has appointed the
Chief Executive Officer and has
established a framework for the
delegation of authority.
Comply
Principle 2.18
The Board comprises a balance of
power, with a majority of Nonexecutive Directors. The majority of
Non-executive Directors are
independent.
Comply
Principle 2.19
Directors are appointed through a
formal process.
Comply
165
Commentary
an Independent NonExecutive Director. The roles
of the Chairman and Chief
Executive Officer are
separated and clearly
defined.
While retaining overall
accountability and subject to
matters reserved to itself, the
Board has delegated
authority to the Chief
Executive Officer and other
Executive Directors and
Prescribed Officers as part of
the Executive Committee
(“ExCo”) to run the day-today affairs of the Company.
An approval framework has
been tabled for review at the
first board meeting held on 28
November 2016. Mr Andrew
McLachlan is appointed as
CEO. A delegation of
authority document has been
prepared and will be
reviewed and approved by
the Audit Committee in due
course.
The Board has a majority of
Non-Executive Directors. There
are two Executive, three
independent Non-executive,
and one Non-executive
Director.
To ensure a transparent
process, any new
appointment of a Director is
considered by the Board as a
whole. The selection process
involves considering the
existing balance of skills and
experience on the Board and
a continual process of
assessing the needs of the
Company. Directors are
appointed in terms of the
Company‟s MOI and these
interim appointments are
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
Principle 2.20
The induction of and on-going
training, as well as the
development of Directors is
conducted through a formal
process.
Comply
Principle 2.21
The Board is assisted by a
competent, suitably qualified and
experienced Company Secretary.
Comply
Principle 2.22
The evaluation of the Board, its
committees and individual
Directors is performed every year.
Do not
comply
Principle 2.23
The Board delegates certain
functions to well-structured
committees without abdicating its
own responsibilities.
Comply
Principle 2.24
A governance framework has
been agreed between the Group
and its Subsidiaries‟ boards.
Comply
Principle 2.25
The Company remunerates its
Partially
166
Commentary
confirmed at the next Annual
General Meeting.
New appointees to the board
are familiarised with the
Company appropriately
through an induction
programme and on-going
training will be provided if
deemed necessary by the
board and/or Company
Secretary. Attendance at the
Directors Induction Program in
accordance with the AltX
Listings Requirements will be
ensured.
The Company Secretary is
appointed by the Board in
accordance with the
Companies Act and the JSE
Listings Requirements and will
be evaluated annually. The
Board is satisfied that the
Company Secretary is
independent and is properly
qualified and experienced to
competently carry out the
duties and responsibilities of
Company Secretary.
The performance of the Board
as a whole and the Board
Committees individually is not
evaluated on an annual basis
currently. This will be
reconsidered in future.
The Board has delegated
certain
functions
without
abdicating
its
own
responsibilities to the following
committees:
 Audit and Risk committee;
and
 Social and Ethics
committee.
The governance of whollyowned Subsidiaries is handled
by Board and Board
Committee resolutions.
Disinterested members of the
King III Ref
King III Principle
Directors and executives fairly and
responsibly.
Comply/
Partially
Comply/
Do Not
comply
comply
Principle 2.26
The Company has disclosed the
remuneration of each individual
director and prescribed officer
Comply
Principle 2.27
The shareholders have approved
the Company‟s remuneration
policy.
Comply
Principle 3.1
Principle 3.2
CHAPTER 3 - AUDIT COMMITTEES
The Board has ensured that the
Comply
Company has an effective and
independent audit committee.
Audit committee members are
suitably skilled and experienced
independent Non-executive
Directors.
167
Comply
Commentary
Board will oversee the
remuneration of Directors and
Senior Executives and will
make the determination
taking into account market
conditions, expert advice from
remuneration specialists and
in accordance with the
Remuneration policy. Nonexecutive Directors‟ fees will
be submitted annually to
shareholders for approval at
the Annual General Meeting.
The remuneration of Directors
and Prescribed Officers will be
included in the Directors‟
report of the Integrated
Annual Report.
The Company‟s Remuneration
Policy, approved by the
Board, will be tabled for a
non-binding advisory vote at
each Annual General Meeting
of shareholders.
The Board has recently
appointed an Audit and Risk
Committee ahead of its listing
and has established a Charter.
The board considers that it has
an effective and independent
Audit and Risk Committee.
The effectiveness of the
Committee will be evaluated
annually by the Directors. The
group has an Audit and Risk
Committee comprising three
independent Non-executive
Directors and is thus
considered independent.
Two of the three members of
the Audit and Risk Committee
are independent Nonexecutive Directors and one is
a Chartered Accountant. All
three members have the
appropriate professional skills
and experience to sit on the
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
Principle 3.3
The audit committee is chaired by
an independent Non-executive
Director.
Comply
Principle 3.4
The audit committee oversees
integrated reporting.
Comply
Principle 3.5
The audit committee has ensured
that a combined assurance model
has been applied which provides
a coordinated approach to all
assurance activities.
Partially
comply
Principle 3.6
The audit committee is satisfied
with the expertise, resources and
experience of the Company‟s
finance function.
Comply
168
Commentary
Audit and Risk Committee. The
Board will consider the
independence (in terms of
King III), skills and experience
of the Committee members
annually. The Companies Act
allows for non-executive
directors who are not
independent directors to be
members of an audit
committee.
The Board has appointed a
suitably qualified Independent
Non-executive Director to
chair the Audit and Risk
Committee.
The Audit and Risk Committee
will have oversight over the
preparation of the Integrated
Annual Report including the
annual financial statements
and sustainability information,
and will recommend the
approval of the Integrated
Annual Report to the Board.
Where necessary or relevant,
the Company is committed to
appointing service providers to
provide independent
assurance on both the
financial and non-financial
aspects of the business based
upon their specific expertise
and experience. The Audit
and Risk Committee will
oversee the assurance
activities to ensure that they
are performed in a coordinated manner.
The Audit and Risk Committee
has evaluated the expertise
and experience of the
Financial Director and the
Company‟s finance function
and will review this annually.
The Committee will disclose
the results of its evaluation of
the expertise and experience
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
Principle 3.7
The audit committee should be
responsible for overseeing the
internal audit process.
Do not
Comply
Principle 3.8
The audit committee is an integral
component of the risk
management process.
The audit committee is responsible
for recommending the
appointment of the external
auditor and overseeing the
external audit process.
Comply
The audit committee has reported
to the board and the shareholders
as to how it has discharged its
duties.
Comply
Principle 3.9
Principle 3.10
169
Comply
Commentary
of the Financial Director and
the finance function annually
in the Integrated Annual
Report.
The Audit and Risk Committee
will be responsible for
overseeing the internal audit
function. The requirement for
internal audit will be
considered on an on-going
basis throughout the year and
will be a standard agenda
item. However, at present,
due to the size and centralised
finance function of the
business, an internal audit
function has not yet been
established.
The Audit and Risk Committee
will be responsible for
overseeing risk management.
Annually, the Audit and Risk
Committee will oversee the
external audit process,
approve external audit fees
and fees for non-audit
services. The Committee will
also evaluate the
performance, and review the
independence of the external
auditor, including the
professional suitability of the
lead auditor and if
appropriate recommend their
re-appointment to the Board
and shareholders for the
forthcoming financial year.
The Audit and Risk Committee
will report to the Board at
each Board meeting. A report
to shareholders on how the
Committee discharged its
duties will be included in the
Report of the Audit and Risk
Committee in the Integrated
Annual Report, noting that this
was not previously a
King III Ref
Principle 4.1
Principle 4.2
Principle 4.3
Principle 4.4
Principle 4.5
Principle 4.6
Principle 4.7
King III Principle
Comply/
Partially
Comply/
Do Not
comply
Commentary
requirement as PL Group was
not listed prior to the date of
this Prospectus.
CHAPTER 4 - THE GOVERNANCE OF RISK
The Board is responsible for the
Comply
The Board is responsible for the
governance of risk.
governance of risk and the
Audit and Risk Committee will
assist the Board with this
responsibility.
The Board has determined the
Do not
This was not done historically
levels of risk tolerance.
comply
as an unlisted company. The
Board, through the Audit and
Risk Committee, will monitor
the controls and residual risk
profile of the principal risks of
the Group against set
criteria/tolerance levels and
will periodically review the
levels of risk tolerance. A risk
register will be established in
the forthcoming year.
The risk committee and/or audit
Do not
The Board is responsible for the
committee has assisted the Board
comply
governance of risk and the
in carrying out its risk
Audit and Risk Committee will
responsibilities.
assist the Board with this
responsibility. This was not
done historically as an unlisted
company.
The Board has delegated to
Partially
The Board has delegated the
management the responsibility to
comply
day-to-day responsibility for
design, implement and monitor
risk management to
the risk management plan.
management. A risk
management plan has not
been implemented as yet but
will be in due course.
The Board has ensured that risk
Do not
This was not done historically
assessments are performed on a
comply
as a private company. The
continual basis.
Audit and Risk Committee will
actively monitor the group‟s
key risks as part of its standard
agenda.
The Board has ensured that
Do not
This was not done historically
frameworks and methodologies
comply
as an unlisted company. All
are implemented to increase the
risks are to be identified and
probability of anticipating
steps to mitigate these will be
unpredictable risks.
outlined, including reasonably
unpredictable risks.
The Board has ensured that
Do not
This was not done historically
170
King III Ref
King III Principle
management has considered and
has implemented appropriate risk
responses.
Principle 4.8
Principle 4.9
Principle 4.10
Principle 5.1
Principle 5.2
Principle 5.3
Comply/
Partially
Comply/
Do Not
comply
comply
Commentary
as an unlisted company. The
implementation of controls is
monitored by management
on an on-going basis.
The Board has ensured continual
Do not
This was not done historically
risk monitoring by management.
comply
as an unlisted company.
Responsibility for identified risks
will be assigned to an
appropriate member of the
group‟s senior management
team, who will be required to
report to the Board on the
steps being taken to manage
or mitigate such risks.
The Board has received assurance Do not
This was not done historically
regarding the effectiveness of the
comply
as an unlisted company. The
risk management process.
Audit and Risk Committee will
report to the Board regarding
the efficacy of the risk
management process.
The Board has ensured that there
Do not
This was not done historically
are processes in place which
comply
as an unlisted company. Risk
enable complete, timely, relevant,
disclosure will be made
accurate and accessible risk
annually in the Integrated
disclosure to stakeholders.
Annual Report. The Board
intends to disclose the top risks
faced by the Company and
will confirm its satisfaction with
the management of the risk
management processes.
CHAPTER 5 - THE GOVERNANCE OF INFORMATION TECHNOLOGY
The Board is responsible for IT
Partially
This was not done historically
governance.
Comply
as an unlisted company. An IT
Governance Framework,
including processes,
procedures and structures, has
not been adopted by the
Board. This will be considered
in due course.
IT has been aligned with the
Comply
The IT strategy and procedures
performance and sustainability
are considered to be aligned
objectives of the Company.
with the performance and
sustainability of the Company,
bearing in mind the size and
nature of the Company.
The Board has delegated to
Partially
A delegated director and/or
management the responsibility for Comply
ExCo member will take
the implementation of an IT
responsibility for the
171
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
governance framework.
Principle 5.4
Principle 5.5
Principle 5.6
Principle 5.7
Principle 6.1
Principle 6.2
Commentary
implementation of an IT
governance framework in due
course.
The Board monitors and evaluates Partially
The Board currently monitors
significant IT investments and
complies
and evaluates significant IT
expenditure.
investments and expenditure.
However, an IT Governance
Framework is yet to be
adopted by the Board. The
Board will consider appointing
an individual who will report to
the Board on anticipated and
required IT expenditure when
deemed to be of a material
nature that requires Board
approval and will report to the
Board on IT anticipated
expenditures and possible
budgets.
IT is an integral part of the
Does not
The company was formerly a
Company‟s risk management
comply
private company and as such
plan.
did not have a formal risk
management plan. This will be
considered in due course.
The Board ensured that
Does not
The company was formerly a
information assets are managed
comply
private company and as such
effectively.
did not have a formal
information asset
management plan. This will be
considered in due course.
A risk committee and audit
Partially
The recently formed Audit and
committee assists the Board in
Comply
Risk Committee will assist the
carrying out its IT responsibilities.
Board with this function.
CHAPTER 6 - COMPLIANCE WITH LAWS, CODES, RULES AND STANDARDS
The Board ensures that the
Comply
The Audit and Risk committee,
Company complies with
together with the Social and
applicable laws and considers
Ethics Committee and
adherence to non-binding rules,
Company Secretary, will
codes and standards.
review the adequacy and
effectiveness of the Group‟s
procedures on an on-going
basis to ensure compliance
with legal and regulatory
responsibilities.
The Board and each individual
Comply
The Directors and the Board
director have a working
understand the appropriate
understanding of the effect of
applicable laws, rules, codes
applicable laws, rules, codes and
of standards required by the
172
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
standards on the Company and its
business.
Principle 6.3
Compliance risk should form an
integral part of the Company‟s risk
management process.
Principle 6.4
The Board should delegate to
Do not
management the implementation comply
of an effective compliance
framework and related processes.
CHAPTER 7 - INTERNAL AUDIT
The Board should ensure that there Do not
is an effective risk based internal
comply
audit.
Principle 7.1
Partially
comply
Principle 7.2
Internal Audit should follow a risk
based approach to its plan.
Do not
comply
Principle 7.3
Internal Audit should provide a
written assessment of the
effectiveness of the Company‟s
system of internal controls and risk
management.
Do not
comply
Principle 7.4
The audit committee should be
Do not
173
Commentary
Company and its business. This
understanding will be
reinforced by the Director
Induction Programme that all
Directors will need to attend.
Compliance risk will be
considered by the Audit and
Risk Committee and the Social
and Ethics Committee going
forward.
This was not done historically
as an unlisted company. This
function will be delegated to
management in due course.
This was not done historically
as an unlisted company. The
Company currently does not
have an internal audit
function and this will be
considered on a regular basis
by the Audit and Risk
Committee as a standing
agenda item.
This was not done historically
as an unlisted company. The
Company currently does not
have an internal audit
function as it is not deemed
cost effective by the Audit
and Risk Committee due to
the size of the Company. The
need for this function will be
reviewed by the Audit and
Risk Committee at every
meeting.
This was not done historically
as an unlisted company. The
Company currently does not
have an internal audit
function. However, the Audit
and Risk Committee will
oversee that management
effectively addresses internal
control weakness that are
identified by the external
auditors
The Company currently does
King III Ref
Principle 7.5
Principle 8.1
Principle 8.2
Principle 8.3
Principle 8.4
Principle 8.5
Principle 8.6
Principle 9.1
Principle 9.2
King III Principle
responsible for overseeing the
internal audit process.
Internal audit should be
strategically positioned to achieve
its objectives.
Comply/
Partially
Comply/
Do Not
comply
comply
Commentary
not have an internal audit
function.
Do not
This was not done historically
comply
as an unlisted company. The
Company currently does not
have an internal audit
function.
CHAPTER 8 - GOVERNING STAKEHOLDER RELATIONSHIPS
The Board should appreciate that
Comply
The Company engages with its
stakeholder‟ perceptions affect a
stakeholders on multiple levels
company‟s reputation.
and this allows the Company
to manage issues effectively
and timeously and reduces
the likelihood of reputational
risks.
The Board should delegate to
Comply
Management is responsible for
management the authority to
maintaining stakeholder
proactively deal with stakeholder
relationships.
relationships.
The Board should strive to achieve
Comply
The appropriate balance is
the appropriate balance between
assessed on a continuous
its various stakeholder groupings, in
basis.
the best interests of the Company.
Companies should ensure the
Comply
The Company will act in
equitable treatment of
accordance with the
shareholders.
requirements of the
Companies Act and the JSE
Listings Requirements
regarding the treatment of
shareholders.
Transparent and effective
Comply
The Board is committed to a
communication with stakeholders
communication policy to
is essential for building and
ensure that timely, relevant,
maintaining their trust and
accurate and honest
confidence.
information is provided to all
stakeholders.
The Board should ensure that
Comply
The Board ensures that
disputes are resolved effectively
disputes are resolved
and as expeditiously as possible.
effectively as is possible.
CHAPTER 9 – INTEGRATED REPORTING AND DISCLOSURE
The Board should ensure the
Partially
The Board will be responsible
integrity of the Company‟s
comply
for the integrity of the
integrated report.
integrated report. This was not
previously a requirement as an
unlisted company.
Sustainability reporting and
Do not
This was not done historically
disclosure should be integrated
comply
as an unlisted company The
with the Company‟s financial
Board will ensure that the
174
King III Ref
King III Principle
Comply/
Partially
Comply/
Do Not
comply
reporting.
Principle 9.3
Sustainability reporting and
disclosure should be independently
assured.
Do not
comply
The above table covers all 75 principles as set out in King III.
175
Commentary
company‟s reporting is holistic
and integrated across all
areas of performance and
should include reporting in the
triple context of economic,
social, and environmental
issues.
This was not done historically
as an unlisted company. At
present the Company does
not obtain independent
assurance. This will be
considered in future.
ANNEXURE 17
ANALYSIS OF RISKS FACING SHAREHOLDERS
In accordance with the requirements of CIPC, an analysis of identified risks facing shareholders,
together with mitigating factors, is set out below:
Risk identified
Mitigation of risk
Minimum subscription not
raised
The Prospectus provides for the refund of monies to investors and the
Company will not list on the Alternative Exchange where the minimum
subscription has not been raised. The JSE requires that the share
subscriptions and monies received are audited by the Company‟s auditor
and signed off 48 hours before listing.
Shareholder spread not
achieved
The Prospectus provides for the refund of monies to investors and the
Company will not list on the Alternative Exchange where shareholder
spread has not been achieved. The JSE requires that the share
subscriptions and monies received are audited by the Company‟s auditor
and signed off 48 hours before listing.
Investors will not receive
shares
The share subscriptions come via the Strate system which provides for
delivery against payment. Subscriptions go through this system via the
Transfer Secretaries and the shares are issued in electronic format to the
subscribers.
Possibility of no dividends
for two or more years
The Company will be reinvesting profits into growth of its operations by
way of property acquisitions and expansion of classrooms, which
investments are expected to increase the future prospects of the Group
in the medium to long term. However, shareholders will be able to dispose
of their shares in the open market and need not rely on dividend income.
Nevertheless, investors have been clearly informed on the intentions
surrounding the dividend policy.
Availability of documents
available for inspection
Whilst these documents will be available for inspection for the period
required in terms of the Companies Act, some of the documents will
remain available in the public domain on the Company‟s website, such
as the Prospectus, which contains extracts of all relevant information for
investors to review. Going forward, the Company will comply with the
various disclosure requirements of the JSE.
Management will not run
the business properly
The management team runs the head office and finance function and
allows the headmaster and various heads of department to run the
schools, focussing on education. Management is carefully selected
based on qualifications and experience. The CEO remains a major
shareholder as disclosed in the Prospectus and has a vested interest in
continuing to manage the business effectively. The Board will also ensure
that management discharges its duties effectively.
176
PL Group operates in a
regulated environment
as PLG Schools is
regulated by the
Department of
Education
The Company and its subsidiaries have a strong compliance culture, with
an intention to deliver quality education and a pleasant working
environment for both teachers and pupils, which should further help
monitor and mitigate these risks.
Financial information
may be inaccurate
The financial information and interim financial information has been
audited and reviewed respectively by a JSE accredited auditor and IFRS
experts were consulted.
Debt collection risk
The majority of parents sign debit orders, thereby reducing the risk of
unpaid fees.
The directors of PL Group believe that despite the accumulated losses
incurred in the Group thus far, as well as the losses forecast for the 2017
financial year, the Company will still be able to finance future operations
and will continue as a going concern. Certain of the schools have
already become profitable on an operational level.
Going concern risk
Andrew McLachlan has also agreed to continue to offer support and to
subordinate the related party shareholder loans and to, in order to
alleviate any liquidity risk. The proceeds from the listing will not be used to
settle this loan.
Initial low school
capacity
The PLG schools will run at low capacities once they open. This could be
viewed as risky since the schools will run at a loss until the capacities
increase. However, this is part of PL Group‟s business model. The initial low
capacities ensure room for large growth, and the demand for affordable,
accessible, quality private education in South Africa will ensure that the
Company‟s pupil growth projections are met.
It should be noted that PL Group‟s expected pupil projections for 2017
are expected to be exceeded based on non-refundable deposits
received for 2017, as explained in the assumption detailed in Annexure 7
of this Prospectus.
Properties may not get
consent for education
use
On acquisition of a property, the zoning is reviewed and an assessment
made as to whether the property can be used for education. Where in
doubt, this will be made a suspensive condition to the acquisition.
177
ANNEXURE 18
SALIENT FEATURES OF THE SHARE INCENTIVE SCHEME
Below is an extract from the Company‟s Share Incentive Scheme approved by the JSE and
shareholders which numbering is as appears in the full Share Incentive Scheme.
2.
PURPOSE
The purpose of the Scheme shall be to attract, motivate, reward and retain Participants who
are able to influence the performance of the Group, on a basis which aligns their interests with
those of the Company‟s shareholders.
PART II - ADMINISTRATION OF THE SCHEME
3.
THE SCHEME
The Scheme is hereby constituted, which Scheme shall be administered for the purpose and in
the manner set out in these Rules.
4.
4.1
4.2
5.
5.1
5.1.1
5.1.2
5.1.3
5.1.4
5.1.5
5.1.6
ADMINISTRATION OF THE SCHEME
The Board is responsible for the operation and administration of the Scheme, and subject to
Applicable Laws has discretion to decide whether and on what basis the Scheme shall be
operated, which may include but not be limited to the delegation of the administration of the
Scheme to a Compliance Officer or any third party appointed by the Board, but excluding any
Executive Director of the Company.
Subject to the provisions of the Scheme, any Applicable Laws and to the approval of the
Board, the Board shall be entitled to make and establish such rules and regulations, and to
amend the same from time to time, as they may deem necessary or expedient for the proper
implementation and administration of the Scheme.
ANNUAL ACCOUNTS
The Board shall ensure that a summary appears in the annual financial statements of the
Company of the:
number of Options granted, Share Appreciation Rights Allocated and Performance Shares
Awarded to Participants;
number of Shares that may be utilised for the purposes of this Scheme at the beginning of
the financial year;
any changes in such numbers during the financial year under review;
the balance of securities available for utilisation for the purposes of the Scheme at the end
of the financial year;
number of Shares, if any, held by any Employer Company which may be acquired by
Participants upon Vesting; and
number of Shares, if any, then under the control of the Board for Settlement to Participants
in terms of this Scheme.
178
6.
6.1
6.1.1
6.1.2
6.1.3
7.
7.1
7.1.1
7.1.2
7.1.3
7.1.4
7.1.5
7.2
8.
8.1
8.1.1
8.1.2
8.2
8.3
SHARES
The Company shall:
at all times reserve and keep available, free from pre-emptive rights, out of its authorised
but unissued capital, such number of Shares as may be required to enable the Company to
fulfil its obligations to Settle Shares to Participants;
ensure that Shares may only be issued or purchased for purposes of the Scheme once a
Participant (or group of Participants) to whom they will be Granted, Allocated or Awarded
has been formally identified.
ensure that Shares held for purposes of the Scheme will not have their votes at
general/annual general meetings taken into account for the purposes of resolutions
proposed in terms of the JSE Listings Requirements or for purposes of determining
categorisations as detailed in Section 9 of the JSE Listings Requirements.
FUNDING
Other than any Tax/Social Liability as defined in 27.2, all costs of and incidental to the
implementation and administration of the Scheme, including but not limited to:
the consideration for Shares (if any) acquired under the Scheme;
the costs incurred in the acquisition thereof;
any administration or other expenses or administration fees;
any duties payable upon the Settlement of Shares to Participants including without
limitation issue duty, stamp duty, securities transfer tax; and
all secretarial, accounting, administrative, legal and financial advice and services, office
accommodation and stationery,
properly incurred by the Employer Company for the Company as agent for and on behalf of
each Employer Company in order to give effect to the Scheme (all of the aforegoing costs,
expenses and duties hereinafter referred to as “Participation Costs”) shall be funded, as the
Board may from time to time direct.
The Company shall recover from each Employer Company such Participation Costs as may be
attributable to the participation of any of its Participants in the Scheme. To this effect the
Company shall procure that all Employer Companies execute an Agency Agreement, which,
once executed, shall be deemed to be incorporated by reference into these Rules, and read
together will constitute one agreement.
MAXIMUM NUMBER OF SHARES WHICH MAY BE ACQUIRED BY PARTICIPANTS
Subject to the prior approval, if required, of any securities exchange on which Shares are listed,
the prior authority of 75% (seventy five percent) of the shareholders of the Company in general
meeting (excluding all of the votes attached to Shares owned or controlled by existing
Participants in the Scheme) shall be required if the aggregate number of Shares which may be
acquired by:
all Participants under the Scheme is to exceed 20,500,000 (twenty million, five hundred
thousand) Shares; or
any one Participant in terms of the Scheme is to exceed 5,000,000 (five million) Shares.
In the determination of the number of Shares which may be acquired by Participants in terms
of 8.1, Shares shall not be taken into account, which have been purchased through the open
market of the JSE.
The Rolling over (including the arrangement assuming that equity securities which have already
vested and been issued in terms of the Scheme, and which usually revert back to the number
referred to in clause 8.1.1 above after a 10-year period) is prohibited.
179
9.
9.1
9.1.1
9.1.2
TERMINATION OF EMPLOYMENT
A Participant who ceases to be employed by an Employer Company on the basis that he is –
immediately thereafter employed by another Employer Company; or
thereafter re-employed by such Employer Company pursuant to it being determined that
the termination of his employment on the grounds specified in 1.1.29.1 and 1.1.29.2 was not
lawful in terms of the LRA;
shall be deemed not to have terminated his employment for the purposes of the Scheme and
his rights (whether conditional or otherwise) in and to the Option Shares, Share Appreciation
Rights, and/or Performance Shares shall be deemed to be unaffected.
PART III - THE SHARE OPTION METHOD
10.
GRANT OF OPTIONS
10.1
The Board may, in its sole and absolute discretion, resolve to Grant Options to Eligible
Employees.
10.2
The Board shall, as soon as reasonably practicable on or after the Option Date, notify the
Eligible Employees of the Option in an Option Letter. The Option Letter shall be in the form
prescribed by the Board and shall specify –
10.2.1
the number of Option Shares Granted to the Eligible Employee;
10.2.2
the Option Price per Share;
10.2.3
the Option Date;
10.2.4
the Vesting Dates;
10.2.5
any conditions attaching to the Option;
10.2.6
the provisions of 27;
10.2.7
a stipulation that the Option is subject to the provisions of these Rules;
10.2.8
where a copy of these Rules might be obtained for perusal; and
10.2.9
provision for signed acceptance by the Eligible Employee.
10.3
Acceptance by an Eligible Employee of an Option shall be communicated to the Board, in
writing in such form as the Board may from time to time prescribe. An Option which is not
accepted by an Eligible Employee as aforesaid shall automatically be deemed to have been
cancelled, subject to re-instatement or extension by the Board in its sole and absolute
discretion.
10.4
Subject to 23, an Option is personal to a Participant and shall not be capable of being ceded,
assigned, transferred or otherwise disposed of or encumbered by a Participant. An Option is
only capable of being exercised by the relevant Participant or the executor of the deceased
estate of the Participant concerned.
10.5
There shall be no consideration payable for an Option.
10.6
If no loan is being made to the individual concerned, then payment would need to be made
within 30 days of the exercise date.
10.7
A Participant shall have no expectation of earning any dividends (or other distributions made)
and shall have no right to vote in respect of Option Shares Granted to him, unless and until the
Option Shares under his Option are Settled in accordance with the provisions of this Scheme.
10.8
The Options are irrevocably granted for a period of 3 (three) years after the Option Date, but
subject to the relevant terms of this Scheme.
10.9
An Option may be cancelled at any time after the date of acceptance thereof if the Board
and Participants so agree in writing.
11.
11.1
11.2
VESTING AND SETTLEMENT OF OPTION
On the Vesting Date in respect of an Option, and subject to 11.2, the number of Option Shares
available for Vesting under the Option shall Vest in a Participant, and then be Settled by him as
soon as practically possible after the Vesting Date.
Notwithstanding 11.1, the Participant shall pay, in such manner as the Board may from time to
time prescribe, any amount which the Board may notify the Participant of, in respect of any
deduction on account of Tax as may be required by Applicable Laws which may arise on the
Vesting of his Option Shares.
180
11.3
Notwithstanding 11.1, the Board may resolve that where a Participant exercises an Option and
does not have the funds to pay for the Option Shares, the Participant shall instead receive a
cash amount equal to the net amount by which the proceeds realised on the disposal of the
Shares on the Participant‟s behalf in respect of which the Option is exercised exceeds the
Option Price (if any) on the Option Exercise Date.
12.
LAPSE OF OPTION
12.1
An Option shall lapse:
12.1.1
if, subject to 9, and unless the Board determines otherwise, a Participant ceases to be
employed by the Group by reason of a –
12.1.1.1
No Fault Termination prior to the Vesting of his Option, then the Option shall Vest in full
on the Date of Termination of Employment and shall be Settled by the Participant as
soon as practically possible after the Date of Termination of Employment; or
12.1.1.2
Fault Termination prior to the Vesting of his Option, then such Option shall be forfeited
and cancelled on the Date of Termination of Employment;
12.1.2 if the interest of a Participant in an Option is attached under any circumstances
whatsoever and the Board passes a resolution that such Option shall lapse; or
12.1.3 if not duly exercised by the 5th (fifth) anniversary of the Option Date;
12.1.4 if the Option is purportedly exercised otherwise that by the Participant concerned or by the
persons contemplated in 10.4.
PART IV - THE SHARE APPRECIATION METHOD
13.
ALLOCATIONS
13.1
The Board may, in its sole and absolute discretion, resolve to allocate Share Appreciation Rights
to Eligible Employees.
13.2
The Board shall, as soon as reasonably practicable on or after the Allocation Date, notify the
Eligible Employees of the Allocation in an Allocation Letter. The Allocation Letter shall be in the
form prescribed by the Board and shall specify –
13.2.1
the number of Share Appreciation Rights allocated to the Eligible Employee;
13.2.2
the Allocation Price per Share Appreciation Right;
13.2.3
the Allocation Date;
13.2.4
the Vesting Dates;
13.2.5
Performance Criteria, if any, imposed by the Board, which will determine the manner in
which the number of Share Appreciation Rights referred to in 13.2.1 shall be adjusted prior
to Settlement;
13.2.6
the provisions of 27;
13.2.7
a stipulation that the Allocation is subject to the provisions of these Rules;
13.2.8
where a copy of these Rules might be obtained for perusal; and
13.2.9
provision for signed acceptance by the Eligible Employee.
13.3
Acceptance by an Eligible Employee of an Allocation shall be communicated to the Board, in
writing in such form as the Board may from time to time prescribe. An Allocation which is not
accepted by an Eligible Employee as aforesaid shall automatically be deemed to have been
cancelled, subject to re-instatement or extension by the Board in its sole and absolute
discretion.
13.4
Subject to 23, an Allocation is personal to a Participant and shall not be capable of being
ceded, assigned, transferred or otherwise disposed of or encumbered by a Participant.
13.5
There shall be no consideration payable for an Allocation.
13.6
A Participant shall not be entitled to any dividends (or other distributions made) and shall have
no right to vote in respect of Share Appreciation Rights Allocated to him, unless and until the
Share Appreciation Rights under his Allocation are Settled in accordance with the provisions of
this Scheme.
13.7
An Allocation may be cancelled at any time after the date of acceptance thereof if the Board
and Participants so agree in writing.
181
14.
VESTING OF SHARE APPRECIATION RIGHT
The Board shall prior to the Vesting Date in respect of an Allocation assess and determine the
extent to which any Performance Criteria imposed by the Board have been achieved. The
Share Appreciation Rights comprising that portion of an Allocation in respect of which the
Performance Criteria have been achieved, shall Vest on the Vesting Date and the balance
shall be forfeited and cancelled.
15.
15.1
EXCERCISE AND SETTLEMENT
A Participant shall be entitled, on or after the Vesting thereof, but prior to the end of the
Maximum Period, to give an Exercise Notice to that effect to the Company, to Exercise one or
more of such Share Appreciation Rights. The Participant shall, in respect of each Share
Appreciation Right Exercised and approved as aforesaid, receive, and be Settled, such
number of Shares as is calculated in accordance with 15.4.
If a Participant elects not to Exercise any Share Appreciation Rights on or after the Vesting
thereof, then Settlement shall not take place, and the provisions of 13.3, 13.5, 13.6, 22 and 24
shall apply until the Maximum Period.
Subject to 16, on the expiry of the Maximum Period in respect of any Share Appreciation Rights,
such Share Appreciation Rights as have Vested in a Participant, but have not yet been
exercised by the Participant, shall be forfeited and shall automatically lapse.
A Participant shall, in respect of all Share Appreciation Rights Exercised, be entitled to be
Settled the number of Shares determined by dividing X by the Closing Price on the Exercise
Date where X is calculated in accordance with the following formula –
X=NxA
where –
N = the number of Share Appreciation Rights which have been Exercised;
A = the Appreciation;
provided that where the Board decides in its sole and absolute discretion to apply Settlement
by way of 1.1.50.4, a Participant shall be entitled to be Settled the South African Rand value of
X.
Notwithstanding 15.4, the Participant shall pay, in such manner as the Board may from time to
time prescribe, any amount which the Board may notify the Participant of, in respect of any
deduction on account of Tax as may be required by Applicable Laws which may arise on the
Settlement of Share Appreciation Rights to him.
15.2
15.3
15.4
15.5
16.
16.1
16.2
TERMINATION OF EMPLOYMENT
Subject to 9, and unless the Board determines otherwise, if a Participant ceases to be
employed by the Group by reason of a Fault or No Fault Termination prior to the Vesting or
Exercise of his Share Appreciation Rights, then the provisions of Annexure A shall be applied to
ascertain the rights of Participants to Allocations.
Any Allocation in respect of which the Board shall determine that no Settlement shall occur in
terms of 16.1, shall be forfeited and cancelled.
PART V - THE PERFORMANCE SHARE METHOD
17.
AWARDS
17.1
The Board may, in its sole and absolute discretion, resolve to make Awards to Eligible
Employees.
17.2
The Board shall, as soon as reasonably practicable on or after the Award Date, notify the
Eligible Employee of the Award in an Award Letter. The Award Letter shall be in the form as
prescribed by the Board from time to time and shall specify –
17.2.1
targeted number of Performance Shares awarded to the Eligible Employee;
17.2.2
the Award Date;
17.2.3
the Vesting Date;
17.2.4
the Performance Criteria imposed by the Board, which, will determine the manner in which
the number of Performance Shares referred to in 17.2.1 shall be adjusted prior to Settlement;
182
17.2.5
the provisions of 27;
17.2.6
a stipulation that the Award is subject to the provisions of these Rules;
17.2.7
where a copy of the Rules might be obtained for perusal; and
17.2.8
provision for signed acceptance by the Eligible Employee.
17.3
Acceptance by an Eligible Employee of an Award shall be communicated to the Board by the
signature and return of the Award Letter. An Award which is not accepted by an Eligible
Employee as aforesaid shall automatically be deemed to have been cancelled, subject to reinstatement or extension by the Board in its sole and absolute discretion.
17.4
Subject to 23, an Award is personal to a Participant and shall not be capable of being ceded,
assigned, transferred or otherwise disposed of or encumbered by a Participant.
17.5
There shall be no consideration payable for an Award.
17.6
A Participant shall have no expectation of earning any dividends (or other distributions made)
and shall have no right to vote in respect of Performance Shares awarded to him; unless and
until and to the extent that the Performance Shares under his Award are Settled in accordance
with the provisions of this Scheme.
17.7
An Award may be cancelled at any time after the date of acceptance thereof if the Board
and the Participant so agree in writing.
18.
18.1
18.2
18.3
VESTING AND SETTLEMENT OF PERFORMANCE SHARES
The Board shall prior to the Vesting Date in respect of an Award assess and determine the
extent to which the Performance Criteria imposed by the Board have been achieved. The
performance Shares comprising that portion of an Award in respect of which the Performance
Criteria have been achieved, shall Vest on the Vesting Date, and the balance shall be
cancelled.
The number of Performance Shares which have Vested in respect of an Award shall be Settled
to the Participant as soon as practically possible after the Vesting Date, subject to compliance
with 18.3 and 28. Where the Board decides in its sole and absolute discretion to apply
Settlement by way of 1.1.50.4, the amount of the cash bonus to be Settled to the Participant
shall be determined by multiplying the number of Shares to be Settled by the Closing Price on
the Vesting Date.
Notwithstanding 18.2, the Participant shall pay, in such manner as the Board may from time to
time prescribe, any amount which the Board may notify the Participant of, in respect of any
deduction on account of Tax as may be required by Applicable Laws which may arise on the
Settlement of Performance Shares to him.
19.
19.1
TERMINATION OF EMPLOYMENT
Subject to 9 and 19.2, and unless the Board determines otherwise, if a Participant ceases to be
employed by the Group by reason of a No Fault Termination prior to the Vesting of his Award or
Awards:
19.1.1
the Performance Shares forming part of an Award shall be in the first instance be pro-rated
for the period from the Award Date until the Date of Termination of Employment; and once
so pro-rated
19.1.2
the applicable performance Criteria shall be applied as at the Date of Termination of
Employment;
following which the Performance Shares available to be Settled to the participant shall be
settled to him as soon as practically possible after the Date of Termination of Employment.
19.2
In the event of the death of a Participant prior to the Vesting of his Award or Awards, all the
provisions of 19.1 save for the provisions of 19.1.1, shall be applied to determine the
Performance Shares available to be Settled, whereafter Settlement shall take place to the
deceased estate as soon as practically possible after the date of death.
183
19.3
19.4
Subject to 9, and unless the Board determines otherwise, if a Participant ceases to be
employed by the Group by reason of a Fault Termination, his Award or Awards that have not
yet Vested shall be forfeited and cancelled. If the Board determines that an Award shall not
be cancelled, the Performance Shares available to be Settled to the Participant shall be
Settled as soon as practically possible after the Date of Termination of Employment.
Any Award in respect of which the Board shall determine that no Settlement shall occur, shall
be forfeited and cancelled.
184
ANNEXURE 19
SUMMARY OF INDEPENDENT VALUER’S REPORT
“22 February 2017
The Directors
Pembury Lifestyle Group Limited
Reg: 2013/205899/06
Dear Sirs
SUMMARY VALUATION REPORT ON THE OPEN MARKET VALUATION OF THE PROPERTIES LISTED BELOW FOR
PEMBURY LIFESTYLE GROUP LIMITED









Raslouw 1 situated on the Remainder of Holding 54, Raslouw Agricultural Holdings;
Raslouw 2 situated on Portion 2 of Holding 54, Raslouw Agricultural Holdings;
Springs situated on Erf 1729, Strubenvale Extension 2;
Doxa Deo (Hartbeespoort) situated on Erf 630, Xanadu Extension 12;
Allens View situated on Erf 640, Allensnek Extension 35;
Mellow Oaks situated Portion 480 (a Portion of Portion 12) of the farm Wilgespruit 190-IQ;
Randfontein situated on Portion “A” of the Remainder of Portion 163 of the farm Elandsvlei 249-IQ;
Willow View situated on Portion 8 of the farm Rietfontein 31-IR; and
Northriding situated on Portion 0 of Erf 612, Northwold Extension 13.
In accordance with your instructions, I have initially inspected the properties described above,
between 16 August 2016 and 30 September 2016 and again inspected the properties between
15 February 2017 and 18 February 2017 as detailed in the individual property valuation reports more
fully detailed in the valuation reports, and declare, for the purpose of this summary valuation report
that as at 20 February 2017 in my considered opinion:
I, Johannes Simon Bosman, registered (without restriction) as a Professional Valuer No. 2450 under
Subsection (2) (a) of Section 20 of Act 47 of 2000 of the Property Valuers Profession Act, certify to the
best of my knowledge and skill, the open market values of the properties under consideration are fairly
assessed at:
 R196 800 000.00 (ONE HUNDRED AND NINETY SIX MILLION EIGHT HUNDRED THOUSAND RAND)
BREAK-UP OF VALUE AS FOLLOWS:
 Raslouw 1 situated on the Remainder of Holding 54, Raslouw Agricultural Holdings
R22 100 000 (Twenty Two Million One Hundred Thousand Rand)
 Raslouw 2 situated on Portion 2 of Holding 54, Raslouw Agricultural Holdings
R6 000 000 (Six Million Rand)
 Springs situated on Erf 1729, Strubenvale Extension 2
R9 000 000 (Nine Million Rand)
185
 Doxa Deo (Hartbeespoort) situated on Erf 630, Xanadu Extension 12
R40 000 000 (Forty Million Rand)
 Allens View situated on Erf 640, Allensnek Extension 35
R15 000 000 (Fifteen Million Rand)
 Mellow Oaks situated Portion 480 (a Portion of Portion 12) of the farm Wilgespruit 190-IQ
R23 500 000 (Twenty Three Million Five Hundred Thousand Rand)
 Randfontein situated on Portion “A” of the Remainder of Portion 163 of the farm Elandsvlei 249-IQ
R12 500 000 (Twelve Million Five Hundred Thousand Rand)
 Willow View situated on Portion 8 of the farm Rietfontein 31-IR
R32 500 000 (Thirty Two Million Five Hundred Thousand Rand)
 North Riding situated on Portion 0 of Erf 612, Northwold Extension 13
R36 200 000 (Thirty Six Million Two Hundred Thousand Rand)
I further confirm that no restrictions were placed upon me.
1.
Valuation Instruction
Requestor:
Request date:
Inspection dates:
Reinspection dates:
Effective Valuation date:
Valuation instruction:
Type of property:
Current use of property:
Alternative use of property:
Specific instruction:
2.
Mr Andrew McLachlan
16 August 2016
16 August 2016 – 30 September 2016
13 February 2017 to 20 February 2017
1 November 2016 and again at 20 February 2017
To undertake a new inspection and compile a report in order to
determine a fair and reasonable open market value as at
1 October 2016 for company purposes. A request to inspect the
properties again was received during February 2017 and to update
the valuation reports as at 20 February 2017.
Specialised / Commercial
Schools
There is no alternate use for the property and it has been valued
based on its current use.
Determine market value as at 1 November 2016 and again as at 20
February 2017.
Client Information
Client name:
Contact person:
Contact details:
Email address:
Property street address:
Pembury Lifestyle Group Ltd
Mr Andrew McLachlan
(011) 678 4406
[email protected]
111 9th Avenue Fairland Johannesburg
186
3.
Property Details / Title Deed Information
3.1
Raslouw 1 situated on the Remainder of Holding 54, Raslouw Agricultural Holdings
Deeds office information:
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Remainder Holding 54, Raslouw Agricultural Holdings
T20357/2009
1,1893 ha
17/04/2009
R3 500 000
290 Pool Avenue, Raslouw, Centurion - Pretoria
Lat/Long: 25,845910 / +28, 123147
Bond information:
i) Bond number:
i) Bond amount:
ii) Bond holder:
B15933/2009
R2 625 000
ABSA Home Loans 101 (RF) Ltd
Owner’s details:
i) Registered owners:
ii) Registration number:
HJN Van Rooyen
570507 5075 08 4
Location of property:
Subject property is situated in Poole Avenue No. 290 in Raslouw Agricultural Holdings in Centurion
– Pretoria.
3.2
Raslouw 2 situated on Portion 2 of Holding 54, Raslouw Agricultural Holdings
Deeds office information:
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Ptn 2 of Holding 54, Raslouw Agricultural Holdings
T113734/2000
1,0000 ha
13/05/2000
R225 000
Pool Avenue, Raslouw, Centurion - Pretoria
Lat/Long: 25,845910 / + 28,123147
Bond information:
i) Bond number:
i) Bond amount:
ii) Bond holder:
B152539/2000
R3 000 000
Standard Bank of S.A. Ltd
Owner’s details:
i) Registered owners:
ii) Registration number:
RG Pietersen
710424 5023 08 9
Location of property:
Subject property is situated in Poole Avenue in Raslouw Agricultural Holdings in Centurion –
Pretoria.
187
3.3
Springs situated on Erf 1729, Strubenvale Extension 2
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Erf 1729, Strubenvale, Ext. 2, Springs
T23766/2009
1,2441 ha
Not available
Not available
4 Langlaagte Road, Springs
Lat/Long: 26.241385 / +28.464862
Bond information
There is no bond registered over the property.
Owner details
i) Registered owner:
ii) Registration number:
Fifth Season Inv. 99 (Pty) Ltd
2005/008325/07
Location of property
Subject property is situated at No. 4, Langlaagte Road, next to Grootvlei Estates in Strubenvale in
Springs - Gauteng Province.
3.4
Doxa Deo (Hartbeespoort) situated on Erf 630, Xanadu Extension 12
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Bond information
i) Bond number:
ii) Bond amount:
iii) Bond holder:
Owner details
i) Registered owner:
ii) Registration number:
Erf 630, Xanadu Ext. 12, Hartbeespoort
T20692/2008
10,1177 ha
06/12/2006
R2 850 000
Kubla Khan Drive, Xanadu Eco Park, Hartbeespoort
Lat/Long: 25.7486258286 / + 27.9138945594
B20743/2008 B20744/2008
R55, 396,000 R3, 554,890
Development Bank of Southern Africa Ltd & Xanadu Eco Park
Ltd
Doxa Deo Educational Trust
IT 7361/98
Location of property
Subject property is situated in Xanadu Eco Park, Kubla Khan Drive, Hartbeespoort.
188
3.5
Allens View situated on Erf 640, Allensnek Extension 35
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Erf 640, Allensnek Ext. 35, Roodepoort
T12216/2004
1,4715 ha
Unavailable
Unavailable
1014 Landhuis Street, Allensnek
Lat/Long: 26,121574 / +27, 921471
Bond information
i) Bond numbers:
ii) Bond amount:
iii) Bond holder:
B 10986 B 42573
R550 000 R2, 450,000
ABSA Bank Ltd ABSA Bank Ltd
Owner’s details
i) Registered owners:
ii) Registration number:
Grobler CJJ
500924 5015 08 2
Location of property
Subject property is situated in 1014 Landhuis Street, Allensnek Ext. 35 a suburb of Roodepoort.
3.6
Mellow Oaks situated Portion 480 (a Portion of Portion 12) of the farm Wilgespruit 190-IQ
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Portion 480 (a portion of portion 12) of the Farm Wilgespruit
190 IQ
T61983/1998
4,7728 ha
30 March 1998
R536 000
8 Van Staden Road, Aanwins A.H.
Lat/Long: - 26.1009134674 / +27.8818404191
Bond information
i) Bond number:
ii) Bond amount:
iii) Bond holder:
B7117/1999
R1 125 000
ABSA
Owner details
i) Registered owner:
ii) Registration number:
J H Van Dyk Enterprises CC
2002/025346/23
Location of property
Subject property is situated in Van Staden Road in Aanwins AH. This is a suburb of Roodepoort.
189
3.7
Randfontein situated on Proposed Portion “A” of the Remainder of Portion 163 of the farm
Elandsvlei 249-IQ
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
Unregistered Ptn of Re of Remainder Ptn163 Farm Elandsvlei
249 IQ
Unregistered
±11750m²
Not registered yet
Not registered yet
Sydney Carter Street
Bond information
There is no bond registered over the property.
Owner details
i) Registered owner:
Reg no.
Connie Mulder Centre
NPO 001 - 078
Location of property
Subject property is situated in Sydney Carter Street which is the border of Greenhills, which is a
suburb of Randfontein.
3.8
Willow View situated on Portion 8 of the farm Rietfontein 31-IR
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Portion 8 of the Farm Rietfontein 31 IR
T8863/2009
8,5653 hectares
26/09/2008
R20 000 000
8131 1st Street, Bredell, Kempton Park
Lat/Long: -26.0713925493/ +28.2930950195
Bond information
i) Bond number:
ii) Bond amount:
iii) Bond holder:
B44672/2014
R40 000 000
Andre Posthumus Familie Trust
Owner details
i) Registered owner:
ii) Registration number:
Zephan Prop (Pty) Ltd
2003 02 01 7407
Location of property
Subject property is situated on 1st Street, Bredell, a suburb of Kempton Park.
190
3.9
Northriding situated on Portion 0 of Erf 612, Northwold Extension 13
Deeds office information
i) Legal description:
ii) Title deed number:
iii) Area of stand:
iv) Purchase date:
v) Purchase price:
vi) Address:
vii) Co-ordinates:
Erf 612/0, Northwold Ext. 13 - Randburg
T20842/2008
7430m²
07/05/2008
R59 500 000
612 Hunters Road Northwold, Randburg
Lat/Long: - 26, 0619 / + 27, 9549
Bond information
i) Bond number:
ii) Bond amount:
iii) Bond holder:
B27115/2008
R81 302 000
Investec Bank Ltd
Owner details
i) Registered owner:
ii) Registration number:
Zephan Prop (Pty) Ltd
2003 0201 7407
Location of property
Subject property is situated at No. 612, Hunters Road, Northwold, Randburg.
4.
Local Authority Information
Property
Raslouw 1
Raslouw 2
Springs
Doxa Deo (Harties)
Allens View
Mellow Oaks
Randfontein
Willow View
Northriding
Zoning
Agricultural - Consent use for
education
Agricultural - Consent use for
education
Special – Town planner‟s
letter has been lodged
advising of intended rezoning
to educational
Educational
Educational
Agricultural - Consent use for
education. Town planner‟s
letter has been lodged
advising of intended rezoning
to educational
Institutional
Business (including place of
instruction and institutions)
Business 1
Authority
Tshwane Metropolitan Municipality
Tshwane Metropolitan Municipality
Ekurhuleni Metropolitan Municipality
Madibeng Local Municipality
City of Johannesburg Metropolitan
Municipality
City of Johannesburg Metropolitan
Municipality
Rand West City Local Municipality (Old
Randfontein Local Municipality)
Ekurhuleni Metropolitan Municipality
City of Johannesburg Metropolitan
Municipality
During the valuation process, no material contravention of statutory requirements was identified.
191
5.
Building And Improvements
Raslouw 1
Description of Buildings
A.
Main building - (Partly double storey building)
i)
Comprises of:
Entrance hall
Reception
Offices
Ablutions
Industrial kitchen
Pantry
Scullery
Board room with ablutions
ii)
Construction
Walls:
Roof:
Ceilings:
Doors and windows:
Built-in cupboards:
Flooring:
Special mentioning:
Condition:
Area of building:
Age of building:
B.
Brick plastered and painted
Pitched cement tile roof
Rhino Board
Steel
Kitchen and bedrooms
Wall to wall ceramic tiles
Large kitchen - used for functions
Very good and clean condition
432m²
± 5 years
Chapel
Brick plastered and painted chapel under a pitched concrete tile roof, Rhino ceilings and
tiled floors. Good chandeliers in Chapel with good finish inside.
Area – chapel:
Area - clock tower:
C.
145m²
25m²
2 X Attached flats
2 Small, 1 bedroom flats with lounge and kitchen. Brick plastered and painted under flat
iron roof. Good condition – well-kept and maintained.
Area – flats:
25m²
192
D.
2 X Small cottages
2 X Cottages attached. Brick plastered and painted – walls under a flat Iron roof with
Rhino Board ceilings and tiled floors.
Comprises of:
Lounge
Kitchen
2 Bedrooms
Bathroom
Area – cottages:
E.
36m²
4 X Rooms
4 X Attached rooms. Brick plastered and painted – walls under a flat Iron roof with Rhino
Board ceilings and tiled floors. Good and clean condition.
Area – rooms:
F.
64m²
Rondavel
Well-built brick rondavel under a pitched thatch roof. Good and clean condition.
Comprises of:
Kitchen
Bedroom
Bathroom
Area – Rondavel:
G.
40m²
Dwelling
Brick plastered and painted dwelling under a pitched Harvey tile roof with Rhino Board
ceilings and tiled floors. Good and clean condition. The approximate age of the dwelling
is 15 years.
Comprises of:
Lounge
Kitchen
3 X Bedrooms
Bathroom
Area – House:
110m²
193
H.
Building – No. 2
Brick plastered and painted dwelling under a concrete roof with Rhino Board ceilings and
tiled floors. Good and clean condition.
Comprises of:
Offices / classrooms
Small boardroom
Kitchen
There is also an attached thatch roof lapa
Area – building:
Area – lapa:
I.
279m²
110m²
Building – No. 3
Brick plastered and painted dwelling under a pitched Harvey tile roof with Rhino Board
ceilings and tiled floors. Good and clean condition.
Comprises of:
Offices / classrooms
Laundry
Garages
Area – building:
Area - garages
J.
292m²
88m²
Building – No. 4
Brick plastered and painted dwelling under a pitched Harvey tile roof with Rhino Board
ceilings and tiled floors. Good and clean condition.
Comprises of:
Offices / classrooms
Ablution
Area – building:
K.
108m²
Carport
Steel carport
Area - carport
L.
84m²
Parking
Brick paving and driveways
Area:
M.
± 2000m²
Fencing
Brick plastered fence wall and steel gates
194
N.
Generator
Big generator plant.
Raslouw 2
Description of Buildings
Double-story building with four large rooms downstairs used for the pre-school and three upstairs
rooms. Land used for sports facilities.
Springs
Description of Buildings
A.
Main dwelling
Rooms and offices – difficult to identify because of restoration process.
building that still appears strong and well built.
Single storey
Was an old mine clubhouse and is now converted into school building.
Construction
Walls exterior:
Face brick plastered and painted
Walls interior:
Plastered and painted
Roof:
Slate tiles
Ceilings:
Rhino board
Windows / door frames: Steel
Flooring:
Parquet wooden blocks, tiles and Novilon
Built in cupboards:
Various rooms
Special mentioning:
Currently not in good condition
Age of building
± 30 years, but recently renovated
Condition:
In process of restoration at date of physical inspection. Restoration
now complete.
Remarks
The shell of main buildings is in good condition and is well built with no cracks, but no
finishes inside.
Areas of buildings
Main building:
Court yard under roof:
Outbuildings:
Entrance port:
599m²
188,2m²
48,5m²
50m²
Other improvements
Tarred driveway – not in good condition.
Face brick fence wall
195
Doxa Deo (Hartbeespoort)
Improvements
A.
Main building
Comprises of:
Entrance hall
Ablutions – male
Ablutions – female
Ablutions – wheel chair
Kitchen
Auditorium
Upstairs offices
Mother‟s room
Sick bay
Pack room
6 X Offices
Server room
4 X Classrooms on lower ground floor- 2 smaller ablutions
Construction
Well built modern double storey building with brick plastered and painted walls under a
pitched tile roof with concrete and Rhino board ceilings. Doors and window frames are
Aluminium. Floors covering are tiles and wall to wall carpets and the auditorium with
laminated floor covering.
Total area of building:
Lower ground floor classrooms:
Age of building:
B.
1595m²
233m².
±8 years
Building 2 – classrooms
Classroom construction
Precast and brick walls under concrete tile roof with Rhino Board ceilings and tiled flooring
with steel window and door frames.
Area of building:
C.
119m²
Building 3 – class rooms
Precast and brick walls under concrete roof with Rhino Board ceilings and tiled flooring,
steel windows and steel door frames. There are male and female ablutions.
Area of building:
276m²
196
D.
Class rooms
2 Container type class rooms with wooden floor.
Area of building:
E.
48m²
Class rooms
8 Class rooms double storey brick and plastered and painted building under a tiled roof
with concrete and suspended ceilings. Good condition.
Area of building:
F.
818m²
Lapa type class room
Thatch roof lapa class room
Area of building:
81m²
G.
Lapa type class room
8 Double shade net ports for 16 cars.
H.
Boarding house complex
Construction: Pre-fabricated steel plate panels under iron roof with wooden flooring.
Comprises of:
Dining room:
Boys‟ hostel and ablutions:
Girls‟ hostel and ablutions:
Office / store:
Manager‟s room:
Kids zone – open plan building:
48m²
60m² & 16m²
60m² & 16m²
39m²
32m²
204m
General condition is good – well-kept and maintained.
I.
Other improvements
2 Equip boreholes
General plant
Allens View
Description of Buildings
A.
Building 1
Comprises of:
3 X Pre-school classes
Store
3 W.C.
Kitchen
197
Construction
Walls - exterior:
Walls - interior:
Roof:
Ceilings:
Doors and windows:
Floor covering:
Built-in cupboards:
Flooring:
Condition:
Good Klinker brick
Brick plastered and painted
Pitched concrete tiles roof
Suspended Rhino Board
Wood and steel
Ceramic floor tiles
Kitchen and bedrooms
Wall to wall ceramic tiles
Modern fairly new building – good clean condition – well-kept and
maintained
Floor area of building: 250m²
Age of building:
±5 years
B.
Building 2
Comprises of:
Reception area
Foyer
3 X Offices
8 X Classrooms
5 X Ablution facilities
Entrance hall
School hall
3 X W.C.
Construction
Same as building 1
Area of building:
Age of building:
C.
904m²
±5 years
Other improvements
Fencing
Paving
Parking bays
198
Mellow Oaks
Description of improvements
A.
Main building:
This building comprises of class rooms, offices, kitchen and reception areas.
Building is brick plastered and painted walls under a pitched corrugated iron roof with
suspended ceilings and tile covered floors.
General condition is fair condition well-kept and maintained.
Area of building:
Entrance foyer:
Age of building:
B.
457m²
42m²
±20 years
Rondavel
Brick built rondavel – old building under Thatch roof still in sound condition – to be used as a
classroom in future.
Area of building:
C.
180m²
Staff house
Older type brick and plastered dwelling under a flat Iron roof with Rhino Board ceilings and
basic finishes inside. Dwelling in fair condition well-kept and maintained.
Area of dwelling:
D.
± 180m²
Class rooms
2 X Attached brick built class rooms under pitched Iron roof with Rhino Board ceilings and
tiled floors with average finishes inside. Building in fair condition well-kept and maintained.
Area of building:
Area of veranda:
E.
140m²
68m²
Tuck shop
Well built shop – brick plastered and painted building under pitched tile roof with average
finishes inside. Shop well-kept and maintained.
Area of shop:
F.
20m²
Chapel
Well built brick plastered and painted walls under a pitched tile roof with suspended
ceilings and floor tiles. Property well-kept and maintained and in good clean condition.
Area of chapel:
Area of foyer:
230m²
18m²
199
G.
Ablution block
Well built brick plastered and painted building under a pitched tile roof.
Comprises off bathroom facilities for girls and boys. Property well-kept and maintained
Area of building:
H.
40m²
Class rooms
Building comprises off class rooms, kitchen and storerooms. Well built brick plastered and
painted walls under a pitched tile roof with Suspended ceilings and tiled floors. Property
well-kept and maintained and in good clean condition.
Area of building:
Area of veranda:
I.
729m²
140m²
Sports offices
Well built brick building that comprises of offices. Building well-kept and maintained and in
good clean condition.
Area of building:
J.
64m²
Staff quarters
Brick building under Iron roof. Rooms and ablutions attached.
Area of building:
K.
50m²
Other improvements
Generator plant
Carports:
40m²
Tarred driveways
Fence and guarded gate entrance
200
Randfontein
Description of improvements
A.
Main building
Newly well built centre area 1080m².
Construction
Walls – internal:
Walls – external:
Roof:
Ceilings:
Windows and door frames:
Flooring:
Built in cupboards:
Special mentioning:
Age of building:
Expensive clinker bricks
Brick plastered and painted
Pitched concrete roof tiles
Suspended
Aluminium
To be completed once building 100%
completed
Recently completed
Willow View
Improvements
A.
Description of improvements
Buildings
 Lodge – 50 rooms (certain rooms already converted to classrooms, some rooms
potentially being retained for boarding purposes)
 Guest House – 24 rooms (used for boarding purposes)
 Hall
 3 X Class rooms
 8 X Offices
 Dining room
 1 x Lift
 Restaurant /shop area
 Kitchen
 Scullery
 Laundry
 Storerooms
 7 X Class rooms (Old conference centre)
 Pantry
 Walk in fridge
 Gate house
 Covered walkways
 Big generator
 2 Pools
 Koi dam
 Brick paving
 Fence – brick, palisade and wire fencing.
201
Construction
Walls exterior:
Wall:
Roof:
Ceilings:
Windows and door frames:
Flooring:
Built in cupboards:
Special mentioning:
Condition:
Age of building:
Face brick
Face brick and brick plastered
Corrugated iron roof
Suspended aquatic and Rhino Board ceilings
Aluminium and Steel
Slasto tiles and ceramic floor tiles
Pantry and some offices
Industrial kitchen with walk in fridge
There are various different buildings and condition
varies between good and fair – some buildings in need
of painting and good cleaning at the date of
inspection. These have been completed towards year
end per advice from the Company.
±10 years
Remarks
The subject property is currently used as a Learners Academy. All buildings are in fair
condition and is usable as a school building and is converted for this specific use currently –
about 1/3 of property is utilized for the school.
There is also a section wet lands but that still leaves a portion vacant, which was valued as
agricultural land that can in future be utilized for further development of the school
premises.
B.
Areas of buildings
Main complex:
Lodge rooms:
Guest rooms:
DSTV room:
Willow hall:
8 X Offices:
7 X Class rooms/conference:
C.
1024, 6m²
1601, 2m²
486,6m²
20,7m²
295m²
103m²
588m²
Other improvements
Alarm system
Paving
Fencing
202
Northriding
Description of Buildings
There are 3 buildings on this erf.
Senior classes – main building with walkways
Pre-school centre
Crèche
Buildings comprise of:
A.
Seniors’ class rooms
5 X Classrooms – seniors and Grade A – 10 classrooms
School hall
Admin block
Girls and boy‟s ablution facilities on each of the 3 storeys
Under roof stoeps and verandas
Tuck shop
B.
Pre-school complex
3 X Classrooms
Kitchen
Stoep
1 Ablution block
C.
Crèche
1 Class room
Kitchen
Stoep
Ablution
Construction
Walls exterior:
Walls interior:
Roof:
Ceilings:
Windows and door frames:
Flooring:
Built in cupboards:
Special mentioning:
Condition:
Age of building:
Brick plastered and painted
Brick plastered and painted
Pitched concrete tiles
Rhino Board and concrete ceilings
Steel
Slate tiles
Some offices and classes
Buildings fit to be changed into school building
Buildings are in good condition- well-kept
maintained and in clean condition.
±15 years
and
Remarks
Complex already used as school building since January 2016 and there are some sections
that are in process of renovation.
203
Areas of buildings
Main building classes for Sub A and seniors:
Walkways:
Pre-school building:
Crèche:
3708m²
780m²
606m²
200m²
Other improvements
Sports field
Tarmac paving
Fence brick wall/Devil Fork fencing
6.
Condition of Improvements
Upon physical site inspection, the improvements appeared structurally sound and in neat
functional condition, with only on-going general maintenance required. No income has been
lost due to time delays to complete any refurbishments. Due to the age, type and quality of the
accommodation, an overall rating of „average to good‟ is applied to all properties inspected.
Certain properties are in process of renovations.
7.
Tenant Quality
All the properties are occupied by Pembury Schools (Pty) Ltd.
8.
Occupational Rental/Lease Details
Paragraph 13.29 of the JSE Listings Requirements states: In respect of each property that is rented
out by the property entity, the current annual rental and the estimated future annual rental/s at
a specified date/s and for a specified period/s (where this differs materially) must be included in
the detailed valuation report and a statement to that effect must be included in the summary of
the valuation report.
PL Group is not a property entity as defined in the JSE Listings Requirements. The properties will be
acquired by PLG Properties after the listing is complete though the funds raised from the listing.
Only then will PLG Properties start charging PLG Schools monthly rental amounts. However, this
will be inter-company in nature.
204
Occupational rental is being paid until such time that the properties are transferred into
PLG Properties. The occupational rental details are as follows:
8.1
Raslouw 1
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly occupational rental:
Escalated contractual rental:
Additional information:
Vacancy levels
8.2
Raslouw 2
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
8.3
H van Rooyen
Pembury Schools (Pty) Ltd
290 Poole Avenue, Raslouw, Centurion
11 893m²
1 December 2016
Date of transfer
N/A
R80 000
(Excluding VAT)
N/A
Triple Nett Lease
0%. There is only one tenant.
RG Pietersen
Pembury Schools (Pty) Ltd
290 Poole Avenue, Raslouw, Centurion
10 000m²
1 December 2016
2026
8%
R35 000
(Excluding VAT)
R37 800
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
Springs
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
Fifth Season Inv 99 (Pty) Ltd
Pembury Schools (Pty) Ltd
Erf 1729, Strubenvale Extension 2
12 441m²
1 March 2015
2026
8%
R30 000
(Excluding VAT)
R32 400
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
205
8.4
Doxa Deo (Hartbeespoort)
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
8.5
Allens View
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
8.6
Doxa Deo
Pembury Schools (Pty) Ltd
630 Kubla Khan Drive, Xanadu, Hartbeespoort
101 177m²
1 December 2015
2026
8%
R230 000
(Excluding VAT)
R248 400
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
C Grobler
Pembury Schools (Pty) Ltd
1014 Landhuis Street, Allens Nek, Roodepoort
14 715m²
1 October 2016
2026
8%
R83 000
(Excluding VAT)
R89 640
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
Mellow Oaks
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
JH van Dyk Enterprise
Pembury Schools (Pty) Ltd
8 Van Staden Road, Roodepoort
47 728m²
1 December 2015
2026
8%
R120 000
(Excluding VAT)
R129 600
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
206
8.7
Randfontein
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
8.8
Willow View
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
8.9
Connie Mulder Centre
Pembury Schools (Pty) Ltd
Sydney Carter Street, Randfontein
11 750m²
1 March 2017
2026
8%
R60 000
(Excluding VAT)
R64 800
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
Zephan Prop
Pembury Schools (Pty) Ltd
31R 1st Road, Kempton Park
85 653m²
1 December 2015
2026
8%
R340 000
(Excluding VAT)
R367 200
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
Northriding
Lessor:
Lessee:
Lease Premise:
Lease area (m²):
Commencement date:
Expiry date:
Escalation rate:
Current monthly rental:
Escalated contractual rental:
Additional information:
Vacancy levels
Zephan Prop
Pembury Schools (Pty) Ltd
Malibongwe Drive, Northriding, Randburg
7 430m²
1 January 2016
2026
8%
R350 000
(Excluding VAT)
R378 000
(Excluding VAT)
Triple Nett Lease
0%. There is only one tenant.
No adjustments have been made to future rental streams as the current and expected rentals
are not materially different to the market rentals of that area as published in “Rode‟s Retail
Report”.
207
9.
Option to Purchase, intra-group leases and material changes
The properties are in the process of being transferred to PLG Properties (Pty) Ltd. The total
consideration for the above properties is R136 200 000 and the valuation apportioned to the
above properties equates to R196 800 000. There are no other matters which could have a
material effect on the value of the properties.
The writer was in no way influenced by the „consideration value/s‟. The actual leases were
confirmed to be market related. Please refer to the valuation reports for additional information.
There have been no material changes in circumstances since 1 November 2016 until the date of
issue of this summary valuation report that will affect this valuation.
10.
Further Development on the Properties
As the number of pupils on each campus increases, it will be necessary to construct more
classrooms, school facilities and sports facilities to accommodate this planned expansion. The
company is preparing the necessary plans for extensions and alterations and has already
submitted two such plans for PLG Mellow Oaks and PLG Hartbeespoort. The balance of the
plans are expected to be submitted during March and April 2017. Alterations will commence
once the plans are approval by the local town council.
The planned construction costs per campus for 2017 can be seen in the table below. It should be
noted that 70% of the planned expenditure will be spent on new classrooms for each campus,
while the remaining 30% will be spent on sports facilities for each campus.
208
Jan
R
Feb
R
Mar
R
Apr
R
May
R
Jun
R
Jul
R
Aug
R
Sep
R
Oct
R
Nov
R
Dec
R
2017 TOTAL
R
PLG Allens View
Academy
0
0
0
45 500
100 000
208 700
245 000
596 000
360 000
466 000
692 600
860 000
3 573 800
Classrooms
0
0
0
31 850
70 000
146 090
171 500
417 200
252 000
326 200
484 820
602 000
2 501 660
Sports Fields
PLG
Hartbeespoort
Academy
0
0
0
13 650
30 000
62 610
73 500
178 800
108 000
139 800
207 780
258 000
1 072 140
0
0
0
0
0
154 200
245 000
346 000
460 000
816 000
1 388 100
634 230
4 043 530
Classrooms
0
0
0
0
0
107 940
171 500
242 200
322 000
571 200
971 670
443 961
2 830 471
0
0
0
0
0
46 260
73 500
103 800
138 000
244 800
416 430
190 269
1 213 059
0
0
345 500
0
0
108 700
145 000
596 000
360 000
466 000
654 080
335 700
3 010 980
Classrooms
0
0
241 850
0
0
76 090
101 500
417 200
252 000
326 200
457 856
234 990
2 107 686
Sports Fields
PLG Northriding
Academy
0
0
103 650
0
0
32 610
43 500
178 800
108 000
139 800
196 224
100 710
903 294
0
0
345 500
33 000
25 000
101 700
150 000
606 000
334 080
430 000
219 500
7 570
2 252 350
Classrooms
0
0
241 850
23 100
17 500
71 190
105 000
424 200
233 856
301 000
153 650
5 299
1 576 645
0
0
103 650
9 900
7 500
30 510
45 000
181 800
100 224
129 000
65 850
2 271
675 705
0
0
78 500
125 000
126 000
205 700
506 000
262 600
330 000
430 000
950 000
1 244 800
4 258 600
0
0
54 950
87 500
88 200
143 990
354 200
183 820
231 000
301 000
665 000
871 360
2 981 020
0
0
23 550
37 500
37 800
61 710
151 800
78 780
99 000
129 000
285 000
373 440
1 277 580
0
0
45 500
100 000
100 000
208 700
495 000
246 000
360 000
466 000
692 600
860 000
3 573 800
Classrooms
0
0
31 850
70 000
70 000
146 090
346 500
172 200
252 000
326 200
484 820
602 000
2 501 660
Sports Fields
PLG Willow View
Academy
0
0
13 650
30 000
30 000
62 610
148 500
73 800
108 000
139 800
207 780
258 000
1 072 140
0
0
45 500
100 000
100 000
100 000
354 740
220 000
336 960
460 000
686 000
202 250
2 605 450
Classrooms
0
0
31 850
70 000
70 000
70 000
248 318
154 000
235 872
322 000
480 200
141 575
1 823 815
Sports Fields
0
0
13 650
30 000
30 000
30 000
106 422
66 000
101 088
138 000
205 800
60 675
781 635
0
0
860 500
403 500
451 000
1 087 700
2 140 740
2 872 600
2 541 040
3 534 000
5 282 880
4 144 550
23 318 510
Classrooms
0
0
602 350
282 450
315 700
761 390
1 498 518
2 010 820
1 778 728
2 473 800
3 698 016
2 901 185
16 322 957
Sports Fields
0
0
258 150
121 050
135 300
326 310
642 222
861 780
762 312
1 060 200
1 584 864
1 243 365
6 995 553
Sports Fields
PLG Mellow Oaks
Academy
Sports Fields
PLG Raslouw
College
Classrooms
Sports Fields
PLG Springs
Academy
2017 TOTAL
209
The development of additional facilities is planned for 2018 and beyond. However, the
expected development costs going forward will only be established once PL Group has a
clearer understanding of the expected number of pupils. Thus, the planned development
costs for 2018 will only be finalised later this year.
PL Group has obtained permission for the current buildings, while permission is currently being
sought for the new facilities on each respective property going forward. These permissions
should be obtained by no later than the end of April 2017. However, this will be an on-going
process as the schools continue to expand.
11.
Comments on the Main Valuation Inputs
Income: The actual leases were confirmed to be in line with the market and were applied „as
is‟ in the value calculations, based on the Income Capitalisation Method of Valuation.
Expenditures: All leases are triple-net leases where the tenant is responsible for all expenses
such as rates & taxes, Body Corporate levies (which include insurance and external
maintenance) etc. Only a minimal provision for management- and audit fees were included
in the value calculations
Capitalisation Rates: Cap rates of 8.5% - 11% were applied, as fully motivated in the valuation
reports.
12.
Valuation Methodology
All the properties are, or will be, income generating assets and were valued on the Capitalised
Income Method. The Capitalised Income Method is calculated by capitalising the net
operating income into perpetuity at a market related yield.
Other valuation methodologies applied:
 Other than Raslouw 2, the direct comparable method could not be used due to lack of
sales information as school properties are normally sold together with a school entity by
way of a sale of shares and thus the sale is not recorded at the Deeds Office.
 Accordingly, the depreciated replacement cost method, as detailed in the International
Valuation Standards, Edition 7, was also considered in the valuation of all the abovementioned properties in support of the Capitalisation Income Method.
13.
Location
Properties are all located in different suburbs and towns, these locations are specified as per
the valuation report.
209
14.
Conclusion of Value
After analysing rental information based on the existing use of the properties for schools and
confirmed property sale information (where available), or undertaking the depreciated
replacement cost method, where applicable, and after undertaking extensive research in
order to make an informed decision, it is the property valuer's opinion that the current openmarket values of the subject as stated in this report fall within reasonable market norms.
The valuations are summarised in the table below:
Property Name
Allens View
Hartbeespoort
Mellow Oaks
Northriding
Randfontein
Raslouw 1
Raslouw 2
Springs
Willow View
Total
Value of Buildings
10 000 000
29 600 000
12 500 000
25 200 000
10 400 000
16 100 000
3 000 000
7 500 000
27 000 000
141 300 000
Method of Valuation:
Total market value:
Effective Valuation Date:
15.
Value of Vacant Land
5 000 000
10 400 000
11 000 000
11 000 000
2 100 000
6 000 000
3 000 000
1 500 000
5 500 000
55 500 000
Total
15 000 000
40 000 000
23 500 000
36 200 000
12 500 000
22 100 000
6 000 000
9 000 000
32 500 000
196 800 000
various methods used
R196 800 000
20 February 2017
Special Conditions of Valuation
None
16.
Other Matters
Furthermore, I, Johannes Simon Bosman, declare that:
 I have no personal interest in the subject properties, nor will I have in the future. Furthermore,
I have conducted this valuation in accordance with the ethics of the valuation profession.
 The information furnished by others is believed to be reliable and whilst every attempt has
been made to check on the authenticity of such information, no warranty is given for its
accuracy.
 This certificate forms part of and must be read in conjunction with the valuation reports.
 No account has been taken of any amounts, which may be outstanding in respect of any
registered mortgage bonds over the property, nor any outstanding municipal rates and
taxes.
 I have physically inspected the subject properties, which has been detailed in this report,
however I have not consulted a geotechnical engineer with regards to the soil conditions,
nor has a structural survey of the buildings been undertaken and therefore comment on the
structural condition of the improvements cannot be qualified.
 No land was being developed on any of the properties at the time of the valuation.
Additionally, none of the properties are being held for future development other than to
expand the existing school properties.
211
Having inspected the aforementioned properties and after taking due consideration of all relevant
factors, I JOHANNES SIMON BOSMAN in my capacity as a REGISTERED PROFESSIONAL VALUER NO.
2450 consider the above valuation to be a true and fair assessment of the current open-market
value.
J S BOSMAN
M.I.V. (SA)
NAT. DIPL. PROP VALUATIONS
PROFESSIONAL VALUER
REG. NO: 2450
PLOT 80
GOLF AVENUE
LUSTHOF
PRETORIA
CELLULAR NUMBER:
083 7418 895
E-MAIL:
[email protected]
212
ANNEXURE 20
TERMS OF THE SERVICE LEVEL AGREEMENT BETWEEN PEMBURY SERVICES AND PLG SCHOOLS
Background
Pembury Services performs administrative functions for the PL Group companies. PLG Schools
requires Pembury Services to perform the administrative tasks required for the efficient conducting of
the PLG Schools business. Pembury Services is in a position to perform such tasks and as such will
provide administrative functions for PLG Schools as required from time to time.
Duration of Agreement
The agreement took effect from 1 January 2016 and will continue indefinitely. Both parties have the
right to cancel the agreement provided that a notice period of three months is given. No
termination fee will apply.
Fees and Payment
The fees charged by Pembury Services are as follows (as extracted from the annexure to the service
level agreement):
Pembury Services –
Employee Position
Office manager
Marketing manager
Accountant
Debtors clerk
Accountant
Financial advisor
Invoices accountant
Other costs
Fee for the year ending
31 December 2017
R
132 000
264 000
316 800
190 080
264 000
330 000
261 360
396 000
2 154 240
Fee for the year ending
31 December 2018
R
145 200
290 400
348 480
209 088
290 400
363 000
287 496
435 600
2 369 664
An increase of 10% per annum is assumed.
All fees charged are market related comparable to an arm‟s length transaction. The services are
provided on a cost sharing/cost recovery basis and no mark-up is made on such costs. As such, the
agreement is considered, by the directors that do not have an interest in the above contract, to be
in the best interests of PL Group at this stage of the Group‟s growth.
The intention over time is for PL Group to appoint its own administration staff as the group grows. The
performance in terms of the agreement will be monitored each year by uninterested directors, also
ensuring good corporate governance.
Furthermore, the agreement will be reviewed by the board of directors after 31 December 2018. The
board will ensure that any continuation of the agreement is in the interest of PL Group and any
directors having an interest in this contract will be recused from the board meeting in accordance
with the Companies Act.
213
PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PL Group” or “the Company”)
ISIN Code: ZAE000222949
JSE Code: PEM
APPLICATION FORM IN RESPECT OF THE PRIVATE PLACEMENT BY PL GROUP OF 140 000 000 ORDINARY
SHARES AT 100 CENTS EACH AS REGISTERED BY CIPC ON 8 MARCH 2017
This application form, when completed, should be forwarded by hand or posted to the following
address:
PL Group Subscription c/o
Arbor Capital Sponsors Proprietary Limited
Ground Floor, One Health Building
Woodmead North Office Park
54 Maxwell Drive
Woodmead, 2157
(Suite # 439, Private Bag X29, Gallo Manor, 2052)
To be received by no later than 12:00 on Friday, 24 March 2017.
Application forms can also be sent in the form of an e-mail attachment to one of the following email addresses: [email protected];
[email protected].
Note: All blocks must be completed. Applications are subject to the terms set out below and those
set out in the Prospectus to which this application form is attached.
BLOCK A: APPLICANT‟S DETAILS
Surname of applicant or name of
entity applying for shares:
First names of applicant (if
applicable):
Identity number or registration
number of applicant:
Postal address (preferably a PO Box):
Postal code:
Contact name:
Telephone number and dialling
code:
Cell phone number:
Facsimile number and dialling code:
214
E-mail address:
Former resident or non-resident of
South Africa:
Name of bank account holder
Name of bank:
Branch name:
Branch code:
Account number:
Dividend withholding tax status:
BLOCK B: APPLICATION FOR PL GROUP ORDINARY SHARES
Column 1
Number of PL Group ordinary
Shares applied for (must be a
whole number multiple of 100
with a minimum of 2 000 Shares
Column 2
Price per total number of ordinary
Shares applied for
Number applied for
All PL Group Shares allotted to applicants will be registered in the name and at the address listed
below. Should these registration details not be completed then the PL Group ordinary Shares will be
registered in the name of the applicant listed in BLOCK A above.
Postal address (preferably a PO Box):
Postal code:
BLOCK C: APPLICATION FOR PL GROUP ORDINARY SHARES AT A PRICE OF 100 cents EACH (CREDITED
AS FULLY PAID) (“PL GROUP ORDINARY SHARES”)
To: The Directors of PL Group
I, the undersigned, warrant that I have full legal capacity to contract on behalf of the applicant
stated in Block A above (“the applicant”), and on behalf of the applicant hereby irrevocably to
subscribe for the number of PL Group ordinary Shares stated in column 1 of Block B above at the
price stated in column 2 of Block B above, or any lesser number of PL Group ordinary Shares that
may be allocated to the applicant in the manner set out in paragraph 2.3.2 of the Company‟s
Prospectus dated Thursday, 9 March 2017 to which this application form is attached. Where a
lesser number of PL Group ordinary Shares are allocated to the applicant, I hereby agree that
the relevant amount payable by the applicant in terms of column 3 of Block B above will be
reduced pro-rata to the lesser number of PL Group ordinary Shares allocated. I acknowledge
that, on acceptance by PL Group of the above Private Placement, a binding subscription for PL
Group ordinary Shares allocated to the applicant will result on the terms and conditions set out
below read with the terms of the application set out below:
Full name:
Capacity:
Signature:
Date:
215
BLOCK D: DETAILS OF CSDP OR BROKER (To be completed and stamped by the CSDP or broker).
Name of CSDP or broker:
CSDP or broker contact person:
CSDP or broker contact telephone number:
SCA or Bank CSD account number:
Scrip account number:
Settlement bank account number:
Name of account holder:
Account number:
Stamp and signature of CSDP or broker:
In the event that Block D is not completed, applicants will be issued an electronic share allocation
advice which will be posted to the address set out in Block A above. In accordance with the FMA,
share certificates may not be issued and applications must be made for dematerialised shares.
Terms of the application
1. Applications under this application form are irrevocable and may not be withdrawn once
submitted.
2. Applicants should consult their professional advisors in case of doubt as to the correct
completion of this application form.
3. All alterations on this application form must be authenticated by a full signature. All applications
must be made without any conditions stated by applicants.
4. The name of the applicant may be changed to a nominee holder acceptable to PL Group,
provided that the applicant remains responsible for the obligations of its nominee.
5. PL Group reserves the right to refuse any application in whole or in part, or to accept some
applications in full and others in part, or to reduce all or any application on the basis determined
by it.
6. Payment in respect of PL Group ordinary Shares allocated to the applicant must be made by
electronic funds transfer to PL Group ISSUE and proof of payment must accompany this
application form.
7. If the Private Placement to subscribe for the PL Group ordinary Shares is accepted in whole or in
part, then the resultant subscription is subject to the conditions referred to in section 2 of this
Prospectus.
8. The subscription and allotment of the PL Group ordinary Shares will be subject to the terms and
conditions stated in the Prospectus.
9. If the instructions set out in this application form and the Prospectus are not fully complied with,
the Company reserves the right to accept such applications in whole or in part at its discretion.
10. No receipts will be issued for documents lodged unless specifically requested. In compliance
with the requirements of the JSE, lodging agents are requested to prepare special transaction
receipts, if required. Signatories may be called upon for evidence of their authority or capacity
to sign this application form.
11. If this application form is signed under a power of attorney, then such power of attorney or a
notarially certified copy thereof must be sent with this application form for noting (unless it has
already been noted by Link Market Services). This does not apply in the event of this application
form bearing a JSE broker‟s stamp.
12. This application will constitute a legal contract between PL Group and the applicant.
13. CSDPs and brokers will be required to retain a copy of this application form for presentation to
the Directors if required.
216
14. Applicants need to have appointed a CSDP or broker and must advise their CSDP or broker in
terms of the custody agreement entered into between them and their CSDP or broker.
15. Payment will be made on a delivery versus payment basis. Alternatively, the latest date on which
funds will be debited from shareholders‟ accounts or payments made into the Company‟s bank
account will be Tuesday, 28 March 2017.
16. If payment is dishonoured or not made for any reason, PL Group, in its sole discretion, may
regard the relevant application as invalid or take any such steps in regard thereto as it may
deem fit.
217