Audited Abridged Consolidated
Financial Statements
G4S (Botswana) Limited | for the year ended 31 December 2022 |
Key highlights in million Pula Full Year ended
31 December 2022
250.00
200.00 | ||||||
212.46 | 199.57 | |||||
150.00 | ||||||
100.00 | Key Highlights in milliions | |||||
50.00 | 96.72 | 88.64 | ||||
0.00 | 38.73 | 51.29 | 24.53 | |||
December 2022 | December 2021 |
Financial Highlights | Group KPI'S
ABRIDGED CONSOLIDATED | GROUP | ||||||||
STATEMENT OF COMPREHENSIVE INCOME | Restated | ||||||||
for the year ended 31 December 2022 | Year ended | Year ended 31 | |||||||
31 December | December | ||||||||
2022 | 2021 | ||||||||
P´000 | P´000 | ||||||||
Revenue | 212,460 | 199,565 | |||||||
Cost of goods sold | -8,066 | -5,493 | |||||||
Cost of providing services | -165,479 | -142,783 | |||||||
Gross profit | 38,916 | 51,289 | |||||||
Other income | 1,129 | 2,518 | |||||||
Movement in credit loss allowances | -4,327 | 4,479 | |||||||
Administrative expenses | -42,815 | -35,209 | |||||||
Operating (loss)/profit | -7,097 | 23,076 | |||||||
Finance income | 2,373 | 3,008 | |||||||
Interest paid | -1,346 | -1,556 | |||||||
(Loss)/profit before taxation | -6,070 | 24,528 | |||||||
Taxation | 97 | -4,957 | |||||||
(Loss)/profit for the year | -5,973 | 19,571 | |||||||
Total comprehensive (loss)/income for the year | -5,973 | 19,571 | |||||||
(Loss)/profit attributable to: | -5,436 | 19,416 | |||||||
Owners of the parent of the company | |||||||||
Non-controlling interest | -537 | 155 | |||||||
(Loss)/earnings per share from operations attributable to | -5,973 | 19,571 | |||||||
the ordinary equity holders of the company | -6.79 | 24.27 | |||||||
Basic and diluted earnings per share (thebe) | |||||||||
ABRIDGED CONSOLIDATED | GROUP | ||||||||
STATEMENTS OF FINANCIAL POSITION | Year ended | Year ended 31 | |||||||
for the year ended 31 December 2022 | |||||||||
31 December | December | ||||||||
2022 | 2021 | ||||||||
P´000 | P´000 | ||||||||
Assets | |||||||||
Non-Current Assets | 23,456 | 14,309 | |||||||
Property, plant and equipment | |||||||||
Right-of-use assets | 11,651 | 14,988 | |||||||
Goodwill | 9,715 | 9,715 | |||||||
Deferred tax | 6,678 | 5,479 | |||||||
Current Assets | 51,499 | 44,491 | |||||||
5,556 | 5,478 | ||||||||
Inventories | |||||||||
Amounts due from related parties | 50,194 | 59,327 | |||||||
Trade and other receivables | 30,451 | 37,470 | |||||||
Current tax receivable | 5,805 | 672 | |||||||
Cash and cash equivalents | 12,051 | 16,027 | |||||||
104,058 | 118,974 | ||||||||
Non-current assets held for sale | 0 | 5,264 | |||||||
Total Assets | 155,557 | 168,730 | |||||||
Equity and Liabilities | |||||||||
Equity | |||||||||
Equity Attributable to Equity Holders of Parent | 1,805 | 1,805 | |||||||
Stated capital | |||||||||
Retained income | 109,426 | 114,862 | |||||||
111,231 | 116,666 | ||||||||
Non-controlling interest | 861 | 1,398 | |||||||
Liabilities | 112,092 | 118,064 | |||||||
Non-Current Liabilities | 9,351 | 12,117 | |||||||
Finance lease liabilities | |||||||||
Current Liabilities | 27,723 | 27,208 | |||||||
Trade and other payables | |||||||||
Amounts due to group companies | 1,092 | 3,393 | |||||||
Finance lease liabilities | 5,299 | 5,413 | |||||||
Provisions | 0 | 984 | |||||||
34,114 | 36,998 | ||||||||
Non-current liabilities of assets held for sale | 0 | 1,550 | |||||||
Total Liabilities | 43,465 | 50,665 | |||||||
Total Equity and Liabilities | 155,557 | 168,730 | |||||||
ABRIDGED CONSOLIDATED | |||||||||
STATEMENTS OF CHANGES IN EQUITY | Stated | Retained | Total | Non | Total | ||||
capital | income | controlling | equity | ||||||
interest | |||||||||
P'000 | P'000 | P'000 | P'000 | P'000 | |||||
GROUP | |||||||||
Balance at 01 January 2021 | 1,805 | 111,146 112,950 | 1,753 | 114,703 | |||||
Profit for the year | 0 | 19,416 | 19,416 | 155 | 19,571 | ||||
Dividends paid | 0 | -15,700 | -15,700 | -510 | -16,210 | ||||
Balance at 31 December 2021 | 1,805 | 114,862 116,666 | 1,398 | 118,064 | |||||
Balance at 1 January 2022 | 1,805 | 114,862 116,666 | 1,398 | 118,064 | |||||
Loss for the year | 0 | -5,436 | -5,436 | -537 | -5,973 | ||||
Balance at 31 December 2022 | 1,805 | 109,426 111,230 | 861 | 112,092 |
GENERAL INFORMATION
G4S (Botswana) Limited is a company registered under the Companies Act, 2003 of Botswana and domiciled in Botswana. The financial statements comprise the company and its subsidiary (together referred to as the 'Group').
BASIS OF PREPARATION
The abridged consolidated financial results of G4S (Botswana) Limited and its subsidiary are extracted from the Group financial statements that have been prepared in accordance with International Financial Reporting Standards ("IFRS"). The financial information is presented in Botswana Pula. The board approved the annual financial statements for the year ended 31 December 2022 for issue on 10 May 2023.The prior year results have been represented due to change in intention not to dispose of investment in subsidiary. Following the change in intention to sell the G4S Facilities management business, the financial statements have been restated to consolidate the previously held for sale business.The financial statements have been prepared on a going concern basis and it has been established that the company will be in operation in the foreseable future.
ACCOUNTING POLICIES
The accounting policies adopted are consistent with those of the previous financial year. Amendments to IFRS effective for the financial year ending 31 December 2022 have been addressed during the year. New accounting standards and interpretations that have been published that are not effective for 31 December 2022 reporting periods have not been adopted by the Group. These standards are not expected to have a material impact on the entity or its transactions in the current or future reporting periods.
USE OF JUDGEMENTS AND ESTIMATES
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these financial statements, the significant judgments made by management in applying the Group's accounting policies, and the key sources of estimation were similar to those applied to the consolidated financial statements for the year ended 31 December 2021, except for deferred tax asset which was raised as a result of taxable loss which was recognised in 2022.
KEY HIGHLIGHTS & FINANCIAL PERFORMANCE YEAR ON YEAR COMPARISON
The Group Revenue performance for the period increased by 6.45% year on year driven primarily by good growth in the Manned guarding (MSS) service line. The top line growth was despite the contract losses experienced during the period under review primarily because of the new citizen economic empowerment legislation.The Cash service line grew marginally by 4% while the Electronic Security Systems (ESS) remained largely unchanged as it continues to experience intense competition from new entrants particularly in the Alarm monitoring and response (AMR) space. A Price Increase (PI) was levied on our MSS customers in January 2022 following a statutory wage increase by the Government which had a marginal impact on the revenue line. Additionally, a marginal inflationary adjustment was passed to some of our cash customers (fuel surcharge) as a response to the abnormally high fuel prices experienced during the year while in the Security systems service line the business passed a 5% increase in pricing to monthly customers from July 2022.
The significant decline in gross profit for the year was as a result of the abnormal price increases on fuel
- fuel expenses increased by 88% for the full year, compared to prior year adding significantly to total cost. Additionally due to the heightened security risk environment, the business invested in enhanced security upgrades to its infrastructure specifically in the cash service line (investment in live monitoring of all cash vehicles) which further added to the cost of providing service putting further pressure to total costs.
The significant miss in Gross Profit (GP) largely drives the decline in the profit before tax (PBT) year on year. Added to the PBT decline is the increase in administrative expenses owing to the normalisation of the alarm monitoring and response (AMR) teams wherein from September 2021 Management added back the full crew complement to the AMR response crew structure which had been reduced during 2020 - effectively experiencing the full cost of this change in the whole of 2022 while in 2021 this was only experienced for 4 months. We saw an increase in movement in credit loss allowances from a gain of P4.4 million (2021) to a loss of P4.3 million (2022).The P8.7 million swing was triggered mainly by a higher loss given default (LGD) percentage applied to the 2022 receivables above 365 days, compared to 2021 which was lower.
Additionally other income did not yield a comparatively higher interest as compared to prior year as a result of the prevailing investment climate with lower yield effectively shedding over 65% compared to the prior year.
OUTLOOK
The Group continues to focus on growing revenue following encouraging increases in revenue quarter on quarter for both Q3 and Q4 2022, indicating that revenue lost during H1 2022 is systematically being recovered. We will continue driving the sale of integrated security solutions to ensure that we remain at the forefront of security capability in Botswana.The trading conditions remain challenging with significantly fewer opportunities than in prior years (primarily due to CEE legislation). As a response, Management continues to drive its commercial strategy of focusing on industry-specific growth (such as the retail growth strategy that has driven the H2 MSS revenue growth. The infusion of technology into our service offering has also been successful as a revenue driver. Specific focus for the year is on cost management with driving efficiencies across the business and continued fuel management aimed at managing profitability. Despite the reduced performance of the company, in lieu of stated reasons, the Board of Directors and Management are confident of the company's going concern status and will continue to work hard towards improved profitability in the foreseeable future.
NON-CURRENT ASSETS HELD FOR SALE
The G4S subsidiary ¨G4S Facilities Management Pty (Ltd) were held for sale in 2021, however in 2022
it ceased to be held for sale and hence its results fully consolidated with G4S Botswana Limited results. Currently the company does not have any intention to sell the subsidiary.
RELATED PARTY TRANSACTIONS
There has been no significant change in the nature of related party transactions from those reported in the annual financial statements for the year ended 31 December 2021.
EVENTS OCCURRING AFTER REPORTING DATE
There were no significant events that occurred after the reporting date that required adjustment to or disclosure in the annual financial statements for the year ended 31 December 2022.
REVENUE | BWP212.46M | 6.46% INCREASE | |||||
2021: BWP199.57M | |||||||
MSS REVENUE | BWP96.72M | 9.12% INCREASE | |||||
2021: BWP88.64M | |||||||
GROSS PROFIT | BWP38.73M | -24.49% DECLINE | |||||
2021:BWP51.29M | |||||||
LOSS BEFORE TAXATION | - BWP5.97M | -124.34% DECLINE | |||||
2021:BWP24.53M | |||||||
SEGMENTS | |||||||
GROUP ABRIDGED | Security | Manned | Cash | ||||
BUSINESS SEGMENTS | Systems | Security | Solutions | ||||
31 December 2022 | P´000 | P´000 | P´000 | ||||
Revenue | 47,107 | 96,725 | 63,174 | ||||
Direct labour | -15,823 | -73,392 | -18,919 | ||||
Direct vehicles | -12,193 | -6,481 | -9,357 | ||||
Direct other costs | -5,340 | -8,810 | -18,106 | ||||
Cost of sales | -33,356 | -88,683 | -46,382 | ||||
Gross profit | 13,751 | 8,041 | 16,792 | ||||
SG&A labour | -6,006 | -5,255 | -3,754 | ||||
SG&A vehicles | -97 | -185 | -306 | ||||
SG&A other costs | -3,600 | -2,031 | -15,014 | ||||
SG&A expenses | -9,703 | -7,471 | -19,074 | ||||
Trading profit/(loss) | 4,048 | 570 | -2,281 | ||||
Movement in credit loss allowances | -2,596 | -865 | -865 | ||||
Other income/expenses | 436 | 408 | 232 | ||||
Finance income | 816 | 703 | 854 | ||||
Finance cost | -285 | -584 | -382 | ||||
Profit/(loss) before taxation | 2,419 | 232 | -2,442 | ||||
Taxation | - | - | - | ||||
Profit/(loss) for the period | 2,419 | 232 | -2,442 | ||||
Material non-cash items | |||||||
Group | |||||||
31 December 2022 | -3,086 | -5,209 | -6,149 | ||||
Depreciation | |||||||
Finance income | 816 | 703 | 854 | ||||
Segment assets | |||||||
Group | |||||||
31 December 2022 | 72,147 | 35,411 | 41,568 | ||||
Total assets | |||||||
Total liabilities | -17,070 | -9,760 | -12,211 | ||||
RESTATED GROUP ABRIDGED | Security | Manned | Cash | ||||
BUSINESS SEGMENTS | Systems | Security | Solutions | ||||
31 December 2021 | P´000 | P´000 | P´000 | ||||
Revenue | 45,114 | 88,636 | 60,939 | ||||
Direct labour | -14,860 | -64,648 | -17,152 | ||||
Direct vehicles | -5,153 | -3,558 | -7,954 | ||||
Direct other costs | -10,065 | -6,327 | -12,510 | ||||
Cost of sales | -30,077 | -74,533 | -37,616 | ||||
Gross profit | 15,037 | 14,103 | 23,323 | ||||
SG&A labour | -4,342 | -7,610 | -4,925 | ||||
SG&A vehicles | -120 | -140 | -69 | ||||
SG&A other costs | -5,365 | -6,386 | -5,442 | ||||
SG&A expenses | -9,827 | -14,135 | -10,436 | ||||
Trading profit/(loss) | 5,210 | -32 | 12,887 | ||||
Other income/expenses | 140 | 274 | 189 | ||||
Movement in credit loss allowances | 926 | 1,533 | 1,533 | ||||
Finance income | 696 | 1,368 | 941 | ||||
Finance cost | -335 | 676 | 452 | ||||
Profit/(loss) before taxation | 6,638 | 3,819 | 16,002 | ||||
Taxation | -1,058 | -2,078 | -1,429 | ||||
Profit/(loss) for the period | 5,580 | 1,741 | 14,573 | ||||
Material non-cash items | |||||||
Group | |||||||
31 December 2021 | -3,430 | -1,717 | 5,033 | ||||
Depreciation | |||||||
Finance income | 696 | 1,368 | 941 | ||||
Segment assets | |||||||
Group | |||||||
31 December 2021 | 69,200 | 39,318 | 47,182 | ||||
Total assets | |||||||
Total liabilities | -15,960 | -9,068 | -10,882 |
The above segmentation excludes immaterial non-reportable segments and the head office, which bears
centralised costs.
The directors of G4S (Botswana) Limited ("the Company") are responsible for the financial statements of the Company and its subsidiary. Their responsibility includes the maintenance of financial records and the preparation of the financial statements consistent with the accounting policies of G4S (Botswana) Limited, which comply with International Financial Reporting Standards ("IFRS").The company and subsidiary maintain systems of internal control, which are designed to provide reasonable assurance that the financial records
ABRIDGED CONSOLIDATED | GROUP | |
STATEMENTS OF CASH FLOWS | Year ended | |
for the year ended 31 December 2022 | ||
31 December | ||
2022 | ||
Cash flows from operating activities | P´000 | |
15,925 | ||
Cash flows generated from operations | ||
Taxation paid | -5,133 | |
Net cash flows generated from operating activities | 10,792 | |
Cash flows from investing activities | -18,127 | |
Purchase of property, plant and equipment | ||
Proceeds from sale of property, plant and equipment | 0 | |
Loans to related parties repaid | 10,000 | |
Interest received | 15 | |
Net cash flows utilised in investing activities | -8,112 | |
Cash flows from financing activities | -6,423 | |
Payment on lease liabilities | ||
Dividends paid | 0 | |
Interest paid | -1,346 | |
Net cash flows utilised in financing activities | -7,769 | |
Movement in cash and cash equivalents | -5,090 | |
Cash and cash equivalents at the beginning of the year | 17,141 | |
Total cash and cash equivalents at the end of the year | 12,051 |
INTERNAL CONTROLS
The effectiveness of the internal control system is monitored through management reviews, Global internal | |
Audit, Reconciliation and Operational Cash Controls (ROCC) and the external auditors' review and testing | |
of appropriate aspects of the internal control systems during the course of their statutory examination of the | |
Company and Group.The Group and Company directors have considered the results of these reviews and | |
are aware of certain internal control deficiencies.The control environment will continue to be improved and | |
30,700 | the 2023 group internal audit will be more robust. No material internal controls lapses have been observed |
-10,085 | for the year under review. |
20,615 | SEGMENT REPORTING |
A segment is a distinguishable component of the Group that is engaged either in providing related products | |
-13,107 | or services (business segment) or in providing products or services within a particular economic environment |
61 | (geographic segment) which is subject to risks and rewards that are different from those of other segments. |
0 | The business activities of the Group are concentrated in the segment of security related services and are |
66 provided within the geographical region of Botswana, therefore geographical segmental information is -12,980 not considered necessary. Management identifies three of its five service lines as its reportable segments.
The Executive Management monitors the performance of these service lines and makes decisions on the allocation of resources to them. Segmental performance is monitored using adjusted segment operating -8,033 results. Revenue and assets of reportable segments exceed 10 percent of the consolidated revenue and assets
-16,210 reported by the Group.
-1,556
AUDITOR'S REPORT
The auditor, Deloitte & Touche, has issued its unmodified opinion on the Group's consolidated financial statements for the year ended 31 December 2022.These are available for inspection at the registered office of G4S (Botswana) Limited.This publication has been extracted from those financial statements.
accurately reflect their transactions, and to provide protection against serious misuse of Group's assets. The directors are also responsible for design, implementation, maintenance and monitoring of these internal controls.The control environment requires improvement and will be a focus point within 2023.
The Board of Directors has reviewed and approved the accompanying condensed financial statements for issue on 10 May 2023.
Signed on behalf of the Board of Directors
10 May 2023
Registered Address
Plot 20584 Western Bypass P.O. Box 1488 Gaborone Botswana
Auditors: Deloitte & Touche, Deloitte House, Plot 64518, Fairgrounds, Gaborone, Botswana,
BOARD OF DIRECTORS
M. Molokomme*,T. Mbaakanyi*, L. Mosetlhanyane*, C.M Motswaiso*, T.K Matthews*, R.Smit**
* Motswana ** South African
Cash Solutions | Manned Security | Systems | Cleaning | Facilities Management | Securing Your World |
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G4S Botswana Limited published this content on 19 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 May 2023 11:41:05 UTC.