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GLOBAL ASSET MANAGEMENT LIMITED - Audited Condensed Results for the Year Ended 30 November 2018

Release Date: 13/03/2019 13:09
Code(s): GAM     PDF:  
Wrap Text
Audited Condensed Results for the Year Ended 30 November 2018

GLOBAL ASSET MANAGEMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003192/06)
Share Code: GAM ISIN: ZAE000173498
(“Global” or “the Company” or “the Group”)

AUDITED CONDENSED RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2018

The Board of Directors of Global (“Board”) presents the audited condensed results of Global and its
subsidiaries for the year ended 30 November 2018.

The 2017 condensed consolidated statement of profit or loss and other comprehensive income has been
re-presented in line with the requirements of IFRS 5: Assets held-for-sale and discontinued operations.
Refer to note 3 and note 7 of this results announcement.

Condensed consolidated statement of profit or loss and other comprehensive income

                                                                                                      Re-presented
                                                                                              2018            2017
                                                                       Notes                     R’              R’
 Continuing operations
 Revenue                                                                                  3 297 807         482 977
 Cost of sales                                                                                    -               -
 Gross profit                                                                             3 297 807         482 977
   Other income                                                                           1 381 524       1 915 159
   Gain due to loss of control of subsidiary                                                      -       3 709 422
   Operating expenses                                                                   (17 761 315)     (9 017 223)
 Operating loss                                                                         (13 081 984)     (2 909 665)
  Finance income                                                                          2 853 802       1 574 791
  Finance costs                                                                          (1 488 895)       (743 001)
 Loss before tax                                                                        (11 717 077)     (2 077 875)
   Income tax benefit                                                                     1 723 107       1 120 455
 Loss for the period from continuing operations                                          (9 993 970)       (957 420)


 Discontinued operations
 (Loss)/ profit for the year from discontinued operations                3              (39 676 135)      7 388 224
 (Loss)/ profit and total comprehensive (loss)/ income for the year                     (49 670 105)      6 430 804
 (Loss)/ profit and total comprehensive (loss)/ income attributable
 to:
    Equity holders of the parent from continuing operations                              (7 900 322)       (420 263)
    Equity holders of the parent from discontinued operations                           (39 676 135)      7 388 224
 Equity holders of the parent                                                           (47 576 457)      6 967 961
   Non-controlling interest                                                              (2 093 648)       (537 157)
 (Loss)/ profit and total comprehensive (loss)/ income for the year                     (49 670 105)      6 430 804
 Basic and diluted (loss)/ earnings per share (cents) from:
   Continuing and discontinued operations                                5                   (64.3)           10.8
   Continuing operations                                                 5                   (10.7)           (0.7)

Condensed consolidated statement of financial position

                                                                           2018          2017
                                                            Notes            R’            R’
ASSETS
  Non-current assets                                                104 524 423   476 925 632
    Property, plant and equipment                            2       57 311 965   413 642 734
    Goodwill                                                         37 959 099    37 959 099
    Intangible asset                                                          -       824 164
    Investment in equity accounted investees                            204 961       204 961
    Loans and advances to customers                                           -    21 157 886
    Trade and other receivables                                       3 404 615             -
    Deferred tax asset                                                5 643 783     3 136 788
  Current assets                                                     41 858 448   103 846 824
    Trade and other receivables                                       3 602 665    41 852 483
    Other financial assets                                           36 047 378    21 506 484
    Cash and cash equivalents                                                 -    39 427 737
    Inventories                                                       2 208 405     1 060 120


    Assets classified as held-for-sale                       3      330 935 705             -


Total assets                                                        477 318 576   580 772 456


EQUITY AND LIABILITIES
Equity
    Share capital                                            4      100 836 971    96 999 130
    Retained earnings                                                48 621 654    97 510 649
Total equity attributable to equity holders of the parent
                                                                    149 458 625   194 509 779
Non-controlling interest                                             30 113 908    34 022 502
Total equity                                                        179 572 533   228 532 281

Liabilities
   Non-current liabilities                                           10 817 315   236 723 520
    Loans payable                                                     8 255 206   192 623 561
    Contingent consideration payable                                    745 353     1 321 023
    Deferred tax liability                                            1 816 756    42 778 936
  Current liabilities                                                23 871 811   115 516 655
    Trade and other payables                                          9 118 334    20 269 270
    Loans payable                                                       606 127    90 303 061
    Other financial liabilities                                      12 968 088     3 154 763
    Bank overdraft                                                    1 174 554             -
    Current tax liability                                                 4 708     1 789 561


    Liabilities associated with assets held- for-sale        3      263 056 917             -


Total equity and liabilities                                        477 318 576   580 772 456
    Condensed consolidated statement of changes in equity



                                                                                       Shareholders’
                                                                                            interest
                                                              Common                      before non           Non-
                                                             control      Retained       controlling    controlling
                                         Share capital       reserve      earnings          interest       interest   Total equity
                                                    R’             R’            R’               R’             R’             R’
Balances at 30 November 2016                57 207 811    (6 941 028)    96 629 418      146 896 201      1 461 073    148 357 274
Issue of ordinary shares                    40 000 000             -              -       40 000 000              -     40 000 000
Share issue expenses                          (208 681)            -              -         (208 681)             -       (208 681)
Equity-settled share-based payment                   -             -      1 040 552        1 040 552              -      1 040 552
Previously recognised losses
transferred to non-controlling interest
due to a loss of control                             -             -       (186 254)        (186 254)       186 254              -
Non-controlling interest arising from
change in ownership interest that
does not result in a loss of control                 -             -              -                -     32 912 332     32 912 332
Transfer of common control reserve
to retained earning                                  -     6 941 028     (6 941 028)               -              -              -
Total comprehensive income and
profit for the period                                -             -      6 967 961        6 967 961       (537 157)     6 430 804
Total changes                               39 791 319     6 941 028        881 231       47 613 578     32 561 429     80 175 007
Balances at 30 November 2017                96 999 130             -     97 510 649      194 509 779     34 022 502    228 532 281
Issue of ordinary shares                     4 230 022             -              -        4 230 022              -      4 230 022
Share issue expenses                          (392 181)            -              -         (392 181)             -       (392 181)
Acquisition of non-controlling interest
without change in control                            -             -     (1 312 538)      (1 312 538)    (1 814 946)    (3 127 484)
Total comprehensive loss and loss
for the period                                       -             -    (47 576 457)     (47 576 457)    (2 093 648)   (49 670 105)
Total changes                                3 837 841             -    (48 888 995)     (45 051 154)    (3 908 594)   (48 959 748)
Balances at 30 November 2018               100 836 971             -     48 621 654      149 458 625     30 113 908    179 572 533
Note:                                                4

Condensed consolidated statement of cash flows

                                                                                          2018            2017
                                                                                            R’              R’
 Cash flows from operating activities
     Cash generated from operations                                                115 342 588     117 456 669
      Finance income                                                                 2 853 802       1 574 791
      Finance costs                                                                (23 476 423)    (29 982 122)
      Tax benefit                                                                    1 779 778       1 470 715
      Net cash from operating activities                                            96 499 745      90 520 053
 Cash flows from investing activities
      Acquisition of property, plant and equipment                                 (28 991 224)     (8 652 055)
      Loans advanced to related parties                                            (18 200 559)     (5 578 545)
      Acquisition of a subsidiary, no cash acquired                                 (6 661 079)              -
      Net cash utilised in investing activities                                    (53 852 862)    (14 230 600)
 Cash flows from financing activities
      Acquisition of non-controlling interest                                         (200 000)              -
      Proceeds from issue of share capital                                           2 327 543      28 854 171
      Payment of share issue expenses                                                 (392 181)       (208 681)
      Proceeds from shares issued to non-
                                                                                             -      20 500 000
      controlling interest
      Proceeds from disposal of partial interest in
                                                                                             -      12 702 000
      subsidiary
      Repayment of loans payable                                                   (88 647 861)   (104 561 927)
       Proceeds from other financial liabilities                                    12 968 088               -
       Repayment of loans from related parties                                      (3 154 763)     (2 368 055)
      Net cash applied to financing activities                                     (77 099 174)    (45 082 492)
      Total cash movement for the period                                           (34 452 291)     31 206 961
    Cash at the beginning of the period                                             39 427 737       8 220 776
    Cash balance included in assets classified as held-
    for-sale                                                                        (6 150 000)              -
 Cash deficit at the end of the period                                              (1 174 554)     39 427 737


1.        BASIS OF PREPARATION

          The Board of Directors presents the Group’s audited condensed results for the year ended
          30 November 2018, which have been prepared in accordance with the framework concepts, the
          measurement and recognition requirements of International Financial Reporting Standards
          (“IFRS”) and the presentation and disclosure requirements of IAS 34 on Interim Financial
          Reporting, and its interpretations issued by the International Accounting Standards Board
          (“IASB”); the SAICA Financial Reporting Guides as issued by the Accounting Practices
          Committee; Financial Pronouncements as issued by the Financial Reporting Standards Council;
          the Companies Act of South Africa, No. 71 of 2018 (“Companies Act”), as amended; and the JSE
          Limited (“JSE”) Listings Requirements.

          The accounting policies applied in the preparation of these condensed consolidated financial
          statements are in terms of IFRS and are consistent with those used in the prior year.

          The results have been audited by Crowe JHB. Their unmodified audit report is available for
          inspection at the Company’s registered office.

          The financial results have been prepared by the financial director, Mr WP Basson CA (SA).

          These audited condensed consolidated financial statements have been derived from the Group’s
          annual financial statements. The contents of this announcement are extracted from audited
          information, although the announcement is not itself audited. The directors take full responsibility
          for the preparation of the provisional report and the financial information has been correctly
          extracted from the underlying annual financial statements.

          The auditor’s report does not necessarily report on all the information contained in this
          announcement. Shareholders are therefore advised that, in order to obtain a full understanding of
          the nature of the auditor’s engagement, they should obtain a copy of the auditor’s report together
          with the accompanying financial information from the Company’s registered office.
  
 2.         PROPERTY, PLANT AND EQUIPMENT

                                                                                                                Accumulated
                                                                                          Cost                 depreciation             Carrying value
               2018                                                                         R’                           R’                          R’
               Furniture and fittings                                                  14 180                      (14 177)                          3
               IT equipment                                                           250 162                     (127 159)                    123 003
               Motor vehicles                                                         464 886                     (184 702)                    280 184
               Plant under construction                                            37 861 962                            -                  37 861 962
               Leasehold improvements                                               3 883 340                     (236 527)                  3 646 813
               Land                                                                13 000 000                            -                  13 000 000
               Buildings                                                            2 400 000                            -                   2 400 000
                                                                                   57 874 530                     (562 565)                 57 311 965

                                                                                                              Accumulated
                                                                                         Cost                depreciation               Carrying value
               2017                                                                        R’                          R’                            R’
               Forklifts                                                          669 643 635               (270 682 114)                   398 961 521
               Furniture and fittings                                                  59 317                    (58 836)                           481
               IT equipment                                                           532 425                   (362 113)                       170 312
               Motor vehicles                                                         428 465                    (89 591)                       338 874
               Plant under construction                                            13 453 882                          -                     13 453 882
               Leasehold improvements                                                 816 224                    (98 560)                       717 664
                                                                                  684 933 948               (271 291 214)                   413 642 734

   Carrying amounts of property, plant and equipment can be reconciled as follows:

                                                                         Reclassified as          Transfers to                             Carrying
                           Carrying value                                    assets held               trading                        value closing
                          opening balance       Additions    Disposals**        for sale           operations*      Depreciation            balance
2018                                   R’              R’             R’              R’                    R’                R’                 R’
Forklifts                     398 961 521       3 744 317             -    (322 148 840)          (20 367 729)      (60 189 269)****             -

Furniture and fittings                481         114 307             -        (108 698)                    -            (6 087)                  3
IT equipment                      170 312         177 380             -        (143 795)                    -           (80 894)            123 003
Motor vehicles                    338 874         471 010             -        (405 617)                    -          (124 083)            280 184
Plant under
construction                   13 453 882      24 693 822      (285 742)              -                     -                 -          37 861 962
Leasehold
improvements                      717 664       3 533 704             -        (349 941)                    -          (254 614)          3 646 813
Land                                    -      13 000 000             -               -                     -                 -          13 000 000
Buildings                               -       2 400 000             -               -                     -                 -           2 400 000
                              413 642 734      48 134 540      (285 742)   (323 156 891)          (20 367 729)      (60 654 947)         57 311 965


                                                                                                   Transfers to                                Carrying
                             Carrying value                                                             Trading                           value closing
                            opening balance      Additions    Impairment         Disposals***        operations*         Depreciation           balance
2017                                     R’             R’            R’                R’                    R’                   R’                R’
Forklifts                      425 029 039     71 994 300      (382 607)                -           (31 780 646)         (65 898 565)      398 961 521
Furniture and fittings               2 219              -              -                -                     -               (1 738)              481
IT equipment                        28 831        164 953              -                -                     -              (23 472)          170 312
Motor vehicles                     116 233        269 966              -                -                     -              (47 325)          338 874
Plant under
construction                    15 099 049      7 995 622              -       (9 640 789)                    -                    -        13 453 882
Leasehold
improvements                             -        816 224              -                -                     -              (98 560)          717 664
                               440 275 371     81 241 065       (382 607)      (9 640 789)          (31 780 646)          (66 069 66       413 642 734

   *        Transfers to trading operations refer to the actual sales of new and used forklifts during the reporting period.
   **       Disposal of plant under construction to Enviroprotek (Pty) Ltd, a joint venture of the Group.
   ***      Disposal of plant under construction relates to the de-recognition of Enviroprotek (Pty) Ltd as a subsidiary due to the loss of
            control.
   *****    Depreciation on forklifts is included in discontinued operations.

3.   DISCONTINUED OPERATIONS AND ASSETS CLASSIFIED AS HELD-FOR-SALE

     Discontinued operations

     Asset finance business

     The Group has classified its asset finance business as a disposal group held-for-sale in terms of
     IFRS 5. The asset finance business, being LFS Assets (Pty) Ltd, relates to the rentals and
     maintenance segment and the sale of forklifts segment. The Group has recognised an
     impairment loss on initial classification of the asset finance business as held-for-sale at
     30 November 2018.

     The results of the discontinued operations included in the profit or loss are set out below. The
     comparative profit and cash flows from discontinued operations have been re-presented to
     include those operations classified as discontinued in the current year.

                                                                                       2018             2017
                                                                                          R’               R’
      Profit for the year from discontinued operations:
      Revenue                                                                   146 870 858      197 403 529
      Cost of sales                                                            (106 688 703)    (141 224 250)
      Gross profit                                                               40 182 155       56 179 279
        Other income                                                                366 857          430 341
        Operating expenses                                                      (13 383 108)     (16 622 024)
      Income from operations                                                     27 165 904       39 987 596
        Finance costs                                                           (21 987 528)     (29 839 103)
      Profit before tax                                                           5 178 376       10 148 493
        Income tax expense                                                       (1 584 111)      (2 760 269)
      Profit for the year from discontinued operations (attributable to
      owners of the parent)                                                       3 594 265        7 388 224
          Impairment loss                                                       (43 270 400)               -
      (Loss)/ profit for the year from discontinued operations (attributable
      to owners of the parent)                                                  (39 676 135)       7 388 224


      Summarised Statement of Cash Flows from discontinued operations:
         Net cash inflow from operating activities                               91 533 662      104 627 661
         Net cash (outflow)/inflow from investing activities                     (1 129 596)         151 880
         Net cash outflow from financing activities                             (88 844 694)    (106 800 733)
      Net cash inflow/ (outflow) for the periods                                  1 559 372       (2 021 192)
     
     Assets classified as held-for-sale
     
     At the reporting date, the directors of the Company valued the assets classified as held-for-sale
     and the liabilities associated with the assets held-for-sale at fair value less costs to sell being
     R67,8 million, based on the subscription price to the shares of the asset finance business as at
     1 February 2019. This is lower than the carrying amount of the asset finance business, and
     accordingly an impairment loss was recognised on initial classification of the asset finance
     business as held-for-sale on 30 November 2018. The transaction is consistent with the Group’s
     long-term strategy to focus its activities on the alternative energy market. The major classes of
     assets and liabilities of the asset finance business at the reporting date are as follows:



                                                                                                   2018
                                                                                                      R’
      Property, plant and equipment                                                         279 969 098
      Intangible asset                                                                          535 511
      Loans and advances to customers                                                        12 764 622
      Trade and other receivables                                                            31 516 474
      Cash and cash equivalents                                                               6 150 000
      Assets classified as held-for-sale                                                    330 935 705

      Loans payable                                                                         194 495 221
      Deferred tax liability                                                                 45 269 187
      Trade and other payables                                                               23 292 509
      Liabilities associated with assets held-for-sale                                      263 056 917


      Net assets of disposal group held-for-sale                                             67 878 788


4.   SHARE CAPITAL

      Authorised:
      1 000 000 000 Ordinary shares at no par value,
      1 000 000 000 Class A (fixed rate), 1 000 000 000 Class B (zero rate), 1 000 000 000 Class C
      (variable rate), five year, redeemable, convertible, non-voting, non-participating preference
      shares at no par value.

     There are 924 340 931 (2017: 926 518 754) unissued ordinary shares in terms of the
     memorandum of incorporation.

                                                 2018                2017          2018            2017
                                     Number of shares    Number of shares             R’              R’
      Issued:
      Opening balance                      73 481 246          54 157 575    96 999 130      57 207 811
      Issued                                2 177 823          19 323 671     3 837 841      39 791 319
      Closing balance                      75 659 069          73 481 246   100 836 971      96 999 130


     Issued share capital consists of 75 659 069 (2017: 73 481 246) ordinary shares at no par value.

5.   EARNINGS PER SHARE

                                                                                                  2018           2017
                                                                                                     R’             R’
     (Loss)/ profit and total comprehensive (loss)/ income for the year                    (49 670 105)     6 430 804
     Adjusted for:
     Non-controlling interest                                                                2 093 648        537 157
     Basic (loss)/ earnings                                                                (47 576 457)     6 967 961
     Adjusted for:
     (Loss)/ profit for the year from discontinued operations used in the calculation of
     basic earnings                                                                         39 676 135     (7 388 224)
     Basic earnings from continuing operations                                              (7 900 322)      (420 263)
     Adjusted for:
     Impairment of financial assets                                                          3 659 665
     Gain due loss of control of subsidiary                                                          -     (3 709 422)
     Non-controlling interest on gain on loss of control of subsidiary                               -        352 395
     Headline earnings from continuing operations                                           (4 240 657)    (3 777 290)

     (Loss)/ profit for the year from discontinued operations                              (39 676 135)     7 388 224
     Adjusted for:
     Impairment loss on initial classification as discontinued operations                   43 270 400              -
     Impairment of used forklifts                                                                    -        382 607
     Tax effect on the impairment of used forklifts                                                  -       (107 130)
     Headline earnings from discontinued operations                                          3 594 265      7 663 701

     Headline earnings from continuing and discontinued operations                            (646 392)     3 886 411




                                                                                                 2018           2017
      Weighted average number of ordinary shares                                           74 007 421     64 216 472
      Basic and diluted earnings/(loss) per share (cents)
                                                                                                 2018           2017
      From continuing operations                                                                (10.7)          (0.7)
      From discontinued operations                                                              (53.6)          11.5
      From continuing and discontinued operations                                               (64.3)          10.8

      Headline earnings/ (loss) per share (cents)
                                                                                                 2018           2017
      From continuing operations                                                                 (5.7)          (5.9)
      From discontinuing operations                                                               4.9           11.9
      From continuing and discontinued operations                                                (0.8)           6.0

     There are no instruments in issue that would cause a dilutive effect.

6.   BUSINESS OVERVIEW

     Global has made good progress during the period, establishing its renewable energy businesses
     which focus on waste-to-energy solutions. A rising oil price has significantly added to projected
     future cashflows, whereas increasing capex costs and project delays have negatively impacted
     on projected returns.

     Enviroprotek (Pty) Ltd (“EPT”) has closed its operations in Springs and has re-established its
     recycling reactors in Nigel, the newly acquired industrial site. The company has used this
     opportunity to further enhance its process flows, with special emphasis being placed on the
     upgrading of the initial rubber recycling reactor, to be on par with the second reactor in terms of
     process time and product quality. The facility is scheduled to recycle up to 500 tons per month of
     waste rubber. The carbon refinement project has achieved satisfactory results and EPT has
     distributed commercial samples to potential customers for testing.

     Plastics Green Energy (Pty) Ltd (“PGE”) has successfully concluded its pilot plant campaign and
     has commenced with the construction of its commercial recycling facility in Nigel. Oil samples of
     its sulphur free, high quality industrial fuel oil have been prepared and sent to customers for
     testing. The waste plastic supply agreements have been finalised and approx. 2 000 tons of
     waste plastic feedstock has been sourced and stored to date. Given the rise in fuel prices as well
     as the current hype around the detrimental impact of plastic waste on the environment, PGE is in
     an ideal position of providing an end-of-life solution to the plastics industry.

     Heliosek (Pty) Ltd has completed the design for its initial pilot plant to be established during 2019.
     The technology allows for the highly efficient exploitation of the unlimited solar resource base of
     Southern Africa and creates an opportunity for expansion into other international jurisdictions.
     The technology offers an alternative to existing solar energy and other renewable energy
     solutions at a lower comparative cost.

     The performance of LFS Assets (Pty) Ltd (“LFS”), Global’s largest subsidiary by assets which
     focuses on asset financing in the logistics sector, has deteriorated slightly. Revenue decreased
     from R197 million in 2017 to R147 million in 2018 over the comparative 12 month period from
     December 2017 to November 2018. This is due to the fact that hardly any new financing deals
     have been closed, since Linde Material Handling South Africa (Pty) Ltd (“LMH”) had given notice
     to LFS in terms of the Country Brand Agreement, under which LFS has leased Linde forklift
     trucks on an exclusive basis to customers over the past 12 years. LFS has employed additional
     resources to manage its second hand fleet of roughly 600 trucks independently of LMH, and will
     also investigate the opportunity of funding logistics assets from other manufacturers, as well as
     renewable energy assets.

7.   FINANCIAL RESULTS

     Points of interest:

     Asset finance business

     Global classified its asset finance business in terms of IFRS 5, with the transaction being in line
     with the Group’s long-term strategy to focus on its renewable energy business. The transaction
     results in Main Street 1236 (Pty) Ltd becoming the controlling shareholder in LFS as at
     1 February 2019. The consideration for the shares is R67.2 million.
    
     Acquisition of Jabumart (Pty) Limited (“Jabumart”)

     The Group acquired all the shares in issue of Jabumart. The transaction had certain conditions
     precedent of which the final condition, being the transfer of a property into Jabumart, was met on
     11 December 2017. The property is used by the Group as the processing site for its plastic-to-oil
     and rubber-to-oil pyrolysis operations.

     Rights offer

     The Company decided to raise equity by way of a Renounceable Rights Offer (“Rights Offer”) in
     June 2018.

     In terms of the Rights Offer, Global shareholders were entitled to subscribe for Rights Offer
     shares on the basis of 50 Rights Offer shares for every 100 Global shares held on such date at a
     Rights Offer price of R1.83 per Rights Offer share. The number of Rights Offer shares subscribed
     to by existing holders were 1 271 881, raising R2.3 million, which resulted in the increase of
     ordinary share capital. R0,3 million equity raising costs were capitalised against ordinary share
     capital in this regard. ARC did not follow its rights at the time as it did not want to trigger a
     mandatory offer. However, shareholders are referred to Subsequent Events below. The Rights
     Offer price was at a substantial discount to the net asset value and tangible net asset value of
     264.7 cents per share and 211.9 cents per share respectively.

     Offer to the Earthwize Energy Holdings (Pty) Limited (“Earthwize Energy Holdings”)
     minority shareholder

     The only remaining minority shareholder in Earthwize Energy Holdings accepted an offer made
     by Global to buy its 4.75% interest in Earthwize Energy Holdings. This offer also included the
     settlement of any current and future legal matters that the shareholder or its representative had or
     might have in future. The R2 million offer will be settled through a combination of Global shares
     and cash, payable by August 2019. The non-controlling interest of the minority shareholder is
     currently recorded at approx. R1.8 million.

     Offer to the Total Rubber Recycle (Pty) Limited (“Total Rubber Recycle”) minority
     shareholders

     The Total Rubber Recycle minority shareholders have agreed to part with their 9.5% interest in
     Total Rubber Recycle in exchange for Global shares. The number of Global shares issued is in
     line with the Group’s latest valuations and as approved by an independent expert.

     Other points of interest:

     •   Global recorded a loss after taxation from continuing operations attributable to equity holders of
         the parent of R7.9 million for the twelve months ended 30 November 2018, as a result of
         incurring operational and development costs on its renewable energy businesses in the Group
         and a provision against a loan receivable.

     •   Property, plant and equipment in the statement of financial position has decreased with the re-
         classification of the disposal group held for sale. The remainder of the property plant and
         equipment consists mainly of plant under construction and land and buildings.

     •   Cash and cash equivalents decreased with the acquisition of Jabumart, the roll-out of the plastic-
         to-oil and rubber-to-oil operations, and the elimination of the cash balance included in the
         disposal group held for sale respectively. The capitalisation of the plastic-to-oil operation has
         been delayed due to funding constraints. Fund raising efforts are still ongoing in order to fully
         capitalise the renewable energy businesses.

     •   The net asset value per share has decreased by 25.3% from 264.7 cents per share as at
         November 2017 to 197.7 cents per share as at November 2018. The main reason for the
         decrease relates to the loss on re-classification of the asset finance business in terms of IFRS 5
         Refer to note 3

    •    The contingent consideration payable forms part of the consideration transferred in acquiring the
         controlling interest in Earthwize Energy Holdings where GAM will allot shares and make a cash
         payment if certain performance criteria are met within 6 years (from December 2015) of acquiring
         the majority interest in Earthwize Energy Holdings.

         The increase in other financial liabilities relates to a loan from ARC. The purpose of the loan is to
         support the current operations and the roll out of the renewable energy projects.

8.       SEGMENT REPORT

         Segment information has been reported by the Group in the following segments, namely rentals
         and maintenance, sale of forklifts, renewable energy and other income. The rentals and
         maintenance and sale of forklift trucks segments have been classified as discontinued
         operations.

                                     Discontinued operations                                                     Continuing operations
                         Rentals and           Sale of                                             Renewable
                         maintenance         forklifts         Intergroup                Total        energy              Other       Intergroup              Total
2018                               R’               R’                  R’                  R’             R’                 R’               R’                 R’

Revenue                  143 285 384       15 569 917         (11 984 443)        146 870 858      4 075 900          7 364 286       (8 142 379)         3 297 807
Cost of sales            (98 305 417)     (20 367 729)         11 984 443        (106 688 703)             -                  -                -                  -
Gross
profit/(loss)             44 979 967       (4 797 812)                  -          40 182 155      4 075 900          7 364 286       (8 142 379)         3 297 807
Finance income                     -                -                   -                   -      2 194 160          3 595 642       (2 936 000)         2 853 802
Finance costs            (21 987 528)               -                   -         (21 987 528)    (2 935 999)        (1 488 896)       2 936 000         (1 488 895)
Operating expense
and other income         (13 016 251)               -                   -         (13 016 251)   (14 253 604)       (10 268 566)       8 142 379        (16 379 791)
Loss on re-
classification to
discontinued
operations               (43 270 400)               -                   -         (43 270 400)             -                  -                -                  -
Income tax
expense benefit/
(expense)                 (2 610 140)       1 026 029                   -          (1 584 111)     1 421 566            301 541                -          1 723 107
Loss after tax           (35 904 352)      (3 771 783)                  -         (39 676 135)    (9 497 977)          (495 993)               -         (9 993 970)

Depreciation a
impairment               (60 852 495                -                   -         (60 852 495)             -           (272 240)               -           (272 240)

Additional
information
Additions to
property plant and
equipment                 4 873 913                 -                   -           4 873 913     27 760 941         15 499 686                -         43 260 627
Investment in
equity-accounted
investees                         -                 -                   -                   -        204 961                  -                -            204 961
Total segment
assets                  331 117 809                 -            (182 104)        330 935 705     92 166 649        194 690 250     (140 474 028)       146 382 871
Segment assets          331 117 809                 -            (182 104)        330 935 705     86 522 866        194 690 250     (140 474 028)       140 739 088
Deferred tax asset                -                 -                   -                   -      5 643 783                  -                -          5 643 783
Total segment
liabilities            (270 246 389)                -           7 189 472        (263 056 917)   (77 695 117)       (42 445 478)      85 451 469        (34 689 126)
Segment liabilities    (224 977 202)                -           7 189 472        (217 787 730)   (77 695 117)       (31 707 542)      76 530 289        (32 872 370)
Deferred tax
liability               (45 269 187)                -                   -         (45 269 187)             -        (10 737 936)       8 921 180         (1 816 756)
                                            
                                           Discontinued operations                                        Continuing operations


                              Rentals and        Sale of                                      Renewable
                              maintenance      forklifts      Intergroup           Total         energy            Other      Intergroup          Total
2017                                    R’             R’              R’              R'             R’               R’              R’             R’

Revenue                       185 311 874     32 930 636     (20 838 981)    197 403 529              -        8 464 762      (7 981 785)       482 977

Cost of sales                (130 253 298)   (31 809 933)     20 838 981    (141 224 250)             -                -               -              -

Gross profit/(loss)            55 058 576      1 120 703               -      56 179 279              -        8 464 762      (7 981 785)       482 977

Finance income                          -              -               -               -      1 408 547        1 860 609      (1 694 365)     1 574 791

Finance costs                 (29 839 103)             -               -     (29 839 103)    (1 686 837)        (750 529)      1 694 365       (743 001)
Operating expense and
other income                  (16 191 683)             -               -     (16 191 683)    (7 037 794)      (4 336 633)      7 981 785     (3 392 642)
Income tax expense
benefit/ (expense)             (2 532 561)      (227 708)              -      (2 760 269)     1 486 505         (366 050)              -      1 120 455

Profit/(loss) after tax         6 495 229        892 995               -       7 388 224     (5 829 579)       4 872 159               -       (957 420)
Depreciation and
impairment                    (66 281 172)             -               -     (66 281 172)             -         (171 095)              -       (171 095)



Additional information
Additions to property
plant and equipment            71 994 300             -               -      71 994 300       8 130 906        1 115 859               -      9 246 765
Investment in equity  
accounted investees                     -             -               -               -         204 961                -               -        204 961

Total segment assets          456 020 000             -        (236 795)    455 783 205      65 959 377      163 108 496    (104 078 622)   124 989 251

Segment assets                456 020 000             -        (236 795)    455 783 205      62 822 589      163 108 496    (104 078 622)   121 852 463

Deferred tax asset                      -             -               -               -       3 136 788                -               -      3 136 788
Total segment
liabilities                  (363 609 035)            -       4 205 471    (359 403 564)    (41 977 238)     (20 261 041)     55 074 890     (7 163 389)

Segment liability            (311 908 919)            -       4 205 471    (307 703 448)    (41 977 238)     (11 339 861)     46 153 710     (7 163 389)

Deferred tax liability        (51 700 116)            -               -     (51 700 116)              -       (8 921 180)      8 921 180              -

9.    RELATED PARTY TRANSACTIONS
      The related party transactions during the period ended 30 November 2018, do not materially
      deviate from the transactions as reflected in the financial statements for the year ended
      30 November 2017.

      The Group’s consolidated financial statements for the year ended 30 November 2017 contains
      details of the Group’s related party relationships and should be read in conjunction with this
      report.

10.   DIRECTORS

      During the year under review, the Board of directors was constituted as follows:

      Name                                                                            Position/title
      N Penzhorn                                                             Chief Executive Officer
      WP Basson                                                              Chief Financial Officer
      MCC van Ettinger                                                       Chief Operating Officer
      MJ Reyneke                                                              Non-Executive Director
      NB Matyolo                                                              Non-Executive Director
      CJP Cilliers*                                                           Non-Executive Director
      AJ Naidoo                                                   Independent Non-Executive Director
      GT Magomola                                                 Independent Non-Executive Director
      GK Cunliffe                                    Independent Non-Executive Director and Chairman

      * Appointed with effect from 23 February 2018, resigned with effect from 21 November 2018.

11.   SHARE CAPITAL / REPURCHASE OF SHARES

      2 177 823 Global shares (constituting approximately 2.96% of Global’s shares following such
      subscription) were issued for a consideration of R4 230 022.

      At the Annual General Meeting of the Company which was held on 11 July 2018, the requisite
      majority of shareholders approved an ordinary resolution authorising the Directors to issue
      shares for cash in accordance with the JSE Listings Requirements.

      During the year under review, the Company did not repurchase any shares.

12.   DIVIDEND

      The Company did not declare a dividend for the year ended 30 November 2018 (2017: R Nil).

13.   LITIGATION

      There is currently litigation pending concerning LFS. This will have no impact on the Group for
      the reasons disclosed in note 3 and note 7.

      There is no other litigation pending that is likely to have a material impact on the results of the
      Group.

14.   CONTINGENT LIABILITIES AND COMMITMENTS

      The Group had no commitments at 30 November 2018, (2017: R Nil), however due to the
      development of the pyrolysis plants the Group expects to incurred capital expenditure of
      approximately R87 million, subject to funding being obtained.

15.   SUBSEQUENT EVENTS

      An accelerated specific issue of shares for cash

      UBI General Partner (Pty) Ltd, on behalf of the ARC Fund (“ARC”), has agreed to a subscription
      for 27 322 404 Global shares for cash, at an issue price of R1.83 per share, for an aggregate
      amount of R50 million (“Specific Issue”). The proposed subscription will result in ARC holding
      approximately 45.30% of the entire issued share capital of Global.

      Loan from ARC

      Subsequent to the reporting date, ARC advanced R7.5 million of short-term funding to the Group.
      The purpose of the loan is to support the current operations and roll out of the renewable energy
      businesses.

      Asset finance business

      Refer to note 3 for the details on the IFRS 5 classification of the asset finance business.

      There are no other major events subsequent to 30 November 2018 that require disclosure.

16.   FUTURE PROSPECTS

      The Global Group will continue to establish its renewable energy businesses at an accelerated
      pace, once the above mentioned funding initiatives are finalised. Following the commissioning of
      the second waste tyre recycling plant, the main focus will be on the construction and
      commissioning of the commercial waste plastic recycling facility.
       
      The Board believes that the Group has excellent prospects to significantly expand its operations
      over the near term. With a renewed worldwide focus on recycling, the management of waste
      streams and rising energy prices, Global is well placed to exploit attractive opportunities, also
      internationally.

      This prospects statement has neither been reviewed nor audited by the Company’s auditors.



By order of the Board
  
GK Cunliffe                                                                                  N Penzhorn
Chairman                                                                        Chief Executive Officer

Johannesburg
13 March 2019

Registered Office
Building 2, Clearwater Office Park
Cnr Christiaan de Wet & Millennium Boulevard
Strubensvalley
Roodepoort, 1724

Directors
GK Cunliffe*; N Penzhorn; MCC van Ettinger; WP Basson; GT Magomola*; AJ Naidoo*; MJ Reyneke^;
NB Matyolo^
* - independent non-executive, ^ - non-executive

Designated Advisor                                                                    Transfer Office
Arbor Capital Sponsors Proprietary Limited                    Link Market Services Proprietary Limited

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