Securing Your World G4S Security Services (Botswana) Limited ANNUAL REPORT 2008 GROUP PROFILE G4S Security Services (Botswana) Limited is the country’s leading provider of security solutions by way of an integrated security service comprising both human resources and technical products. G4S Security Services (Botswana) Limited is listed on the Botswana Stock Exchange. 70% of the issued shares are controlled by G4S plc.G4S plc is the world’s leading international security solutions group and is listed on the London Stock Exchange. RANGE OF SECURITY proDUCTS • Security alarms • Fire alarms • Time locks / time delays for safes and strongrooms • Access control • Guard patrol monitoring systems • CCTV systems • Vehicle tracking and fleet management systems • Smoke-box safes for transporting cash in vehicles • Safes RANGE OF SPECIALISED SECURITY SERVICES • Secure monitoring and response • Vehicle tracking and mobile resource management • Cash logistics and cash management. • Scheduled or unscheduled technical support for the above product range • Specialised manned security, on-site personnel working with technological systems • Management of cash-handling and cash-processing centres • Integrated security solutions involving co-ordinated combinations of the above • Security training Branches Sub-branch • Gaborone (Head Office) Ramotswa • Francistown • Selebi-Phikwe • Lobatse • Palapye (excl. alarm response) Postal address G4S Security Services (Botswana) Limited Phone: (+267) 391 2211, 393 9999 P.O. Box 1488 Fax: (+267) 391 2779 Gaborone E-mail: [email protected] Botswana Head office physical address Plot 20584 Western Bypass, Gaborone Registered office address C/o PricewaterhouseCoopers (Pty.) Ltd. Plot 50371, Fairground Office Park, P.O. Box 294, Gaborone CONTENTS Group profile Board of directors 2 - 3 Chairman’s report 4 -11 Management team 13 Directors’ report 14-16 GROUP ANNUAL FINANCIAL STATEMENTS Contents Page Directors’ responsibility statement 18 Independent auditor’s report 19 Income statements 20 Balance sheets 21 Statements of changes in equity 22 Cash flow statements 23 Significant accounting policies 24 - 28 Notes to the group financial statements 29 - 41 Notice to shareholders 42 Form of proxy 43 G4S Security Services (Botswana) Limited Annual Report 2008 1 BOARD OF DIRECTORS Percy Sekgomenyane Raditladi joined G4S Botswana as managing director in February 2008. He started his career in May 1998 with Debswana Diamond Company as a management trainee. In Lebang Mpotokwane joined INCO Holdings August 1999 he became managing director of (now G4S Security Services (Botswana) Ltd) as Yarona FM106.6, which he started while studying an executive director and a shareholder in 1989. at university, making it Botswana’s first private Willem Van de Ven has been with the G4S He has served as non-executive chairman of the commercial FM broadcasting radio station. He group since February 1993. He has served as the company since 1992. Mr. Mpotokwane has also joined Kgalagadi Breweries (KBL) in January 2003 Regional President of Africa (sub-Sahara) from been non-executive Chairman of Aon Botswana as a Management Trainee. In April 2004 he was April 2003. Formerly he was Managing Director and Associated Fund Administrators Botswana appointed Director, Corporate Affairs. At KBL G4S Netherlands from April 2001 to 2003 since 1991, and a director of Komatsu Botswana he held senior positions in marketing and human and Human Resource director from 1998 to since 1993. He previously served as Chairman resources and served in various SABMiller plc 2001 and Regional director (temporary agency of the University of Botswana Council, and as a projects. He served as director of The Business department) from 1992 to 1998. Mr. Van de director of Botswana Development Corporation; Place and Trustee of Kgalagadi Beverages Trust. He Ven was appointed a non-executive director of Debswana Diamond Company; Standard is a board member of G4S Botswana subsidiaries G4S Security Services (Botswana) Ltd in January Chartered Bank Botswana; PG Industries and Yarona FM. He graduated as a double major in 2004. He studied HR at the Social Academy in (Botswana); and Rural Industries Promotions Organisational Psychology and Industrial Sociology Eindhoven (NL) and Business Economics at the Company Botswana. from the University of Cape Town. University in Tilburg (NL). 2 G4S Security Services (Botswana) Limited Annual Report 2008 Robert Neil Matthews, retired partner of PricewaterhouseCoopers, Gaborone- in charge of the audit practice. He has been active, as Michael Kampani has been with the G4S group a qualified professional accountant, for over since April 1999. He started his G4S career 40 years both in practice and in the business in Malawi as Chief Accountant before joining sectors. He has been professionally involved Karel Meyer has been with the G4S group since G4S Botswana in June 2006 as Group Financial in Botswana from 1972 to 1986 and from February 1998. He is currently the Regional Controller and was appointed Financial Director 1996 to date serving in the profession with Managing Director for Southern and Central in December 2007. Prior to joining G4S he PricewaterhouseCoopers and in his own practice, Africa responsible for Botswana. Prior to his worked as management accountant and company and latterly, as a consultant. In this capacity current position he was the director responsible accountant for two leading Malawian companies he serves on a number of boards and audit for Mergers & Acquisitions and IT for G4S Africa over a five-year period. Mr. Kampani obtained committees. He has acted as honorary treasurer (sub-Saharan). He was the Regional Finance a B.Com degree in accountancy from the to BOCCIM, Kalahari Conservation Society and Director of Africa (sub-Saharan) from September University of Malawi in 1994 and qualified as a the Botswana Society and is a former board 1999 to 2006. He is a holder of Hons B.Compt Chartered Management Accountant in 1996. He is member of the Botswana Power Corporation. from UNISA. Mr Meyer was re-appointed Non- currently a member of the Chartered Institute of He is a Fellow of the Institute of Chartered executive director on 6 November 2008, having Management Accountants (UK), Botswana Institute Accountants in England and Wales, a Certified previously served in similar capacity from 1 of Accountants and the Society of Accountants in Public Accountant (USA) and a fellow (CPA) of October 2003 to 3 May 2007. Malawi. the Botswana Institute of Accountants. G4S Security Services (Botswana) Limited Annual Report 2008 3 CHAIRMAN’S REPORT Chairman: Lebang Mpotokwane Summary of financial results 2008 2007 31 December 31 December P’000 Change P’000 Revenue 112,317 24.4% 90,280 Profit before taxation 22,009 25.9% 17,483 Net distributable profit 17,504 33.6% 13,103 Free cash flow as a % of earnings before interest and taxation 108.80% 44.1% 75.5% Thebe Thebe Earnings per share 218.80 33.6% 163.79 Total dividend per share (net) 107.95 22.1% 88.40 Company ownership structure Through a shareholding of 70% of the issued shares, G4S Security Services (Botswana) Ltd. is part of the world’s leading security company, G4S plc. G4S plc is listed on the London Stock Exchange, operates in over 110 countries and employs more than 570,000 staff. G4S Security Services (Botswana) Limited therefore has access to world-class specialisation and expertise. 4 G4S Security Services (Botswana) Limited Annual Report 2008 FIVE YEAR HISTORY REVIEW OF THE Revenue PAST YEAR 120 112.317 110 I am pleased to report on yet another 100 90.28 successful year for the company. 90 78.739 80 70 66.328 The company achieved good growth in 2008. 59.235 60 This was a particularly good achievement 50 Millions 40 given the unprecedented and unavoidable 30 increases in vehicle-related costs driven by 20 10 escalating crude oil prices. By the nature of 0 the company’s business, transport makes up a 2004 (15 months) 2005 2006 2007 2008 high proportion of its operational expenses. The two product lines of Integrated Services Profit after tax (with specialised manned guarding) and Cash 20 17.504 Services under-performed due to increasing 18 labour and fuel costs. Alarm response 16 13.103 services performed exceptionally well, driven 14 12.706 12 11.109 by improved customer retention and revised 9.990 10 monitoring response rates. The division that 8 Millions operates in larger technological security and 6 safety systems was initially inhibited by the 4 absence of large projects in the market, but 2 recovered well in the closing months. 0 2004 (15 months) 2005 2006 2007 2008 The Botswana group continues to enjoy improved returns from investments through its access to the G4S group’s London treasury facility, which pays preferential rates of interest. These investments are denominated in Pula to avoid exchange rate risks. G4S Security Services (Botswana) Limited Annual Report 2008 5 G4S ALARMS – Secure monitoring and response This is Botswana’s market leader in the field of secure monitoring and response services with about 13,000 alarm sites under monitoring branches in Gaborone, Francistown, Lobatse, Ramotswa and Selebi-Phikwe. The national Control Centre in Gaborone meets international standards and receives alarm signals from throughout Botswana. Despite a very healthy rate of new alarm sales, strict credit control measures during the year reduced the rate of cumulative gain in comparison to earlier years.The introduction of advanced payment and strict credit control measures resulted in highly improved cash flow. The Company anticipates real growth from both organic growth and diversification of control room functions. New technology now enables increasing forms of security solutions to be performed remotely. G4S SYSTEMS – supply and support of technological safety and security systems This division installs and maintains larger electronic systems such as fire detection, automatic fire suppression, advanced intruder alarms, CCTV, access control, time locks, and related electronic security and safety systems. G4S Systems experienced a scarcity of major projects in the market during the early months, but saw improvements towards the end of the year.