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RAL Trust – Section 42 (“S42”) Reversal/Write Off of Interest
VISUAL INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2006/030975/06)
ISIN Code: ZAE000187407 Share Code: VIS
("Visual" or "the Company" or "the Group")
RAL TRUST – SECTION 42 ("S42") REVERSAL/WRITE OFF OF INTEREST
As reported in the director's report in the Annual Financial Statements for the year ended
29 February 2024 ("AFS 2024"), SARS claimed that the RAL Trust owed taxation arising from the
2013/2014 s42 restructure to form the Visual group ahead of the listing on the JSE. At the time
of the formation of the group, professional advice was obtained from a recognised JSE
approved audit firm and substantial taxation was paid at the time of the establishment of the
Visual group. RAL Trust was defending this matter but the interest payable on the loan was
recently disallowed by SARS.
In addition, in the AFS 2024, it was disclosed that the disinterested Board members reduced the
interest rate receivable on the RAL Trust loan to the rate allowed per SARS and reported that,
due to the essence of the majority of the original loan being property in nature and not an
advance of cash, consideration was being made to approach SARS to allow for no interest to
be charged due to the unintended consequence of a potential tax liability, where the nature
of the asset should in fact be property from inception.
CK Robertson is a director of Visual and RAL Trust is an associate of CK Robertson.
Due to the subsequent disallowance by SARS of the interest payable by RAL Trust, the
disinterested board members of Visual approved the reversal/write off of the interest
receivable on the RAL Trust loan on the basis that this is fair and equitable from an original s42
restructure and SARS perspective, noting that no interest would have been charged or levied
by the respective parties in the s42 restructure if it had been anticipated that SARS would
disallow an interest deduction for the one party, namely RAL Trust. Furthermore, due to a large
portion of the RAL Trust loan being tantamount to a deferred property acquisition, the loan was
not advanced in cash.
SARS will be approached through a tax practitioner in this regard.
As the Company had raised an Expected Credit Loss provision against the entire interest
receivable in prior years, there is no impact on the net loss of the Company during the year
under review and the current approach taken in the Audited Financial Statements for the year
ended 28 February 2025 ("AFS 2025") has been to accrue interest receivable to 28 February
2025, again raise the full amount as an expected credit loss provision and then write off the full
interest on the RAL Trust Loan at 28 February 2025 against the Expected Credit Loss allowance.
Interest receivable will not be accrued from 1 March 2025 onwards. Full details will be included
in the AFS 2025 which will be distributed in due course.
As the net impact on the Statement of Comprehensive Income and the Statement of Financial
Position is zero, it is not anticipated that JSE or shareholder approval is required. The Company
will confirm any further requirements with the JSE.
Shareholders will be kept appraised of any developments with SARS and/or the JSE in this
regard.
By order of the Board
Cape Town
30 June 2025
Designated Advisor
AcaciaCap Advisors Proprietary Limited
Date: 30-06-2025 12:20:00
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