| Fri 31 Aug 2007, 10:20 | | ACC - Acc-Ross - Audited results for the year ende |
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ACC
ACC
ACC - Acc-Ross - Audited results for the year ended 28 February 2007 and notice
of date of annual general meeting
ACC-ROSS HOLDINGS LIMITED
(Registration Number: 2000/000059/06)
Share code: ACC ISIN code: ZAE000077335
("Acc-Ross" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2007 AND NOTICE OF DATE OF ANNUAL
GENERAL MEETING
The company presents it`s audited results, which reflect an improvement from the
reviewed results as previously published on SENS, due primarily to a
reclassification of losses to impairments, which has had a positive impact on
the headline loss per share as previously reported for the year ended 28
February 2007. Similarly, the prior year results have been restated pursuant to
the audit, primarily as a result of equity accounting for associates and
reclassification of losses to impairments.
Condensed Consolidated Balance Sheet Audited Restated
at 28 February 2007 2007 2006
R R
ASSETS
Non-current assets 268 489 064 327 213 095
Property, plant and equipment 994 588 1 219 802
Inventory/Freehold land and stands 94 536 260 196 643 322
Goodwill 157 772 084 108 634 094
Investments at amortised cost -- 6 240 025
Loans and receivables at amortised 5 239 443 4 698 202
cost
Deferred tax assets 9 946 689 9 777 650
Current assets 421 341 900 99 172 810
Inventory/Freehold land and stands 368 321 418 31 936 089
Loans and receivables at amortised 16 378 170 9 651 385
cost
Trade and other receivables 35 004 251 46 393 805
Cash and cash equivalents 1 638 036 11 191 531
Non-current assets held for sale 25 --
Total Assets 689 830 964 426 385 905
EQUITY AND LIABILITIES
Equity and reserves 272 016 907 176 321 530
Issued capital, share premium and 280 600 194 167 043 256
share-based payments
Accumulated (loss) profit (8 583 287) 9 278 274
Minority interest 1 980 657 1 123 493
Non-current liabilities 247 086 489 153 418 841
Borrowings 205 482 440 133 005 835
Finance lease obligation 454 537 597 039
Deferred tax liabilities 41 149 512 19 815 967
Current liabilities 168 746 911 95 522 041
Trade and other payables 45 417 992 34 738 733
Borrowings 74 396 014 28 914 204
Finance lease obligation 137 504 109 261
Current tax payable 16 860 125 13 127 473
Provisions 31 935 276 18 632 370
Total Equity and Liabilities 689 830 964 426 385 905
Shares in issue at year end 1 122 430 034 881 930 034
Net asset value per share (cents) 24.23 19.99
Net tangible asset value per share 10.18 7.67
(cents)
Condensed Consolidated Income Audited Restated
Statement 2007 2006
for the year ended 28 February 2007 R R
Revenue 154 890 863 189 027 031
Cost of sales (140 178 401) (157 894 533)
Gross profit 14 712 462 31 132 498
Other gains and losses 30 616 354 16 765 541
Investment revenue 806 364 351 752
Marketing and sales expenses (10 705 793) (5 000 964)
Occupancy expenses (571 036) (390 804)
Other expenses (37 395 305) (23 964 250)
Finance costs (13 845 456) (9 762 229)
(Loss) Profit before tax (16 382 410) 9 131 544
Income tax (expense) / income (734 375) 626 673
(Loss) Profit for the year (17 116 785) 9 758 217
Minority interest (744 776) (479 943)
(Loss) Profit attributable to (17 861 561) 9 278 274
ordinary shareholders of the parent
Headline loss reconciliation:
(Loss) Profit attributable to (17 861 561) 9 278 274
ordinary shareholders of the parent
Adjustments for:
Impairment of goodwill 19 854 778 --
Impairment of investments 4 240 000 1 559 973
Impairment of property, plant and 105 942 --
equipment
Profit on disposal of investments, (26 055 067) (14 333 255)
adjusted for taxation effect
Headline loss for the year (19 715 908) (3 495 007)
Profit on disposal of assets and 26 055 067 14 333 255
investments - project related
Adjusted headline earnings for the 6 339 159 10 838 247
year
Earnings per share information:
Basic loss per share (cents) (1.76) 1.50
Diluted loss per share (cents) (1.76) 1.24
Headline loss per share (cents) (1 95) (0.56)
Diluted headline loss per share (1.95) (0.81)
(cents)
Adjusted headline earnings per share 0.62 1.75
(cents)
Weighted average shares in issue 1 012 689 261 618 708 037
Weighted average shares in issue for 1 012 689 261 622 708 037
dilution
Condensed Consolidated Cash Flow Audited Restated
Statement 2007 2006
for the year ended 28 February 2007 R R
Net cash used in operations (55 909 576) (43 027 900)
Interest income 806 364 351 752
Interest paid (13 845 456) (9 762 229)
Net cash outflow from operating (68 948 668) (52 438 377)
activities
Net cash inflow from investing 254 613 8 115 674
activities
Net cash inflow from financing 59 140 560 53 680 267
activities
Net (decrease) increase in cash and (9 553 495) 9 357 564
cash equivalents
Cash and cash equivalents at 11 191 531 1 833 967
beginning of the year
Cash and cash equivalents at end of 1 638 036 11 191 531
the year
Consolidated Statement of Changes in Equity
for the year ended 28 Share Share Accumulated
February 2007 capital premium profit
R R (loss)
R
Balance at 01 March 2005
as previously reported 47 714 -- --
Loss for the year as
previously reported -- -- (3 468 453)
Issue of ordinary shares
for directors and staff 1 600 8 798 400 --
Issue of ordinary shares
in settlement of 38 207 157 011 960 --
liabilities
Issue of ordinary shares 272 2 715 628 --
for cash
Share issue costs -- (2 191 367) --
Acquired minorities -- -- --
Balance at 1 March 2006 87 793 166 334 621 (3 468 453)
Effect of changes in
accounting policies and 400 620 442 12 746 727
correction of errors
Restated balance at 1
March 2006 88 193 166 955 063 9 278 274
Loss for year -- -- (17 861 561)
Issue of ordinary shares
in settlement of 16 550 98 824 452 --
liabilities
Issue of ordinary shares 7 500 18 704 317 --
for cash
Share issue costs -- (3 995 881) --
Acquired minorities -- -- --
Balance at 28 February 112 243 280 487 951 (8 583 287)
2007
Continued
for the year ended 28 Attributable Minority Total
February 2007 to equity interests
holders of R R
parent
R
Balance at 01 March 2005
as previously reported 47 714 85 47 799
Loss for the year as
previously reported (3 468 453) (5 254 463) (8 722 916)
Issue of ordinary shares
for directors and staff 8 800 000 -- 8 800 000
Issue of ordinary shares
in settlement of 157 050 167 -- 157 050 167
liabilities
Issue of ordinary shares 2 715 900 -- 2 715 900
for cash
Share issue costs (2 191 367) -- (2 191 367)
Acquired minorities -- 6 122 209 6 122 209
Balance at 1 March 2006 162 953 961 867 831 163 821 792
Effect of changes in
accounting policies and 13 367 569 255 662 13 623 231
correction of errors
Restated balance at 1
March 2006 176 321 530 1 123 493 177 445 023
Loss for year (17 861 561) 744 776 (17 116 785)
Issue of ordinary shares
in settlement of 98 841 002 -- 98 841 002
liabilities
Issue of ordinary shares 18 711 817 -- 18 711 817
for cash
Share issue costs (3 995 881) -- (3 995 881)
Acquired minorities -- 112 388 112 388
Balance at 28 February 272 016 907 1 980 657 273 997 564
2007
COMMENTARY
Further to the reviewed results announcement published on SENS on 14 June 2007,
the board of directors presents the Group`s audited results for the year ended
28 February 2007, reflecting the full year`s trading as a listed entity and the
second year of operations as a Group. Acc-Ross listed on the Alternative
Exchange of the JSE Limited ("JSE") on 16 February 2006. These results have
been prepared in terms of International Financial Reporting Standards ("IFRS"),
are consistent with the prior year, with the exception of accounting for
borrowing costs and the reclassification of projects held from Property, Plant
and Equipment to Inventory/Freehold land and stands, which resulted in decrease
in Property, Plant and Equipment in 2006 of R176 582 255 and a corresponding
increase of current and non-current Inventory/Freehold land and stands. In
addition, the Group adopted the following revised accounting standards which had
no material impact on the results:
- IFRS 4 Insurance contracts - Amendment for financial guarantee contracts;
- IFRS 6 Exploration for and Evaluation of Mineral Assets;
- IAS 19 Employee benefits - Option to recognise actuarial gains and losses in
full, outside profit or loss, in the statement of changes in equity;
- IAS 39 Financial Instruments: Recognition and Measurement - Amendment for
hedges of forecast intragroup transactions;
- IAS 39 Financial Instruments: Recognition and Measurement - Amendment for fair
value option;
- IAS 39 Financial Instruments: Recognition and Measurement - Amendment for
financial guarantee contracts;
- IFRIC 4: Determining whether an arrangement contains a Lease;
- IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds;
- IFRIC 6 Liabilities arising from participating in a specific market - Waste
Electrical and electronic equipment;
- IFRIC 7 Applying the restatement approach under IAS 29 Financial reporting in
Hyperinflationary Economies.
The results have been audited by the company`s auditors, Deloitte & Touche,
whose unmodified report is available for inspection at the registered office of
the company.
Acc-Ross appointed Deloitte & Touche as the new auditors to the entire Acc-Ross
Group, having previously had two different audit firms within the Group.
Deloitte & Touche provided clarity on the most appropriate treatment and
interpretation of relevant issues in the industry as well as new developments in
IFRS. This resulted in the reclassification of certain assets and changes in
certain accounting policies which have culminated in the results disclosed and
have assisted greatly in more appropriate classification on the Group`s balance
sheet, more notably with the treatment of the Group`s projects which have now
been accounted for as inventory (current and non-current - Inventory/Freehold
land and stands), as opposed to Property, Plant and Equipment. The
reclassification has had a material impact on the disclosures and classification
of certain items included in the balance sheet and the cash flow statement.
The major impact on the current year`s income statement was, firstly, due to the
decision to include the costs of construction of the Gardener Ross Golf and
Country Estate golf course in cost of sales, which decision is in line with the
original intention when construction of the golf course commenced in 2003 and is
the basis on which the funding and profit share arrangements with Investec Bank
Limited were concluded, prior to it`s acquisition by Acc-Ross. Due to minority
shareholders and profit share arrangements in Gardener Ross, the option for the
Group to retain this asset is not commercially viable at this point in time.
Secondly, in line with developments in IFRS, the Group has early adopted the
amendments to IAS 23: Borrowing Costs, in terms of which borrowing costs are
required to be capitalised to the underlying projects, whereas these were
previously expensed.
RESTATEMENT OF PROFIT FOR THE YEAR ENDED 28 FEBRUARY 2006
Opening balances and comparative results have required restatement as a result
of the above two issues, as well as other restatements, and are detailed below.
Attributable Minority Total
to equity interest
holders of
the parent
As previously stated (3 468 453) (5 254 463) (8 722 916)
Change in accounting policy
Capitalisation of borrowing (13 570 080) -- (13 570 080)
costs
Other restatements
Equity accounting for (2 687 112) 2 687 112 -
associates
Share based payments to staff (1 562 000) -- (1 562 000)
and directors
Reconciling differences to 18 089 -- 18 089
the fixed asset register
Finance lease previously not (1 375) -- (1 375)
recorded
Additional accruals (2 322 168) (164 074) (2 486 242)
Adjustment to cost of sales 9 667 552 2 168 536 11 836 088
and inventory
Subsidiaries previously 17 560 578 -- 17 560 578
incorrectly consolidated
Accounting entries previously 5 643 243 1 042 832 6 686 075
incorrectly raised
As restated 9 278 274 479 943 9 758 217
In order to comply with IAS 27: Consolidated and Separate Financial Statements,
an adjustment has been made for the consolidation of certain subsidiaries in the
prior year as well as an adjustment for the cut off date for the consolidation
of Gardener Ross, which represents the major portion of the adjustment. The
adjustment relating to shares issued to employees and directors relate to
commitments made during 2005 prior to the listing, but which were inadvertently
omitted from the original share allocations, which have been fair valued at R2.2
million. Taxation adjustments have been made where appropriate, including the
reversal of deferred tax assets incorrectly raised in terms of IAS 12: Income
Taxes.
SEGMENTAL REPORTING
The group early adopted IFRS 8 Operating Segments. This Standard requires an
entity to report financial and descriptive information about its reportable
segments, which are operating segments or aggregations of operating segments
that meet specified criteria. Operating segments are components of an entity
about which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. The amount reported for each segment
item is the measure reported to the chief operating decision maker for these
purposes. For management purposes, the group`s 7 operating segments are
aggregated into a single operating segment, because the 7 operating segments
exhibit similar long-term financial performance and economic characteristics,
have the same products, processes, customers, distribution lines and regulatory
environments.
Sale of Advertising
2007 freehold land on web-page Group
R R R
Segment revenue 154 885 665 5 198 154 890 863
Segment loss before (16 366 532) (15 878) (16 382 410)
taxation
Other gains 30 616 354 - 30 616 354
Investment income 806 284 80 806 364
Depreciation of segment (226 761) - (226 761)
assets
Impairment losses (24 200 720) - (24 200 720)
recognised in profit or
loss
Finance cost (13 845 456) - (13 845 456)
Segment assets (adjusted 679 741 537 142 738 679 884 275
for deferred tax assets)
Deferred tax assets 9 946 689 - 9 946 689
Acquisition of segment 144 803 102 - 144 803 102
assets
Segment liabilities (357 665 248) (158 515) (357 823 763)
(adjusted for deferred tax
and current tax
liabilities)
Deferred tax liabilities (41 149 512) - (41 149 512)
Current tax payable (16 860 125) - (16 860 125)
2006
Segment revenue 189 027 031 - 189 027 031
Segment profit before 9 131 544 - 9 131 544
taxation
Other gains 16 765 541 - 16 765 541
Investment income 351 752 - 351 752
Depreciation of segment (96 132) - (96 132)
assets
Impairment losses (4 597 161) - (4 597 161)
recognised in profit or
loss
Finance cost (9 762 229) - (9 762 229)
Segment assets (adjusted 416 608 255 - 416 608 255
for deferred tax assets)
Deferred tax assets 9 777 650 - 9 777 650
Acquisition of segment 292 660 986 - 292 660 986
assets
Segment liabilities (215 997 442) - (215 997 442)
(adjusted for deferred tax
and current tax
liabilities)
Deferred tax liabilities (19 815 967) - (19 815 967)
Current tax payable (13 127 473) - (13 127 473)
ANNUAL GENERAL MEETING
Shareholders are advised that the company`s annual report is being finalised and
will be posted to shareholders shortly. The date of the annual general meeting
has been set for 11h00 on Thursday, 04 October 2007 and will be held at Arcay
House II, Number 3 Anerley Road, Parktown, Johannesburg.
By order of the Board
AM Mashiatshidi W Robinson.
Chairperson Chief Executive Officer
29 August 2007
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg, 2193
PO Box 62397, Marshalltown, Johannesburg, 2107
Directors
AM Mashiatshidi *(Chairman), W Robinson (CEO), N Owen, A Wiese, KS Mthembu*,
EM Sono*
* Non-executive
Designated Advisor Transfer Office
Arcay Corporate Services Computershare Investor Services 2004
(Proprietary) Limited
Date: 31/08/2007 10:20:12 Produced by the JSE SENS Department.
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