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BWI
BWI
BWI - B & W Instrumentation And Electrical - Disclosure Announcement
B & W INSTRUMENTATION AND ELECTRICAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 2001/008548/06)
Share code: BWI & ISIN: ZAE000098687
("B&W")
DISCLOSURE ANNOUNCEMENT
B&W has noted that the annual report for the year ended 31 August 2008
contained information which required additional disclosure. There has been
no change to the numbers reported, however the disclosure below will assist
shareholders to fully understand the disclosures in the annual report. The
affected notes to the annual financial statements have been included below.
Additions have been shown IN CAPITALS and text that has been removed is
shown in underlined Italics:
1 Directors` report
Share capital
On 1 September 2007 the authorised share capital of the company comprised
500 000 000 ordinary shares, of which 200 000 000 were in issue.
During the year 3 990 000 ordinary shares were allocated to key members of
staff THE B & W SHARE INCENTIVE SCHEME TRUST in terms of the company`s
assisted share purchase scheme. THESE SHARES WERE ISSUED AT R1.68 PER SHARE,
BEING THE RULING PRICE ON THE ALTX ON THE DATE OF ISSUE.
At 31 August 2008 the aggregate number of ordinary shares in issue was
accordingly 203 990 000.
No other changes have occurred to the group`s issued share capital between
year-end and the date of this report.
2 Income Statement
The description of Revenue in the income statement is replaced with CONTRACT
Revenue.
3 Note 1.1 Property, plant and equipment
All property, plant and equipment are initially recorded at cost, less
accumulated depreciation and accumulated impairment losses.
The cost of an item of fixed asset is recognised as an asset when it is
probable that future economic benefits associated with the item will flow to
the company, and the cost of the item can be measured reliably. Costs
include costs incurred initially to acquire or construct a fixed asset and
costs incurred subsequently to add to, replace part of, or service it. If a
replacement cost is recognised in the carrying amount of an item of a fixed
assets, the carrying amount of the replaced part is derecognised.
There has been no major change in the nature of the property, plant and
equipment, nor any change in policy regarding the use thereof.
Depreciation is calculated on the straight-line method to write off the cost
of each asset, or the revalued amounts, to their residual values over their
estimated useful lives. The estimated useful lives of the fixed assets are
between 3 to 20 years. The depreciation charge for each period is recognised
in profit or loss, unless it is included in the carrying amount of another
asset. The gain or loss arising from the derecognition of an item of
property, plant and equipment is included in profit or loss when the item is
derecognised. The gain or loss arising from the derecognition of an item of
property, plant and equipment is determined as the difference between the
net disposal proceeds, if any, and the carrying amount of the item. The
estimated useful lives of the assets are as follows:-
Item Average useful life
Land and buildings UNLIMITED USEFUL LIFE Land and buildings
are not depreciated
BUILDINGS 20 YEARS, COMMENCING IN THE 2009 FINANCIAL
YEAR ONCE THE BUILDING IS DEEMED READY FOR
USE.
Plant and machinery 5 to 10 years
Furniture and fixtures 10 to 15 years
Motor vehicles 5 to 20 years
IT equipment 3 to 5 years
Mobile offices 10 to 15 years
The carrying values of property, plant and equipment are reviewed for
impairment when events or changes in circumstances indicate the carrying
value may not be recoverable. If any such indication exists and where the
carrying values exceed the estimated recoverable amount, the assets or
cash-generating units are written down to their recoverable amount.
Gains and losses on disposal of property, plant and equipment are determined
by reference to their carrying amount and are taken into account in
determining operating profit. On disposal of revalued assets, amounts in
revaluation and other reserves relating to that asset are transferred to
retained earnings
Residual values, depreciation method and useful lives are reassessed
annually.
Where parts of an item of plant and equipment have different useful lives,
they are accounted for as separate items.
4 Note 1.3 Investment in joint ventures
An investment in a joint venture is carried at cost less any accumulated
impairment.
Profits and losses resulting from contributions or sale of assets to joint
ventures are only recognised to the extent of other venturers` interests in
the joint venture.
The group`s share of profits or losses, resulting from purchase of assets
from joint ventures are recognised only when the assets are resold to an
independent party.
In respect of its interests in jointly controlled operations, the company
recognises in its annual financial statements:
- the assets that it controls and the liabilities that it incurs; and
- the expenses that it incurs and its share of the income that it earns
from the sale of goods or services by the joint venture.
In respect of its interest in jointly controlled assets, the company
recognises in its annual financial statements:
- its share of the jointly controlled assets, classified according to the
nature of the assets;
- any liabilities that it has incurred;
- its share of any liabilities incurred jointly with the other venturers in
relation to the joint venture;
- any income from the sale or use of its share of the output of the joint
venture, together with its share of any expenses incurred by the joint
venture; and
- any expenses that it has incurred in respect of its interest in the joint
venture.
THE COMPANY WAS INVOLVED IN TWO JOINT VENTURES DURING THE YEAR, OF WHICH 50%
OF THE JOINT VENTURES WERE CONTROLLED BY THE COMPANY. THE INTEREST IN THE
JOINT VENTURES ARE CONSOLIDATED INTO THE GROUP FINANCIAL STATEMENTS ON A
PROPORTIONATE BASIS, INCORPORATING THE JOINT VENTURES FIGURES INTO THAT OF
THE COMPANY`S, ON A LINE BY LINE BASIS
5 Note 1.7 Construction contracts and receivables
When the outcome of a construction contract can be reliably estimated and it
is probable that the contract will be profitable, profits are generally
realised on a percentage of completion basis every month, based on the terms
and conditions negotiated with the client and such conditions influence
contract pricing and are inextricably interwoven with contract
profitability. Risks and contingencies are also taken into consideration.
IN DETERMINING THE STAGE OF COMPLETION OF ANY CONTRACT, THE ACTUAL COST
INCURRED IS COMPARED TO THE FINAL ESTIMATED COST OF THE CONTRACT.
Variations in contract work, claims and incentive payments are included to
the extent that they have been agreed with the customer.
When the outcome of a construction contract cannot be estimated reliably,
contract revenue is recognised to the extent that contract costs incurred
are recoverable. Contract costs are recognised as an expense in the period
in which they are incurred.
Construction contracts in progress represent costs that have not yet been
billed to clients.
On completion of each contract a portion of the profits will be held back
until retention`s are released by the client.
When it is probable that total contract costs will exceed total contract
revenue, the expected loss is recognised as an expense immediately.
6 Note 1.12 PRIOR PERIOD ERRORS Fundamental errors
There have not been any PRIOR PERIOD ERRORS fundamental errors during the
periods reported on.
7 Note 1.14 Translation of foreign currencies INCLUDING TRANSLATION OF
FOREIGN SUBSIDIARIES
Transactions
A foreign currency transaction is recorded, on initial recognition in
Rand`s, by applying to the foreign currency amount the spot exchange rate
between the functional currency and the foreign currency at the date of the
transaction.
At each balance sheet date:
- foreign currency monetary items are translated using the closing rate;
- non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date of the
transaction; and
- non-monetary items that are measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value
was determined.
Exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
translated on initial recognition during the period or in previous annual
financial statements are recognised in profit or loss in the period in which
they arise.
8 NOTE 1.16 CAPITAL RISK MANAGEMENT
THE GROUP`S OBJECTIVES WHEN MANAGING CAPITAL ARE TO SAFEGUARD THE GROUP`S
ABILITY TO CONTINUE AS A GOING CONCERN IN ORDER TO PROVIDE RETURNS FOR
SHAREHOLDERS AND BENEFITS FOR OTHER STAKEHOLDERS, TAKING INTO ACCOUNT THE
FUTURE CAPITAL REQUIREMENTS OF THE GROUP.
IN ORDER TO MAINTAIN OR ADJUST THE CAPITAL STRUCTURE, THE GROUP MAY ADJUST
THE AMOUNT OF DIVIDENDS PAID TO SHAREHOLDERS, RETURN CAPITAL TO
SHAREHOLDERS, ISSUE NEW SHARES OR RAISE DEBT. THE DIRECTORS ARE OF THE
OPINION THAT THEIR CURRENT CAPITAL STRUCTURE IS INLINE WITH THE GROUP`S
STRATEGIC OBJECTIVES AND ANY FUTURE GEARING WILL BE LINKED TO FUTURE
EXPANSION IN THE GROUP.
9 Note 2. Property, plant and equipment - Group
2008
Cost valuation Accumulated Carrying value
depreciation
Land and 1,600,000 - 1,600,000
buildings
BUILDINGS 698,037 - 698,037
Plant and 2,104,931 (704,899) 1,400,032
machinery
Furniture and 662,604 (133,291) 529,313
fixtures
Motor vehicles 6,797,769 (1,836,248) 4,961,521
IT equipment 585,714 (216,484) 369,230
Mobile offices 1,738,004 (735,603) 1,002,401
Total 14,187,059 (3,626,525) 10,560,534
2007
Cost valuation Accumulated Carrying value
depreciation
Land and - - -
buildings
BUILDINGS - - -
Plant and 1,778,830 (701,738) 1,077,092
machinery
Furniture and 301,116 (78,766) 222,350
fixtures
Motor vehicles 5,121,308 (984,776) 4,136,532
IT equipment 295,700 (131,440) 164,260
Mobile offices 1,486,651 (600,556) 886,095
Total 8,983,605 (2,497,276) 6,486,329
Reconciliation of property, plant
and equipment - 2008
Opening Additions Disposals Depreciation Total
Balance
Land and - 1,600,000 - - 1,600,000
buildings
BUILDINGS - 698,037 - - 698,037
Plant and 1,077,092 505,093 (13,242) (168,911) 1,400,032
machinery
Furniture and 222,350 367,435 (851) (59,621) 529,313
fixtures
Motor vehicles 4,136,532 2,048,015 (215,031) (1,007,995) 4,961,521
IT equipment 164,260 322,761 - (117,791) 369,230
Mobile offices 886,095 251,353 - (135,047) 1,002,401
6,486,329 5,792,694 (229,124) (1,489,365) 10,560,534
Details of properties 2008 2007
Erf 530, Alrode, Extension 7
Terms and conditions
- Purchase price - LAND 1,600,000 -
- BUILDING COSTS (Additions since purchase or 698,037 -
valuation)
2,298,037 -
NO INTEREST WAS CAPITALISED DURING THE YEAR WITH
REGARD TO THE ADDITIONS TO BUILDINGS AS IT WAS
FUNDED BY THE COMPANIES CASH RESOURCES.
A register containing the information required by paragraph 22(3) of
Schedule 4 of the Companies Act is available for inspection at the
registered office of the company.
10 Note 3. Investment in subsidiaries
11
Name of company Held by % holding % holding Carrying amount Carrying
2008 2007 2008 amount
2007
B&W Madagascar - % -
SARL 99.00% 9,300
B&W Electricidade, - % -
Lda 99.00% 22,785
32,085 -
The carrying amounts of subsidiaries HAVE NOT BEEN IMPAIRED AS THEY ARE
DEEMED TO BE VALUED CORRECTLY BY THE DIRECTORS are shown net of impairment
losses.
11 Note 4. Loans to (from) group companies
Joint ventures
Group Company
2008 2007 2008 2007
Bokomoso Joint Venture (1,185,247) - (2,370,493) -
Unsecured loan, not
bearing interest AND WILL
BE SETTLED WITHIN THE NEXT
TWELVE MONTHS
RELATED PARTIES
LOANS TO RELATED PARTIES 940,393 6,033,660 940,393 6,033,660
(SEE NOTE 21)B & W 106,924 432,472 106,924 432,472
Industrial Technology
(Proprietary) Limited
Unsecured loans, bearing
interest at rates linked
to prime lending rates
B & W Employee Trust 767,388 3,208,440 767,388 3,208,440
Unsecured loan, bearing
interest at rates linked
to prime lending rates
Calaban Properties - 1,077,000 1,077,000
(Proprietary) Limited
Unsecured loan, bearing
interest at rates linked
to prime lending rates
Hotgaurd Plant 66,081 1,315,748 66,081 1,315,748
(Proprietary) Limited
Unsecured loan, bearing
interest at rates linked
to prime lending rates
940,393 6,033,660 940,393 6,033,660
Group companies
B & W Share Purchase - - 7,205,940 -
Scheme Trust
Unsecured loan, bearing
interest at rates linked
to prime lending rates.
B&W Madagascar SARL - - 11,581,401 -
Unsecured loan, bearing no
interest.
B&W Electricidade, Lda - - 207,667 -
Unsecured loan, bearing no
interest.
- - 18,995,008 -
The loans, excluding the B&W Employee Trust loan and the B & W Share
Incentive Scheme Trust loan, arose as trading accounts that occurred in the
normal course of business between the entities during the year which were
not settled as at year end. Due to the fact that they are trading accounts,
the loans are unsecured, but bear interest at rates linked to prime lending
rates. There have been no changes to the terms or conditions of these loans
during the year
The loan to the B&W Employee Trust and B & W Share Incentive Scheme Trust,
resulted from assistance given to the Trusts in order for the Trust to
acquire shares in the company. Interest is charged on the loan at a rate
linked to prime lending rates, and it is anticipated that the loan will be
settled in the 2008 financial year.
Group Company
2008 2007 2008 2007
Current assets 940393 6,033,660 19,935,401 6,033,660
Current liabilities (1,185,247) - (2,370,493) -
17,564,908
(244,854) 6,033,660 6,033,660
The carrying amount of loans in foreign currencies to and from group
companies are denominated in the following currencies in their Rand
equivalents:
Pula (1,185,247) - (2,370,493) -
Ariary - - 11,581,401 -
Metica - - 207,667 -
12 Note 6. Deferred tax
Deferred tax liability
Group Company
2008 2007 2008 2007
Deferred tax (11,607,844) (8,124,080) (11,607,844) (8,124,080)
Reconciliation of
deferred tax asset
(liability)
At beginning of the (8,124,080) (5,267,920) (8,124,080) (5,267,920)
year
Reduction due to rate 280,141 - 280,141 -
change
Temporary differences (3,763,905) (2,856,160) (3,763,905) (2,856,160)
(11,607,844) (8,124,080) (11,607,844) (8,124,080)
TEMPORARY DIFFERENCES
PROVISIONS 250,835 407,873 250,835 407,873
ACCELLERATED CAPITAL (66,438) (153,905) (66,438) (153,905)
ALLOWANCES FOR TAX
PURPOSES
CONTRACT ALLOWANCES (6,365,068) 3,709,897 (6,365,068) 3,709,897
PAYMENTS RECEIVED IN 2,416,766 1,895,043 2,416,766 1,895,043
ADVANCE
ASSESSED LOSSES (8,715,068) (8,715,068)
(3,763,905) (2,856,160) (3,763,905) (2,856,160)
13 Note 10. Share capital
Group Company
2008 2007 2008 2007
Authorised
500 000 000 Ordinary shares of 5,000 5,000 5,000 5,000
0.001cents each
unissued ordinary shares are under the control of the directors in terms of
a resolution of members passed at the last annual general meeting. This
authority remains in force until the next annual general meeting.
Issued
203 990 000 2,000 2,000 2,040 2,000
(2007:200 000 000)
Ordinary SHARES OF
0.001 CENTS EACH
Share premium 32,282,856 32,282,856 38,986,016 32,282,856
32,284,856 32,284,856 38,988,056 32,284,856
RECONCILIATION OF
SHARES ISSUED DURING
THE YEAR
OPENING BALANCE - 1 200,000,000
SEPTEMBER 2007
ISSUED DURING THE 3,990,000
YEAR TO B&W SHARE
INCENTIVE SCHEME
TRUST
CLOSING BALANCE AS AT 203,990,000
31 AUGUST 2008
RECONCILIATION OF SHARE
PREMIUM
OPENING BALANCE - 1 32,282,856
SEPTEMBER 2007
SHARE ISSUED DURING THE 6,703,160
YEAR TO B&W SHARE INCENTIVE
SCHEME TRUST
CLOSING BALANCE AS AT 31 38,986,016
AUGUST 2008
THE B&W SHARE INCENTIVE SCHEME TRUST IS A SUBSIDIARY OF B&W INSTRUMENTATION
AND ELECTRICAL LIMITED, DUE TO THE NATURE OF CONTROL THAT THE DIRECTORS HAVE
OVER THE TRUST. THESE SHARES ARE ELIMINATED ON CONSOLIDATION OF THE GROUP,
THEREFORE SHOWING THE ISSUED SHARE CAPITAL OF THE GROUP AS 200 000 000
ORDINARY 0.001 CENT SHARES.
14 Note 21. Related parties
The following companies have common
directors with B & W Instrumentation and
Electrical Limited
Related party balances
Group Company
2008 2007 2008 2007
Loan accounts - Owing (to) by
related parties
Hotgaurd Plant (Proprietary) 66,081 1,315,748 66,081 1,315,748
Limited
B & W Industrial Technology 106,924 432,472 106,924 432,472
(Proprietary) Limited
Calaban Properties - 1,077,000 - 1,077,000
(Proprietary) Limited
B & W EMPLOYEE TRUST 767,388 3,208,440 767,388 3,208,440
940,393 6,033,6600 940,393 6,033,6600
Related party transactions
Interest paid to (received
from) related parties
Hotgaurd Plant (65,801) (124,846) (65,801) (124,846)
(Proprietary) Limited
B & W Industrial Technology (25,686) 1,428 (25,686) 1,428
(Proprietary) Limited
Calaban Properties (26,925) (42,299) (26,925) (42,299)
(Proprietary) Limited
Rent paid to (received
from) related parties
Calaban Properties 571,200 312,870 571,200 312,870
(Proprietary) Limited
Compensation to directors
and other key management
Directors emoluments 9,867,525 8,251,228 9,867,525 8,251,228
15 Note 26. Joint Ventures
ON CONSOLIDATION OF THE TWO JOINT 2008 2007
VENTURES, THE FOLLOWING FIGURES WERE
INCORPORATED INTO THE GROUPS
FINANCIAL STATEMENTS
CURRENT ASSETS 12,756,173 -
CURRENT LIABILITIES 11,931,423 -
REVENUE 22,122,653 -
EXPENSES 21,297,904 -
NET PROFIT 824,749 -
16 Note 27. Construction contracts
THE FOLLOWING AMOUNTS HAVE BEEN INCLUDED IN THE FINANCIAL STATEMENTS FOR
CONTRACTS IN PROGRESS AT THE END OF THE REPORTING PERIOD.
Group Company
2008 2007 2008 2007
ADVANCES RECEIVED ON 8,631,306 6,534,630 8,631,306 6,534,630
CONTRACTS (INCLUDED IN
TRADE PAYABLES)
RETENTIONS HELD AT YEAR 31,454,789 18,908,026 27,647,805 18,908,026
END (INCLUDED IN TRADE
DEBTORS)
AGGREGATE AMOUNT OF 368,079,470 263,208,310 329,117,610 263,208,310
COSTS INCURRED (INCL
COSTS FROM PRIOR YEARS)
AGGREGATE AMOUNT OF 59,887,266 39,468,566 59,887,266 39,468,566
RECOGNISED PROFITS
(INCL PROFITS FROM
PRIOR YEARS)
Johannesburg
15 May 2009
Designated Adviser
Merchantec (Proprietary) Limited
Date: 15/05/2009 17:30:03 Produced by the JSE SENS Department.
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