| Tue 30 Jun 2009, 17:05 | | CSP - Chemical Specialities Limited - Audited condensed results for the year |
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CSP
CSP
CSP - Chemical Specialities Limited - Audited condensed results for the year
ended 31 March 2009
CHEMICAL SPECIALITIES LIMITED
Country of incorporation and domicile: South Africa
Registration number: 2005/039947/06
Share code: CSP
ISIN: ZAE000109427
AUDITED CONDENSED RESULTS FOR THE YEAR ENDED 31 MARCH 2009
FINANCIAL HIGHLIGHTS
65% Earnings growth
35% Operating profit growth
29% Earnings per share
11% Headline earnings growth
6% Revenue growth
27,2c Cash generated by operations per share
R101m Improvement in net cash from operating activities
KEY STATISTICS AND RATIOS
PROFITABILITY
40% Gross profit margin
12% Operating profit margin
MANAGEMENT EFFECTIVENESS
27% Return on equity
7% Return on assets
1,17 Assets turnover
FINANCIAL STRENGTH
R0,14 Working capital per rand of revenue
0,83 Quick ratio
1,52 Current ratio
2,88 Interest cover ratio
38% Long term debt to equity
PER SHARE DATA (cents)
12,91 Earnings
201,17 Sales
55,07 Net book value
19,44 Operating cash flow
VALUATION RATIOS
75c Recent price
R232 million Market capitalisation
5,81 Price / Earnings
0,37 Price / Sales
1,36 Price / net book value
3,86 Price / operating cash flow
COMMENTARY
Overview
ChemSpec has posted pleasing results considering the current trading
environment and has benefited from a continued focus on cash generation and
working capital management.
Financial performance
Group revenue of R617,5million is 6,4% up on the year ended March 2008. The
impact of the fire in our Automotive plant (see details below) reduced revenue
by R11,7 million which would have further increased our growth in automotive
sales by 5% when compared with the prior year.
Continued focus on key product costs helped maintain profit margins at 40%.
Strict fiscal discipline and a good understanding of cost drivers helped to
control operating expenses and contributed significantly to the 35% growth in
operating profit to R70,8 million. This is further emphasised by the increase
in our operating profit margins which improved from 9% in the prior year to 12%
in the current year.
On 11 June 2007, ChemSpec entered into an agreement to acquire immovable
property comprising of land, buildings and equipment in Canelands, Durban
("Canelands Property") from Dow AgroSciences Southern Africa (Proprietary)
Limited ("Dow") for a purchase consideration of R70 million. The Canelands
Property is currently being used as the company`s global headquarters.
The purchase and capital expenditure amounting to R 171 million incurred on the
Canelands Property will leave the group with a world class manufacturing
facility with significantly increased production capacity. This expenditure
resulted in a large increase in plant and equipment as well as the current
financial liabilities for the group, the majority of which will be settled from
the proceeds of the sale of the Canelands Property. This resulted in an
increase in net finance costs to R36,6 million which equates to 10c per share
after tax.
However, management`s focus on cash generation and working capital management
resulted in an increase in net cash from operating activities of R101 million
when compared with the prior year. This resulted in a decrease in the group
overdraft by R32,5 million which in turn impacted favourably on the overall
financing costs.
The group`s headline earnings increased by 11% to R24,7 million from R22,2
million in the prior year. However, the group`s headline earnings per share
decreased by 13% to 8,05 cents per share from 9,25 cents due to the increased
weighted average number of shares in issue in the current year compared with
the prior year.
The group`s basic earnings increased by 65% to R39,6 million from R24,04
million in the prior year. The group`s basic earnings per share increased by
29% to 12,91 cents per share from 10,01 cents per share in the prior year.
Trading performance
The automotive division continues its impressive growth trajectory achieving
24% growth when compared with the prior year. This growth would have been 29%
were it not for the loss of turnover experienced through the automotive plant
fire (see below). The automotive segment continues to lead in delivering margin
which is further improved when sold through our global businesses and where we
continue to remain highly competitive. This remains the main focus of the group
and we continue to target growth in our international business.
Decorative performance was adversely impacted by the current market conditions.
Our decorative segment did not grow when compared with the comparative year.
Margins from our decorative range are lower than our automotive range but are,
nevertheless, a significant contributor to our success.
Our industrial and wood finish business continues to generate solid results in
both revenue and margin and represents the "bread and butter" products of our
business.
The buy-ins and adhesive sections achieved negative growth as the group moves
away from this market and focuses on its in-house product offering. Reasonable
growth was achieved in the solvents business.
Canelands Property
ChemSpec shareholders were advised in an announcement on SENS on 4 June 2009
that ChemSpec had entered into an agreement to dispose of the ChemSpec Property
("the Disposal"), further details of which are provided below.
The Canelands Property comprises owner-occupied property as well as investment
property, a portion of which is being leased back to Dow under an operating
lease.
The directors resolved in September 2008 to dispose of the Canelands Property
on the basis of a sale and operating leaseback to realise the value embedded in
the Canelands Property for purposes of reducing the level of debt.
Accordingly, on 23 February 2009, ChemSpec entered into an agreement with
Zevoli 243 (Proprietary) Limited ("the Purchaser"), to dispose of the Canelands
Property, together with all improvements thereon, but excluding all plant and
equipment specifically related to the production of paint, agricultural
chemicals and related activities which are the property of ChemSpec or Dow.
On 2 April 2009, ChemSpec and the Purchaser entered into a written agreement of
lease in respect of the Canelands Property ("ChemSpec Lease"). The ChemSpec
Lease is a standard triple net single tenant lease. The terms of the ChemSpec
Lease are as follows:
ChemSpec will be responsible for all repairs, insurance, building operating
costs, utility services, connection costs, rates and maintenance of the
Canelands property;
the term of the ChemSpec Lease is 10 years with a renewal period of a further
10 years after the expiry of the initial lease period at a market related
rental and escalation at the time;
the commencement date of the ChemSpec Lease is the date of registration of
the transfer of the Canelands property into the name of the Purchaser, if the
commencement date is the first day of the month or the first day of the month
in which the commencement date arrives, if the commencement date is not the
first day of a month; and
the commencement basic net monthly rental is R1 350 000 plus VAT, which will
escalate annually at a market related rate.
On 30 April 2009, the independent directors on the ChemSpec board of directors
approved the Disposal and the ChemSpec Lease subject to the fulfilment of the
conditions precedent.
The effective date of the Disposal is the date on which ChemSpec`s existing
mortgage bonds registered over the Canelands property are cancelled, the
transfer of the Canelands Property into the name of the Purchaser takes place
and a first mortgage bond over the Canelands Property is registered in favour
of Nedbank Limited by the Purchaser ("Effective Date").
The Disposal is a related party transaction as defined in Section 10 of the JSE
Limited ("JSE") Listings Requirements and the ChemSpec board has appointed an
independent adviser to advise on whether the terms and conditions of the
Disposal are fair to the ChemSpec shareholders other than the related parties.
The purchase consideration amounts to R130 million (excluding VAT) which will be
settled in cash as follows:
R7,5 million was paid to the Conveyancing Attorneys on signature of the
agreement; and
The balance of the purchase consideration and VAT will be paid on the Effective
Date;
The proceeds will be used for working capital and to settle the existing
mortgage bond over the Canelands Property.
The Disposal is subject to the fulfilment of, inter alia, the following
remaining major conditions precedent:
obtaining the necessary statutory and regulatory approvals; and
approval of the disposal by ChemSpec shareholders in general meeting in
accordance with Section 10 of the JSE Limited`s ("JSE") Listings Requirements.
The consolidation of the company`s production at the new plant located on the
Canelands Property is expected to result in a cost savings towards the end of
the 2009 calendar year. It is anticipated that these cost savings will further
improve ChemSpec`s ability to be price competitive in global markets. At this
point in time ChemSpec has committed R30,6 million to certain improvements and
management estimates that a further R16 million will be required to make the
plant fit for its intended purpose.
Automotive plant fire
On 11 February 2009 there was a fire at one of the group`s four manufacturing
facilities situated at Jaco Place in Jacobs, Durban. This facility primarily
manufactured automotive coatings. The fire destroyed the raw material and
finished goods stockholding located at the plant. The group was adequately
insured for all damaged stock as well as for associated cleanup costs.
Furthermore, the group has submitted a claim for loss of profits. The insurers
have formally accepted liability. The directors have raised a debtor in the
amount of R8 815 925 being the settlement for the period to 31 March 2009 as
they are virtually certain that this will be paid. They intend to proceed to
recover a higher amount in terms of the claim referred to above as well as for
losses incurred subsequent to 31 March 2009. The full R8 815 925 compensation
for the loss of this revenue is included in profit and loss as other income.
The road ahead
We will continue to focus our efforts during the 2010 year on bedding down the
consolidation process. A clear focus will ensure that we harness the savings
and economies of scale that we have been engineering while moving across to the
Canelands Property. We are confident that we will emerge as a low-cost,
well-managed company with international-standard processes and product quality.
Growth across all sectors will be slow and difficult to attain, as all
manufacturers are fighting for share of a greatly reduced market.
We believe that ChemSpec is well placed to accept the challenges of this new
economic landscape and we will continue to remain a profitable, professional
operation.
Directorate
Ivan Clark was appointed to the board as Chairman on 22 July 2008. He resigned
for personal reasons with effect from 21 October 2008. Strath Wood continues in
the role of chairman and chief executive officer. Jonathan Maehler resigned in
December 2008 to pursue family interests. Bruce MacKinnon was appointed Chief
Financial Officer in his place. David Randles resigned in May 2009. Robert
Simpson was appointed as an executive director to replace David Randles in June
2009.
Dividend
In view of the board`s strategy to retain capital for investment in global
business growth, no dividend has been declared for the year. The board is,
however, committed to adopt its dividend policy and target dividend cover of
approximately three times subject to meeting its capital management objectives.
Appreciation
The directors would like to thank the management and staff of the group for
their hard work and dedication during the period, as well as shareholders,
customers and suppliers for their continued invaluable support.
Annual general meeting
The annual general meeting of the company will be held at 2029 Old Mill Road,
Canelands, Verulam, KwaZulu-Natal, on Thursday, 17 September 2009 at 11:00.
For and on behalf of the board
SM Wood BR Mackinnon
Chief Executive Officer Chief Financial Officer
30 June 2009
CONDENSED CONSOLIDATED INCOME STATEMENTS
Figures in Rand Notes 2009 2008
Revenue 617 460 571 580 239 447
Cost of sales (371 663 534) (346 836 126)
Gross profit 245 797 037 233 403 321
Other income 45 346 818 17 139 386
Operating expenses (220 350 865) (197 972 427)
Operating profit 2 70 792 990 52 570 280
Investment revenue 6 039 768 4 414 318
Finance costs (30 604 113) (29 302 019)
Profit before taxation 46 228 645 27 682 579
Taxation (7 776 239) (3 890 144)
Profit for the period 38 452 406 23 792 435
Attributable to:
Equity holders of the parent 39 614 858 24 041 841
Minority interest (1 162 452) (249 406)
38 452 406 23 792 435
Basic and diluted earnings per
share (cents) 3 12,91 10,01
Notes to the income statement
Basic and diluted headline
earnings
per share (cents) 3 8,05 9,25
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Figures in Rand 2009 2008
Profit for the period 38 452 406 23 792 435
Other comprehensive income (1 695 025) 2 232 087
Exchange differences on translating foreign
operations (1 695 025) 2 232 087
Income tax relating to comprehensive income - -
Total comprehensive income for the year 36 757 381 26 024 522
Total comprehensive income attributable to:
Equity holders of the parent 38 126 790 26 066 977
Minority interest (1 369 409) (42 455)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Figures in Rand Notes 2009 2008
Assets
Non-current assets
Property, plant and equipment 115 978 065 62 143 711
Intangible assets 14 861 807 7 861 326
Goodwill 21 203 440 22 457 038
Other financial assets 671 1 431 055
Deferred tax - 841 196
152 043 983 94 734 326
Current assets
Inventories 112 417 365 138 330 361
Other financial assets 6 468 769 6 190 743
Trade and other receivables 124 951 710 136 869 774
Cash and cash equivalents 5 249 024 8 795 349
249 086 868 290 186 227
Non-current assets held for sale 5 128 769 654 -
Total assets 529 900 505 384 920 553
Equity and liabilities
Equity
Share capital 6 1 550 1500
Share premium 6 115 021 345 103 553 089
Reserves 942 789 2 430 857
Retained income 54 740 001 19 582 398
Attributable to equity holders of the
parent 170 705 685 125 567 844
Minority interest - 3 812 544
170 705 685 129 380 388
Liabilities
Non-current liabilities
Other financial liabilities 39 559 901 44 888 554
Deferred tax 6 477 137 -
46 037 038 44 888 554
Current liabilities
Other financial liabilities 149 290 122 7 148 598
Trade and other payables 77 906 601 81 457 321
Bank overdraft 85 961 059 122 045 692
313 157 782 210 651 611
Total liabilities 359 194 820 255 540 165
Total equity and liabilities 529 900 505 384 920 553
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share
(Accumulated loss)
translation
Note Share reserve
capital premium
Figures in Rand
Balance at 1 April 2007 1,000 -
Issue of shares 6 500 109 950 000
Share issue expenses 6 - (6 396 911)
Acquisition of subsidiaries 4 - -
Subtotal 1500 103 553 089
Total comprehensive income - -
Balance at 31 March 2008 1500 103 553 089
Issue of shares 6 50 11 499 950
Share issue expenses 6 - (31 694)
Acquisition of subsidiaries 4 - -
Subtotal 1550 115 021 345
Total comprehensive income - -
Balance at 31 March 2009 1550 115 021 345
Foreign currency
Share (Accumulated loss) translation reserve
Retained income (FCTR)
Figures in Rand
Balance at 1 April 2007 (4,315,116) 405,721
Issue of shares - -
Share issue expenses - -
Acquisition of subsidiaries (144 327) -
Subtotal (4 459 443) 405 721
Total comprehensive income 24 041 841 2 025 136
Balance at 31 March 2008 19 582 398 2 430 857
Issue of shares - -
Share issue expenses - -
Acquisition of subsidiaries (4 457 255) -
Subtotal 15 125 143 2 430 857
Total comprehensive income 39 614 858 (1 488 068)
Balance at 31 March 2009 54 740 001 942 789
Total Minority interest Total equity
Figures in Rand
Balance at 1 April 2007 (3,908,395) - (3,908,395)
Issue of shares 109 950 500 - 109 950 500
Share issue expenses (6 396 911) - (6 396 911)
Acquisition of
subsidiaries (144 327) 3 854 999 3 710 672
Subtotal 99 500 867 3 854 999 103 355 865
Total comprehensive
income 26 066 977 (42 455) 26 024 522
Balance at 31 March 2008 125 567 844 3 812 544 129 380 388
Issue of shares 11 500 000 - 11 500 000
Share issue expenses (31 694) - (31 694)
Acquisition of
subsidiaries (4 457 255) (2 443 135) (6 900 390)
Subtotal 132 578 895 1 369 409 133 948 304
Total comprehensive
income 38 126 790 (1 369 409) 36 757 381
Balance at 31 March 2009 170 705 685 - 170 705 685
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
Figures in Rand Note 2009 2008
Cash flows from operating activities
Operating cash flows before
movements in working capital 46 104 344 61 989 916
Decrease/(increase) in working capital 37 241 176 (77 341 611)
Cash generated /(used by) from operations 83 345 520 (15 351 695)
Investment revenue 2 788 766 1 147 964
Finance costs (26 293 001) (25 779 597)
Taxation paid (188 812) (1 410 672)
Net cash from operating activities 59 652 473 (41 394 000)
Cash flows from investing
activities
Acquisition of property, plant and
equipment (171 354 674) (36 850 658)
Proceeds on sale/claims for
property, plant and equipment 10 061 590 26 060 440
Acquisition of intangible assets (8 354 225) (7 087 388)
Acquisition of
businesses/subsidiaries 4 (6 900 390) (10 027 199)
Purchase of financial assets 1 152 358 (213 500)
Net cash from investing activities (175 395 341) (28 118 305)
Cash flows from financing activities
Proceeds on share issue 11 468 306 103 553 589
Proceeds/(Repayment) of other
financial liabilities 136 812 870 (49 605 343)
Repayment of shareholders` liabilities - (81 709 491)
Net cash from financing activities 148 281 176 (27 761 245)
Total cash movement for the year 32 538 308 (97 273 550)
Overdraft at the beginning of the year (113 250 343) (15 976 793)
Cash and cash equivalents at the
end of the year (80 712 035) (113 250 343)
Reconciled as follows:
Cash and cash equivalents 5 249 024 8 795 349
Bank Overdraft (85 961 059) (122 045 692)
Cash and cash equivalents at the
end of the year (80 712 035) (113 250 343)
CONDENSED CONSOLIDATED SEGMENT REPORT
Figures in Rand Note 2009 2008
Segment revenues
Buy-ins 42 728 925 76 985 641
Automotive 296 604 487 238 535 190
Decorative 57 560 068 68 665 980
Industrial/Wood 202 076 950 174 640 279
Solvents 58 310 668 55 390 125
Adhesives and Oleo 5 901 253 8 111 257
Total of all segments 663 182 351 622 328 472
Eliminations of intercompany revenue (45 721 780) (42 089 025)
Consolidated revenue 617 460 571 580 239 447
External customers
South Africa 456 608 524 440 774 389
International 160 852 047 139 465 058
Segment result
Buy-ins 3 436 492 3 604 506
Automotive 19 369 999 12 407 259
Decorative 5 238 254 3 122 531
Industrial/Wood 15 083 124 6 888 355
Solvents 2 929 382 1 432 156
Adhesives and Oleo 171 394 227 773
Profit before taxation 46 228 645 27 682 580
Taxation (7 776 239) (3 890 145)
Profit for the year 38 452 406 23 792 435
Segment assets
Buy-ins 34 141 558 47 616 905
Automotive 236 994 950 147 537 998
Decorative 45 992 040 42 471 055
Industrial/Wood 161 464 909 108 017 929
Solvents 46 591 789 34 259 717
Adhesives and Oleo 4 715 259 5 016 949
Total of all segments 529 900 505 384 920 553
NOTES to the condensed consolidated annual financial statements
1 Basis of preparation
The consolidated annual financial statements, from which these condensed
consolidated annual financial statements were derived, have been prepared in
accordance with International Financial Reporting Standards (`IFRS`), the
Companies Act of South Africa and the JSE Limited Listings Requirements. These
condensed consolidated annual financial statements contain the information
required in terms of IAS34 - Interim Financial Reporting.
All new and revised Standards and Interpretations that became effective during
the year were adopted and did not lead to changes in accounting policies. The
accounting policies and method of measurement, recognition and computation
applied in preparation of the condensed consolidated annual financial
statements have been consistently applied.
The condensed consolidated annual financial statements have been audited by BDO
Spencer Steward (KZN) Inc., Registered Auditors. Their unqualified opinion is
available for inspection at the group`s registered office.
The board acknowledges its responsibility for the preparation of the condensed
consolidated annual financial statements in accordance with IFRS, the Companies
Act of South Africa, and the JSE Limited Listings Requirements.
2 Operating profit
Figures in Rand 2009 2008
The following significant amounts are included
in operating profit:
Appreciation of investment property 15 291 446 -
Deferred income 10 395 916 -
Insurance claim 8 815 295 10 024 097
Rental Income 2 832 000 -
Appreciation of investment property and rental income was received from
investment property in non-current assets held for sale. Deferred income was
raised on the sale and leaseback of a portion of the Canelands Property to Dow.
The deferred income was realised in profit and loss as a result of the decision
to dispose of the Canelands Property (Refer note 5).
The income from the insurance claim relates to the automotive plant fire,
affecting the automotive segment. The prior year amount is due to a fire at the
Phoenix plant, affecting the decorative segment.
The impairment losses are show below:-
Figures in Rand 2009 2008
Property, plant and equipment - 2 213 004
Inventory 3 214 594 8 001 226
3 Basic and diluted earnings and headline earnings per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic and diluted earnings and headline earnings per share are
as follows:
Reconciliation of total earnings to headline earnings attributable to equity
holders of the parent
Figures in Rand 2009 2008
Total earnings attributable to equity holders 39 614 858 24 041 841
Non-headline earnings
Less appreciation/profit on sale of property (15 291 446) (2 121 120)
Less (profit) / add loss on sale of plant and
equipment (2 425 063) 26 783
Total tax effect of adjustments 2 819 820 320 847
Total minority interest in adjustments - (48 807)
Headline earnings 24 718 169 22 219 544
Weighted average number of ordinary shares in
issue 306 931 507 240 163 934
4 Acquisition of businesses
Figures in Rand 2009 2008
Assets
Property, plant and equipment - 6 723 706
Deferred tax - 160 065
Inventories - 10 964 116
Trade and other receivables - 8 108 708
Cash/(Bank overdraft) - 826 486
Liabilities
Other financial liabilities - (8 644 994)
Trade and other payables - (8 415 028)
- 9 723 059
Less minority interest - (3 854 999)
Goodwill on acquisition - 4 841 298
ChemSpec USA, Inc. 6 900 390 10 709 358
- 144 327
Chem Spec (Coatings) (Pty) Limited
6 900 390 10 853 685
2009
In April 2008, January and February 2009, the company acquired a further 39,65%
share in ChemSpec USA Inc. No change in control took place and the increase in
equity was set off against the increase in the cost of the investment on
consolidation. The cost of the acquisition was financed by the Vendors. No
further goodwill was recorded as there was no change in control.
2008
On 6 June 2007, the group acquired a 60,35% interest in ChemSpec USA, Inc.
(previously Montana Products Inc.). Goodwill arose in the business combination
because the cost of the combination included a control premium paid to acquire
ChemSpec USA, Inc. In addition, the consideration paid for the combination
effectively included amounts in relation to the benefit of expected synergies,
revenue growth, future market development and the assembled workforce of
ChemSpec USA, Inc. These benefits are not recognised separately from goodwill
as the future economic benefits arising from them cannot be reliably measured.
The cost of acquisition of ChemSpec USA, Inc. was paid in cash. No further
adjustments to the cost of this investment will be made.
On 13 November 2007 the group acquired a further 14,999% share in ChemSpec
(Coatings) (Pty) Limited through a rights issue. No change in control took
place and the increase in equity was set off against the increase in the cost
of the investment on consolidation. An amount of R144 327 relating to the costs
of this transaction was written off against equity. No further goodwill was
recorded as there was no change in control. There was no cash outflow other
than the R144 327 referred to above.
5 Non-current assets held for sale
In September 2008 a decision was taken by the board to dispose of the property
listed below.
Canelands Property
2029 Old Mill Site, Canelands, Verulam
Figures in Rand 2009 2008
Pre-acquisition additions (Reclassified from property,
plant and equipment) 4 363 700 -
Acquisition consideration 65 232 425 -
Additions 43 882 082 -
Fair value adjustment 15 291 447 -
128 769 654 -
Rental income from investment property is disclosed in other income. (Refer to
note 2).
Valued by Mr. MH North, (MIV) SA MD PREP of North Property Consultants, to have
a market value of R 135 000 000 (excluding VAT) based on market evidence on 23
February 2009.
Properties to be sold consist of:
Ervin 105, 106, 108, 109 & 205 Canelands Extension 6 KwaZulu Natal, all held
under Titled Deed No. T23011/2008; and the remaining Extent of Portion 1171 and
the remaining Extent of Portion 1199 of the Farm Cotton Lands No. 1575, all
held under Title Deed No. T23012/2008, in total measuring approximately 20,2025
hectares, together with all improvements thereon, but excluding all plant and
equipment specifically related to the production of paint, agricultural
chemicals and related activities which are the property of ChemSpec or Dow.
The sale price is R 130 000 000 (excluding VAT).
6 Changes in share capital and share premium
Figures in Rand 2009 2008
Share capital: 1 550 1 500
310 000 000 ordinary shares of R0,000005 each
(2008: 300 000 000 ordinary shares of R0,000005
each)
Share premium: 110 000 000 ordinary shares of
R1,104049 121 449 950 109 950 000
(2008 : 100 000 000 ordinary shares of R1,0995
Less share issue expenses (6 428 605) (6 396 911)
115 021 345 103 553 089
Reconciliation between opening balance of issued
shares and closing balance
Total share capital in issue at the beginning
of the year 300 000 000 100 000
Subdivision of shares - 199 900 000
Private placing - 100 000 000
Additional private placing 10 000 000 -
Total share capital in issue at the end of the
year 310 000 000 300 000 000
2009
On 21 July 2008 the company made a specific issue of 10 000 000 ordinary shares
by way of a private placing at a price of R1,15.
2008
On 14 September 2007 after converting to a public company the share capital of
the company was altered as follows:
The authorised share capital of R 3 000 ( 300 000 ordinary par value shares
of R0,01 each) was increased to R 5 000 (500 000 ordinary par value shares of R
0,01 each);
The ordinary share capital of 500 000 ordinary par value shares of R 0,01
each was subdivided into 1 000 000 000 ordinary par value shares of R0,000005
each; and
The issue share capital of R 1 000, comprising 100 000 ordinary par value
shares of R 0,01 each, was subdivided into 200 000 000 ordinary par value
shares of R 0,000005 each.
On 6 November 2007, the company listed on the ALTX after a private placing of
100 000 000 shares.
All shares in issue are fully paid up.
7 Related party transactions
Canelands Property
The proposed disposal of the Canelands Property (refer to Commentary / note 5)
is classified as a related party transaction due to the following:
Zevoli 243 (Pty) Ltd ("Zevoli") is the purchaser in the transaction. Mr. Strath
Wood, the CEO of ChemSpec is the director of Zevoli and he is the sole
shareholder of Dream Weaver Trading 382 (Pty) Ltd, a 25% shareholder of Zevoli.
Corvest 6 (Pty) Ltd, a major shareholder of ChemSpec, is a 75% shareholder of
Zevoli. Other than the above transaction, there has been no significant change
in related party relationships since the previous year or significant
transactions during the year other than in the normal course of business.
8 Commitments and post-balance sheet events
Authorised capital expenditure
The group has committed to spend a further R 16 000 000 on the completion of
the consolidated plant on the Canelands Property.
This expenditure will be financed from the proceeds on the sale of the
Canelands Property as well as existing borrowings.
Other than the sale of the Canelands Property (Refer note 5) there are no other
post-balance sheet events.
The annual report is avalible on our website: www.chemspecpaint.com
CHEMICAL SPECIALITIES LIMITED
Country of incorporation and domicile: South Africa
Registration number: 2005/039947/06
Share code: CSP
ISIN: ZAE000109427
Registered office
2029 Old Mill Road, Canelands, Verulam, 4339
Postal address
PO Box 41177, Rossburgh, 4072
Directors
SM Wood Chief Executive Officer, BR Mackinnon Chief Financial Officer,
R D Simpson Executive Director, MC Oldham Non-executive Director,
A Moodley Non-executive Director
Contact details
Tel: +27 32 541 8600
Fax: +27 32 541 8653
Web: www.chemspecpaint.com
Transfer secretaries
Computershare Investor Services (Pty) Limited
Auditors
BDO Spencer Steward (KZN) Incorporated
Designated Advisor
QuestCo Sponsors (Pty) Limited
Date: 30/06/2009 17:05:01 Produced by the JSE SENS Department.
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