| Fri 27 Aug 2010, 17:04 | | CMO - Chrometco Limited - Revised Trading Statement Review |
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CMO
CMO
CMO - Chrometco Limited - Revised Trading Statement, Review
of Rooderand transaction, re-statement of prior financial
statements and renewal of cautionary announcement
Chrometco Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/026265/06)
Share code: CMO ISIN: ZAE00007020249
("Chrometco" or "the company" or "the group")
REVISED TRADING STATEMENT, REVIEW OF ROODERAND TRANSACTION,
RE-STATEMENT OF PRIOR FINANCIAL STATEMENTS AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
In terms of the listing requirements of the JSE Limited
("JSE"), companies are required to publish a trading
statement as soon as they are satisfied that a reasonable
degree of certainty exists that the financial results for
the period to be reported on will differ by 20% or more from
the financial results for the period as previously
published.
Shareholders are referred to the announcement released on
SENS on 20 July 2010 and are advised that current management
have embarked on a detailed ongoing review of the
conditional sale of two of the group`s subsidiaries, namely
Korpo Trust (Proprietary) Ltd ("Korpo") and Rooderand Chrome
(Proprietary) Limited ("Rooderand") ("the conditional sale")
and a mining and management agreement in 2007 ("the
Rooderand transaction").
Pursuant to an investigation by the GAAP Monitoring Panel
("GMP"), the company has been advised that the accounting
treatment for the Rooderand transaction was contrary to the
requirements of IFRS, in particular, that the company did
not account for the conditional sale in the annual financial
statements for the year ended 29 February 2008 in
circumstances where control of the assets sold had been
lost, and brought to account payments received from the
buyer in 2008 and 2009 as revenue and in 2008 reversed a
prior intangible impairment .
Management has also obtained a technical accounting opinion
from an IFRS specialist concerning the accounting treatment
of the Rooderand transaction, which has confirmed the GMP
view. The conclusion reached by the IFRS specialist is that,
notwithstanding the conditional nature of the conditional
sale, a sale of Korpo and Rooderand took place upon
conclusion of the conditional sale agreements and mining and
management agreement underlying the Rooderand transaction in
2007. The IFRS specialist holds the view that the
conditional sale was deemed to have taken place in terms of
IFRS, as the effect of the conditional sale agreements
Accordingly, the board has decided that, notwithstanding the
fact that the conditional sale remains subject to the
fulfillment of various conditions precedent, it would be
appropriate to restate the figures relating to the 2008 and
2009 financial years (as they appear in the 2010 annual
financial statements), as well as the 2010 reviewed results
as previously published on SENS on 7 May 2010. To comply
with IFRS, the re-statement recognises the sale in 2008 and
eliminates the amounts erroneously recognised as revenue in
the annual financial statements for the financial years 2008
and 2009. The error in relation to the 2008 reversal of the
prior intangible impairment has also been corrected.
Shareholders are advised that the change to the prior period
accounting treatment has no effect on the net cash flows and
cash position previously reported by the group.
Shareholders are advised that Chrometco is currently
finalising its financial results and comparative results for
the years ended 28 February 2010, 28 February 2009 and 29
February 2008. As a result of the change in prior period
accounting treatment, earnings per share for the year ended
29 February 2008 is expected to increase from 4.99 cents per
share (as previously reported on SENS on 29 May 2008) to
16.04 cents per share. Earnings per share for the 2009 year
then ended is expected to decrease from 3.19 cents per share
(as previously reported on SENS on 1 June 2009) to a loss
per share of 1.05 cents. Earnings per share for the year
ended 28 February 2009 is expected to decrease from 5.41
cents per share (as previously reported on SENS on 7 May
2010) to a loss per share of 2.89 cents.
Headline loss per share for the year ended 29 February 2008
is expected to decrease from 3.67 cents per share (as
previously reported on SENS on 29 May 2008) to a headline
loss per share of 3.39 cents. Headline earnings per share
for the year ended 28 February 2009 is expected to decrease
from 3.3 cents per share (as previously reported on SENS on
1 June 2009) to a headline loss per share of 0.94 cents.
Headline earnings per share for the year ended 28 February
2010 is expected to decrease from 5.41 cents per share (as
previously reported on SENS on 7 May 2010) to a headline
loss per share of 2.81 cents.
The financial information on which this trading statement is
based has not been reviewed or reported on by Chrometco`s
auditors.
The company`s results for the year ended 28 February 2010
are expected to be published on SENS on or about 31 August
2010.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Having regard to the above, shareholders are advised to
continue to exercise caution when dealing in the company`s
securities until the publication of its audited results for
the year ended 28 February 2010 on or about 31 August 2010.
For and on behalf of the board of directors
P.J. Cilliers
Managing Director
27 August 2010
Directors: P.C.Baloyi (Chairman), P.J.Cilliers (MD),
J.G.Scott, T.W.Scott
Designated Advisor
Sasfin Capital
(a division of Sasfin Bank Limited)
Date: 27/08/2010 17:04:01 Produced by the JSE SENS Department.
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