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CMO
CMO
CMO - Chrometco Ltd - Revised Audited Consolidated Results for the Year Ended 28
February 2010
Chrometco Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/026265/06)
Share code: CMO ISIN: ZAE000070249
("Chrometco" or "the company" or "the group")
REVISED AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2010,
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT, POSTING OF THE ANNUAL REPORT AND NOTICE
OF ANNUAL GENERAL MEETING
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Restated Restated
as at audited as audited as
28 Feb at 28 Feb at 29 Feb
2010 2009 2008
R`000 R`000 R`000
ASSETS
Non-current assets 650 40 11 993
Tangible assets 55 40 639
Deferred taxation 595 - -
Other long-term receivables - - 11 354
Current assets 42 513 49 789 42 640
Inventories - - 53
Trade and other receivables 1 053 13 198 13 292
Cash and cash equivalents 41 460 36 591 29 295
Total assets 43 163 49 829 54 633
EQUITY AND LIABILITIES
Capital and reserves 42 931 48 268 50 733
Issued capital 2 2 2
Share premium 35 485 35 485 35 985
Non-distributable reserves - - -
Retained earnings 7 444 12 781 14 746
Non-current liabilities - 393 1 416
Deferred taxation - 393 1 063
Long-term borrowings - - 353
Current liabilities 232 1 168 2 484
Trade and other payables 232 1 168 2 399
Current portion of borrowings - - 85
Total equity and liabilities 43 163 49 829 54 633
Net asset value per share (cents) 23.21 26.10 26.90
Closing number of shares (`000) 184 929 184 929 188 594
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Restated
for year audited
ended 28 for year
Feb 2010 ended 28
R`000 Feb 2009
R`000
Revenue - 61
Cost of sales - (54)
Gross profit - 7
Other income 412 166
Operating expenses (9 168) (7 308)
Net loss before interest
and taxation (8 756) (7 135)
Investment income 2 431 4 542
Finance charges - (42)
Loss before taxation (6 325) (2 635)
Taxation 988 670
Loss for the year (5 337) (1 965)
Other comprehensive income - -
Taxation on other comprehensive - -
income
Total comprehensive loss
for the year (5 337) (1 965)
Reconciliation between earnings and
head line earnings per share
Basic loss per share (cents) (2.89) (1.05)
Diluted loss per share (cents) (2.89) (1.05)
Loss for the year (5 337) (1 965)
Adjustments:
Loss on disposal of vehicles - 202
Impairment of receivable 80 -
Headline loss attributable to (5 257) (1 763)
ordinary shareholders
Headline loss per share (cents) (2.81) (0.94)
Weighted average number of shares 184 929 187 372
(`000)
CONSOLIDATED CASH FLOW STATEMENTS
Audited Restated
for year audited for
ended 28 Feb year ended
2010 28 Feb 2009
R`000 R`000
Cash flows from operating 4 899 (3 444)
activities
Cash flows from investing (30) 11 678
activities
Cash flows from financing - (938)
activities
Net movement in cash and 4 869 7 296
cash equivalents
Cash and cash equivalents at 36 591 29 295
the beginning of the period
Cash and cash equivalents at 41 460 36 591
the end of the period.
STATEMENT OF CHANGES IN EQUITY
Share Retained Total
Capital Earnings
and
Premium
R`000 R`000 R`000
Balance at 1 March 2007 14 853 (15 055) (202)
Issue of shares 23 132 - 23 132
Repurchase of shares (1 998) - (1 998)
Comprehensive income for the - 29 801 29 801
period as restated
Balance at 29 February 2008 as 35 987 14 746 50 733
restated
Balance at 1 March 2008 as 35 987 14 746 50 733
restated
Repurchase of shares (500) - (500)
Comprehensive loss for the - (1 965) (1 965)
period as restated
Balance at 28 February 2009 as 35 487 12 781 48 268
restated
Balance at 1 March 2009 as 35 487 12 781 48 268
restated
Comprehensive loss for the - (5 337) (5 337)
period
Balance at 28 February 2010 35 487 7 444 42 931
COMMENTARY - Financial and operational
overview.
1. The directors present the audited
consolidated results for the year ended 28
February 2010
2. Basis of preparation
The accounting policies of the group comply in
all material respects with recognition and
measurement criteria of International
Financial Reporting Standards ("IFRS") and its
interpretations adopted by the International
Accounting Standards Board ("IASB") in issue
and effective at 31 August 2009, the AC 500
Standards as issued by the Accounting
Practices Board and its successor, as well as
the presentation and disclosure requirements
of IAS 34 - Interim Financial Reporting, the
JSE Listings Requirements and the Companies
Act of 1973. The accounting policies and
methods of measurement and recognition are
consistent with those applied in the financial
period ended 28 February 2009.
3. Auditors` report
The Chrometco group`s auditors, RSM Betty &
Dickson (Johannesburg), have audited these
results. Their report contains an emphasis of
matter modification relating to the
restatement of the 2008 and 2009 financial
statements due to the change in prior period
accounting treatment. The emphasis of matter
that has been expressed on the accompanying
financial information is as follows:
"Basis for emphasis of matter conclusion
The relevant opinion and emphasis of matter
paragraph have been extracted from the audit
report and are presented below:
Opinion
In our opinion, the annual financial
statements present fairly, in all material
respects, the financial position of the
company as of 28 February 2010, and of its
financial performance and its cash flows for
the year then ended in accordance with
International Financial Reporting Standards,
the AC 500 Standards as issued by the
Accounting Practices Board and its successor
and in the manner required by the Companies
Act of South Africa.
Emphasis of matter
Without qualifying our opinion, we draw
attention to a change to the prior period
accounting treatment disclosed in the annual
financial statements and directors` report;
which includes an appropriate description of
the company`s prior period accounting
treatment.`
The modified report is available for
inspection at the company`s registered office
during normal office hours.
4. Nature of business.
The company is involved in the exploration of
mineral resources and the possible
beneficiation thereof.
5. General review of operations.
During the period under review, the group
focused its attention on the following
important issues:-
- Finalisation of the conditional sale of
Korpo Trust (Pty) Ltd and Rooderand Chrome
(Pty) Ltd and conversion and transfer of the
used old order mining license held by
Pilanesberg Mining Company (Pty) Ltd to a new
order mining right.
- Management and oversight of mining
operations subcontracted to DCM Chrome (Pty)
Ltd on the Rooderand site
- The proposed acquisition of Lime-Chem (Pty)
Ltd.
- The acquisition of mineral rights, and
business opportunities in the Republic and
elsewhere in Africa.
- Optimisation of the allocation of capital
resources
6. Change in prior period accounting treatment
Shareholders are advised that subsequent to a
detailed ongoing review of the Rooderand
transaction by current management, and
following a query raised by the GAAP
Monitoring Panel ("GMP"), concerning the
accounting treatment of the Rooderand
transaction in terms of IFRS, management
obtained a technical accounting opinion from
an IFRS specialist concerning the accounting
treatment of the conditional sale of shares
agreement and the mining and management
agreement relevant to the Rooderand assets.
The conclusion reached by the IFRS specialist
was that, notwithstanding the conditional
nature of the sale of shares agreement, a sale
of two of the group`s subsidiaries, namely
Korpo Trust (Proprietary) Ltd ("Korpo") and
Rooderand Chrome (Proprietary) Limited
("Rooderand"), took place (from an accounting
perspective) upon the conclusion of 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 two agreements
(construed by them as being one single
agreement for accounting purposes) resulted in
a loss of control by Chrometco of the two
aforementioned subsidiaries. The conclusion
reached by the IFRS specialist confirms the
view expressed by the GMP. Based on the
conclusions reached by the IFRS specialist as
well as the view expressed by the GMP,
management have decided that, notwithstanding
the fact that the sale of shares agreement
remains subject to the fulfillment of
conditions precedent, it would be appropriate
to restate 2008 and 2009 financial statements,
as well as the 2010 reviewed results as
previously published on SENS in order to
reflect the transaction as if the sale had
taken place at the time of the conclusion of
the agreements in 2007, in accordance with the
views now expressed by the IFRS specialist,
and the GMP.
The financial effect of the restatement
effectively relates to the timing of the
recognition of profits previously reported and
results in the movement of profits previously
reported in the 2010, 2009 and 2008 years into
the 2008 financial period. The derecognition
of the company`s R 2.6m investment in Korpo
and R1 investment in Rooderand is also
recorded in the 2008 year. 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 company and the group.
7. Posting of the Annual Report and the notice
of Annual General Meeting
The annual report has been posted to
shareholders on 31 August 2010.
Notice is hereby given that the Annual General
Meeting of Chrometco will be held at
Computershare at 10:00 , 70 Marshall Street,
Johannesburg, on
Friday, 8 October 2010 to transact the
business as stated in the notice of Annual
General Meeting forming part of the annual
financial statements.
8. Withdrawal of cautionary
Shareholders are advised that, in light of the
information presented above,
there is no longer a need to exercise caution
when dealing in Chrometco shares.
For and on behalf of the board of directors
PJ Cilliers
Managing Director
31 August 2010
Directors: PC Baloyi (Chairman), PJ Cilliers
(MD),
JG Scott, TW Scott (FD)
Designated Advisor: Sasfin Capital
(A division of Sasfin Bank Limited).
Company Secretary: Computershare
Registered Office
70 Marshall Street
Johannesburg
(P.O.Box 3787, Dainfern. 2055)
www.chrometco.co.za
Date: 31/08/2010 17:00:01 Produced by the JSE SENS Department.
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