| Tue 9 Apr 2002, 0:00 | | Daewoo Electronics S.a. Limited - Preliminary Resu |
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Daewoo Electronics S.A. Limited
Registration number 1987/004570/06
Share code: DAE ISIN: ZAE000009437
Preliminary Report for the year ended 31 December 2001
The annual financial statements are prepared on the historical cost basis
and comply with Generally Accepted Accounting Practice as prescribed by the
accounting standards issued by the South African Institute of Chartered
Accountants that are applicable for this year. The principal accounting
policies have been consistently applied with the previous year.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2001
2001 2000
R000's R000's
Audited Audited
Revenue 134 505 159 116
Loss from operations 91 847 53 844
Finance costs 1 683 6 083
Net loss before taxation 93 530 59 927
Taxation - 131
Net loss after taxation 93 530 60 058
Preference dividends - 1 048
Total net loss 93 530 61 106
Reconciliation of headline loss
Total net loss 93 530 61 106
Profit/(Loss) on disposal
of fixed assets 617 (25)
Restructuring costs - (1)
Headline loss 94 147 61 080
Number of shares in
issue (000) 51 600 51 600
Loss per share (cents) 181,3 118,4
Headline loss per share (cents) 182,5 118,4
Net deficit per share (cents) 343,9 162,6
Capital expenditure
incurred (R000's) 378 562
CONSOLIDATED BALANCE SHEET
at 31 December 2001
2001 2000
R000's R000's
Audited Audited
Assets
Non-current assets 785 11 045
Property, plant and equipment 785 11 045
Current assets 188 057 148 332
Receivables and prepayments 147 037 95 030
Inventory 39 965 51 250
Cash and cash equivalents 1 055 2 052
Total assets 188 842 159 377
Equity and liabilities
Capital and reserves (177 439) (83 909)
Share capital 516 516
Share premium 29 153 29 153
General reserve 60 000 60 000
Accumulated loss (267 108) (173 578)
Non-current liabilities 9 194 386
Interest bearing
borrowings 9 194 386
Current liabilities 357 087 242 900
Trade and other payables 351 829 241 429
Bank overdraft 5 008 0
Short-term borrowings 250 1 471
Total equity and liabilities 188 842 159 377
STATEMENT OF CHANGES IN EQUITY
Accumu-
Share Share General lated
capital Premium reserve loss Total
R'000 R'000 R'000 R'000 R'000
Balance at
1 January
2000 33 017 29 153 0 (112 472) (50 302)
Preference
shares
redeemed (32 501) - - - (32 501)
Reserve on
redemption of
preference
shares - - 60 000 - 60 000
Net loss - - - (61 106) (61 106)
Balance at
31 December
2000 516 29 153 60 000 (173 578) (83 909)
Net loss - - - (93 530) (93 530)
Balance at
31 December
2001 516 29 153 60 000 (267 108) (177 439)
CASH FLOW STATEMENT
for the year ended 31 December 2001
2001 2000
R000's R000's
Audited Audited
Operating activities
Cash utilised by operations (11 207) (52 997)
Changes in working capital 68 629 84 069
57 422 31 072
Interest paid (1 683) (6 083)
Preference dividends paid - (2 948)
Taxation paid - (1 076)
55 739 20 965
Investing activities
Net fixed assets 10 195 (517)
10 195 (517)
Net cash inflow 65 934 20 448
Financing activities
Net loans (repaid) (71 768) (413)
(71 768) (413)
Cash
Net cash movements (5 834) 20 035
Net short-term borrowings at the
beginning of the year 1 631 (18 404)
Net cash/(short-term borrowings) at the
end of the year (4 203) 1 631
QUALIFIED REPORT OF THE INDEPENDENT AUDITORS
We have audited the annual financial statements of Daewoo Electronics S.A
Limited for the year ended 31 December 2001. These financial statements are
the responsibility of the Company's directors. Our responsibility is to
express an opinion on these financial statements based on our audit.
Scope
We conducted our audit in accordance with statements of South African
Auditing Standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance that the financial statements are free
of material misstatement. An audit includes:
- examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements;
- assessing the accounting principles used and significant estimates made by
management; and
- evaluating the overall financial statement presentation,
We believe that our audit provides a reasonable basis for our opinion.
Contravention of statute
Without qualifying our audit opinion in this respect, we draw attention to
the fact that the Register of Directors and Officers, as required by Section
215 of the Companies Act, has not been kept up to date and that all such
returns, as are required by Section 268(G)d to be lodged with the Registrar
of Companies, have not been lodged and the Registrar's records are therefore
not true, correct and up to date.
Going concern qualification
We draw attention to the fact that the Company incurred a net loss of R93,5
million during the year ended 31 December 2001 (2000: R61,1 million) and as
of that date, the Company's current liabilities were R357,1 million (2000:
R242,9 million). We also draw attention to the fact that the ultimate
holding company, Daewoo Electronics Company Limited of Korea and its
subsidiary and product supplier to the Group Daewoo Electronics Middle East
FZE, have subordinated their trade accounts amounting to R304,8 million at
31 December 2001 (2000: R226,2 million) in favour of the other creditors
until such time as the assets of the company, fairly valued, exceed its
liabilities.
The financial statements have been prepared on the basis of accounting
practices applicable to a going concern. This basis presumes that funds will
be available to finance future operations and that the realisation of assets
and settlement of liabilities and commitments will occur in the ordinary
course of business. The ability of the Company to continue as a going
concern depends on the continued support of the holding company and/or its
return to profitability.
There is however a material uncertainty about the ability of the Company's
ultimate holding company to continue as a going concern.
Adverse qualification
In our opinion, the net loss for the year of R93,5 million is understated by
R12,1 million. This is as a result of the following balance sheet items that
are in our opinion not properly reported in terms of Generally Accepted
Accounting Practice:
- Inventories are overstated by R4,7 million;
- Trade and other receivables are overstated by R1,8 million;
- Interest bearing borrowings are overstated by R8,9 million; and
- Trade and other payables are understated by R14,5 million.
Correspondingly, loss per share has also been understated by 23,5 cents per
share.
In addition we could find no evidence to support the directors' assertion
that the ultimate holding company, Daewoo Electronics Company Limited of
Korea, would repay the R30 million, originally paid by the Company's
subsidiary Daewoo Electronics (Proprietary) Limited, to redeem a portion of
the variable rate redeemable cumulative preference shares.
Adverse audit opinion
In our opinion, because of the effect on the financial statements of the
matters referred to in the preceding paragraph and due to the material
uncertainty with regard to the going concern basis, the financial statements
do not fairly present, in all material respects, the financial position of
the Company at 31 December 2001, and the results of its operations and cash
flows for the year then ended in accordance with Generally Accepted
Accounting Practice, and in the manner required by the Companies Act.
Anton Hayward
Chartered Accountants (SA)
Registered Accountants and Auditors
Results
Revenue for the 2001 year was lower than expected, dropping from the
previous corresponding period by 53%. This was due to difficulties
experienced by financial restrictions imposed on the Company's major
supplier, Daewoo Electronics Co. Limited, Korea. Further to that heavy
competition also played a big part in reduced sales.
Margins were under severe pressure throughout the period due to market
conditions, heavy competition and the deteriorating Rand:US Dollar exchange
rate which declined by 54% during the period under review.
Overheads were well contained but the lower margins resulted in a
continuation of operating losses, exacerbated by the unrealised currency
loss referred to below.
Excluding cash on hand, total assets were R188 million. This is an increase
of R30 million since 31 December 2000.
The company continues to be financed by extended trade credit provided by
the holding company Daewoo Electronics Co. Limited, Korea. The amount owing
has increased from R226 million (USD30 million) at the beginning of the year
to R305 million (USD25 million) at 31 December 2001. As at 31 December USD25
million of this was unhedged. Based on the exchange rate of R11,98 = USD1
ruling at 31 December 2001 this has resulted in an unrealised currency loss
of
R81 million which is provided for in the accounts.
Activities
The Group's activities remain solely the importation and distribution of
Daewoo branded consumer products.
Prospects
Trading conditions continued to remain extremely competitive with a
resultant pressure on margins. It is hoped that these conditions will
improve and will boost consumer expenditure in the following year.
The Company's gearing remains unsatisfactory and it is hoped that the
holding company will be in a position to address this to a greater extent in
the new year. In this event the unrealised currency losses could be
eliminated in whole or in part.
By order of the board
W Dong Y G Kim Johannesburg
Chairman Chief Executive Officer 5 April 2002
Directors:
W Dong (Chairman), Y G Kim* (Chief Executive Officer),
J H Huh, Y S Kim, J H Lee. * Executive
Transfer secretaries
Computershare Investor Services Limited
41 Fox Street
Johannesburg 2000
Registered office
146 Boeing Road East
Elma Park
Edenvale 1609
Auditors
Anton Hayward
Chartered Accountants (SA)
Registered Accountants and Auditors
