Afgri Limited - Earnings Update And Change In Acco
Afgri Limited - Earnings Update And Change In Accounting Policy
Release Date: 28/01/2003 17:40:05 Code(s): AFR
Afgri Limited - Earnings Update And Change In Accounting Policy
Afgri Limited
("the Company")
JSE Code: AFR ISIN: ZAE000040549
Announcement
EARNINGS UPDATE AND CHANGE IN ACCOUNTING POLICY
The Board recently became aware that certain grain hedges put in place in the
Company`s Trading Division were mismatched. This led to significant losses in
that division. The procedural and systems failures that led to the mismatching
have now been identified and corrected and management is confident that the
mismatches will not recur. An independent review of the Trading division has
also been performed.
The impact of the mismatched hedges has been adequately provided for and will be
fully absorbed in the financial results for the year ending 28 February 2003.
Notwithstanding the losses incurred, the Board is confident that the Company
will meet its targeted growth in earnings for the year ending 28 February 2003.
Arising from the events described above, the Board also reviewed the impact of
accounting standard AC 133 ("Financial Instruments: Recognition and
Measurement"), the adoption of which is compulsory for the Company`s financial
year ending 29 February 2004. The Board decided on 27 January 2003 to
accelerate the adoption of AC 133 so that it will now also apply in respect of
the year ending 28 February 2003. This implies that all derivatives will be
daily marked to market and any differences expensed through the income
statement. The Company previously, as permitted under GAAP, only applied this
method of accounting to certain types of transactions.
In accordance with the principles of AC133 the difference in accounting policy
must be adjusted to the opening equity of the 2003 financial year and will have
the effect of reducing opening equity and tangible net asset value at 1 March
2002 by R110m, a decrease in tangible net asset value per share from 403 to 370
cents per share.
By order of the Board
28 January 2003
Ends
ISSUED FOR : Afgri Holdings
CONTACT : Jeff Wright (011) 706 7897 Cell 082 806 1284
De Wet Goosen (011) 706 7897 Cell 082 770 7859
Louis Wolthers 012 663 1312 Cell 082 451 6313
WEBSITE : www.afgri.co.za
Sponsor
Rand Merchant Bank
A division of FirstRand Bank Limited
Corporate Finance
Date: 28/01/2003 05:40:00 PM Produced by the JSE SENS Department
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