| Mon 14 Apr 2003, 15:35 | | Directors" preliminary report for the year ended 3 |
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Burlington Industries Ltd -
Burlington Industries Limited and its subsidiaries
(Incorporated in the Republic of South Africa)
Reg No 1947/021549/06
Share code: BUR ISIN: ZAE000001194
Directors" preliminary report for the year ended 31 December 2002
Consolidated income statement for the year ended 31 December 2002
31.12.02 31.12.01
Audited
Turnover 14 736 000 13 288 000
Cost of sales 7 798 000 7 572 000
Gross profit 6 938 000 5 716 000
Other operating costs 5 275 000 4 225 000
Operating profit 1 663 000 1 491 000
Finance charges 1 379 000 1 383 000
Profit before taxation 284 000 108 000
Taxation 1 000
Net profit for the year 284 000 107 000
Weighted average number of ordinary shares 600 000 600 000
Earnings per ordinary share (cents) 47,3 16,9
Headline earnings per ordinary share (note 3) 54,6 25,2
Dividends per ordinary share (cents) - -
Consolidated balance sheet at 31 December 2002
31.12.02 31.12.01
Audited
ASSETS
Non-current assets 11 524 000 11 729 000
Property, plant and equipment (Note 2) 10 620 000 10 701 000
Intangible assets 904 000 1 028 000
Current assets 16 733 000 15 096 000
28 257 000 26 825 000
EQUITY AND LIABILITIES
Equity capital 5 336 000 5 052 000
Ordinary shareholders" interest 5 236 000 4 952 000
Preference share capital 100 000 100 000
Non-current liabilities 16 620 000 15 283 000
Current liabilities 6 301 000 6 490 000
28 257 000 26 825 000
Consolidated cash flow statement for the year ended 31 December 2002
31.12.2001
31.12.2002
Reviewed Audited
R R
Cash flows from operating activities (1 431 (1 473
000) 000)
Cash flows from investing activities (262 000) (383 000)
Cash flows from financing activities 1 337 000 973 000
Net decrease in cash and cash equivalents (356 000) (883 000)
Cash and cash equivalents at the beginning of
the period (3 196 (2 313
000) 000)
Cash and cash equivalents at the end of the (3 552 (3 196
period 000) 000)
Consolidated statement of changes in equity
Ordinar Preferenc Non- Distribut- Total
y share e share distributabl able
capital capital e reserve reserves
R R R R R
Group
Balance at 300 000 100 000 5 154 000 (502 000) 5 052
1 January 2002 000
Net profit for the 284 000 284 000
year
Transfer to (5 154 000) 5 154 000
distributable
reserves
Balance as at 300 000 100 000 - 4 936 000
31 December 2002
Notes to the financial statements
1.Accounting policies
The financial statements are prepared on the historical cost basis, adjusted by
the revaluation of land and buildings as detailed below, and incorporate the
principal accounting policies set out below which are consistent with those of
the previous year. These policies comply with Statements of South African
Generally Accepted Accounting Practice, except as disclosed in notes 1.8 and
1.9. The financial statements are prepared on a going concern basis.
1.1 Basis of consolidation
The consolidated financial statements incorporate those of the company and all
of its subsidiaries. The results of subsidiaries acquired or disposed of during
the year are included from the effective dates of acquisition and up to the
effective dates of disposal. Differences between the consideration paid for
subsidiaries acquired and the fair value of their identifiable net assets at
dates of acquisition are expressed as goodwill or reserve on acquisition of
subsidiaries. Unrealised income arising from transactions within the group and
inter-company balances have been eliminated.
1.2 Property, plant and equipment
The group owns two properties; both are stated at fair value. Independent
valuations will be obtained yearly.
Gains or losses arising from a change in fair value are included in net profit
or loss for the period in which it arises.
Assets held under finance leases are capitalised. At the commencement of the
leases, these assets are reflected at open market value and the related
liability is recognised at an equivalent amount. Finance charges are written off
over the periods of the leases based on the effective rates of interest.
Depreciation is provided on all property, plant and equipment, other than land
and buildings, to write down the cost, less estimated residual value, over their
estimated economic lives as follows:
Electrical equipment 15% per annum reducing balance method
Factory furniture 10% per annum reducing balance method
Motor vehicles 10% per annum straight line method
Office equipment 10% per annum reducing balance method
Plant and machinery 7,5% to 15% per annum reducing balance
method
No depreciation is provided on land and buildings.
1.3 Intangible assets
Goodwill
Goodwill is the excess of the cost of an acquisition over the company"s interest
in the fair value of the identifiable assets and liabilities accrued at
acquisition date. Depreciation is being provided on goodwill to write down the
cost over twenty years.
Development expenditure
Development costs comprise all costs that are directly attributable to
development activities or that can be allocated on a reasonable basis to such
activities.
Development costs are recognised as an asset only when it is probable that the
costs will give rise to future economic benefits and the costs can be measured
reliably. Development costs are amortised on the straight-line basis at rates
considered to be appropriate to the time period in which benefits are expected
from the sale or use of the products. Development costs are further written down
to the extent that the unamortised balances will in all probability no longer be
recovered from expected future economic benefits.
1.4 Inventories
Inventories are valued at the lower of cost or estimated net realisable value.
Raw materials are valued at invoice cost on a first-in first-out basis.
Work-in-progress and finished goods include raw materials, labour and factory
overheads.
1.5 Translation of foreign currencies- foreign entities
All assets and liabilities are translated at the closing rate.
Income statement items are translated at an appropriate weighted average
exchange rate for the year.
Exchange differences are taken directly to the foreign currency translation
reserve.
1.6 Employee benefits
Defined contribution plan
Contributions to a defined contribution plan in respect of service in a
particular period are recognised as an expense in that period.
1.7 Revenue
Turnover is defined as sales to customers and finance charges and excludes value
added tax.
1.8 Cost of sales
Cost of sales consists of the cost of inventories sold during the year including
related overhead costs.
1.9 Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and balances with banks and
other financial institutions and investments in money market instruments.
2. Property, plant and equipment
31.12.02 31.12.01
Reviewed Audited
Cost
Plant, vehicles and equipment 7 019 000 6 977 000
Valuation
Freehold property 7 349 000 7 129 000
14 368 000 14 106 000
Accumulated depreciation
Plant, vehicles and equipment 3 748 000 3 405 000
Net carrying value
Freehold property 7 349 000 7 129 000
Plant, vehicles and equipment 3 271 000 3 572 000
10 620 000 10 701 000
Movement for year
Capital expenditure
Freehold property 220 000 -
Plant, vehicles and equipment 69 000 446 000
Disposals
Plant, vehicles and equipment (2 000)
Depreciation (370 000) (349 000)
(81 000) 95 000
3. Headline earnings
The calculation of headline earnings per share is based on earnings of R328 000
(2001: R145 000)
Adjustments to net earnings are detailed below:
Reconciliation between net earnings and headline earnings
Net profit per income statement 284 000 107 000
Preference dividend - (6 000)
Goodwill amortised 44 000 44 000
Headline earnings 328 000 145 000
Review by Independent Auditors
The financial information set out above has been reviewed, but not audited, by
the group"s auditors Grant Thornton Kessel Feinstein. Their review report is
available for inspection at the company"s registered office.
Directors" report
We are pleased to report that turnover has increased by more than 10%
compared to the previous year and that operating profit increased by 11,5%
to R1 663 000 (2001: R1 491 000).
This improvement was mainly due to improved trading in the retail division
of the group and the reduction of costs in the manufacturing division. Our
retail division has expanded with the opening of an additional shop in
Rosebank, Johannesburg, in December 2002 and a further shop will be opening
in Hyde Park, Johannesburg, in June 2003 and the steady and deliberate roll-
out of our Marlboro Originals stores will continue.
No ordinary dividends have been paid or declared during the period.
For and on behalf of the board
Perry Kawitzky Anthony Kawitzky
Joint chairman Joint chairman
14 April 2003
Registered Office: Cnr 7th Avenue and Nyman Street, Maitland, 7405
Transfer Office: Ultra Registrars (Pty) Limited, 11 Diagonal Street,
Johannesburg, 2001
Directors: P Kawitzky, P Kawitzky, A Kawitzky, R D Hugo
