| Fri 11 Jun 2004, 17:24 | | ABRIDGED REPORT AND NOTICE OF ANNUAL GENERAL MEETI |
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Fairvest - Abridged Report And Notice Of Annual General Meeting
Fairvest Property Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1998/005011/06)
(`Fairvest`)
Share code: FVT ISIN: ZAE000034658
ABRIDGED REPORT AND NOTICE OF ANNUAL GENERAL MEETING
1. Fairvest published its reviewed provisional financial statements for the year
ended 30 September 2003 on SENS on 22 April 2004 and in the press on the same
day. The annual report was mailed to shareholders on 10 June 2004.
2. Other than the qualified audit report expressed by auditors, Grant Thornton,
the directors wish to report that there is no change to the annual financial
statements published on SENS and in the press.
3. At the time of the publication of the reviewed provisional results, the
auditors issued a qualified review report, which qualification was based on the
following two paragraphs included in the publication of the reviewed provisional
financial statements on 22 April 2004:
`INVESTMENT IN BONATLA PROPERTY HOLDINGS LIMITED
During the course of the audit it was brought to the attention of the directors
that verification of the existence and ownership of the company`s investment in
Bonatla Property Holdings Limited (`Bonatla`) was proving difficult.
As at the date of publication, the existence and ownership of 4 920 512 Bonatla
linked units has not been verified. Furthermore, the capital reduction of 50c
per share paid by Bonatla has not been received by the company.
In the light of these circumstances the directors have considered it prudent to
fully provide against the 4 920 512 Bonatla linked units in the financial
statements in order for the company to be in a position to publish its results
for the year ended 30 September 2003.
The directors of Fairvest view the situation in a most serious light and a
resolution has been passed authorising the appointment of forensic auditors to
investigate the position regarding the above mentioned 4 920 512 Bonatla linked
units.
Shareholders will be kept informed of developments; and
ACQUISITION OF PROPERTY FROM GORFIL BROTHERS (PTY) LIMITED
At a general meeting held during December 2001, the company agreed to acquire a
R79,3 million property portfolio from Gorfil Brothers (Pty) Limited. The
purchase consideration was settled by the assumption of mortgage bond facilities
of R52,9 million and the issue of 17 615 616 Fairvest linked units at a value of
R26,4 million. Shareholders also agreed to the granting of put options to the
vendors for the amount of the linked units issued. In terms of these put
options, if Mr NG Vontas was unable to meet the put option obligations, the
company was obliged to meet them. This has resulted in the company making a fair
value adjustment of R16,599 million.
As at 30 September 2003, these obligations had not been met by Mr NG Vontas or
Fairvest. In terms of a settlement agreement reached on 9 March 2004 that has
subsequently been made an Order of the High Court, Fairvest is required to
repurchase 17 615 616 Fairvest linked units from the vendors for an estimated
outstanding amount of R24,4 million plus interest. The vendors also have to be
released from a R10 million securing deposit.
To effect the repurchase and settlement of the estimated amount owing of R34,4
million, Fairvest will dispose of properties to the value of R107,9 million,
resulting in the repayment of mortgage bonds to the value of R53,4 million, the
realisation of R35,4 million in cash and the repurchase of linked units to the
value of R19,1 million. Following the above transactions, Fairvest will own
the R10 million securing deposit. The above transactions are subject to the
approval of the JSE Securities Exchange South Africa and Fairvest linked unit
holders.`
4. In the Report of the Independent Auditors to the members of Fairvest
Property Holdings Limited dated 20 May 2004, Grant Thornton have qualified their
report as follows:
`Certain assets of the company being 4 920 512 shares in Bonatla Property
Holdings Limited are unaccounted for at 30 September 2003. The company has made
full provision of R2 755 487 against the loss of this asset. Furthermore the
capital reduction of 50 cents per share paid by Bonatla Property Holdings
Limited subsequent to the year end has not been received by Fairvest. This, in
our view, has caused or is likely to cause financial loss to the company or to
all or some of its members or creditors. This matter has been reported to the
directors of the company as a material irregularity in terms of section 20(5) of
the Public Accountants` and Auditors` Act.`
5. NOTICE OF ANNUAL GENERAL MEETING
Shareholders are advised that the Annual General Meeting of Fairvest
shareholders will be held at 10:00 on Tuesday, 24 August 2004 in the first floor
boardroom at 43 Wierda Road East, Wierda Valley, Sandton and that the Notice of
Annual General Meeting, together with a Form of Proxy will be mailed to
shareholders under separate cover in due course.
By order of the board
Johannesburg
11 June 2004
Directors: RS Wilkinson (Non-Executive Chairman), NB Read (Non-Executive), AB
Platt (Non-Executive), TP Botsis (Non-Executive), DA Johnston (Non-Executive)
Registered office: 6 Dale Lace Glades, Eastwood Street, Randpark Ridge, 2156
Company Secretary: Corporate Governance cc
Sponsor: Imara Corporate Finance South Africa (Pty) Ltd
Date: 11/06/2004 05:20:02 PM
Produced by the JSE SENS Department
