| Fri 24 Dec 2004, 9:58 | | RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004 |
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FAIRVEST PROPERTY HOLDINGS LIMITED - REVIEWED PROVISIONAL CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2004 AND CAUTIONARY ANNOUNCEMENT
Fairvest Property Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1998/005011/06)
(`Fairvest`)
Share code: FVT ISIN: ZAE000034658
REVIEWED PROVISIONAL CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
SEPTEMBER 2004 AND CAUTIONARY ANNOUNCEMENT
CONSOLIDATED INCOME STATEMENT
2004 2003
R`000 R`000
Revenue 52 014 57 009
Operating costs (27 776) (28 930)
Other revenue net of costs (2 385) 14 015
Fair value adjustment - debentures 14 640 51 465
Loss on sale investment property (13 111) (1 488)
Change in value of investment properties (1 094) (7 522)
Debt written off - (3 600)
Change in value of financial assets (2 970) 1 226
(Profit)/Loss on sale - shares in 150 (5 372)
subsidiary
Loss on settlement of amount due from - (1 380)
vendor - (2 755)
Financial assets unaccounted for - (16 559)
Fair value adjustment - put options
Operating profit 21 853 42 094
Interest received 265 733
Dividends received 2 700 -
Finance charges (21 656) (33 992)
Debenture interest (327) -
Profit before taxation 2 835 8 835
Taxation (2 835) (8 835)
Profit attributable to shareholders - -
Shares are traded as part of linked units. Headline earnings include fair value
adjustments for debentures.
Reconciliation between net earnings and headline earnings
R`000 R`000
Net income after taxation - -
Realised loss on sale of investment (13 111) (1 488)
property
Realised loss on sale of investment 150
property subsidiary (5 372)
Fair value adjustment to investment (1 094) (7 522)
properties
Capital gains tax thereon - (661)
Headline earnings/(loss) (14 055) (15 043)
Earnings per share
Cents Cents
Basic earnings per share - -
Headline earnings/(loss) per share
(12,25) (13,11)
Number of shares in issue 114 741 370 114 741 370
Distribution per linked unit
2004 2003
Cents Cents
Distribution per linked unit - -
CONSOLIDATED BALANCE SHEET
2004 2003
R`000 R`000
ASSETS
Non-current assets 196 663 280 176
Property and equipment 196 609 277 152
Financial assets 54 3 024
Current assets 20 462 3 283
Trade and other receivables 20 462 2 986
Amount due from a vendor - -
Cash and cash equivalents - 297
Total assets 217 125 283 459
EQUITY AND LIABILITIES
Equity capital and reserves 1 147 1 147
Non-current liabilities 194 727 247 703
Linked unit debentures and premiums 67 708 82 347
Long term liabilities 116 395 156 724
Deferred taxation 10 624 8 632
Current liabilities 21 251 34 609
Trade and other payables 10 731 8 763
Vendor liabilities - 16 559
Interest bearing redeemable debentures 2 291 2 291
Bank overdraft 587 -
Loans payable 6 370 6 543
Taxation 1 272 453
Total equity and liabilities 217 125 283 459
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Distribu- Non- Total
Capital Premium table distribu-
R`000 R`000 reserve table
R`000 reserve
R`000
Balance at 1 October
2002 983 - - - 983
Share capital issued
to vendors 176 - - - 176
Treasury shares (12) - - - (12)
Balance at 1 October
2003 1 147 - - - 1 147
Profit for the year
- - - - -
Balance at 30
September 2004 1 147 - - - 1 147
CONSOLIDATED STATEMENT OF CHANGES IN DEBENTURES
Linked unit Linked Total
debenture unit R`000
capital debenture
R`000 premium
R`000
Balance at 1 October
2002 983 108 344 109 327
Debentures issued to
vendors 176 26 070 26 246
Treasury shares (12) (1 749) (1 761)
AC133 adjustment - (51 465) (51 465)
Balance at 1 October
2003 1 147 81 200 82 347
AC133 adjustment - (14 639) (14 639)
Balance at 30
September 2004 1 147 66 561 67 708
CONSOLIDATED CASH FLOW STATEMENT
2004 2003
R`000 R`000
Cash outflows from operating activities (22 456) (2 695)
Cash inflows from investing activities 58 155 5 543
Cash outflows from financing activities (36 583) (2 788)
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (884) 60
Cash and cash equivalents at the beginning
of the year 297 237
(Bank overdraft)/cash and cash equivalents
at the end of the year (587) 297
COMMENTARY
1.ACCOUNTING POLICIES
The consolidated reviewed financial statements are prepared in accordance with
South African Statements of Generally Accepted Accounting Practice and the
requirements of the South African Companies Act. The accounting policies are
consistent with those applied in the annual financial statements for the year
ended 30 September 2003, including the implementation of AC133: Financial
Instruments Recognition and Measurement. The debentures have been restated as a
liability in accordance with the contractual arrangements. The consolidated
financial statements are prepared on the basis that the assets of the group are
to be realised and the liabilities settled.
1.1 Financial instruments
Financial instruments are stated at fair value. The adoption of the fair value
basis gives rise to fair value adjustments to financial instruments. Those
adjustments are recognised in the income statements.
1.2 Deferred taxation
Deferred taxation is provided using the liability method based on temporary
differences. Temporary differences are differences between the carrying amount
of assets and liabilities for financial reporting purposes and their tax base.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities.
Deferred taxation relating to fair value adjustments in the current year is
charged to the income statement.
Fairvest`s auditors, Horwath Leveton Boner, have issued an review report on the
results. Their report is available for inspection at the company`s registered
office.
2.INVESTMENT IN BONATLA PROPERTY HOLDINGS LIMITED
During the course of the audit verification of the existence and ownership of
the company`s investment in Bonatla Property Holdings Limited (`Bonatla`) was
established.
As at the date of publication, the existence and ownership of 4 920 512 Bonatla
linked units were verified. Furthermore, the capital reduction of 50c per share
paid by Bonatla has been accounted for in the current financial year.
3.ACQUISITION OF PROPERTY FROM VARIOUS GORFIL BROTHERS CORPORATIONS.
At a general meeting held during December 2001, the company agreed to acquire a
R79,3 million property portfolio from various Gorfil Brothers corporations. 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 resulted in the company making a fair
value adjustment of R16,559 million during 2003.
In terms of a settlement agreement reached on 9 March 2004, that was
subsequently made an Order of the High Court, Fairvest has met all its
obligations to repurchase the 17 615 616 Fairvest shares. The final date for the
repurchase of the 17 615 616 Fairvest shares from the Gorfil Brothers
corporations and the crediting of a R10 million securing deposit into the name
of Fairvest is due for finalisation during the early part of January 2005.
To effect the repurchase and settlement of the estimated amount owing of R34,4
million, Fairvest disposed 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 R26,4 million.
4.SUBSEQUENT EVENTS
It remains the intention of the directors to rationalise the group`s operations
in order to maximise shareholder value. Linked unit holders are referred to an
announcement dated 15 October 2004, in terms of which it was stated that it is
the intention of the Board of Directors to either dispose of the entire property
portfolio of Fairvest, and repay linked unit holders the excess proceeds, or to
identify and acquire an appropriate property portfolio to maximise linked unit
holders wealth. Linked unit holders are advised that discussions in this regard
are continuing with a number of parties which, if concluded will have an affect
on the value of each linked unit.
5.CAUTIONARY ANNOUNCEMENT
Shareholders of Fairvest are advised to exercise caution in the trading of their
shares until such time as the intentions of the Board of Directors are
implemented. Linked unit holders will be kept informed of developments.
6.APPLICATION FOR LIFTING OF SUSPENSION ON THE JSE
Application will be made for the lifting of the suspension of the company`s
linked units on the JSE Securities Exchange South Africa.
By Order of the Board
Johannesburg
24 December 2004
Directors: RS Wilkinson (Non-Executive Chairman), TA Bell (CA) SA (Executive),
AB Platt (Executive), TP Botsis (Non-Executive), DA Johnston (Non-Executive)
Registered office: 6 Dale Lace Glades, Eastwood Street, Randpark Ridge.
Company Secretary: Corporate Governance cc
Sponsor: Imara Corporate Finance South Africa (Pty) Ltd
Date: 24/12/2004 09:47:51 AM
Produced by the JSE SENS Department
