| Thu 28 Sep 2006, 16:15 | | AfroCentric - Audited results for the year ended 3 |
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ACT ACTP
ACT
AfroCentric - Audited results for the year ended 30 June 2006
AFROCENTRIC INVESTMENT CORPORATION LIMITED
(Formerly W B Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1988/000570/06)
("AfroCentric" or "the company")
JSE Codes: ACT, ACTP
ISIN: ZAE000078416 & ZAE000082269
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2006
CONDENSED INCOME STATEMENT 2006 2005
R"000 R"000
Audited Audited
Revenue - -
Administrative expenses (758) -
Other expenses (4,910) (6,107)
Finance Income 26 -
Loss before tax (5,642) (6,107)
Income tax expense (428) -
Loss for the year attributable to (6,070) (6,107)
equity holders of the company
Loss per share (cents) ( 64,5) ( 64,9 )
Dividend per share (cents) 1,82 -
Other expenditure includes
Loss on Disposal of subsidiary (4,910) -
Impairment of Investment in subsidiary - (6,107)
CONDENSED BALANCE SHEET
ASSETS
Non-current assets
Interest in subsidiary - 23,450
Current assets 568 -
Deferred expenditure 303 -
Cash and cash equivalents 265 -
Total assets 568 23,450
EQUITY 239 23,417
Share capital 94 94
Retained earnings 145 23,323
Current liabilities
Trade and other payables 329 33
Total equity and liabilities 568 23,450
CONDENSED STATEMENT OF CHANGES IN
EQUITY
Opening balance 23,417 29,518
Reversal of unclaimed dividends - 6
Dividends paid (17,108) -
Net loss for the year (6,070) (6,107)
Closing balance 239 23,417
CONDENSED CASH FLOW STATEMENT
Cash outflow from operating activities (18,275) -
Cash inflow from investing activities 18,540 -
Net movement in cash and cash 265 -
equivalents
Cash and cash equivalents at the - -
beginning of the period
Cash and cash equivalents at the end of 265
the period
RECONCILIATION OF ATTRIBUTABLE LOSS AND
HEADLINE LOSS
Attributable loss for the year (6,070) (6,107)
Impairment of assets - 6,107
Loss on disposal of subsidiary 4,910 -
STC on special dividend paid 428 -
Headline loss for the year (732) -
Loss per ordinary share (cents)
(64.5) (64.9)
Headline loss per ordinary share (8) -
(cents)
Weighted average number of shares in 9,400,000 9,400,000
issue
ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and the requirements
of the South African Companies Act, 1973, except for the matter detailed
below. The financial statements have been prepared under the historical
cost convention. No reconciliation between the previously reported SA
GAAP financial information and restated IFRS financial information has
been prepared as the transition to IFRS has had no impact on the company.
The company disposed of its operating subsidiary, which was its only
subsidiary, during the first half of the financial year and became a cash
shell. Having regard to the fact that for the major part of the financial
year the company"s sole asset was cash, the Board of Directors have in
terms of Section 291 of the Companies Act, 1973, and with the requisite
approval of the Registrar of Companies, exercised their discretion not to
present consolidated financial statements because the incorporation of
approximately five months trading of the subsidiary prior to its disposal
for cash would be misleading and of no real value to members of the
company.
In terms of International Accounting Standards (IAS) 27, the company is
required to prepare consolidated financial statements. In the light of
the decision taken by the Board of Directors as indicated above, the
auditors are obliged to qualify their audit opinion; however, in the
opinion of the company"s auditors, this qualification on the presented
non consolidated company information only, has no adverse impact on the
presented company financial statements.
BUSINESS ACTIVITIES AND COMPANY RESULTS
During November 2005 shareholders approved the disposal of the company"s
entire business undertaking to SGM Investments (Pty) limited for the sum
of R 18 540 000. A dividend of R 1.82 per share amounting in aggregate to
R 17 108 000 was declared and paid from the proceeds of the disposal.
During December 2005 80% of the issued share capital of the company was
acquired by Messrs. Meyer Kahn and Michael Sacks. This acquisition was a
precursor to the reconstitution and capital restructure of the company as
a black empowered investment holding company.
Since December 2005, save for the statutory and regulatory compliance
requirements in preparation for the company"s reconstitution, no other
activities were conducted. The attributable loss of R 6.07 million for
the year substantially relates to the loss on sale of the company"s
business undertaking and certain administrative costs incurred.
CHANGE OF NAME AND CHANGE IN SHARE CAPITAL
Given the intended change in the nature of the company"s business from a
farming enterprise to an investment holding company the company"s name
was changed from W.B. Holdings Limited to Afrocentric Investment
Corporation Limited. In addition and in anticipation of the company"s
restructure and recapitalization, on 31 March 2006 shareholders approved
an increase in the authorized share capital from 20 million ordinary
shares of 1 cent each to 1 billion ordinary shares of 1 cent each and 60
million redeemable preference shares of 1 cent each.
DIRECTORS
Following the purchase of control of the company by Messrs JM Kahn and MI
Sacks in December 2006, the then existing board of directors resigned and
the following were appointed to the Board of Directors on 20 December
2005: NB Bam * (Chairperson), NMJ Canca *, MV Gantsho *, JM Kahn **, MI
Sacks **, Prof. DI Swartz*. B Joffe ** was appointed to the Board of
directors on 25 May 2006.
* independent non-executive ** non-executive
POST BALANCE SHEET EVENTS
Subsequent to year end, the Board of Directors resolved to recapitalise
the company by means of a rights offer. The objective of the rights offer
was to raise approximately R100 million before expenses to provide the
company with capital for investment. Shareholders were invited to
subscribe for 84 600 000 new ordinary shares in cash at 100 cents per
share and 16 638 000 new redeemable preference shares at 91 cents per
share. The rights issue was fully subscribed and an amount of R 99 740
580 was received on 11 August 2006. At the same time, The AfroCentric
Empowerment Trust, a trust with leading black organisations and
institutions as its beneficiaries, acquired a 50.1% shareholding in the
company. The company"s funds are presently invested in short term
interest bearing deposit accounts.
On 26 September 2006 AfroCentric and Rio Tinto plc jointly announced the
completion of a broad mutual cooperation agreement ("strategic
agreement") covering exploration and mining related opportunities locally
and elsewhere in Southern Africa. Under the terms of the strategic
agreement, Rio Tinto and AfroCentric will jointly pursue selected new
exploration and mining initiatives in South Africa and the rest of the
African continent. The strategic agreement is designed to take advantage
of the relative skills of each party, industry expertise and local
knowledge. Both companies have identified or been made aware of numerous
resource opportunities that could benefit from their cooperation and
joint pursuit.
RELATED PARTY TRANSACTIONS
During the 2006 financial period, the company sold its entire business
comprising largely its investments in its subsidiary, Theewaterskloof to
its parent SGM Investments (Pty) Ltd (ultimate parent being Fruitmaster
Investment (Pty) Ltd), which owned 80% of the Company"s shares for R18,5
Million. Subsequent to the disposal to SGM Investments (Pty) Ltd,
Messer"s. MI Sacks and M Kahn (currently directors of the company)
acquired the 80% shareholding that SGM Investments (Pty) Ltd held in
Afrocentric Investment Corporation Limited (previously WB Holdings).
MATERIAL COMMITMENTS, LEASE PAYMENTS AND CONTINGENT LIABILITIES
No material capital commitments or lease payments have been contracted
for or approved by the Board of Directors. The company has no contingent
liabilities at balance sheet date.
PROSPECTS
The company intends to invest in enterprises that could materially
benefit from its principal Black Economic Empowerment status and the
entrepreneurial and intellectual capital which resides in the company.
The investment philosophy of Afrocentric will be strictly commercial and
will embody the active involvement in or management of selected
investments, depending on the circumstances in each case. Given the
nature and characteristics of South Africa"s transforming economy, the
Directors are cautiously confident that Afrocentric will be able to
participate creatively in several opportunities for the benefit of its
shareholders.
AUDITORS" REPORT
SizweNtsaluba VSP"s modified auditors" report included in the annual
financial statements is available for inspection at the company"s
registered address.
By order of the Board
M.I. Sacks CA (SA) AICPA (ISR)
Company Secretary
Johannesburg
27 September 2006
REGISTERED OFFICE
c/o Fisher Hoffman PKF (JHB) Inc.
FHS House
15 Girton Road
Parktown
2193
Date: 28/09/2006 04:15:09 PM Produced by the JSE SENS Department
