| Fri 29 Sep 2006, 11:00 | | Seardel - Audited results: year ended 30 June 2006 |
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SER SRN
SER
Seardel - Audited results: year ended 30 June 2006 and dividend declaration
Seardel Investment Corporation Limited
Registration no. 1968/011249/06
(Incorporated in the Republic of South Africa)
JSE Code: SER ISIN Code: ZAE000029815
JSE Code: SRN ISIN Code: ZAE000030144
("Seardel")
Audited results for the year ended 30 June 2006
FINANCIAL HIGHLIGHTS YEAR ENDED 30 JUNE
Rand thousands
Unless otherwise indicated 2006 2005 % Change
Revenue 3 686 322 3 745 145 -1,6
Income before taxation 106 165 73 180 +45,1
Capital and reserves 1 370 789 1 397 995 -1,9
Total tangible assets 2 491 242 2 435 313 +2,3
(excluding cash)
Return on total tangible 6,2% 5,3% -
assets
Return on shareholders" 6,3% 5,2% -
interest
Ratio of borrowings to 22,9% 22,8% -
capital and reserves
STATISTICS PER SHARE
In cents, where applicable 2006 2005 % Change
Headline earnings 74,2 58,6 +26,6
Earnings 82,4 58,3 +41,3
Proposed dividend 27,0 11,0 +145,5
Proposed dividend cover on 2,8 5,3 -46,3
headline earnings
Operating cash flow 123 99 +24,2
Tangible net asset value 1 496 1 212 +23,4
Market price - 30 June 2006
Ordinary 700 360
N Ordinary 670 370
Price range - High
Ordinary 700 430
N Ordinary 700 425
Price range - Low
Ordinary 365 205
N Ordinary 350 181
CONSOLIDATED INCOME STATEMENTS
Rand thousands 2006 2005
Revenue 3 686 322 3 745 145
Cost of revenue (2 806 496) (2 860 936)
Gross profit 879 826 884 209
Other operating income 128 823 92 527
Distribution costs (421 112) (258 600)
Administrative and other expenses (434 844) (588 926)
Operating profit before finance costs 152 693 129 210
Finance income 15 463 12 176
Finance expenses (61 991) (68 206)
Profit before taxation 106 165 73 180
Taxation (19 366) (23)
Profit for the year 86 799 73 157
Attributable to:
Shareholders 86 681 73 255
Minority interest 118 (98)
Profit for the year 86 799 73 157
Basic earnings per share - cents 82,4 59,9
Diluted earnings per share - cents 81,8 59,6
CONSOLIDATED BALANCE SHEETS
Rand thousands 2006 2005
ASSETS
Non-current assets 1 029 537 1 115 996
Property, plant and equipment 971 703 1 052 810
Goodwill - 542
Interest in subsidiary companies - -
Investments 1 801 1 332
Long-term receivables 49 153 47 153
Deferred taxation 6 880 14 159
Current assets 1 650 455 1 531 821
Inventories 736 921 666 156
Trade and other receivables 703 923 667 862
Non-current assets held for sale 27 741 -
Taxation receivable - 6 121
Cash and cash equivalents 181 870 191 682
TOTAL ASSETS R2 679 992 R2 647 817
EQUITY AND LIABILITIES
Total equity 1 370 789 1 397 995
Share capital and share premium 6 262 6 906
Treasury shares (4 740) (5 420)
Reserves 1 366 071 1 393 296
Total equity attributable to equity 1 367 593 1 394 782
holders
Minority interest 3 196 3 213
Non-current liabilities 484 809 433 672
Interest-bearing liabilities 256 619 194 947
Deferred liabilities 68 074 63 331
Deferred taxation 154 303 169 161
Operating lease accruals 5 813 6 233
Current liabilities 824 394 816 150
Interest-bearing liabilities 217 496 309 905
Trade and other payables 497 355 414 491
Provisions 79 351 85 533
Bank overdrafts 22 159 6 198
Taxation payable 8 016 -
Dividend to shareholders 17 23
TOTAL EQUITY AND LIABILITIES R2 679 992 R2 647 817
Net asset value (excluding intangible R1 367 593 R1 394 240
assets)
Net asset value per share after 1 496 1 212
treasury shares - cents
CONSOLIDATED CASH FLOW STATEMENTS
for year ended 30 June
Rand thousands 2006 2005
Net cash flow from operating activities 116 817 102 863
Cash generated from operations 197 620 198 728
Working capital changes (13 826) 8 706
Finance income 15 463 12 176
Finance expenses (61 991) (68 206)
Taxation paid (4 535) (27 372)
Dividend paid (12 609) (18 034)
Investment income 97 97
Contributions for post employment medical (3 402) (3 232)
benefits
Net cash flow from investing activities (1 844) (34 756)
Additions of property, plant and equipment (89 759) (80 921)
Proceeds on disposal of property, plant 89 915 23 811
and equipment
Decrease/(increase) in long-term (2 000) (56)
receivables
Proceeds on disposal of investments - 24 818
Acquisition of interest in - (2 408)
subsidiary/division
Increase/(decrease) in loans in subsidiary - -
companies
Net cash flow from financing activities (140 746) (76 678)
Increase/(decrease) in long-term 61 672 (116 982)
borrowings
(Decrease)/increase in short-term (92 409) 88 435
borrowings
Proceeds on share options exercised 1 580 7 585
Share repurchases (3 784) (2 884)
Cancellation of shares (107 805) (52 832)
Net (decrease)/increase in cash and cash (25 773) (8 571)
equivalents
Cash and cash equivalents at beginning of 185 484 194 055
year
Cash and cash equivalents at end of year R159 711 R185 484
*Operating cash flow per share - cents 123 99
* Net cash flow from operating activities plus distribution paid, divided by the
weighted average number of shares in issue.
STATEMENTS OF CHANGES IN EQUITY (GROUP)
(first section)
Share Share Treasury
Capital Premium Shares
Balance 30 June 2004 7 041 52 697 (10 121)
Other reserves and retained
income as previously
reported
IFRS adjustments at
transition date
Prior year adjustments
Dilution of interest in
subsidiary
Revaluation of land and
buildings
As previously reported
IFRS adjustments
Revaluation of investments
Share repurchases (2 884)
Cancellation of shares (322) (52 510)
Share options exercised 7 585
Profit for the year
Profit for the year as
previously reported
IFRS adjustments
Prior year adjustments
Dividend
Balance 30 June 2005 6 719 187 (5 420)
Sale of revalued land and
buildings
Revalued amount released
Deferred tax
Revaluation of investments
Share repurchases (3 784)
Cancellation of shares (644) 2 884
Share options exercised 1 580
Profit for the year
Dividend
Balance 30 June 2006 R6 075 R187 (R4 740)
STATEMENTS OF CHANGES IN EQUITY (GROUP)
(second section of table, showing totals)
Other Retained Minority
Reserves Income Interest Total
Balance 30 June 2004 1 020 1 267 526 1 318 163
Other reserves and 34 107 834 684
retained income as
previously reported
IFRS adjustments at - 137 894
transition date
Prior year adjustments (33 087) 294 948
Dilution of interest in 7 259 3 311 10 570
subsidiary
Revaluation of land and 61 887 61 887
buildings
As previously reported 100 132
IFRS adjustments (38 245)
Revaluation of investments 368 368
Share repurchases (2 884)
Cancellation of shares (52 832)
Share options exercised 7 585
Profit for the year 73 255 (98) 73 157
Profit for the year as 55 435
previously reported
IFRS adjustments 18 983
Prior year adjustments (1 163)
Dividend (18 019) (18 019)
Balance 30 June 2005 70 534 1 322 762 3 213 1 397 995
Sale of revalued land and (29 754) 38 027 8 273
buildings
Revalued amount released (38 027) 38 027
Deferred tax 8 273 -
Revaluation of investments 469 469
Share repurchases (3 784)
Cancellation of shares (110 045) (107 805)
Share options exercised 1 580
Profit for the year 86 681 118 86 799
Dividend (12 603) (135) (12 738)
Balance 30 June 2006 R41 249 R1 324 822 R3 196 R1 370 789
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS
2006
Profit Number of shares Per
R000"s 000"s share
cents
Net number of shares in issue 91 412
Number of shares in issue - 92 579
30 June 2006
Number of treasury shares in (1 167)
issue - 30 June 2006
Weighted average number of 105 224
shares
Diluted weighted average 105 997
number of shares
Weighted average number of 105 224
shares
Share options granted, not 773
yet exercised
Basic earnings
Profit attributable to 86 681 105 224 82,4
shareholders
Diluted earnings
Profit attributable to 86 681 105 997 81,8
shareholders
Headline earnings
Reconciliation between
earnings and headline
earnings
Profit attributable to 86 681
shareholders
Impairment of goodwill 542
Insurance claim - loss of (34)
profits
Reversal of impairment of (6 190)
property, plant and equipment
Surplus on disposal of (12 077)
property, plant and equipment
Profit on share options (24)
exercised
Tax effect of adjustments 9 155
Headline earnings 78 053 105 224 74,2
Diluted headline earnings 78 053 105 997 73,6
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS (continued)
2005
Profit Number of Per
R000"s shares 000"s share
cents
Net number of shares in issue 115 035
Number of shares in issue - 117 397
30 June 2005
Number of treasury shares in (2 362)
issue - 30 June 2005
Weighted average number of 122 362
shares
Diluted weighted average 123 013
number of shares
Weighted average number of 122 362
shares
Share options granted, not 651
yet exercised
Basic earnings
Profit attributable to 73 255 122 362 59,9
shareholders
Diluted earnings
Profit attributable to 73 255 123 013 59,6
shareholders
Headline earnings
Reconciliation between
earnings and headline
earnings
Profit attributable to 73 255
shareholders
Impairment of goodwill 1 000
Impairment of property, plant 3 080
and equipment
Reversal of impairment of (13 626)
plant and equipment
Loss on disposal of property, 7 291
plant and equipment
Tax effect of adjustments 675
Headline earnings 71 675 122 362 58,6
Diluted headline earnings 71 675 123 013 58,3
ACCOUNTING POLICIES
Seardel Investment Corporation (the company) is a company domiciled in South
Africa. The consolidated financial statements of the company for the year ended
30 June 2006 comprise the company and its subsidiaries (together referred to as
the group).
The financial statements were authorised for issue by the directors on 22
September 2006.
STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and its interpretation
adopted by the International Accounting Standards Board (IASB). These are the
group"s first consolidated financial statements and IFRS 1 has been applied.
An explanation of how the transition to IFRS has affected the reported financial
position and financial performance of the group is provided in note 19.
BASIS OF PREPARATION
The financial statements are presented in South African Rand, rounded to the
nearest thousand. They have been prepared on the going concern and historical
cost bases under IFRS, except for those assets and liabilities which are stated
at fair value as disclosed in the notes to the financial statements.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The assumptions and estimates are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the period of the
revision and future period if the revision affects both current and future
periods.
Judgements made by management in the application of IFRS that have a significant
effect on the financial statements and estimates with a significant risk of
material adjustments in the next year are discussed in note 19.
The accounting policies set out below have been applied consistently to all
periods presented in these financial statements and in preparing an opening IFRS
balance sheet at 1 July 2004 for the purposes of transition to IFRS.
The accounting policies have been applied consistently by the
group entities and to all periods prescribed in these consolidated financial
statements and in preparing an opening IFRS balance sheet at 1 July 2004 for the
purposes of the transition to IFRS.
BASIS OF CONSOLIDATION
Subsidiaries
The group financial statements include the financial statements of the company
and its subsidiaries. Subsidiaries are entities controlled by the company.
Control exists when the company has the power, directly or indirectly, to govern
the financial and operating policies of an entity so as to obtain benefits from
its activities. In assessing control, potential voting rights that presently are
exercisable or convertible are taken into account. The financial statements of
subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases.
The Seardel Investment Corporation Limited Employee Incentive Scheme has a 28th
February year end. Its results are adjusted accordingly.
In view of the uncertainty relating to the group"s investment in its Zimbabwean
subsidiary, the directors maintain their decision not to consolidate its results
or financial position. Income is accounted for on a cash dividend received basis
and the investment in the subsidiary has been written down to a nominal value.
Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses or income and expenses
arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements. Unrealised losses are eliminated in the same
way as unrealised gains, but only to the extent that there is no evidence of
impairment.
Goodwill and negative goodwill
All business combinations are accounted for by applying the purchase method.
Goodwill represents amounts arising on acquisition of subsidiaries, associates
and joint ventures and is the difference between the cost of the acquisition and
the fair value of the identifiable assets and liabilities acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is
allocated to cash-generating units and is no longer amortised but is tested
annually for impairment (see accounting policy on impairment below).
Negative goodwill arising on an acquisition is recognised directly in the income
statement.
PROPERTY, PLANT AND EQUIPMENT
Owned assets
Land is not depreciated while buildings are depreciated over
50 years. Land and buildings are revalued to approximate fair value.
Other items of property, plant and equipment are stated at historical cost less
accumulated depreciation and accumulated impairment losses.
Where an item of property, plant and equipment is comprised of major components
with different useful lives, the components are accounted for as separate items
of property, plant and equipment. For plant and equipment, depreciation is
provided on a straight line basis over the estimated useful lives of the assets.
The group recognises in the carrying amount of an item of property, plant and
equipment the cost of replacing part of such an item when that cost is incurred
if it is probable that the future economic benefits embodied with the item will
flow to the group and the cost of the item can be measured reliably. All other
costs are recognised in the income statement as an expense is incurred.
Estimates of useful lives, residual values and methods of depreciation are
reviewed annually. Any changes are accounted for prospectively as a change in
accounting estimate. If the expected residual value of an asset is equal to or
greater than its carrying value, depreciation on that asset is ceased.
Depreciation is resumed when the expected residual value falls below the asset"s
carrying value.
NON-CURRENT ASSETS HELD FOR SALE
Non-current assets are classified as held for sale when their carrying amounts
will be recovered principally through sale and are measured at the lower of
carrying amount and fair value less costs to sell. Comparatives are not restated
when an asset is classified as held for sale.
IMPAIRMENT
The carrying amount of the group"s assets, other than inventories and deferred
tax assets are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If such indication exists, the asset"s recoverable
amount is estimated.
For goodwill, assets that have an indefinite useful life and intangible assets
that are not yet available for use, the recoverable amount is estimated at each
balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash generated unit exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to cash-generating
units and then, to reduce the carrying amount of the other asset in the unit on
a pro rata basis.
The recoverable amount of the group"s investment in held-to-maturity securities
and receivables carried at amortised cost is calculated as the present value of
estimated future cash flows, discounted at the original effective interest rate.
The recoverable amount of other assets is the greater of their net selling price
and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset. For an asset that does not generate largely independent cash flows,
the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
An impairment loss in respect of a held-to-maturity security or receivable
carried at amortised cost is reversed if the subsequent increase in recoverable
amount can be related objectively to an event occurring after the impairment
loss was recognised.
An impairment loss in respect of goodwill and available-for-sale assets are not
reversed.
When a decline in the fair value of an available-for-sale asset has been
recognised directly in equity and there is objective evidence that the asset is
impaired, the cumulative loss that has been recognised directly in equity is
charged to the income statement. The amount of the cumulative loss that is
recognised in the income statement is the difference between the acquisition
cost and the current fair value, less any impairment loss previously recognised
in the income statement.
In respect of other assets, an impairment loss is not reversed if there has been
a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset"s carrying
amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised.
INCOME TAX
Income tax on the profit or loss for the year comprises current and deferred
tax. Income tax is recognised in the income statement except to the extent that
it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted at the balance sheet date, and any adjustment to tax
payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The
following temporary differences are not provided for: goodwill not deductible
for tax purposes, the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit, and differences relating to investments
in subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the balance
sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the associated unused tax
losses and deductible temporary differences can be utilised. Deferred tax assets
are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.
Secondary Tax on Companies (STC) paid on net dividends paid is recognised as a
tax charge in the year it is incurred. STC is provided for at a rate of 12,5% on
the amount by which dividends declared by the company exceed dividends received.
STC is recognised as part of the current tax charge in the income statement when
the related dividend is declared. Deferred tax on unutilised STC credits is
recognised to the extent that STC payable on future dividend payments is likely
to be available for set-off.
INVENTORY
Raw materials and consumables, work-in-progress and finished goods are stated at
the lower of cost and net realisable value. Net realisable value is the
estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses. Cost is determined on the first-in,
first-out principle and includes direct material costs together with appropriate
allocations of labour and overheads based on normal operating capacity.
PROVISIONS
Provisions are recognised when the group has a present legal or constructive
obligation as a result of past events, for which it is probable that an outflow
of economic benefits will occur, and where a reliable estimate can be made of
the amount of the obligation. Where the effect of discounting is material,
provisions are discounted.
The discount rate used is a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks
specific to the liability. Provisions are reviewed at each balance sheet date
and adjusted to reflect the current or best estimate.
FINANCIAL INSTRUMENTS
Measurement
Financial instruments are initially measured at cost, which includes transaction
costs. Subsequent to initial recognition these instruments are measured as
follows:
Investments
Listed investments classified as available-for-sale financial assets are carried
at market value, which is calculated by reference to stock exchange quoted
selling prices at the close of business at the balance sheet date. Unlisted
investments are shown at fair value, unless their fair value cannot be reliably
determined, in which case they are shown at cost less accumulated impairment
losses. Gains and losses are recognised directly in equity in a revaluation
reserve except for impairment losses, which are expensed in the income
statement.
Investments that meet the criteria for classification as held-to maturity
financial assets are carried at amortised cost.
In the company financial statements investments/investments in subsidiaries are
carried at cost less impairment.
Trade, long term and other receivables
Trade and other receivables originated by the group are stated at amortised cost
less impairment losses (see accounting policy on impairment).
Trade and other payables
Trade and other payables are stated at amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprises cash balances and call deposits and are
measured at fair value.
Finance income and cost
Finance costs comprise interest payable on borrowings, dividends on redeemable
preference shares, interest received on funds invested, dividend income, foreign
exchange gains and losses and gains and losses on hedging instruments that are
recognised in the income statement.
Interest income is recognised in the income statement as it accrues, using the
effective interest method. Dividend income is recognised in the income statement
on the date the entity"s right to receive payments is established. The interest
expense component of finance lease payments is recognised in the income
statement using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost,
comprising original debt less principal payments and amortisations.
Derivative instruments
Derivative instruments are measured at fair value.
Hedging Instruments
Gains and losses from measuring the hedging instruments relating to
a fair value hedge at fair value are recognised immediately in net profit or
loss.
Gains and losses from remeasuring the hedging instruments relating to a cash
flow hedge to fair value are initially recognised directly in equity. If the
hedged firm commitment or forecast transaction results in the recognition of an
asset or a liability, the cumulative amount recognised in equity up to the
transaction date is adjusted against the initial measurement of the asset or
liability. Where the hedging instrument or hedge relationship is terminated but
the hedged transaction is still expected to occur, the cumulative unrealised
gain or loss at that point remains in equity and is recognised in accordance
with the above policy when the transaction occurs. If the hedged transaction is
no longer expected to occur, the cumulative unrealised gain or loss is
recognised in the income statement immediately.
Offset
In the instance that the group has a legal right to apply an amount due from a
third party against the amount due to a creditor, provided that there is an
agreement among the three parties that clearly establishes the contractual right
to set-off, and the group intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously, the related amounts are
offset and the net amounts reported in the balance sheet.
REVENUE
Group revenue comprises, in the main, net invoiced sales excluding value added
tax, operating and finance lease income and is stated net of transactions with
group companies. Company revenue comprises dividends received.
Revenue recognition
Turnover is recognised when the significant risks and rewards of ownership have
been transferred to the buyer.
Interest income is accrued on a time basis, by reference to the principal
amounts outstanding and the interest rate applicable.
Dividend income from investments is recognised when the right to receive payment
is established.
Dividend income from Harven Manufacturing Company (Pvt) Limited is accounted for
only when received, due to the difficulties in remitting dividends from
Zimbabwe.
EARNINGS PER SHARE
Earnings per share is based on earnings attributable to shareholders and is
calculated on the weighted average number of shares in issue during the
financial year. Headline earnings per share is based on profit attributable to
shareholders, excluding any non-trading, capital items and the tax effect
thereon, and is calculated as above.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are translated at the foreign exchange rate
ruling at the transaction date. Monetary assets and liabilities denominated in
foreign currencies are translated into South African Rand at rates of exchange
ruling at the balance sheet date. Translation gains and losses, whether realised
or unrealised, are taken to income.
LEASES
Finance leases
Leases that transfer substantially all the risks and rewards of ownership of the
underlying asset to the group are classified as finance leases. Assets acquired
in terms of finance leases are capitalised at the lower of fair value and the
present value of the minimum lease payments at inception of the lease, and
depreciated over the estimated useful life of the asset. The capital element of
future obligations under the leases is included as a liability in the balance
sheet. Lease payments are allocated using the effective interest rate method to
determine the lease finance cost, which is charged against income over the lease
period, and the capital repayment, which reduces the liability to the lessor.
Operating leases
Leases where the lessor retains the risks and rewards of ownership of the
underlying asset are classified as operating leases. Payments made under
operating leases are charged against income on a straight line basis over the
period of the lease.
EMPLOYEE BENEFITS
Short-term employee benefits
The cost of all short-term employee benefits is recognised during the period in
which the employee renders the related service. The provisions for employee
entitlements to wages, salaries, annual and sick leave represent the amount that
the group has a present obligation to pay as a result of employees" services
provided to the balance sheet date. The provisions have been calculated at
undiscounted amounts based on current wage and salary rates.
Retirement fund
The group contributes to several defined contribution plans. Contributions to
defined contribution funds are charged against income as incurred.
Medical aid
Where the group has an obligation to provide post retirement medical aid
benefits to employees, the group recognises the costs of these benefits in the
year in which the employees render the service.
Actuarial gains or losses in respect of the defined benefit medical plan are
recognised as income or expense in the year which they arise.
Past service costs are recognised as an expense on a straight line basis over
the average period until the benefits become vested. To the extent that the
benefits are already vested, past service costs are recognised immediately.
Equity compensation benefits
The group grants share options to certain employees under an employee share
plan. Other than costs incurred in administering the schemes, which are expensed
as incurred, the scheme does not result in an expense to the group.
DIVIDENDS TO SHAREHOLDERS
Dividends and related STC charges are accounted for in the period in which the
dividends are declared.
TREASURY SHARES
Shares in the company held by group entities are classified as treasury shares.
These shares are treated as a deduction from the weighted average number of
shares and the cost price of the shares is deducted from equity in the statement
of changes in equity. Dividends received on treasury shares are eliminated on
consolidation.
INTEREST-BEARING BORROWINGS
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost with any difference between cost
and redemption value being recognised in the income statement over the period of
the borrowings on an effective interest basis.
SEGMENTAL REPORTING
The group"s main activities are the manufacture of textiles and men"s, women"s
and children"s apparel. Its other activities are comprised of the distribution
of toys and consumer electronics. It also has travel and property investment
interests related to its manufacturing divisions. On a primary basis the group
is organised into five major operating divisions:
- Textiles and household textiles, comprising the manufacture of woven and
knitted fabrics;
- Apparel, comprising the manufacture of clothing and household textiles;
- Office automation and consumer electronics, comprising the distribution of
office automation products and consumer electronic products;
- Toys, comprising the distribution of toys;
- Industrial products.
Geographical markets are reported on a secondary basis. Segment results include
revenue and expenses directly attributable to a segment, and head office
expenses that can be allocated on a reasonable basis to a segment. Segment
assets comprise those operating assets that are directly attributable to the
segment or can be allocated to the segment on a reasonable basis. Segment
liabilities comprise those operating liabilities that are directly attributable
to the segment on a reasonable basis. Segment assets and liabilities do not
include income tax items. Capital expenditure represents the total costs
incurred during the year to acquire segment assets that are expected to be used
during more than one period, i.e. property, plant and equipment.
FINANCIAL CALENDAR
Annual General Meeting
The annual report containing a notice of the Annual General Meeting to be held
on 24 October 2006 at 10:00 at the company"s registered office:
2nd Floor, Seardel House, Alphen Park, Constantia Main Road, Constantia 7806,
Cape Town, was dispatched today.
Dividend
Dividend of 27 cents per share proposed.
Last day to trade cum dividend Friday, 10 November 2006.
Ex dividend trades from Monday, 13 November 2006.
Record date Friday, 17 November 2006.
Payment date Monday, 20 November 2006.
Share certificates may not be dematerialised or rematerialised between Monday 13
November 2006 and Friday 17 November 2006,
both days inclusive.
Reports 2007
Interim for six months ending 31 December 2006 published February 2007. Annual
for year ending 30 June 2007 published September 2007.
Administration
Registered office: 2nd Floor, Seardel House, Alphen Park, Constantia Main Road,
Constantia 7806, Cape Town
Postal address: Private Bag X8, Constantia 7848
Telephone: +27-21-7943600. Telefax: +27-21-7942009
E-mail: lyndac@seardel.co.za or aj@seardel.co.za
Internet: http://www.seardel.co.za/
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001
P O Box 61051 Marshalltown Johannesburg 2107
Telephone: +27-11-3705000
Auditors: KPMG Inc.
The Auditors" unqualified audit report is available for inspection at the
company"s registered office.
Attorneys: Sonnenberg Hoffmann & Galombik Inc.
Secretary and registered office:
L A Clohessy
2nd Floor, Seardel House, Alphen Park, Constantia Main Road, Constantia 7806,
Cape Town.
Date: 29/09/2006 11:00:25 AM Produced by the JSE SENS Department
