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Rlf - Rolfes Holdings Limited - Unaudited Consolidated Condensed Interim Results

Release Date: 22/02/2012 07:13:22      Code(s): RLF
RLF - Rolfes Holdings Limited - Unaudited consolidated condensed interim results
for the six months ended 31 December 2011                                       
ROLFES HOLDINGS LIMITED                                                         
(formerly Rolfes Technology Holdings Limited)                                   
(Registration number 2000/002715/06)                                            
Share Code: RLF                                                                 
ISIN:ZAE000159836                                                               
("Rolfes" or "the Group" or "the Company")                                      
www.rolfesza.com                                                                
UNAUDITED CONSOLIDATED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31    
DECEMBER 2011                                                                   
Highlights                                                                      
-  Turnover increased by 30,2% to R302,8 million                                
-  Operating profit increased by 29,0% to R31,0 million                         
-  Headline earnings increased by 16,1% to 17,3 cents per share                 
-  Net asset value increased by 24,1% to 180,2 cents per share                  
CONDENSED CONSOLIDATED GROUP STATEMENTS OF COMPREHENSIVE INCOME                 
for the period ended 31 December 2011                                           
                         UNAUDITED      UNAUDITED       AUDITED                 
SIX MONTHS     SIX MONTHS          YEAR                 
                            31 DEC         31 DEC       30 JUNE                 
                              2011           2010          2011                 
                             R`000          R`000         R`000                 
Revenue                     302 837        232 680       460 699                
Cost of sales              (249 966)      (190 180)     (373 675)               
Gross profit                 52 871         42 500        87 024                
Gross profit margin            17,5%          18,3%         18,9%               
Other operating income        7 864          1 286         4 075                
Operating expenses          (29 719)       (19 747)      (41 531)               
Operating profit before                                                         
interest                     31 016         24 039        49 568                
Operating profit percentage    10,2%          10,3%         10,8%               
Interest paid and finance                                                       
charges                      (3 192)        (2 173)       (3 780)               
Income from investments           -              -            40                
Net profit before taxation   27 824         21 866        45 828                
Tax expenses                 (8 124)        (6 584)      (13 497)               
Profit and total comprehensive income                                           
for the period               19 700         15 282        32 331                
Attributable to:                                                                
Owners of parent             17 632         15 282        32 331                
Non-controlling interest      2 068              -             -                
Attributable to:                                                                
Continuing operations        19 700         15 282        32 331                
Reconciliation of headline                                                      
earnings                                                                        
Attributable profit          17 632         15 282        32 331                
Adjustment for the after-tax                                                    
effect of:                                                                      
Loss/(Gain) from sale of                                                        
fixed asset                     191             87          (171)               
Headline earnings            17 823         15 369        32 160                
Weighted average number of                                                      
shares in issue (`000)      102 968        102 968       102 968                
Earnings per share (cents)                                                      
- Basic                        17,1           14,8          31,4                
- Headline                     17,3           14,9          31,2                
- Diluted                      17,1           14,8          31,4                
- Diluted headline             17,3           14,9          31,2                
CONDENSED CONSOLIDATED GROUP STATEMENTS OF FINANCIAL POSITION                   
as at 31 December 2011                                                          
                         UNAUDITED      UNAUDITED       AUDITED                 
                            31 DEC         31 DEC       30 JUNE                 
2011           2010          2011                 
                             R`000          R`000         R`000                 
ASSETS                                                                          
Non-current assets          140 433         98 426        97 526                
Plant and equipment          45 540         38 306        37 352                
Property                     28 642         27 762        27 816                
Intangible assets            66 251         32 358        32 358                
Current assets              330 600        157 554       179 582                
Inventories                 161 554         80 427        94 953                
Trade and other receivables 166 762         74 036        74 454                
Financial asset                   -            573             -                
Cash and cash equivalents       596              -         4 833                
Tax asset                         -              -           636                
Value Added Tax asset         1 688          2 518         4 706                
Total assets                471 033        255 980       277 108                
EQUITY AND LIABILITIES                                                          
Capital and reserves        186 677        150 422       162 291                
Share capital                 1 036          1 036         1 036                
Share premium                28 603         28 603        28 603                
Treasury shares                (868)          (868)         (868)               
Retained income             145 972        121 651       133 520                
Non-controlling interest     11 934              -             -                
Non-current liabilities      62 556         25 015        23 830                
Interest-bearing                                                                
liabilities                  40 714         12 093         8 688                
Acquisition vendor            5 547              -             -                
Outside shareholders loans    1 207              -             -                
Deferred tax liability       11 636          9 691        11 799                
Provisions                    3 452          3 231         3 343                
Current liabilities         221 800         80 543        90 987                
Trade and other payables    141 744         59 316        82 947                
Cash and cash equivalents        -          11 983             -                
Current portion of                                                              
interest-bearing liabilities 12 808          7 373         7 213                
Financial liability              43              -           184                
Value Added Tax liability         -              -             -                
Tax liability                 2 696          1 226             -                
Provisions                      709            645           643                
Short term loans             63 800              -             -                
Total equity and                                                                
liabilities                 471 033        255 980       277 108                
Number of shares in                                                             
issue (`000)                103 609        103 609       103 609                
Net Asset Value per                                                             
share (cents)                 180,2          145,2         156,6                
Net tangible Asset Value                                                        
per share (cents)             114,4          114,0         125,4                
CONDENSED CONSOLIDATED GROUP STATEMENTS OF CHANGES IN EQUITY                    
for the period ended 31 December                                                
               Ordinary   Share Retained Treasury Outside  Total                
                 shares premium   income  shares   share  equity                
                                                 holders                        
R`000   R`000    R`000   R`000   R`000   R`000                
Balance at                                                                      
30 June 2010       1 036  28 603  111 549    (868)      - 140 320               
Net profit for the                                                              
period                 -       -   15 282       -       -  15 282               
Dividends paid         -       -   (5 180)      -       -  (5 180)              
Balance at                                                                      
31 December 2010   1 036  28 603  121 651    (868)      - 150 422               
Net profit for the                                                              
period                 -       -   17 049       -       -  17 049               
Dividends paid         -       -   (5 180)      -       -  (5 180)              
Balance at                                                                      
30 June 2011       1 036  28 603  133 520    (868)      - 162 291               
Outside shareholders                                                            
Obtained from purchase                                                          
Of subsidiaries        -       -        -       -   9 866   9 866               
Net profit for the                                                              
period                 -       -   17 632       -   2 068  19 700               
Dividends paid         -       -   (5 180)      -      -   (5 180)              
Balance at                                                                      
31 December 2011   1 036  28 603  145 972    (868) 11 934 186 677               
CONDENSED CONSOLIDATED GROUP CASH FLOW STATEMENTS                               
for the period ended 31 December 2011                                           
                         UNAUDITED      UNAUDITED       AUDITED                 
SIX MONTHS     SIX MONTHS          YEAR                 
                            31 DEC         31 DEC       30 JUNE                 
                              2011           2010          2011                 
                             R`000          R`000         R`000                 
Cash and cash equivalents                                                       
at the beginning of the                                                         
period                        4 833          6 127         6 127                
Cash flow (utilised in) /                                                       
generated from                                                                  
operating activities         (1 075)         4 806        40 311                
Net interest paid            (3 191)        (2 173)       (3 740)               
Taxation paid                (3 250)        (3 971)      (10 609)               
Dividends paid               (5 180)        (5 180)      (10 360)               
Cash flow utilised in                                                           
investing activities        (62 867)        (3 416)       (3 437)               
Cash flow generated from /                                                      
(utilised in)financing                                                          
activities                   71 326         (8 176)      (13 459)               
Cash and cash equivalents                                                       
- end of the period             596         (11 983)       4 833                
SEGMENTAL ANALYSIS                                                              
   Gross Operating      Net           Liabi-                                    
               Revenue profit   Profit   Profit   Assets  lities                
                 R`000  R`000    R`000     R`000   R`000   R`000                
2011 - for the                                                                  
six months ended                                                                
31 December                                                                     
Industrial                                                                      
Chemicals        88 726  12 394   8 541    5 575   81 226  73 650               
Silica           22 581   5 227   3 323    2 212   53 240  26 408               
Pigments        155 045  22 039  10 655    7 013  204 192  99 233               
Agri - Chemicals 35 008  11 734   6 852    4 557  116 000  84 875               
Other             1 477   1 477   1 645      343   34 554  53 048               
Elimination                                                                     
of intergroup                                                                   
items                 -       -       -        -  (18 775)(53 454)              
Total           302 837  52 871  31 016   19 700  470 437 283 760               
   Gross Operating      Net           Liabi-                                    
               Revenue profit   Profit   Profit   Assets  lities                
                 R`000  R`000    R`000     R`000   R`000   R`000                
2010 - for the                                                                  
six months ended                                                                
31 December                                                                     
Industrial                                                                      
chemicals        66 304   9 376    5 747    3 597  58 479  57 592               
Silica           20 799   5 532    3 270    2 245  53 273  30 756               
Pigments        144 404  26 419   16 141   11 010 132 136  60 241 Other         
1 173   1 173   (1 119)  (1 570) 72 647  20 348                                 
Elimination                                                                     
of intergroup                                                                   
items           -       -        -        -       (60 555)(63 379)              
Total           232 680   42 500   24 039   15 282 255 980 105 558              
Gross Operating      Net           Liabi-                                    
               Revenue profit   Profit   Profit   Assets  lities                
                 R`000  R`000    R`000     R`000   R`000   R`000                
2011 - for the                                                                  
twelve months ended                                                             
30 June                                                                         
Industrial                                                                      
chemicals       131 431  21 175  12 197    7 761   67 170  49 440               
Silica           41 387  11 577   7 901    5 358   48 713  23 222               
Pigments        285 675  52 214  31 686   22 358  130 644  49 502               
Other             2 206   2 058  (2 216)  (3 146)  30 776  (7 147)              
Elimination of                                                                  
intergroup                                                                      
items and other  -       -       -        -          (195)   (200)              
Total           460 699  87 024  49 568   32 331   277 108 114 817              
The basis of preparation of the segmental analysis includes certain intercompany
transactions which are eliminated in the respective segmental results in the    
current and previous year`s reporting. This is consistent with the presentation 
in the latest annual financial statements. Acquisition finance interest has been
reallocated under line item "other". The basis of measurement of segment profit 
and loss is discussed in more detail in the following paragraph.                
COMMENTARY                                                                      
Group product offering and divisional structure                                 
The Rolfes Group manufactures and distributes a wide range of market-leading,   
high-quality chemical products to diverse industries including the coatings,    
plastics, vinyl, leather, ink, metallurgical, water filtration, cleaning,       
formulators, automotive, general manufacturers, agricultural and construction   
industries.                                                                     
The strategic acquisition of a controlling stake, effective 1 November 2011,    
in Agchem Holdings (Pty) Limited ("Agchem"), a distributor and manufacturer     
of agri-chemical products, will allow Rolfes to realise its strategy of being   
able to offer a complete range of chemicals to diverse markets and industries.  
Shareholders are referred to the SENS announcements released on 12 July 2011,   
18 August 2011 and 31 October 2011, respectively, detailing the terms and       
conditions pertaining to the acquisition of Agchem. The strategic acquisition   
of a 70% controlling stake, effective 1 November 2011, in Amazon Colours (Pty)  
Ltd ("Amazon"), a manufacturer and distributor of in-plant and point-of-sale    
dispersions now enables the Group to offer a complete basket of products in     
the colourants industry. Shareholders are referred to the SENS announcement     
released on 2 November 2011, detailing the terms and conditions pertaining      
to the acquisition of Amazon.                                                   
In line with strategic objectives, the Group companies are allocated to specific
divisions being Pigments, Industrial Chemicals, Silica and Agri-Chemicals. The  
Pigments division includes the results of Rolfes Colour Pigments International  
and Amazon who are responsible for the manufacture and distribution of alkyd    
resins, various organic and inorganic pigments, additives, and in-plant and     
point-of-sale dispersions. The Industrial Chemicals division comprise the       
results of Rolfes Chemicals and Acacia Specialty Chemicals. Rolfes Chemicals    
distributes solvents, lacquer thinners, surfactants, cleaning solvents,         
creosotes, waxes, and other industrial chemicals while Acacia Specialty         
Chemicals procures and distributes specialty chemicals for the agricultural,    
food and certain other sectors. The Agri-Chemical division contains the newly   
acquired Agchem group of companies, including Introlab. Agchem manufactures and 
distributes products including herbicides, insecticides, fungicides, adjuvants, 
foliar feeds and enriched compost pellets, promoting general plant, root,       
foliage and soil health. Introlab procures certain raw materials and soluble    
fertilisers for Agchem and also sells these products to other local and export  
customers.                                                                      
The Group exports products into Europe, Asia, South America, and the rest of    
Africa which now includes Zambia, Kenya, Uganda, Mauritius, Madagascar, Malawi, 
Tanzania, Zimbabwe, Botswana, Swaziland and Namibia.                            
Group results overview                                                          
The Group performed satisfactorily for the six months to December 2011          
considering the European financial crises resulting in unstable world-wide      
economic conditions, and adverse local conditions. Results were bolstered by the
inclusion of the Agchem and Amazon results for two months from 1 November 2011. 
Revenue increased by 30,2% notwithstanding a one month long labour strike during
July 2011 affecting performance significantly during the first few months of the
period under review. Reduced European product demand prompted a decline in      
exports while certain high volume product demand reduced locally due to weak    
trading conditions and unfavourable import pricing, resulting in increased      
competition. Overall market share was sustained for the period under review, and
divisions yielded mixed results, very much dependent on the sector in which they
operate.                                                                        
Exports into the rest of Africa continued to grow, albeit from a very low base. 
Total exports now comprise R34,7 million or 11.5% of revenue for the period     
under review.                                                                   
Group financial performance                                                     
Group revenue for the six months increased by 30,2% to R302,8 million (December 
2010: R232, 7 million). The Agchem acquisition, included from 1 November 2011,  
contributed R35,0 million to Group turnover and R4,6 million to profit after    
tax. Amazon, included from the same date contributed R4,2 million to group      
turnover and R0,2 million to profit after tax. Gross profit increased to R52,9  
million (December 2010: R 42,5 million) with gross profit margins decreasing to 
17,5% (December 2010: 18,3%). Operating profit increased by 29,0% to R31,0      
million (December 2010: R24,0 million), with headline earnings increasing by    
16,0% to R17,8 million (December 2010: R15,4 million). Fully diluted headline   
earnings per share was 17,3 cents (December 2010: 14,9 cents), increasing by    
16,1% over the comparative period.                                              
The total net asset value increased to R186,7 million (December 2010: R150,4    
million). The net asset value per share improved to 180,2 cents (December 2010: 
145,2 cents) while net tangible asset value per share remained stable at 114,4  
cents ( December 2010: 114,0 cents), based on 103 609 469 shares in issue.      
Interest cover reduced to 9,7 times (December 2010: 11,0 times) with the total  
debt (interest-bearing) equity ratio at 0,6 for December 2011 (2010: 0,2). The  
significant increase in the debt equity ratio is primarily due to the           
consideration for the acquisition of Agchem and Amazon, totalling R 54 million, 
financed through a combination of short and long term debt. Management is in the
process of restructuring certain of the short term debt to long term debt. The  
reduction in interest cover is primarily due to the increase in interest paid   
emanating from the debt incurred on the Agchem and Amazon acquisitions.         
The Group incurred capital expenditure of R3,1 million (December 2010: R2,6     
million) mainly to upgrade current logistics and production capabilities.       
Group cash flow                                                                 
The Group paid an interim cash dividend of R5,2 million during the financial    
year (excluding STC) (December 2010: R5,2 million) to shareholders, from current
cash resources. The increase in net working capital investment since 30 June    
2011 of R35,1 million, represents an increase in inventory and accounts         
receivable of R19,8 million and R8,1 million respectively, and a decrease in    
accounts payable and value added tax of R7,2 million. Working capital days were 
calculated on a proportionate basis, due to turnover and cost of sales, debtors,
stock and creditors of the two acquisitions being included since 1 November 2011
only. Debtors` days increased to 62 days (June 2011: 52 days) due to slower debt
collection over December, which has since improved within acceptable norms..    
Stock days increased to 99 days (June 2011: 93 days) mainly as a result of      
Agchem and Rolfes Colour Pigments having longer stock cycles at this time of the
year, and an investment in imports directly related to the closure of Asian     
harbours for the Chinese New Year in January. Creditor days decreased to 66 days
(June 2010: 71 days). Initiatives are currently underway to align new           
acquisitions` working capital practices to Group policies. Transaction costs    
relating to the two acquisitions amounting to R2,0 million were paid through    
cash resources. Due to the nature of capital expenditure incurred during the    
year, R2,5 million of the R3,1 million spent was financed through cash          
resources.                                                                      
Divisional review                                                               
Pigments                                                                        
Turnover increased by 7,4% to R155,1 million (December 2010: R144,4 million)    
mainly due to increased sales in certain resin product lines of 45,8% albeit at 
a breakeven margin due to severely adverse competitive market pricing tactics.  
Pigments and dispersion turnover performance, displaying marginal growth for the
period under review, was hampered by primarily weaker trading conditions in the 
coatings industry, the labour dispute in July 2011, lower product demand for    
titanium and a reduction of iron oxide volumes due the weak construction        
industry and increased competition. Furthermore, the European financial crises  
directly impacted the export of organic pigment into Europe resulting in        
significantly lower than expected export volumes. The inclusion of Amazon       
results from 1 November 2011 contributed marginally to turnover growth.         
The division`s gross profit margin decreased to 14,2% (December 2010: 18,3%) due
to competitors pricing strategies in the resin market, placing margins under    
severe pressure, as well as slightly higher raw material input costs in the     
pigments business and depressed margins in the iron oxide business. Net         
operating expenses increased by 10,8 % due to extending the sales force and the 
addition of Amazon Colours operating costs from 1 November 2011 to the division.
Strategies are underway to synergise and optimise cost structures between the   
two companies.                                                                  
Capital expenditure amounted to R0,8 million (December 2010: R0,3 million)      
incurred to expand and improve production and logistics capabilities.           
The division is constantly exploring opportunities to optimise and increase its 
product basket, expecting further increases in local market and export          
activities, especially into Africa and South America.                           
Industrial chemicals                                                            
The wider product offering and expanded national presence resulted in the       
significant increase in turnover of 33,8% to R88,7 million (December 2010: R66,3
million). Gross profit margins was maintained at 14,0% (December 2010: 14,1%).  
The inclusion of Acacia Specialty Chemicals for the period from 1 November 2011 
contributed marginally to the divisions` results. The divisions` achievement was
notwithstanding the month long labour strike in July 2011 and untimely refinery 
shut downs for routine maintenance and safety reasons resulting in key product  
shortages for a prolonged period, hampering delivery to market. Increased market
share, assisted by strategic pricing in both Kwa Zulu Natal and the Western Cape
compensated for key product shortages. Rolfes Chemicals remains a key player in 
the Gauteng solvents market, supplying from small to large customers.           
Net operating expenses increased by 6,1% mainly due to expansion costs into the 
Western Cape and Kwa Zulu Natal with a further investment in sales              
representatives, in line with new business development initiatives. Net         
operating costs were reduced by R 0.9 million due to the successful arbitration 
outcome of a long standing legal case.                                          
Capital expenditure amounted to R0,7 million (December 2010: R1,1 million) spent
on safety requirements, upgrading of logistics and manufacturing facilities.    
With its on-going expanding product basket, increasing exports into Africa and  
national footprint being extended, the division looks forward to stimulating    
further volume growth in all areas by further extending its product basket to   
include a wider range of specialty and commodity chemicals.                     
Agri-chemicals                                                                  
The newly acquired Agchem group companies have contributed R35,0 million to the 
Group turnover and R11,7 million to gross profit (gross profit margin 33.5%) and
R6,8 million to operating profit. The business was acquired on 1 November 2011  
during its high season. Late rainfalls have resulted in a better than expected  
performance since acquisition. New product development initiatives and efforts  
to increase export opportunities to European and African countries are already  
underway to compensate and assist with counteracting lessor performance during  
low season.                                                                     
Capital expenditure to improve and expand production facilities to a world class
standard, meeting future local and export product demands will be undertaken    
during the next six months.                                                     
Silica                                                                          
Turnover increased by 8,6% to R22,6 million (December 2010: R20,8 million).     
Volume demands for silica fines increased by 2,0% while the demand for          
aggregates reduced by 10,7%. Market share was maintained with the lower demand  
by larger aggregate customers continuing to influence the results.              
Gross profit margins at 23,2% (December 2010: 26,6%) declined as a result of    
changes in production and sales mix adjusted to match market demands.           
Manufacturing and transport costs were contained at 2010 levels with operating  
expenses decreasing by 15,8% due to a reduction in consulting fees related to   
the mining licence application finalised during the previous financial year.    
Capital expenditure incurred to build sleep over facilities and increase safety 
standards, amounted to R0,5 million (December 2010: R1,2 million).              
Government infrastructure spending remained on hold during the period under     
review, influencing aggregate demand. Opportunities for increased supply into   
the metallurgical and fertiliser industries continue to present themselves,     
locally and in the rest of Africa, promising improved prospects for business    
growth.                                                                         
Market conditions                                                               
Conditions for the Group improved slightly during last few months of the period 
under review partly due to the African, Cape Town and Durban markets responding 
very well to the Rolfes branches and products. However, local trading conditions
remain strained, especially in the coatings industry, but with some optimism in 
other sectors.                                                                  
Efforts to grow the African market have paid off with the fully operational     
Rolfes Africa`s Zambian branch with product available at an outsourced          
distribution facility in Lusaka. The Kenya branch is in the setting up phase    
with Ghana to follow in March. The physical presence in Africa has already,     
stimulated much interest in the Group`s product offering. Furthermore the Group 
has also entered into various agency and distribution type agreements to sell   
more products into more African countries.                                      
The European economic crises peaked during the last quarter of the period under 
review and the outlook remains difficult influencing European exports           
negatively.                                                                     
The Group will continue to actively pursue new acquisition opportunities in the 
chemicals sphere, especially in the mining and specialty chemicals sectors.     
None of the market conditions and prospects information in this report have been
reviewed or reported on by Rolfes` auditors.                                    
Related party transactions                                                      
The Group companies entered into various related party transactions. These      
transactions are no less favourable than those entered into with third parties  
and occur on an arm`s length and commercial basis.                              
Trade and other receivables                                                     
Certain trade and other receivables are ceded to the Nedbank Limited under a    
debtor financing agreement with recourse.                                       
Short term loans                                                                
The loan represents the Nedbank Limited loan and is secured by debtors.         
Corporate governance and sustainability                                         
The Group recognises the recommendations of King III and remains committed to   
sound corporate governance and sustainability practices.                        
Dividends and share liquidity                                                   
The Group declared an interim dividend to shareholders of 5 cents per share     
payable on 19 March 2012.                                                       
The salient dates of the dividend payment are as follows:                       
                                                2012                            
Last date to trade "cum" the dividend            Friday, 9 March                
Shares to commence trading "ex" the dividend     Monday, 12 March               
Record date                                      Friday, 16 March               
Payment date                                     Monday, 19 March               
Share certificates may not be dematerialised or rematerialised between Monday,  
12 March 2012 and Friday, 16 March 2012, both days inclusive.                   
Investor relationship strategies continued to focus on improving share          
liquidity. Regular investor and stockbroker visits and creation of communication
platforms will keep the investment community informed on corporate activity and 
developments within the Group.                                                  
Business combinations and corporate actions                                     
Acquisitions during the period                                                  
Purchase of interest in Agchem                                                  
On 1 November 2011 the Group acquired 70% of the voting equity instruments of   
Agchem, a company whose principal activities compromise the manufacturing and   
distribution of products including herbicides, insecticides, fungicides,        
adjuvants, foliar feeds and enriched compost pellets.                           
Rolfes acquired 70% of Agchem`s share capital via a cash transaction. In        
accordance with IFRS 3 disclosure requirements, Agchem`s contribution to group  
revenue and profit before tax from 1 July 2011 would have been R 135, 6 million 
and R 13, 6 million respectively.                                               
Detail of the provisional fair value of identifiable assets and liabilities     
acquired, purchase consideration and goodwill at the acquisition date are as    
follows:                                                                        
                        Book value     Fair value     Provisional               
Adjustment      fair value               
                             R`000          R`000          R`000                
Property, plant and                                                             
Equipment                     7 823              -          7 823               
Trade and other                                                                 
Receivables                  74 509              -         74 509               
Inventory                    42 775              -         42 775               
Cash and cash equivalents      (280)             -           (280)              
Long term loans             (12 499)             -        (12 499)              
Trade and other payables    (62 992)             -        (62 992)              
Short term loans            (22 624)             -        (22 624)              
Deferred taxation             2 170              -          2 170               
28 882                        28 882                
Non-controlling interest                                   (8 665)              
Consideration settled in cash                             (47 392)              
Acquisition Vendor                                         (5 511)              
Goodwill                                        (32 686)                        
The identifiable net assets of Agchem acquired on 1 November 2011 have been     
determined on a provisional basis due to an independent valuation being carried 
out on the fair value of property, plant and equipment, intangible assets not   
previously recognised and inventory.                                            
Acquisitions of subsidiaries and businesses are accounted for using the purchase
method.  The cost of the business combination is measured as the aggregate of   
the fair values (at the date of exchange) of assets given, liabilities incurred 
or assumed, and equity instruments issued by the group in exchange for control  
of the acquiree.  The acquiree`s identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 Business      
Combinations are recognised at their fair values at the acquisition date.       
The interest of non-controlling shareholders in the acquiree is initially       
measured at the non-controlling shareholders proportion of the net fair value of
the assets, liabilities and contingent liabilities recognised.                  
Goodwill                                                                        
Goodwill represents the excess of the cost of a business combination over the   
total acquisition date fair value of the identifiable assets, liabilities and   
contingent liabilities acquired.                                                
Basis of preparation                                                            
The Board acknowledges its responsibility for the preparation of the unaudited  
consolidated interim condensed financial results. The unaudited consolidated    
interim condensed financial results for the six months ended 31 December 2011   
have been prepared in accordance with and contains the information required by  
International Accounting Standard 34 (IAS 34) as well as AC 500 standards.      
Accounting policies                                                             
The unaudited consolidated interim condensed financial results do not include   
all the information required by IFRS for full financial statements. The         
accounting policies adopted in the preparation of the unaudited consolidated    
interim condensed financial results are in terms of IFRS and consistent with    
those applied in the preparation of the annual financial statements for the year
ended 30 June 2011. However, the following Standards and amendments to standards
have been adopted in the current financial year in accordance with the          
transitional provisions of the standards:                                       
    * IFRS 3 - Business combinations                                            
* IAS 12 - Income taxes                                                         
* IAS 24 - Related party disclosure                                             
    * IAS 34 - Interim financial reporting                                      
There is no material effect on the unaudited consolidated interim condensed     
financial results as a result of the adoption of the above standards.           
For and on behalf of the Board                                                  
BT Ngcuka                                E van der Merwe                        
Chairman                                 Chief Executive Officer                
22 February 2012                                                                
Midrand                                                                         
Company secretary: J Schlebusch                                                 
Registered office: 12 Jet Park Road, Jet Park, Boksburg, 1459                   
Transfer Secretaries: Computershare Investor Services (Pty) Limited,            
70 Marshall Street, Johannesburg 2001                                           
Directors: BT Ngcuka* (Chairman), E van der Merwe (Chief Executive Officer),    
L Dyosi*, AJ Fourie*, L Lynch (Financial Director),                             
KT Nondumo*#, TAM Tshivhase*#, NN Mthombeni*#                                   
*Non-executive                                                                  
#Independent                                                                    
Sponsor: Grindrod Bank Limited                                                  
Registered auditors: BDO South Africa Incorporated                              
Preparer: L Lynch                                                               
www.rolfesza.com                                                                
Date: 22/02/2012 07:13:21 Supplied by www.sharenet.co.za                     
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