Wrap Text
Abridged summarised consolidated financial results for the year ended
31 December 2015
RBA Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/009701/06)
(JSE code: RBA ISIN: ZAE000199642)
(“RBA” or the “Company”)
Abridged summarised consolidated financial results for the year ended
31 December 2015
Review of financial results and activities
RBA Holding Limited (“RBAH” or the “company” or the “Group”) increased
its operational capacity from the prior year to deliver on anticipated
growth in line with the improved land and sales pipeline. The actual
growth was not in line with the expectations, which resulted in operational
capacity not being utilised in full and a higher cost structure being carried.
Although the Group achieved significant improvements in the production levels,
approved sales and its land pipeline, the breakeven production levels were not
achieved due to delays in the registration process of houses and the proportion
of turnkey deals under construction, resulting in liquidity constraints.
Fair value adjustments on investment properties and net realisable value
adjustments on undeveloped stands held for trading resulted in increased
losses relative to the prior year. Production levels reached breakeven levels
at a gross margin level at the end of the first quarter of 2015. The liquidity
constraints were driven largely by a significant increase in the proportion of
turnkey deals under construction where the end consumer finance providers make
full payment only on completion and final transfer of the house.
In addition, the company experienced significant delays in the registration
process of both serviced land as well as completed houses. This was due to inter
alia town council internal processes that have delayed installation of electrical
and water meters, in particular in Tshwane where three of our largest projects
are located and disruptions in the Deeds Office in Johannesburg.
Key summary of results:
• Revenue increased 66.2% to R308,5 million (2014: R185,7 million).
• Operating losses decreased to R55,1 million from R55,9 million in 2014. Included
in the operating losses for 2015 are net realisable value adjustments on undeveloped
stands held for trading amounting to R15,7 million (2014: nil) and fair value adjustments
on investment properties of R20,8 million (2014: R4,2 million). The operating loss
for the year excluding such fair value adjustments is R18,6 million, which comprises
a R33,1 million improvement relative to the prior year.
• Operating costs increased to R107,5 million from R84,6 million in the prior year.
Should the fair value adjustments included in operating costs be excluded, operating
costs were R6,3 million higher than the prior year.
• The company reported a total loss of R92,0 million, compared to the loss reported
at the end of 2014 (R73,3 million).
• The increase in the total loss for the period is largely attributable to net
realisable value and fair value adjustments of R36,5 million and an increase in
finance charges of R8,4 million relative to the prior year.
• As a result of the losses incurred and the additional debt obtained to fund
operations, total Liabilities exceeded total Assets by R50,3 million at the end
of the year.
RBAH and four of its subsidiaries (RBA Developments (JHB) (Pty) Ltd, RBA Homes (Pty) Ltd,
RBA Building Projects (Pty) Ltd and RBA Executive Homes (Pty) Ltd) have been placed under
supervision and in business rescue in terms of sections 131(1) and 129(1) of the Companies
Act of South Africa (“Companies Act”). Mr Trevor Glaum was appointed as the business rescue
practitioner in terms of section 131 read with section 147 and section 129(3)(b) of the
Companies Act. In terms of section 140 of the Companies Act he has management control over
the companies in business rescue. The RBAH board continue to operate and fulfil its duties
as delegated by the business rescue practitioner.
The business rescue practitioner is in the process of preparing business rescue plans for
publication and approval by creditors for RBAH and the subsidiaries under business rescue
in terms of section 150 of the Companies Act.
The creditors of the various companies have approved that the publication date for
the business rescue plans be extended to 29 July 2016. The required meetings to approve
the business plans are scheduled to be held in August 2016.
The directors are unable to determine if RBAH and its consolidated entities will
continue as a going concern in the year ahead due to the ongoing business rescue proceedings.
Statement of financial position
At 31 December 2015
Restated Restated
31 Dec 31 Dec 1 Jan
2015 2014 2014
R’000 R’000 R’000
Assets
Non-current assets
Investment property - rental portfolio 76,026 93,879 108,130
Investment property 5,868 12,346 10,731
Property, plant and equipment 3,600 1,490 1,310
Investments in associates 291 294 639
Investments in joint ventures 6,372 32 -
Deferred tax - 11,280 9,720
92,157 119,321 130,530
Current assets
Inventories 4,726 3,173 2,132
Loan to joint venture 13,873 1,349 -
Stands held for trading 57,894 85,291 78,774
Revenue recognised in excess of billings 37,740 8,171 12,675
Trade and other receivables 19,905 9,274 12,396
Deposits for land and stand allocations 2,781 2,399 3,304
Cash and cash equivalents 7,666 19,650 3,754
Investment property – rental portfolio -
held for sale 981 6,820 -
145,566 136,127 113,035
Total assets 237,723 255,448 243,565
Statement of financial position
At 31 December 2015
Restated Restated
31 Dec 31 Dec 1 Jan
2015 2014 2014
R’000 R’000 R’000
Equity and liabilities
Equity
Share capital 153,670 98,670 61,470
Share-based payment reserve 3,292 2,954 2,768
Accumulated loss (190,861) (109,540) (41,290)
Shareholder’s equity (33,899) (7,916) 22,948
Non-controlling interests (16,392) (5,678) (651)
(50,290) (13,595) 22,296
Liabilities
Non-current liabilities
Loans and borrowings 189,447 127,129 136,379
Instalment sale liabilities 1,127 297 661
Deferred tax - 2,539 2,885
190,574 129,965 139,925
Current liabilities
Loans and borrowings 47,994 82,896 16,761
Loan from joint venture 89 - -
Taxation payable 1,138 1,126 1,098
Instalment sale liabilities 482 248 268
Trade and other payables 43,868 45,446 53,856
Billings in excess of revenue
recognised 506 393 520
Loans from directors and management 796 1,268 985
Bank overdraft 1,988 3,182 7,855
Other financial liabilities – rental
portfolio – held for sale 578 4,518 -
97,439 139,077 81,343
Total liabilities 288,014 269,042 221,268
Total equity and liabilities 237,723 255,448 243,565
Statement of profit or loss and other comprehensive income
For the year ended 31 December 2015
Restated
2015 2014
R’000 R’000
Revenue 308,509 185,666
Cost of sales (including net realisable value
adjustments) (263,232) (157,662)
Gross profit 45,277 28,004
Other income 7,123 781
Operating expenses (including fair value
adjustment of investment property) (107,514) (84,645)
Operating loss (55,114) (55,860)
Share of losses of equity accounted investees (890) (314)
Finance income 2 4
Finance costs (27,290) (18,901)
Loss before taxation (83,292) (75,071)
Taxation (8,742) 1,790
Loss and total comprehensive income for the year (92,034) (73,281)
Loss and total comprehensive income for the year
attributable to:
Equity holders (81,321) (68,254)
Non-controlling interests (10,713) (5,027)
(92,034) (73,281)
Earnings per share
Basic and diluted loss per share (cents) (57,1) (108,7)
Further details disclosed in note 8
Statement of changes in equity
For the year ended 31 December 2015
Share-
based
Share payment Accumulated
capital reserve loss
R’000 R’000 R’000
Balance at 1 January 2014 – as
previously reported 61,470 2,768 (26,042)
Restatement - - (15,248)
Balance at 1 January 2014 - restated 61,470 2,768 (41,290)
Total comprehensive income - - (68,254)
Transactions with owners - - -
Share-based payment expense - 186 -
Issue of shares 37,200 - -
Change in shareholding - - 4
Total changes 37,200 186 (68,250)
Balance at 1 January 2015 98,670 2,954 (109,540)
Total comprehensive income - - (81,321)
Transactions with owners - - -
Share-based payment expense - 338 -
Issue of shares 55,000 - -
Total changes 55,000 338 (81,321)
Balance at 31 December 2015 153,670 3,292 (190,861)
Shareholders Non- Total
equity/ controlling equity/
(deficit) interests (deficit)
R’000 R’000 R’000
Balance at 1 January 2014 – as 38,197 349 38,544
previously reported
Restatement (15,248) (1,000) (16,248)
Balance at 1 January 2014 -
restated 22,948 (651) 22,296
Total comprehensive income (68,254) (5,027) (73,281)
Transactions with owners - - -
Share-based payment expense 186 - 186
Issue of shares 37,200 - 37,200
Change in shareholding 4 - 4
Total changes (30,864) (5,027) (35,891)
Balance at 1 January 2015 (7,916) (5,678) (13,595)
Total comprehensive income (81,321) (10,713) (92,034)
Transactions with owners - - -
Share-based payment expense 338 - 338
Issue of shares 55,000 - 55,000
Total changes (25,983) (10,713) (36,695)
Balance at 31 December 2015 (33,899) (16,392) (50,290)
Statement of cash flows
For the year ended 31 December 2015
Restated
2015 2014
R’000 R’000
Cash flows from operating activities
Cash used in operations (46,343) (56,204)
Finance income 2 3
Finance costs (16,699) (14,939)
Tax paid 12 (89)
Net cash used in operating activities (63,028) (71,229)
Cash flows from investing activities
Acquisitions of property, plant and equipment (4,353) (1,268)
Proceeds from sale of property, plant and equipment 93 178
Proceeds from sale of investment property 7,675 (309)
Loan to joint venture (12,436) (1,349)
Investments in joint ventures (7,228) -
Net cash used in investing activities (16,249) (2,748)
Cash flows from financing activities
Proceeds on share issue 55,000 37,200
Loans repaid (13,191) -
Proceeds from loans 26,086 57,447
Loans from directors, managers and employees (472) 284
Proceeds from instalment sale liabilities 1,063 (384)
Net cash from financing activities 68,486 94,546
Cash movement for the year (10,790) 20,569
Cash and cash equivalents at the beginning
of the year 16,468 (4,102)
Cash and cash equivalents at end of the year 5,678 16,468
Selected notes to the abridged summarised consolidated results
1. Basis of preparation
The summarised consolidated financial results are prepared in accordance with
the requirements of the JSE Limited Listings Requirements for abridged reports,
and the requirements of the Companies Act applicable to summarised financial
statements. The Listings Requirements require abridged reports to be prepared in
accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (“IFRS”) and the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the Financial Reporting Standards Council
and to also, as a minimum, contain the information required by IAS 34 Interim
Financial Reporting. This announcement does not include the information required
pursuant to paragraph 16A(j) of IAS 34.
The full report is available on the issuer’s website, at the issuer’s registered
offices and upon request. The accounting policies applied in the preparation of
the consolidated financial statements, from which the summarised consolidated
financial statements were derived, are in terms of International Financial Reporting
Standards and are consistent with the accounting policies applied in the preparation
of the previous consolidated financial statements. The financial statements that
are summarised in this report were prepared under the supervision of the CFO,
Armine Schaefer.
The full annual financial statements are published on the same day as this report
and may be obtained from the registered office of the company, its sponsor, or its
website. The annual financial statements provide details of all material movements
in account balances.
2. Investment property – rental portfolio
Investment property – rental portfolio represents sectional title units that
generate rental income.
Reconciliation of investment property – rental portfolio – 2015
Loss from Classified
Opening fair value as held Closing
balance Disposals measurement for sale balance
Investment property
– Rental portfolio
R’000 93,879 - (17,853) - 76,026
Reconciliation of investment property – rental portfolio – 2014
Loss from Classified
Opening fair value as held Closing
balance Disposals measurement for sale balance
Investment property
– Rental portfolio
R’000 108,130 (3,095) (4,335) (6,819) 93,879
Pledged as security
Investment property amounting to R76,025,927 (2014: R93,879,347) has been
pledged as security amounting to R62,931,806 (2014: R62,104,676) in favor
of financial institutions.
A register containing the information required by Regulation 25(3) of the
Companies Regulations, 2011 is available for inspection at the registered
office of the company.
Determination of fair value
The fair value of investment property – rental portfolio was determined by
the directors and takes into account a valuation by an independent valuer
who holds a recognised and relevant professional qualification and has
recent experience in the location and category for the investment property
being valued. Fair value adjustments are recognised in profit or loss.
The following valuation methods were considered:
Gross rental valuation method - Protea Glen Erf 8487 and 8488
The rental yield method considers the present value of gross rentals to
be generated by the property over its remaining useful life. This
process applies an appropriate market related gross rental yield for low
cost properties to the projected cash flow to arrive at a capital value,
taking into account expected rental and occupancy rates. The discount
rate estimation consider the quality of the buildings and its location,
tenant credit quality and lease terms.
Change in valuation method from the prior year
Due to the limited number of similar properties and properties being
sold in the immediate area, the directors reassessed the valuation
method and changed the valuation method from the comparable sales method
to the gross rental valuation method.
Significant unobservable inputs
Protea Glen Erf 8487 and 8488 (176 Units) Monthly rental
- 2 Bedroom units R3,800
- 3 Bedroom units R4,500
Rental yield
- Gross yield 8,3%
- Occupancy 77,6%
Comparable sales method - Forest View Portion 204 of 146 of the farm
Turfontein 100
The comparable sales method is a comparative approach that considers
the sales of similar or substitute assets and related market data. In
general, an asset being valued is compared with similar items that have
been transacted in the market, with appropriate adjustments to reflect
different properties or characteristics.
Significant unobservable inputs
Forest View Portion 204 of 146 of the farm Turfontein 100 (40 Units)
Comparable sales
- Bachelor units R395,000 (2014: R487,137)
- 2 Bedroom units R460,000 (2014: R487,137)
The estimated fair values would increase/(decrease) if
- expected market rentals growth were higher/(lower)
- occupancy rates were higher/(lower)
- the risk-adjusted discount rate were lower/(higher)
The fair value measurement for both investment properties have been
categorised as level 3 fair values based on the inputs to the valuation
methods used.
Recognised in the statement of comprehensive income:
Restated
R’000 R’000
- Rental income from investment properties - rental
portfolio (10,069) (11,920)
- Direct operating expenses (including repairs and
maintenance and excluding fair value adjustment) 3,180 7,819
- Loss on fair value measurement (17,853) (4,335)
- Loss on disposal of investment property - (1,391)
3. Investment property
Investment property represents vacant land and or buildings held for capital appreciation.
Reconciliation of investment property - 2015
Reclassification
from stands
Opening held for Fair value Closing
balance trading measurement Disposals balance
Investment
property R’000 12,346 - (2,930) (3,548) 5,868
Reconciliation of investment property – 2014
Reclassification
from stands
Opening held for Fair value Closing
balance trading measurement Disposals balance
Investment
property R’000 10,731 5,758 140 (4,283) 12,346
The reclassification of stands held for trading in 2014 of R5,758,484 to investment
property relates to free standing stands. Due to the nature of the stands, the
capital appreciation intention when the stands were acquired and the fact that
the stands will not be sold in the ordinary course of business, the stands were
reclassified to investment property.
Pledged as security
Investment property amounting to R5,868,241 (2014: R12,345,942) has been
pledged as security amounting to R3,674,815 (2014: R10,452,866) in favor
of financial institutions.
Determination of fair value
The directors used the comparable sales method to determine the fair
value of investment property.
The comparable sales method is a comparative approach that considers the sales
of similar or substitute assets and related market data. In general, an asset
being valued is compared with similar items that have been transacted in the
market, with appropriate adjustments to reflect different properties or
characteristics. The comparable sales are registered sales in the same area
or in similar areas in recent times and should be arms length transactions
(not forced sale transactions) between a willing seller and a willing buyer.
The fair value measurement has been categorised as level 3 values based on the
inputs to the valuation method used.
Recognised in the statement of comprehensive income:
Restated
2015 2014
R’000 R’000
- Rental income derived from investment property (417) (486)
- Direct operating expenses (including repairs and
maintenance and excluding fair value adjustment) 185 288
- Loss on fair value measurement (2,930) 140
- Loss on disposal of investment property (894) (538)
4. Property, plant and equipment
Reconciliation of property, plant and equipment – 2015
Opening Closing
balance Additions Disposals Depreciation balance
R’000 R’000 R’000 R’000 R’000
Land 170 - - - 170
Plant and
machinery 137 9 - (40) 106
Furniture and
fixtures 72 - - (54) 19
Motor vehicles 316 1,416 - (469) 1,264
Office
equipment 33 46 - (18) 61
IT equipment 146 190 - (132) 204
Computer
software 616 2,692 - (1,531) 1,777
1,490 4,353 - (2,243) 3,600
Reconciliation of property, plant and equipment - 2014
Opening Closing
balance Additions Disposals Depreciation balance
R’000 R’000 R’000 R’000 R’000
Land - 170 - - 170
Plant and
machinery 191 - (7) (47) 137
Furniture and
fixtures 133 - - (60) 72
Motor vehicles 714 - (89) (309) 316
Office equipment 87 12 (18) (47) 33
IT equipment 170 99 (1) (122) 146
Computer
software 16 987 - (387) 616
1,310 1,268 (115) (972) 1,490
Pledged as security
Assets with a carrying value of R1,263,557 (2014: R316,231) have been pledged
as security for instalment sale agreement obligations.
A register containing the information required by Regulation 25(3) of the
Companies Regulations, 2011 is available for inspection at the registered
office of the company
5. Stands held for trading
Restated
2015 2014
Developments in progress 37,505 68,188
Completed developments 20,389 17,104
Stands held for trading 57,894 85,291
Amounts recognised in cost of sales as a result of
net realisable value adjustments (15,699) -
Stands held for trading carried at net realisable
values 13,267 -
Borrowing costs capitalised during the year included
in the carrying value of stands held for trading 571 3,209
Stands held for trading with a carrying value of R54,331,572 (2014: R81,594,271),
have been pledged as security amounting to R36,865,325 (2014: R64,675,347) in
favour of financial institutions.
6. Deferred tax
Deferred tax assets have been recognised to the extent that it is probable that
entities will generate future taxable income against which tax losses can be utilised.
At 31 December 2015, the Group had unutilised tax losses of R302,019,104
(2014: R150,238,217) available for set off against future taxable profits.
Prior year adjustment
During 2015 the criteria to evaluate the probability that taxable profit will be
available against which the unused tax losses can be utilised were reassessed and
it was identified that deferred tax assets were incorrectly recognised. It was also
identified that deferred tax assets of a subsidiary were not deducted from deferred
tax liabilities.
Statement of financial position
Impact of restatement
As
previously
Restated Adjustment reported
R’000 R’000 R’000
1 January 2014
Deferred tax assets 9,720 (18,808) 28,528
Deferred tax liabilities (2,885) 2,556 (5,445)
Accumulated loss (41,290) (15,284) (26,043)
Non-controlling interests (651) (1,000) 349
31 December 2014
Deferred tax assets 11,280 (36,597) 47,878
Deferred tax liabilities (2,539) 2,932 (5,471)
Accumulated loss (109,540) (31,403) (78,137)
Non-controlling interests (5,679) (2,261) (3,417)
The impact on the Group’s basic and diluted earnings per share was to increase
the loss per share by 25,7 cents.
7. Loans and borrowings
Held at amortised cost
Restated
2015 2014
R’000 R’000
Total loans and borrowings 237,441 210,025
Short-term portion of loans and borrowings 36,594 23,853
Short-term loans and borrowings 11,400 59,043
Long-term loans and borrowings 189,447 127,129
Prior year adjustment – HIFSA Loan
The payment received from HIFSA for the subscription of shares
classified as a long-term equity loan in the prior year, was restated as
a short-term liability given that the loan was subject to suspensive conditions
that were not all met as at 31 December 2014.
Impact of restatement
As
previously
Restated Adjustment reported
R’000 R’000 R’000
Short-term loans and borrowings
as at 31 December 2014 55,000 55,000 -
Equity loan as at 31 December 2014 - 55,000 55,000
Loan covenant
RBA Developments (JHB) (Pty) Ltd has access to liquidity from the Housing Impact
Fund of South Africa as set out below:
Restated
2015 2014
R’000 R’000
Working capital facility 70,000 -
Top structure facility 30,000 -
100,000 -
The carrying amount at year end was R101,997,504.
The working capital facility contains financial covenants stating that:
- EBITDA for the period ending 30 June 2015 shall be positive
- The interest cover ratio for the measurement period ending 31
December 2015 shall not be less that 1,5:1 and in respect of each measuring period
ending on a measurement date after 31 December 2015 shall not be less than 2:1.
- The debt to EBITDA ratio in respect of each measurement period ending on a
measurement period date after 31 December 2015 shall not be greater than 2,5:1.
- The security cover ratio in respect of each measuring period ending on a measuring
date shall not be less than 0,7 to 1.
The agreement also defines events of default which include, but are not limited to,
business rescue proceedings.
On and anytime after the occurrence of an event of default the lender may, by notice to
RBA Developments (JHB) (Pty) Ltd.
- Cancel all or any part of the commitment
- Declare that all or part of the loans, together with accrued interest, be immediately
due and payable and/or
- Declare that all or part of the loans be payable on demand, whereupon they shall
immediately become payable on demand on the instruction of the lender.
The company is in breach of the loan covenants. Up to the date of preparing these
financial, the lender had not elected to excise the right to acceleration and accordingly,
the loans were not payable on demand at 31 December 2015
8. Basic, diluted and headline earnings per share
Basic, diluted and headline earnings per share for the previous year was restated as a
result of prior year adjustments as well as the share consolidation in February 2015.
At 31 December 2015 and 31 December 2014 the share options are not dilutive as the average
market price of RBA’s shares during the period exceeded the exercise price of the options.
Reconciliation of earnings
2015 2014
R’000 R’000
Loss attributable to equity holders (81,321) (68,254)
- Profit on sale of property plant and equipment (93) (63)
- Loss on disposal of investment property 1,712 1,929
- Fair value adjustment of investment properties 20,784 4,196
- Tax affect - 26
Headline earnings attributable to equity holders (58,918) (62,167)
Weighted average number of shares in issue 142,397,710 62,800,449
- Basic and diluted loss per share (cents) (57,1) (108,7)
- Headline and diluted loss per share (cents) (41,4) (99,0)
9. Segmental report
The Group supplies affordable housing units for residential use. Some of these units
are built and sold (“property development activities”) and some of the properties are
retained and rented (“sectional title rental activities”) to create a recurring income
for the company. There are only two segments “property development activities” and
“sectional title rental activities” and there were no transactions between these
reportable segments. Geographically the Group operates primarily in the Gauteng area.
Property development
activities
Restated
2015 2014
R’000 R’000
Revenue 298,440 173,746
Cost of sales (263,232) (157,662)
Gross profit 35,208 16,084
Other income 7,123 781
Operating expenses (excluding fair value
adjustment) (83,549) (72,633)
Loss on fair value adjustments (2,930) 140
Total operating expenses (86,479) (72,493)
Share of losses of equity accounted investees (890) (314)
Finance income 2 3
Finance cost (16,368) (11,985)
Loss (61,405) (67,925)
Total assets 158,878 150,087
Total liabilities 184,594 197,779
Sectional title
rental activities
Restated
2015 2014
R’000 R’000
Revenue 10,069 11,920
Cost of sales - -
Gross profit 10,069 11,920
Other income - –
Operating expenses (excluding fair value adjustment) (3,182) (7,816)
Loss on fair value adjustments (17,853) (4,335)
Total operating expenses (21,035) (12,152)
Share of losses of equity accounted investees - -
Finance income - -
Finance cost (10,922) (6,915)
Loss (21,887) (7,146)
Total assets 78,846 105,361
Total liabilities 103,419 71,263
Consolidated
Restated
2015 2014
R’000 R’000
Revenue 308,509 185,666
Cost of sales (263,232) (157,662)
Gross profit 45,277 28,004
Other income 7,123 781
Operating expenses (excluding fair value
adjustment) (86,731) (80,450)
Loss on fair value adjustments (20,784) (4,195)
Total operating expenses (107,514) (84,645)
Share of losses of equity accounted investees (890) (314)
Finance income 2 3
Finance cost (27,290) (18,901)
Loss (83,292) (75,071)
Total assets 237,723 255,448
Total liabilities 288,014 269,042
10. Subsequent events
On 9 February 2016 the trustees of Housing Impact Fund of South Africa (“HIFSA”),
applied to the High Court of South Africa, for an order placing the company under
supervision and commencing business rescue proceedings in terms of section 131(1)
of the Act and appointing Trevor Glaum as the business rescue practitioner of the
company. A similar application was made in respect of the company’s wholly owned
subsidiary, RBA Developments (JHB) Proprietary Limited (“RBA Developments”). HIFSA
has indicated that the trustees are willing to make available (within reason and
subject to appropriate authorisation) funding as will be necessary during the
business rescue process as post-commencement finance. This order was granted
on 23 February 2016.
On 30 March 2016 the business rescue practitioner informed stakeholders that the
boards of certain subsidiaries of the company listed below had resolved, in terms
of Section 129(1) of the Companies Act 71 of 2008, that the following subsidiaries
be placed under supervision and in business rescue on a voluntary basis:
- RBA Executive Homes (Pty) Ltd;
- RBA Homes (Pty) Ltd; and
- RBA Building Projects (Pty) Ltd.
It is the subsidiary boards’ assessment that the subsidiaries are financially
distressed and there appear to be reasonable prospects of rescuing the subsidiaries.
The business rescue practitioner is preparing business rescue plans for publication
and approval for RBA Holdings Limited and the subsidiaries in terms of section 150
of the Companies Act. The requested meetings to approve the plans will be held
during August 2016. The RBA Holdings Limited board of directors, the audit and
risk committee and social and ethics committee will continue to operate and fulfill
their duties as delegated by the business rescue practitioner.
11. Going concern
Preparation of the Group financial statements in accordance with IFRS assumes that
RBA Holdings Limited and its consolidated entities will continue to operate as going
concerns and requires management to make an assessment of the ability to continue as
going concerns.
Under the going concern assumption, an entity is viewed as continuing in business
for the foreseeable future with neither the intention nor the necessity of liquidation,
ceasing trading or seeking protection from creditors. Accordingly assets and liabilities
are recorded on the basis that the entity will be able to realise its assets and discharge
liabilities in the normal course of business.
The Group incurred a net loss for the year ending 31 December 2015 of R83,3 million
(2014: R75,1 million) and at that date its total liabilities exceeded its total assets
by R50,3 million (R2014:R13,6 million). As explained in note 16 the Group is also in
breach of a loan covenant at year end.
RBA Holdings Limited and certain subsidiaries have been placed under supervision and
business rescue proceedings in terms of sections 131(1) and 129 (1) of the Companies
Act, 2008. Mr Trevor Glaum was appointed as the interim business rescue practitioner
and in terms of section 140 (1)(a) of the Companies Act he has management control over the
companies.
The directors are unable to determine if RBA Holdings Limited and its subsidiaries
will continue as going concerns in the year ahead until such time as the business
rescue plans are finalised and approved by creditors in terms of sections 150,151
and 152 of the Companies Act.
12. Capital expenditure
The Group incurred capital expenditure of R4 352 852 (2014: R1 267 689)
during the year.
13. Dividends
No dividends were declared or paid to the shareholders during the year under review.
14. Change in shareholding
HIFSA became a shareholder at a shareholder meeting on 19 January 2015 with a shareholding
of 36.55% of the issued share capital of the company.
15. Comparative figures
Certain comparative figures in the statements of financial position and profit and loss
and other comprehensive income have been restated as a result of corrections of errors.
Comparative figures were reclassified, as necessary, to afford a proper and more meaningful
comparison of the financial statements. Certain additional disclosures have also been
provided in the current year. Figures relating to deferred tax have been restated. At the
end of 2014, RBA raised additional share capital of R55 million and working capital of
R70 million from the Housing Impact Fund of South Africa (“HIFSA”).
16. Audit opinion
This summarised report is extracted from audited information, but is not itself audited.
The financial statements were audited by KPMG Inc., who expressed a disclaimer of opinion
thereon as the business rescue practitioners plan has not been finalised nor approved,
therefore the auditors were unable to obtain sufficient appropriate audit evidence to
support the appropriateness of the financial statements being prepared using the going
concern basis of accounting. The audited financial statements and the auditor’s report
thereon are available for inspection at the company’s registered office. The directors
take full responsibility for the preparation of the summarised report and the financial
information has been correctly extracted from the underlying annual financial statements.
17. Directorate
The directors in office at the date of this report are as follows:
Directors Office Designation
A J Rothman Chief Executive
Officer Executive Resigned 17 March 2016
J L Mortimer Chief Financial
Officer Executive Resigned 20 April 2015
B A Stegmann Director Business
Development Executive Resigned 10 June 2016
F S Le Roux Chief Operating
Officer Executive Resigned 11 April 2016
A T Schaefer Chief Financial
Officer Executive Appointed 8 May 2015
M M Long Director Development
and Construction Executive Appointed 10 June 2016
L S Mokhesi Chairman Non-executive Resigned 31 January 2016
K M Maroga Non-executive Resigned 31 December 2015
K A Hopkins* Non-executive Appointed 16 February 2015
C Glover* Acting Chairman Non-executive Appointed 9 December 2015
E Nyandoro* Non-executive Appointed 25 March 2015
M Nienaber* Non-executive Appointed 9 December 2015
* Audit Committee members. The Acting Chairman is Ken Hopkins.
18. Annual general meeting
The annual general meeting of the company will be held at the same time as
the shareholders meeting with the business rescue pratitioner. This date is
still to be confirmed and will be communicated to all shareholders.
19. Appreciation
The Group recognises the value of its management teams and staff and thanks
them for their loyalty and work ethic during the year. We also thank our
suppliers, business partners, advisors, clients and shareholders for their
support for the group.
The Group annual financial statements, were approved by the board of directors,
as delegated to them by the business rescue practitioner, on 10 June 2016
and signed by:
A T Schaefer C Glover
Chief Financial Officer Acting Chairman
Corporate information
Executive directors: A T Schaefer
Non-executive directors: C Glover (Acting Chairman), M Nienaber, K T Hopkins, E Nyandoro
Company Secretary: R Kleyn
Registration number: 1999/009701/06
Registered address: Nedbank Building, Cnr Biccard & Jorissen Street, Braamfontein, 2017
Postal address: PO Box 30885, Braamfontein, 2017
Telephone: 011 483 5000
Facsimile: 086 516 0873
Web address: www.rbaholdings.co.za
Transfer secretaries: Computershare Investor Services (Pty) Limited
Auditors: KPMG Inc.
Designated Adviser: Exchange Sponsors (2008) (Pty) Limited
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