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Provisional reviewed results for the year ended 30 June 2012
PROVISIONAL REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2012
Awethu Breweries Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1992/004352/06)
Share Code: AWT ISIN Number: ZAE 000013769
(“the company” or “Awethu”)
Condensed Statement of Comprehensive Income
Year ended Year ended
30 June 2012 30 June 2011
Reviewed Audited
R R
Continuing operations
Revenue 7 630 065 814 077
Cost of sales (6 581 588) (807 687)
Gross profit 1 048 477 6 390
Fair value adjustment 4 419 824 -
Impairment loss on assets (1 245 703) (1 018 748)
Operating expenses (1 551 059) (1 313 699)
Investment revenue 40 254 17 071
Finance costs (26 338) (25 016)
Profit/ (loss) from continuing 2 685 455 (2 334 002)
operations before tax
Taxation - -
Profit/ (loss) from continuing 2 685 455 (2 334 002)
operations
Profit from discontinued
operations - 3 099 957
Total comprehensive income 2 685 455 765 955
Basic earnings per share (cents) 3.18 0.91
Basic earnings/(loss)per share
(cents) from continuing operations 3.18 (2.76)
Reconciliation between basic earnings and headline loss:
Net profit for year 2 685 455 765 955
Discontinued operations - (3 099 957)
Fair value adjustment on
investment property (4 419 824) -
Impairment of PPE - (621 160)
Total tax effect of adjustments 917 397 -
Headline loss for the year (816 972) (1 712 842)
Headline loss per share
(cents) (0.97) (2.02)
Weighted average number of shares on which:
Basic earnings per share is based 84 566 909 84 566 909
Headline loss per share is based 84 566 909 84 566 909
Condensed Statement of Changes in Equity
Share Share Total Share Accumulated Total
Capital Premium Capital Loss Equity
R R R R R
Balance at
01 July 2010 845 569 9 901 507 10 747 076 (15 879 922)(5 132 846)
Changes in equity
Total comprehensive
profit for the year 765 955 765 955
Balance at
30 June 2011 845 569 9 901 507 10 747 076 (15 113 967)(4 366 891)
Changes in equity
Total comprehensive
profit for the year 2 685 455 2 685 455
Balance at
30 June 2012 845 569 9 901 507 10 747 076 (12 428 512)(1 681 436)
Condensed Statement of Financial Position
30 June 30 June
2012 2011
Reviewed Audited
R R
Assets
Non-Current Assets
Property, plant and equipment 42 761 508 699
Investment Property 7 427 199 2 676 000
Deferred tax asset - -
7 469 960 3 184 699
Current Assets
Trade and other receivables 1 331 666 33 898
Cash and cash equivalents 480 751 361 725
Investment debtor - 3 017 071
Straightlining of lease 133 056 86 100
1 945 473 3 498 794
Total Assets 9 415 433 6 683 493
Equity and Liabilities
Equity
Share capital 10 747 076 10 747 076
Accumulated loss (12 428 512) (15 113 967)
(1 681 436) (4 366 891)
Liabilities
Non-Current Liabilities
Loan from shareholder 9 498 440 8 131 585
Deferred tax liability - -
9 498 440 8 131 585
Current Liabilities
Trade and other payables 521 071 1 841 441
Provisions 1 077 358 1 077 358
1 598 429 2 918 799
Total Liabilities 11 096 869 11 050 384
Total Equity and Liabilities 9 415 433 6 683 493
Condensed Statement of Cash Flows
30 June 30 June
2012 2011
Reviewed Audited
R R
Cash flows from operating activities
Cash used in operations (4 278 816) (768 587)
Finance costs (26 338) (25 016)
Net cash from operating activities (4 305 154) (793 603)
Cash flows from investing activities
Cash flows from held for sale/discontinued
Operations - 5 348 239
Interest Income 40 254 17 071
Net cash from investing activities 40 254 5 365 310
Cash flows from financing activities
Investment debtor 3 017 071 (3 017 071)
Movement in shareholder’s loan 1 366 855 (1 193 127)
Net cash from financing activities 4 383 926 (4 210 198)
Total cash movement for the year (119 026) 361 509
Cash at the beginning of the year 361 725 216
Total cash at end of the year 480 751 361 725
COMMENTARY
1. Review of the results
Your directors are pleased to advise that the turnover for the year
increased by R6,8 million, and the loss before tax for 2011 of R2,3
million increased to a profit before tax of R2,6 million.
The basic earnings per share from continuing operations for the year of
3.18 cents improved on the prior year’s loss of 2.76 cents per share. The
company is in the process of expanding its operations to include a more
profitable line of retail and wholesale liquor and other commodities to
the informal sector.
2. Prospects
Awethu is positioning the company for growth over the next few years, and
the mix of businesses is intended to increase value for shareholders. This
general forecast has not been reviewed or reported on by the company’s
auditors.
3. Dividends
No dividend has been declared for the year.
4. Going Concern
The ability of the company to continue as a going concern is dependent on
a number of factors. The most significant of these is that the directors
continue to procure funding for the ongoing operations of the company and
that the subordination agreement by the major shareholder of the company
will remain in force for as long as it takes to restore the solvency of
the company. The directors are satisfied that the solvency and liquidity
of the company is adequate for the next 12 months.
5. Accounting policies / compliance
These condensed financial statements have been prepared by JM Caddy, in
accordance with International Financial Reporting Standards ("IFRS") and
IAS 34 - Interim Reporting, using accounting policies which are consistent
with those for the year ended 30 June 2011 and complies with the relevant
sections of the Companies Act of South Africa and the Listings
Requirements of the JSE Limited.
During the year under review the company adopted all of the IFRS and
Interpretations being effective and deemed applicable.
6. Independent review by the external auditors
The condensed provisional results have been reviewed by our auditors,
Logista CA(SA) Incorporated, who have performed their review in accordance
with International Standards on Auditing. The modified audit report on
review engagements is available for inspection at the company’s registered
office.
Emphasis of matter
Without qualifying our opinion, we draw attention to the fact that the
company’s liabilities exceeded its total assets by R3 058 762. This
condition indicates the existence of a material uncertainty which may cast
significant doubt about the company’s ability to continue as a going
concern.
7. Significant events and transactions
30 June 30 June
2012 2011
Reviewed Audited
R R
7.1 Impairment loss on trade and other receivables
During the current period an impairment loss of R1 245 703 (2011:
R397 588) was recognised.
7.2 Fair value adjustment on investment property
The company has determined the fair value of its investment property, the
fair value adjustment recognised in profit or loss amounted to R4 419 824
(2011: R0).
7.3 Taxation
The company has recognised a deferred tax liability amounting to R954 653
(2011: R0) due to the fair value adjustment on investment property and the
straight-lining of operating leases.
The breakdown is as follows:
Deferred tax liability
Fair value adjustment 917 397 -
Operating lease asset - straight-lining 37 256 -
Total 954 653 -
The company has recognised a deferred tax asset to the extent that future
profits will be available to offset the asset against, amounting to R954
653 (2011: R0).
The company has the following amount in respect of which no deferred tax
asset has been recognised due to the unpredictability of future profit
streams or gains against which these could be utilised:
Unused tax losses 29 051 435 32 691 543
Use and sale rate
In terms of IAS 12, for investment property carried under the fair value
model there is a rebuttable presumption that that the carrying amount of
the investment property will be recovered through sale. If that
presumption is not rebutted, the deferred tax reflects the tax
consequences of recovering the carrying amount entirely through sale, even
if the company expects to earn rental income from the property before
sale. The presumption can only be rebutted if the investment property is
depreciable and is held within a business model whose objective is to
consume substantially all of the economic benefits embodied in the
investment property over time, rather than through sale. The presumption
was not rebutted i.e., the carrying amount of the investment property is
recovered through sale, therefore the capital gains tax rate is used to
calculate the deferred tax.
7.4 Related party transactions
The company entered into the following significant related party
transactions:
Amounts included in trade receivables regarding related parties
Plexiphon 157 CC 1 331 666 33 898
Loan account owing to related party
TTW Ford 9 498 440 8 131 585
Related party transactions
Sales to related party
Plexiphon 157 CC 6 798 908 270 460
8. Operating segments
The segmental information has been prepared in accordance with IFRS 8
Operating segments which defines the requirements for the disclosure of
financial information of an entity’s operating segments. Each of the
operating segments is managed separately as they differ in resources and
marketing approaches.
Operating segments have been identified as follows:
The segment revenues, operating profit and other expenses generated by
each reportable segment is summarised as follows:
2012 2011
Sales of goods
Revenues 6 798 908 606 010
Investment revenue 40 254 17 071
Cost of sales (6 581 588) (807 687)
Depreciation (134 563) (134 562)
Impairment of assets (1 245 703) (1 018 748)
Operating lease charges (60 000) (60 000)
Employee costs (94 925) (337 046)
Finance costs (26 338) (25 016)
Segment loss (1 303 955) (1 759 978)
Rental of premises
Rental income 831 156 208 067
Fair value adjustments 4 419 824 -
Segment profit 5 250 980 208 067
Other expenses (244 491) (204 851)
Director’s remuneration (60 547) -
Listing costs (551 172) (540 390)
Audit and accounting (405 361) (36 850)
Company profit/ (loss) 2 685 455 (2 334 002)
from continuing operations
before tax
All segment revenue is derived from external sources.
External revenues per geography are summarised as follows:
2012 2011
Ventersdorp
Goods sold 6 798 908 606 010
Rental income 831 156 208 067
Total revenue 7 630 065 814 077
The operating segment assets by each reportable segment are summarised as
follows:
2012 2011
Sales of goods
Property, plant and equipment 42 761 508 699
Trade and other receivables 1 331 666 33 898
Segment assets 1 374 427 542 597
Rental of premises
Investment property 7 427 199 2 676 000
Segment assets 7 427 199 2 676 000
Unallocated assets:
Cash and cash equivalents 480 751 361 725
Investment debtor - 3 017 071
Straight-lining of lease asset 133 056 86 100
Company assets 9 415 433 6 683 493
The company does not report on segment liabilities.
Non-current non-financial asset per geography are summarised as follows:
2012 2011
Ventersdorp
Property, plant and equipment 42 761 508 699
Investment property 7 427 199 2 676 000
Total assets 7 469 960 3 184 699
There were no additions to non-current non-financial assets.
9. Events after reporting date
There are no events to report after the reporting date.
10. Director changes during the year
There were no director changes during the year under review.
11. Approval of the Financial Statements
The annual financial statements were approved by the board of directors on
12 October 2012.
On behalf of the board
TTW Ford
Chief executive
12 October 2012
Vanderbijlpark
Corporate Information:
Registered Office: 24 Sering Street, SE3 Vanderbijlpark, 1911
Postal address: PO Box 6170, Vanderbijlpark, 1900
Transfer secretaries: Computershare Investor Services (Pty) Ltd –
70 Marshall Street, Johannesburg, 2001
Directors: JA Taylor(Chairman)(ne),TTW Ford(CEO),
I Vermaak(FD),H Bismilla(ne),A Seedat(ne),
M Lockhat(ne)
Company Secretary: JM Caddy FCIS
Auditors: Logista CA (SA) Incorporated
Chartered Accountants (S.A.)
Registered Auditors
Date: 12/10/2012 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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