Wrap Text
Reviewed consolidated provisional financial results for The year ended 28 February 2013
BRIKOR LIMITED
("Brikor" or "the Company" or "the Group")
Registration number: 1998/013247/06
JSE code: BIK
ISIN: ZAE000101945
www.brikor.co.za
REVIEWED CONSOLIDATED PROVISIONAL FINANCIAL RESULTS FOR THE YEAR
ENDED 28 FEBRUARY 2013
HIGHLIGHTS
Revenue increased by 66,0% to R223,8 million
Gross profit increased by 64,0% to R67,9 million
Operating expenses increased by 7,5% to R34,5 million
Net increase in cash and cash equivalents of R15,3 million
Profit after tax improved to a R44,0 million profit
PREPARED BY:
The condensed consolidated provisional financial results
(Òprovisional financial resultsÓ or ÒresultsÓ) for the year ended
28 February 2013 were prepared by Laura Craig CA(SA) under the
supervision of Hanlieu Botha, Financial Director. This
provisional results report has been reviewed by the auditors,
KPMG Inc., who have expressed an unqualified review conclusion
with an emphasis of matter. A copy of the auditorÕs report is
available for inspection at the CompanyÕs registered office. This
provisional results report for the year ended 28 February 2013
was published on 25 June 2013.
The results for the year ended 28 February 2013, as approved at a
meeting of the Board of Directors held on 24 June 2013, are
presented below:
OVERVIEW
The directors of Brikor are pleased to present the reviewed
condensed consolidated provisional financial results for the year
ended 28 February 2013, which reflect a return to profitability.
Brikor is a diverse manufacturer and supplier of building and
construction materials across a broad spectrum of the market from
low-cost housing, residential to commercial, industrial, civil
engineering and infrastructure projects and has aggregate, clay
bricks and coal operations.
The GroupÕs margins improved substantially in a competitive
trading environment through effective cost management initiatives
and a concerted effort on sustainable working capital management.
The focus returned to core operations and the coal operations
were successfully commissioned.
The increase in turnover has been largely attributable to the
addition of coal sales and increased sales in the aggregate
division. Gross profit percentage improved visibly as a result of
cost management and high margins achieved in the coal and
aggregate divisions, increased volumes in the aggregate division
and an improvement in yields in the brick division.
The Donkerhoek operation produces aggregates of a wide variety of
sizes and technical specifications with products including stone,
gravel and sand for large and small scale civil engineering and
infrastructure projects. The improvements of the Donkerhoek
production process resulted in better yields and volumes achieved
and consequentially the securing of tenders, which were
previously unattainable. The commencement of supply on these
projects contributed substantially to the profits achieved for
the year.
The Brick division sales improved marginally due to higher
average sales prices attained due to improved product yields. The
effect of an increase in production volumes is expected to show
returns in the next reporting period.
Brikor successfully commissioned the coal operations at
Vlakfontein, giving it access to clay and coal deposits.
The mining of coal has shown considerable returns and assisted
with the increase in turnover and margins during the reporting
year.
FINANCIAL RESULTS
In a competitive operating environment revenue increased by 66,0%
to R223,8 million (2012: R134,8 million) and gross profit
increased by 64,0% to R67,9 million (2012: R41,4 million). The
improvement in gross profit is mainly due to improved yields and
sales margins as a result of continued cost management
initiatives and renewed focus on the GroupÕs core business.
Competitive pressure remained throughout the year, inhibiting the
GroupÕs ability to fully pass input cost increases on to
customers. The coal operations contributed significantly to the
GroupÕs results for the year.
Operating expenses increased by 7,5% to R34,5 million (2012:
R32,1 million) as a result of continued cost management.
The above measures resulted in the Group generating an operating
profit before impairment reversals of R34,5 million (2012: R13,5
million).
After taking finance income, finance costs and impairment
reversals into consideration, the profit for the year amounted to
R44,0 million (2012: R6,4 million loss) from continuing
operations, and a total profit and other comprehensive income of
R32,9 million (2012: R32,8 million total loss and comprehensive
income), which resulted in earnings per share of 5,2 cents (2012:
5,2 cents loss per share) and fully diluted earnings per share of
5,2 cents (2012: 5,1 cents loss per share) for the year.
Continuing operations delivered earnings per share of 7,0 cents
(2012: 1,0 cents loss per share) and fully diluted headline
earnings per share of 2,0 cents (2012: 2,3 cents loss per share).
Property, plant and equipment increased to R110,0 million (2012:
R80,7 million) as a net result of:
Ð the disposal of operations of R2,4 million (2012: R52,1
million);
- additions of R18,8 million (2012: R5,7 million);
- depreciation of R6,8 million (2012: R6,2 million);
- transfers of assets to Investment Property of R14,3
million;
- capitalisation of decommissioning assets of R6,7 million
relating the environmental provision;
- a reversal of impairment of R1,3 million on assets being
brought back into use;
- a reversal of impairment of R24,6 million on the Donkerhoek
division which is no longer impaired as the division has returned
to profitability; and
- transfers of R1,4 million from assets held for sale considered
to be more valuable in use in the mining operations.
Assets reclassified as held for sale amounted to R15 million
(2012: R60,2 million).
Impairment reversals amounting to R3,9 million (2012: R23,8
million impairments) were recognised in respect of these assets
held for sale to adjust the assets to their recoverable amounts.
Brikor is currently in breach of the financing covenants of its
RMB facilities. The current carrying value of the loans is R101,8
million (2012: R110,5 million). As a result of the breach of the
covenants, the portion of the loans relating to continuing
operations is reflected under current liabilities. The proceeds
of R37,2 million received from the sale of discontinued
operations have been used in the repayment of this debt.
PROSPECTS
The Group is benefiting from a gradual improvement in market
conditions and has positioned itself accordingly to extrapolate
maximum benefits from such improvements.
Assuming that current market and economic conditions will not
deteriorate, Brikor is expecting continuing improved results in
the next financial year.
The market and prospect information contained in the reviewed
condensed consolidated provisional financial results for the year
ended 28 February 2013 have been neither reviewed nor reported on
by the GroupÕs external auditors.
DIVIDEND
No dividend has been declared for the year.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 28 February
Reviewed Audited
2013 2012
Notes RÕ000 RÕ000
CONTINUING OPERATIONS
Revenue 223 755 134 807
Cost of sales (155 861) (93 388)
Gross profit 67 894 41 419
Other income 1 100 4 251
Administrative expenses (29 815) (27 821)
Distribution expenses (3 943) (4 092)
Other expenses (777) (224)
Operating profit before
impairment reversals 34 459 13 533
Impairments 32 299 8 549
Operating profit before interest
and taxation 66 758 22 082
Finance income 2 516 1 178
Finance costs (23 449) (29 654)
Profit/(loss) before taxation 45 825 (6 394)
Taxation (1 797) Ð
Profit/(loss) after taxation from
continuing operations 44 028 (6 394)
Loss from discontinued operation 2 (530) (30 033)
(Loss)/profit from disposal of
discontinued operation 2 (10 569) 3 675
Total profit/(loss) for the year
attributable to equity holders
of the Company 32 929 (32 752)
Total profit/(loss) and other
comprehensive income for the
year attributable to equity
holders of the Company 32 929 (32 752)
Reconciliation of EBITDA
Operating profit before interest
and taxation (ÒEBITÓ) 66 758 22 082
Depreciation cost of sales 6 388 4 954
Depreciation operating expenses 648 1 204
Impairment reversals (32 299) (8 549)
Earnings before interest, taxation,
depreciation, amortisation and
impairment reversals (ÒEBITDAÓ) 41 495 19 691
Earnings/(loss) per share cents cents
Basic
Continuing operations 7,0 (1,0)
Discontinued operations (1,8) (4,2)
Total 5,2 (5,2)
Diluted
Continuing operations 7,0 (1,0)
Discontinued operations (1,8) (4,1)
Total 5,2 (5,1)
Headline
Continuing operations 2,0 (2,4)
Discontinued operations (0,7) (1,0)
Total 1,3 (3,4)
Diluted headline
Continuing operations 2,0 (2,3)
Discontinued operations (0,7) (1,0)
Total 1,3 (3,3)
HEADLINE EARNINGS
Discon-
Continuing tinued
Operations operations Total
RÕ000 RÕ000 RÕ000
28 February 2013 (Reviewed)
Reconciliation of
headline profit/(loss):
Profit/(loss) attributable
to ordinary shareholders 44 028 (11 099) 32 929
Adjusted for impairment
reversals of assets (32 299) (3 914) (36 213)
Adjusted for loss on disposal
of non-current assets 850 10 569 11 419
Headline profit/(loss)
attributable to ordinary
shareholders of the Company 12 579 (4 444) 8 135
29 February 2012 (Audited)
Reconciliation of headline loss:
Loss attributable to
ordinary shareholders (6 394) (26 358) (32 752)
Adjusted for impairment/
(reversals) of assets (8 549) 23 826 15 277
Adjusted for (profit)/loss
on disposal of non-current
assets 16 (3 525) (3 509)
Headline loss attributable
to ordinary shareholders of
the Company (14 927) (6 057) (20 984)
Reviewed Audited
28 Feb 29 Feb
2013 2012
Ô000 Ô000
Weighted average shares in issue on
which earnings are based 629 342 629 342
Treasury shares issued to the Brikor
Share Incentive Scheme Ð 15 900
Fully diluted weighted average shares
in issue 629 342 645 242
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February
Reviewed Audited
2013 2012
RÕ000 RÕ000
Total balance at beginning of the year 296 33 048
Total profit/(loss) for the year 32 929 (32 752)
Balance at end of year 33 225 296
Condensed consolidated statement of FINANCIAL POSITION
as at 28 February
Reviewed Audited
2013 2012
Notes RÕ000 RÕ000
ASSETS
Non-current assets 164 825 116 446
Property, plant and equipment 110 034 80 718
Investment property 3 14 342 Ð
Intangible assets 15 169 8 350
Other financial assets 25 280 27 378
Current assets 90 220 59 115
Inventories 47 195 38 380
Trade and other receivables 33 157 18 317
Cash and cash equivalents 9 868 2 418
Non-current assets held for sale 14 959 60 159
Total assets 270 004 235 720
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the Company 33 225 296
Share capital 63 63
Share premium 228 179 228 179
Accumulated loss (195 017) (227 946)
Non-current liabilities 52 222 47 706
Borrowings 5 037 9 946
Shareholder loans 29 430 27 574
Provisions 17 010 10 186
Deferred taxation 745 Ð
Current liabilities 184 557 187 718
Borrowings 102 794 114 081
Trade and other payables 49 008 29 546
Taxation 11 528 15 040
Bank overdraft 21 227 29 051
Total equity and liabilities 270 004 235 720
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 28 February
Reviewed Audited
2013 2012
RÕ000 RÕ000
Cash flows from/(utilised in)
operating activities 8 208 (10 724)
Continuing operations 12 652 (9 171)
Discontinued operations (4 444) (1 553)
Cash flows from/(utilised in) investing
activities 21 406 27 484
Continuing operations (15 798) (26 398)
Discontinued operations 37 204 53 882
Cash flows from/(utilised in) financing
activities (14 340) (23 236)
Continuing operations (14 340) 33 594
Discontinued operations Ð (56 830)
Net increase/(decrease) in cash and
cash equivalents 15 274 (6 476)
Cash and cash equivalents at the
beginning of the year (26 633) (20 157)
Cash and cash equivalents at the end
of the year (11 359) (26 633)
Condensed consolidated Segmental ANALYSIS
for the year ended 28 February 2013
SEGMENTAL REVENUE AND RESULTS
The following is an analysis of the GroupÕs revenue and results
from operations by reportable segments:
Aggre-
Coal Bricks gates Total
RÕ000 RÕ000 RÕ000 RÕ000
Year ended
28 Febuary 2013
(Reviewed)
Revenue from external
customers 60 483 114 720 48 552 223 755
Reportable segment
revenue 60 483 114 720 48 552 223 755
Operating profit before
impairments 17 411 6 078 10 970 34 459
Impairment reversals Ð
property, plant and
equipment and
intangibles Ð 1 015 31 284 32 299
Operating profit before
interest and taxation 17 411 7 093 42 254 66 758
Segment assets and
liabilities
Segment assets 25 244 147 486 82 315 255 045
Segment liabilities (6 128) (67 561) (9 047) (82 736)
Year ended
29 Febuary 2012
(Audited)
Revenue from external
customers Ð 112 818 21 989 134 807
Reportable segment revenue Ð 112 818 21 989 134 807
Operating profit before
impairments Ð 8 015 5 518 13 533
Impairment reversals Ð
property, plant and
equipment Ð 8 549 Ð 8 549
Operating profit before
interest and taxation Ð 16 564 5 518 22 082
Segment assets and
liabilities
Segment assets Ð 135 777 39 784 175 561
Segment liabilities Ð (70 900) (6 289) (77 189)
Reviewed Audited
28 Feb 29 Feb
2013 2012
RÔ000 RÕ000
Reconciliation of assets
Total assets for reportable segments 255 045 175 561
Non-current assets held for sale 14 959 60 159
270 004 235 720
Reconciliation of liabilities
Total liabilities for reportable segments (82 736) (77 189)
Corporate liabilities (101 821) (110 529)
Other liabilities (52 222) (47 706)
(236 779) (235 424)
The major changes in segment assets during the year relate to the
sale of the Stanger division, Vereeniging division,
Bronkhorstspruit division, Olifantsfontein divisionÕs plant and
equipment and the addition of plant and equipment. These
divisions were previously included in the Bricks segment.
During the current year, BrikorÕs coal mining activities
commenced. As a result, a coal reportable segment has been added
to the segment report. The three segments offer different
products and are managed separately because they require
different technology and marketing strategies. For each of these
segments, the GroupÕs CEO (the chief operating decision-maker)
reviews internal management reports on at least a quarterly
basis.
- Coal includes mining and sales of coal
- Bricks includes manufacturing and sales of bricks
- Aggregates includes the quarrying and sales of aggregates.
NOTES TO THE CONDENSED FINANCIAL RESULTS
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated provisional financial results for the
year ended 28 February 2013 have been prepared in accordance with
the recognition and measurement requirements of International
Financial Reporting Standards (IFRS) and the presentation and
disclosure requirements of IAS 34 Interim Financial Reporting,
the Listings Requirements of the JSE Limited, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee
and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, and the Companies Act.
The accounting policies applied are consistent with those applied
for the year ended 29 February 2012 and are in terms of
International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board. New standards and
interpretations that became effective on 1 March 2012 had no
material effect on the results for the year.
The condensed consolidated provisional financial results have
been prepared on the historic cost convention, except for certain
financial instruments, which are stated at fair value and are
presented in Rand rounded to the nearest thousand (R'000).
2. DISCONTINUED OPERATIONS
On 18 August 2011 Brikor entered into an agreement for the sale
of the Stanger operations for R50 million; to be settled through
the payment of R30 million in cash and R20 million in 72 monthly
instalments. The agreement became unconditional on
30 November 2011.
On 10 October 2011 a decision was taken by the Board to dispose
of the operations in Olifantsfontein, Vereeniging and
Bronkhorstspruit.
On 8 July 2012 Brikor held an auction for the sale of plant and
equipment of which R8,6 million was received for the Vereeniging
division and R0,5 million for the Olifantsfontein division. On 12
July 2012 Brikor disposed of R8,3 million of the Olifantsfontein
divisionÕs plant and equipment. On 14 August 2012 Brikor entered
into an agreement for the sale of the Olifantsfontein properties
for R15,0 million. As at 28 February 2013 the transfer of the
property was in progress at the deeds office as all sales
conditions had not been met and accordingly this sale has not yet
been recorded. On 17 August 2012 Brikor auctioned the Vereeniging
divisionÕs property for R11,0 million. On 24 August 2012 Brikor
auctioned the Bronkhorstspruit division for R10,0 million. The
properties relating to the unrecorded sale of the Olifantsfontein
properties have been re-valued at their new fair value less cost
to sell recoverable amounts. The table below analyses key amounts
relating to the discontinued operations:
Bronk-
Olifants- Ver- horst-
fontein eeniging spruit Total
RÕ000 RÕ000 RÕ000 RÕ000
February 2013
(Reviewed)
Revenue 1 574 1 385 Ð 2 959
Expenses (3 469) (3 336) (598) (7 403)
Impairments 7 517 1 256 (4 859) 3 914
Profit/(loss)
before taxation 5 622 (695) (5 457) (530)
Taxation Ð Ð Ð Ð
Profit/(loss) from
discontinued operations 5 622 (695) (5 457) (530)
Loss on disposal of
discontinued operations (3 010) (7 559) Ð (10 569)
Loss on disposal (3 010) (7 559) Ð (10 569)
Taxation Ð Ð Ð Ð
Total profit/(loss) from
discontinued operations 2 612 (8 254) (5 457) (11 099)
Bronk-
Olifants- Ver- horst-
fontein eeniging spruit Stanger Total
RÕ000 RÕ000 RÕ000 RÕ000 RÕ000
February
2012
(Audited)
Revenue 36 8 657 4 038 52 667 65 398
Expenses (4 121) (9 827) (6 213) (51 369) (71 530)
Impairments (14 004) (7 878) Ð (1 944) (23 826)
Net financing
cost Ð Ð Ð (75) (75)
Loss before
taxation (18 089) (9 048) (2 175) (721) (30 033)
Taxation Ð Ð Ð Ð Ð
Total loss from
discontinued
operations (18 089) (9 048) (2 175) (721) (30 033)
Profit on
disposal of
discontinued
operations Ð Ð Ð 3 675 3 675
Profit on disposal Ð Ð Ð 3 675 3 675
Taxation Ð Ð Ð Ð Ð
Total (loss)/
profit from
discontinued
operations (18 089) (9 048) (2 175) 2 954 (26 358)
The following table summarises the carrying values of both the
assets and liabilities sold as well as held for sale at
28 February 2013:
Bronk-
Olifants- Ver- horst-
fontein eeniging spruit Total
RÕ000 RÕ000 RÕ000 RÕ000
February 2013 (Reviewed)
Property, plant and
equipment 20 219 25 066 14 874 60 159
Impairments 7 517 1 256 (4 859) 3 914
Transferred back into
continued operations (962) (379) Ð (1 341)
Assets sold (11 815) (25 943) (10 015) (47 773)
Held for sale 14 959 Ð Ð 14 959
Assets sold (11 815) (25 943) (10 015) (47 773)
Proceeds 8 805 18 384 10 015 37 204
Loss on disposal (3 010) (7 559) Ð (10 569)
Bronk-
Olifants- Ver- horst-
fontein eeniging spruit Total Stanger
RÕ000 RÕ000 RÕ000 RÕ000 RÕ000
February 2012
(Audited)
Property, plant
and equipment 20 219 25 066 14 874 60 159 41 856
Inventories 5 080
Trade and other receivables 7 168
Cash and cash equivalents 1 440
Provisions (1 440)
Borrowings (1 615)
Trade and
other payables (6 164)
20 219 25 066 14 874 60 159 46 325
Profit of disposal 3 675
Proceeds on disposal 50 000
Less: Cash and cash equivalents (1 440)
Cash proceeds 48 560
3. INVESTMENT PROPERTY
Investment property arises from the transfer of property which
was owner-occupied and is now held for capital appreciation.
4. RELATED PARTIES
Ultimate controlling party
The GroupÕs ultimate controlling party is G v N Parkin.
Related party transactions
Transaction value Balance
for the year ended outstanding
28 Feb 29 Feb 28 Feb 29 Feb
2013 2012 2013 2012
RÕ000 RÕ000 RÕ000 RÕ000
Sales to related parties
Cyndara 113 (Pty) Ltd 1 636 707 69 49
Kuvula Trade 40 (Pty) Ltd 3 883 2 837 354 328
Vecto Trade 449 (Pty) Ltd Ð Ð 218 218
Scarlet Sun 33 (Pty) Ltd 252 1 609 203 147
Purchases from related
parties
Cyndara 113 (Pty) Ltd 2 552 939 159 246
Kuvula Trade 40
(Pty) Ltd 8 874 7 818 918 68
Leomega (Pty) Ltd Ð 64 Ð 22
Vecto Trade 449 (Pty) Ltd Ð 295 Ð Ð
Scarlet Sun 33 (Pty) Ltd 1 715 Ð Ð Ð
Interest paid to related
parties
G v N Parkin 2 468 2 288 29 430 27 574
Interest received from
related parties
Huntrex (Pty) Ltd 1 835 869 17 884 20 504
The above transactions occurred at armÕs length on market-related
terms.
5. SALIENT FEATURES
Reviewed Audited
28 Feb 29 Feb
2013 2012
Number of shares in issue (excluding
treasury shares)(Ô000) 629 342 629 342
Net asset value per share (cents) 5,3 0,05
Net tangible asset value per share (cents) 2,9 (1,3)
Significant items in profit/(loss) before
taxation
- Impairment reversals/(impairments) 32 299 8 549
- DirectorsÕ emoluments 3 577 4 810
- Employee cost 50 492 46 902
Net asset value per share is determined by dividing the total
equity by the actual number of shares in issue at reporting date.
Net tangible asset value per share is determined by dividing the
total equity less intangible assets by the actual number of
shares in issue at reporting date.
6. SUBSEQUENT EVENTS AND GOING CONCERN
During the 2013 financial year, the Board decided to focus on its
core operations to improve BrikorÕs financial position. Core
focus areas included a reduction in costs, the commissioning of
coal operations and the sale of non-core assets. The successful
implementation of these steps positively influenced the results
for the year ended 28 February 2013, resulting in the Group
realising an operating profit before impairment reversals on
continuing operations of R34,5 million.
The directors have prepared their budgets and cash flow forecast
for the 2014 financial year based on reasonable and supportable
assumptions.
The cash flow forecast indicates that Brikor will have sufficient
cash to enable Brikor to settle its liabilities (excluding the
financing under dispute, which is discussed further below) in the
ordinary course of business. Subsequent to year end, during the
first three months of the 2014 financial period, Brikor has
maintained the growth that is reflected in the 2013 results and
the 2014 cash flow forecast. In addition, the following steps
were taken by the directors to improve BrikorÕs cash flow:
- Included in other financial assets is an amount of R 17,9
million owing by Huntrex 305 (Pty) Ltd in respect of itsÕ
purchase of the Stanger division. Huntrex has indicated that it
is willing to settle a portion of this loan in advance of the due
date. A firm proposal is awaited from Huntrex 305 (Pty) Ltd.
- A subsidiary of Brikor is currently in negotiations with a
third party to supply a material amount of unwashed coal, which
will improve the groupÕs cash flows during the 2014 financial
year.
The directors also considered the following matters in their
assessment of the use of the going concern assumption:
- Brikor is exploring a firm expression of interest from a black
empowerment company for the acquisition of additional shares in
Brikor. Discussions are embryonic at this stage and a further
announcement shall be made in due course.
- On 3 May 2013 it was announced on SENS that Investec Bank
Limited has acquired 20,15% of the securities of the Company.
- However, due to a historical breach of financial covenants,
BrikorÕs loan facilities of R101,8 million (2012: R110,5 million)
were reclassified as a current liability from 2011, in accordance
with the requirements of IAS 1 Presentation of Financial
Statements. As a result of this reclassification, the companyÕs
current liabilities exceeded its current assets on the condensed
consolidated statement of financial position at 28 February 2013
by R94,3 million (2012: R128,6 million).
LEGAL DISPUTE WITH FINANCIER
The Company announced on SENS on 22 February 2013 that Brikor was
in breach of the financing covenants of its financier. This SENS
announcement was renewed on 10 April 2013 and 24 May 2013.
Brikor has been involved in an ongoing dispute with its financier
regarding these facilities and the calling up thereof in December
2012. As a result Brikor issued legal proceedings against its
financier.
During December 2012, Brikor obtained an interim interdict
preventing its financier from resorting to threatened liquidation
proceedings, pending the outcome of an action that Brikor
instituted for a declaration of the rights between it and its
financier. The interim interdict has since been set aside and the
action remains pending.
On 11 June 2013 BrikorÕs financier instituted legal proceedings
under its general notarial bond to take physical possession of
BrikorÕs movable assets, to sell such assets and to recover
BrikorÕs trade receivables. Brikor opposed these proceedings and
a consent order was agreed to which secured the financierÕs
pledge over the moveable assets but prevented its financier from
taking physical possession of or selling the assets. With regard
to the trade receivables, an order was granted conflicting with
the consent order and has been referred to the Supreme Court of
Appeal for determination.
The legal proceedings, the finalisation of which is not
imminent, have not disrupted the day to day operations of Brikor.
GOING CONCERN ASSESSMENT
Notwithstanding that BrikorÕs current liabilities exceed its
current assets as a result of the reclassification described
above, there have been considerable improvements to BrikorÕs
financial performance and cash flows during the year as indicated
in the highlights on the first page and in this note. Given the
companyÕs continued growth as indicated above, the condensed
consolidated provisional financial results are prepared on the
basis of accounting policies applicable to a going concern. This
basis presumes that funds will be available to finance future
operations and that the realisation of assets and settlement of
liabilities will occur in the ordinary course of business.
However, should the company be unsuccessful in its legal
proceedings and be unable to secure additional or alternative
financing in such circumstances, a material uncertainty exists
which may cast significant doubt about the Company and its
subsidiariesÕ ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and
discharge their liabilities in the normal course of business.
INDEPENDENT REVIEW BY THE AUDITORS
The review report of the independent auditor, KPMG Inc, on the
condensed provisional consolidated financial results for the year
ended 28 February 2013 contains an unmodified review conclusion
and an emphasis of matter paragraph, and is available for
inspection at the companyÕs registered office together with the
financial results identified in the auditorÕs report.
The Emphasis of Matter paragraph contained in the auditorÕs
report is extracted as follows: ÒWe draw attention to the
subsequent events and going concern note in the financial
results, which indicates that the groupÕs current liabilities
exceeded its current assets by R94,3 million due to a breach of
financial covenants on certain facilities, which has resulted in
a legal dispute. The note states that these conditions, along
with other matters, indicate the existence of material
uncertainty which may cast significant doubt about the Company
and its subsidiariesÕ ability to continue as going concerns. Our
conclusion is not qualified in respect of this matter."
DATE OF PUBLICATION OF THIS REPORT
25 June 2013
ANNUAL FINANCIAL STATEMENTS
The previous signed audited annual financial statements of the
Group for the year ended 29 February 2012 are available for
inspection at the registered address found below and on the
Company website: www.brikor.co.za.
By order of the Board
G v N Parkin H Botha
Chief Executive Officer Financial Director
Durban
25 June 2013
CORPORATE INFORMATION
BRIKOR LIMITED
("Brikor" or "the Company" or "the Group")
Registration number: 1998/013247/06
JSE code: BIK
ISIN: ZAE000101945
Non-executive directors: Dr B Ngubane; CB Madolo
Executive directors: G v N Parkin (CEO); H Botha (CFO); G Parkin
(Jnr) (Alternate director to the CEO)
Registered address: Maharaj Attorneys, 3 Rydall Vale Crescent, La
Lucia Office Park, Durban
Postal address: PO Box 884, Nigel 1490
Telephone: (011) 739 9000
Facsimile: (011) 739 9021
Company secretary: CIS Company Secretaries (Pty) Ltd
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Auditors: KPMG Inc.
Designated Adviser: Exchange Sponsors (2008) (Pty) Ltd
These results and an overview of Brikor are available at
www.brikor.co.za
Date: 26/06/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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