Wrap Text
Reviewed condensed provisional consolidated financial results for the year ended 28 February 2014.
INFRASORS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/002405/06)
Share code on the JSE: IRA ISIN: ZAE000101507
("Infrasors", "the Company" or "the Group")
REVIEWED CONDENSED
PROVISIONAL CONSOLIDATED
FINANCIAL RESULTS
FOR THE YEAR ENDED 28 FEBRUARY 2014
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Restated Restated
Reviewed audited audited
R000's Note 2014 2013 2012
Revenue – Turnover 327 510 286 986 272 946
Cost of sales (249 772) (253 259) (214 655)
Gross profit 77 738 33 727 58 291
Other income 1 720 1 304 448
Administration and other operating
expenses (30 225) (25 389) (11 187)
Depreciation and amortisation (34 108) (37 608) (20 975)
Contribution/(loss) from operations 15 125 (27 966) 26 577
Fair value adjustment on financial asset – (43 365) –
Other fair value adjustments and
impairments 3 (5 299) (242 752) 10 015
Operating profit/(loss) before interest 9 826 (314 083) 36 592
Investment revenue 1 776 6 869 5 635
Finance costs (11 418) (13 470) (12 549)
Profit/(loss) before tax 184 (320 684) 29 678
Taxation 4 4 723 15 076 (5 208)
Profit/(loss) for the year 4 907 (305 608) 24 470
Other comprehensive income/(loss) not
in profit and loss
Change in deferred tax rate - (340) -
Loss on revaluation reserve - (7 151) -
Deferred tax on los on revaluation reserve - 1 341 -
Total comprehensive income/(loss) for the year 4 907 (311 758) 24 470
Profit/(loss) attributable to
Owners of the parent 4 413 (305 058) 24 680
Non-controlling interest 494 (550) (210)
4 907 (305 608) 24 470
Earnings/(loss) per share(cents)-
Basic and diluted 1 2,8 (166,1) (13,4)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated Restated
Reviewed audited audited
R000's Note 2014 2013 2012
Non-current assets 234 944 281 996 596 475
Property, plant and equipment 5 205 872 242 381 327 071
Investment property 3 040 3 040 98 089
Mineral rights 2 609 2 690 92 464
Goodwill – – 129
Held to maturity investment 6 – 11 676 49 596
Other financial assets 7 22 446 21 653 16 569
Deferred tax assets 977 556 12 557
Current assets 81 417 76 196 83 096
Inventories 14 171 16 859 19 962
Trade and other receivables 51 737 38 593 46 068
Cash and cash equivalents 15 509 20 744 17 066
Total assets 316 361 358 192 679 571
Capital and reserves
Total equity 137 933 140 626 452 384
Share capital 927 927 927
Share premium 256 959 256 959 256 959
Treasury shares 6 (9 962) (2 266) (2 266)
Net issued capital 247 924 255 620 255 620
Revaluation reserve – – 6 150
Share-based payment reserve 96 – –
Retained (loss)/earnings 9 (111 946) (116 358) 188 700
Attributable to equity holders of parent 136 074 139 262 450 470
Non-controlling interest 1 859 1 364 1 914
Non-current liabilities 116 182 147 739 169 361
Borrowings 52 841 81 903 80 623
Environmental rehabilitation provision 18 521 26 747 23 178
Loans from holding company 14 276 – –
Deferred tax liabilities 30 544 39 089 65 560
Current liabilities 62 246 69 827 57 826
Borrowings 16 582 18 812 22 115
Trade and other payables 36 736 40 693 35 452
Bank overdraft 8 181 9 588 –
Current tax liabilities 747 734 259
Total liabilities 178 428 217 566 227 187
Total equity and liabilities 316 361 358 192 679 571
Note to the statement of
financial position:
Net asset value per share (cents) 83,3 75,8 245,2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Restated Restated
Reviewed audited audited
R000's 2014 2013 2012
Cash inflow from operating activities 14 764 20 229 31 208
Cash outflow from investing activities (5 557) (16 001) (38 455)
Cash outflow from financing activities (13 035) (10 138) 7 269
Net decrease in cash and
cash equivalents (3 828) (5 910) 22
Cash and cash equivalents at the beginning
of the year 11 156 17 066 17 044
Cash and cash equivalents at the end
of the year 7 328 11 156 17 066
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Restated Restated
Reviewed audited audited
R000's 2014 2013 2012
Share capital 927 927 927
Share premium 256 959 256 959 256 959
Treasury shares (9 962) (2 266) (2 266)
Opening balance (2 266) (2 266) (2 266)
Retrieval of shares from Infrasors Empowerment Trust
(refer note 7) (11 676) – –
Share buy-back (810) – –
Sale of shares 4 790 – –
Revaluation reserve – – 6 150
Opening balance – 6 150 6 150
Change in deferred tax rate – (340) –
Loss on revaluation of land – (7 151) –
Deferred tax on loss on revaluation of land – 1 341 –
Share-based payment reserve 96 – –
Opening balance – – –
Share options granted 96 – –
Retained (loss)/income (111 946) (116 358) 188 700
Original balance (103 566) 198 603 171 049
Restatement (12 793) (9 903) (7 029)
Restated opening balance (116 359) 188 700 164 020
Restated profit for the year in total
comprehensive income – (305 058) 24 680
Profit for the year in total
comprehensive income 4 413 – –
Non-controlling interest 1 859 1 364 1 914
Opening balance 1 364 1 914 –
Non-controlling interest arising from
business combination – – 2 124
Profit for the year in total
comprehensive income 495 (550) (210)
Balance at end of the year 137 933 140 626 452 384
CONDENSED SEGMENT RESULTS
Dolomite
and
R000's Silica limestone Other Total
Reviewed 12 months ended
28 February 2014
Turnover from external customers 90 725 236 785 – 327 510
Inter-segment revenues – – 33 985 33 985
Depreciation and amortisation (6 019) (26 319) (1 770) (34 108)
Contribution/(loss) from operations 6 129 18 385 (9 389) 15 125
Operating profit/(loss)
before interest 830 18 385 (9 389) 9 826
Additions to non-current assets 4 434 8 846 10 13 290
Assets 77 251 223 752 15 358 316 361
Liabilities (22 293) (84 458) (71 677) (178 428)
Restated audited 12 months
ended 28 February 2013
Turnover from external customers 88 385 197 242 1 359 286 986
Inter-segment revenues – – 22 425 22 425
Depreciation and amortisation (16 450) (20 710) (448) (37 608)
Contribution/(loss) from operations (11 556) 9 978 (26 388) (27 966)
Operating profit/(loss)
before interest (138 557) 7 334 (182 860) (314 083)
Additions to non-current assets 10 869 11 256 382 22 507
Assets 92 028 237 909 28 255 358 192
Liabilities (50 028) (88 865) (78 673) (217 566)
Restated audited 12 months
ended 29 February 2012
Turnover from external customers 86 312 184 756 1 878 272 946
Inter-segment revenues – – 16 845 16 845
Depreciation and amortisation (8 406) (11 692) (877) (20 975)
Contribution/(loss) from operations 13 100 23 923 (10 446) 26 577
Operating profit/(loss)
before interest 13 100 23 923 (431) 36 592
Additions to non-current assets 13 670 18 478 1 110 33 258
Assets 108 855 249 248 321 468 679 571
Liabilities (46 905) (84 814) (95 468) (227 187)
NOTES TO THE REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
Restated Restated
Reviewed audited audited
R000's 2014 2013 2012
Earnings per share ("EPS") reconciliation:
1. Basic and diluted
Restated net profit/(loss) 4 413 (305 058) 24 680
Total shares in issue (000's) 185 521 185 521 185 521
Treasury shares (000's) (22 231) (1 812) (1 812)
Net shares in issue (000's) 163 290 183 709 183 709
Weighted average number of shares
in issue (000's) 159 548 183 709 183 709
Earnings/(loss) per share (cents) 2,8 (166,1) 13,4
2. Headline earnings per share ("HEPS")
reconciliation: Basic and diluted
Net profit/(loss) 4 413 (305 058) 24 680
Loss/(profit) on disposal of property, plant
and equipment 1 946 2 987 (122)
Fair value adjustment on investment property – 88 109 (10 015)
Impairments of property, plant and equipment 5 299 65 545 –
Impairments of mineral rights – 88 969 –
Impairments of goodwill – 129 –
Total fair value adjustments and impairments 5 299 242 752 (10 015)
Tax effect on headline adjustments (2 028) (58 526) 1 436
Headline earnings/(loss) 9 630 (117 845) 15 979
Weighted average number of shares
in issue (000's) 159 548 183 709 183 709
Headline earnings/(loss) per share (cents) 6,0 (64,2) 8,7
3. Other fair value adjustments and
impairments
Fair value adjustment of investment property – (88 109) 10 015
Impairments of property, plant and equipment (5 299) (65 545) –
Impairments of mineral rights – (88 969) –
Impairments of goodwill – (129) –
(5 299) (242 752) 10 015
Impairments of property, plant and
equipment during the year relate to
Delf Sand Proprietary Limited plant
and equipment nearing the end of its
economic life.
4. Taxation 4 723 15 076 (5 208)
The taxation for the year ended
28 February 2014 raised a deferred tax asset
on the assessed loss of Delf Sand
Proprietary Limited
5. Capital commitments
Approved capital expenditure for the
full year to be funded from surplus cash
and bank financing 10 928 19 169 16 455
6. Movement in number of treasury shares
Shares Shares Shares
Opening balance 1 811 927 1 811 927 1 811 927
Retrieval of shares from Infrasors
Empowerment Trust 24 325 348 – –
Repurchase of shares 883 479 – –
Sale of shares (4 790 000) – –
Closing balance 22 230 754 1 811 927 1 811 927
24 325 348 Infrasors Holdings Limited
shares held as security on the
held-to-maturity loan receivable from
the Infrasors Empowerment Trust amounting
to R11,7 million was retrieved as the Trust
is unable to repay the debt.
Refer to SENS announcement dated 18 March 2014
4 790 000 shares were sold to a
BEE investor Joe Kalo Investments
Proprietary Limited.
Restated Restated
Reviewed audited audited
R000's 2014 2013 2012
7. Other financial assets
Opening balance 21 653 16 569 11 433
Investment in environmental insurance policies 2 449 2 277 2 798
Investment in guaranteed endowment policies 3 360 2 807 2 338
Payout and settlement of instalment
sale liabilities (5 016) – –
Closing balance 22 446 21 653 16 569
8. Environment rehabilitation provision
The environment rehabilitation provisions reduced to R18.5 million (2013: R26.7 million)
as a result of a reduction in the rehabilitation requirements.
9. Restatement of comparative periods
The following standards, amendments to published standards and interpretations which became
effective for the year commencing on 1 March 2013 were adopted by the Group:
IFRIC 20 – Stripping costs in the production phase of a surface mine
(effective date: 1 January 2013)
The transitional provisions of IFRIC 20 require an entity to apply this IFRIC to production stripping costs
incurred on or after the beginning of the earliest period presented. The Group has adopted the IFRIC
for the current accounting year, which commenced on 1 March 2013. The IFRIC is therefore applied to
production stripping costs incurred on or after 1 March 2012.
Other Comprehensive Income has been restated to include the movements in the revaluation reserve.
2013 2012
Restate- Restate-
Previously ment for As Previously ment for As
R000's reported IFRIC 20 restated reported IFRIC 20 restated
Balance sheet impact
Change in asset
Property, plant and
equipment
Mining and mine
development assets:
Overburden costs 22 337 – 22 337 14 767 – 14 767
Accumulated depreciation (2 677) (17 767) (20 444) – (13 754) (13 754)
Change in equity and
liabilities
Retained earnings (103 566) (12 792) (116 358) 198 603 (9 903) 188 700
Deferred tax liabilities 44 064 (4 975) 39 089 69 411 (3 851) 65 560
Income statement
impact
Increase in depreciation (33 595) (4 013) (37 608) (16 984) (3 991) (20 975)
Decrease in taxation –
deferred tax 9 407 1 123 10 530 4 756 1 117 5 873
Decrease in net income
for the year (24 188) (2 890) (27 078) (12 228) (2 874) (15 102)
Effect on dolomite
and limestone
segment report
Profit/(loss) before tax (316 671) (4 013) (320 684) 33 669 (3 991) 29 678
Total assets 375 959 (17 767) 358 192 693 325 (13 754) 679 571
Earnings/(loss) per share (164,5) (1,6) (166,1) 15,0 (1,6) 13,4
Headline earnings/(loss)
per share (62,6) (1,6) (64,2) 10,3 (1,6) 8,7
Certain income and expense items included in the Condensed Consolidated Statement of Comprehensive
Income of the comparative periods 2013 and 2012 have been reclassified to be aligned with the
classification policies applied during 2014. This is as a result of the alignment of classification policies of
the Group with its holding company.
2013 2012
R000’s Previously As Previously As
reported Reclassification reclassified reported Reclassification reclassified
Revenue - Turnover 282 605 4 381 286 986 272 744 202 272 946
Cost of sales (221 433) (31 826) (253 259) (191 411) (23 244) (214 655)
Other income 530 774 1 304 882 (434) 448
Administration and other
operating expenses (52 060) 26 671 (25 389) (34 663) 23 476 (11 187)
Restated Restated
Reviewed audited audited
R000's 2014 2013 2012
10. Related party transactions
Management and consulting fees paid to
Afrimat Limited 9 736 – –
Interest paid to Afrimat Group 791 – –
Dolomite products sold to Afrimat Group 6 590 – –
Contributions made to the Infrasors
Environmental Rehabilitation Trust 1 039 1 072 1 038
Rental recoveries from director controlled entity – 192 252
Rent paid to directors/shareholder controlled entity 190 1 492 1 137
11. Events after reporting date
No material events after the reporting date have been identified.
12. Contingent liability
On 25 June 2013 SARS issued an adjusted income tax assessment claiming R9,7 million additional tax, comprising of
R7,3 million penalties and R2,4 million interest, relating to the activities of the subsidiary Lyttelton
Dolomite Proprietary Limited for the tax years 2010, 2011 and 2012 based on the premise that the
Company is not a mining entity. The Company has submitted an appeal to SARS and is of the view
that the activities are of a mining nature. The Company's tax consultants confirmed that the Company's activities
are of a mining nature.
13. Funding
ABSA has agreed to continue with the current funding arrangements for borrowings and overdraft for a
further 36-month period from 1 March 2014.
COMMENTARY
Basis of preparation
The reviewed condensed provisional consolidated financial results ("financial results") for the year ended
28 February 2014 ("year") have been prepared in accordance with the framework and concepts, and in accordance
with and containing the information required by IAS 34: Interim Financial Reporting, the recognition and measurement
requirements of International Financial Reporting Standards ("IFRS"), the SAICA financial reporting guides as issued
by the Accounting Practices Committee and the South African Companies Act, No 71 of 2008 and comply with the
JSE Listings Requirements. The accounting policies and methods of computation applied in the preparation of these financial
results comply with IFRS and are consistent with those applied in the audited annual financial statements
for the 12 months ended 28 February 2013, apart from the effect from the change in accounting policy related to
the first time adoption of IFRIC 20 and except for the adoption of IFRS 10 – Consolidated Financial Statements, which
changed the definition of control as well as IFRS 13 – Fair Value measurement which provides guidance on fair value
measurement in existing IFRS accounting literature with a single standard. These two standards had no material
impact on the Group.
The financial results have been prepared under the supervision of the
Financial Director, M Potgieter CA (SA).
Introduction
The financial results reflect the significant benefits for the Group of the turnaround initiatives introduced, which
have seen a reversal of prior period losses.
Afrimat acquired a majority shareholding of 50.7% in Infrasors with effect from 1 March 2013. Afrimat has since
incrementally increased its shareholding in the Company to 79.6%.
Financial results
Revenue for the year increased by 14.1% to R327.5 million (Restated 2013: R287.0 million), with the contribution from
operations reversing from a prior year loss to a positive R15.1 million (Restated loss 2013: R28.0 million). The Group
reported profit after tax of R4.9 million, which also reversed the prior year loss (Restated loss 2013: R305.6 million)
and includes the costs of impairment to assets amounting to R5.3 million (2013: R242.8 million).
Operational review
Silica segment activities were constrained due to the declining raw material reserve at Delf Silica and the delay in
obtaining the Delf Cullinan mining right. In contrast the Dolomite and Limestone segments reaped the benifits at the higher
demand from the construction sector and cost reduction initiatives.
The turnaround initiatives throughout the Group are progressing satisfactorily with improved plant availability,
increased production throughput and higher sales margins becoming evident.
There has been no material change in the Group's mineral reserves during the year.
Dividends
The directors have elected not to declare a dividend for the year (2013: Rnil) and will reconsider this only when the
Group's borrowings have reduced to an acceptable level.
Prospects
The Group expects to remain a key supplier to the local construction, metallurgical and mining markets.
Infrasors' key focus areas will remain expanding volumes, further reducing costs, continually improving efficiencies and developing the required skills levels of our employees.
Auditor's review
The financial results for the year have been reviewed by the Company's auditor, Mazar Inc. Their unmodified review opinion is available for inspection at the Company's registered office. Their review was conducted in accordance with ISRE 2410 "Review of interim financial information performed by the independent auditor of the entity".
The auditor's report does not necessarily report on all of the information contained in this report. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report together with the accompanying financial information from the Company's registered office.
On behalf of the board
M Noge LR Loubser
Chairman Managing Director
12 May 2014
ADMINSTRATIVE INFORMATION AT DATE OF THIS REPORT
Directors
M Noge# (Chairman), LR Loubser (Managing Director), M Potgieter (Financial Director), JCP Bekker#,
AJ van Heerden*, HP Verreynne*, PFC Ying#
All of the above directors are South African and resident in South Africa.
* Non-executive directors # Independent non-executive directors
Registered office
Lyttelton Dolomite Mine, Botha Avenue, Lyttelton, Centurion, 0157
(PO Box 14014, Lyttelton, 0140)
Sponsor
Bridge Capital Advisors Proprietary Limited
2nd Floor, 27 Fricker Road, Illovo, 2196
(PO Box 651010, Benmore, 2010)
Legal Advisor
Webber Wentzel, 10 Fricker Road, Illovo Boulevard, Johannesburg, 2196
(PO Box 6771, Marshalltown, 2107)
Auditor
Mazars Inc, Designated Auditor Conrad Bruger
Mazars House, Railto Road,
Grand Moorings Precinct, Century City, Cape Town
(PO Box 134, Century City, 7446)
Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennies House, 19 Ameshoff Street, Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
Company Secretary
M Swart
Tyger Valley Office Park No. 2, Corner Willie van Schoor Avenue and Old Oak Road, Tyger Valley, 7530
(PO Box 5278, Tyger Valley, 7536)
Date: 12/05/2014 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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