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Audited consolidated results and cash dividend declaration for the year ended 27 December 2015
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ISIN: ZAE000132817
("Delta EMD" or "the Group")
AUDITED CONSOLIDATED RESULTS AND CASH DIVIDEND DECLARATION
FOR THE YEAR ENDED 27 DECEMBER 2015
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited year to Audited year to
December December
2015 2014
Note R'000 R'000
Revenue 15 211 283 922
Gross profit 2 988 119 671
Interest received 13 223 6 859
Interest paid (714) –
Under recovery of manufacturing overheads – (12 258)
Distribution expenses (1 465) (25 668)
Administrative expenses (8 389) (70 717)
Expenses related to shutdown of business (42 217) (175 283)
Other income/(expenses) 1 694 (1 963)
Pappas Quarry and related expenses (16 203) (1 189)
Profit on sale of assets 9 899 23 257
Impairment raised – (33 085)
Net foreign exchange gains 839 7 264
Loss for the year before taxation (40 345) (163 112)
Taxation (1 545) 10 193
Loss for the year (41 890) (152 919)
Other comprehensive income
Items that may be re classified subsequently to profit or loss:
Reclassification adjustments relating to foreign operations disposed of in the year 4 650 –
Increase in foreign currency translation reserve – 430
Total comprehensive loss for the year (37 240) (152 489)
Attributable to equity holders of parent company
Loss for the year (41 890) (152 919)
Total comprehensive loss for the year (37 240) (152 489)
Headline (loss) attributable to ordinary shareholders 1 (51 789) (145 843)
Number of shares in issue ('000) 49 166 49 166
Weighted number of shares in issue ('000) 49 166 49 166
Attributable loss per share (cents)
– basic and diluted (85,2) (311,0)
Dividend per share (cents) 250,0 –
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited year to Audited year to
December December
2015 2014
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment – 53 774
Current assets
– Inventories – 14 676
– Trade and other receivables 2 616 78 315
Bank balances and cash 185 553 227 378
Taxation receivable 100 101
Assets held for sale 25 949 45 466
Total assets 214 219 419 710
EQUITY AND LIABILITIES
Total shareholders' funds 127 182 291 970
Non-current liabilities
Non-current provisions – 5 228
Current liabilities
– Trade and other payables 28 672 25 301
– Short-term provisions 56 812 97 065
– Taxation payable 1 553 8
Non-current liabilities held for sale – 138
Total equity and liabilities 214 219 419 710
Net asset value per share (cents) 259 594
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited year to Audited year to
December December
2015 2014
R'000 R'000
Cash (utilised) from trading (62 753) (58 130)
Movement in current and non-current provisions (45 474) –
Decrease in working capital 93 607 135 647
Cash (utilised)/generated by operations (14 620) 77 517
Net interest received 12 509 6 859
Taxation paid – (7 705)
Cash (outflow)/inflow from operating activities (2 111) 76 671
Capital expenditure (20 000) (3 875)
Decrease in non-current asset – 2 274
Proceeds on sale of assets 103 189 30 999
Net cash inflow before financing activities 81 078 106 069
Dividend paid – ordinary (122 914) –
Net (decrease)/increase in cash and cash equivalents (41 836) 106 069
Cash and cash equivalents at beginning of year 227 378 121 128
Currency translation of cash in foreign subsidiary 11 181
Cash and cash equivalents at end of year 185 553 227 378
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Foreign
capital currency
and translation Accumulated
premium reserve profit Total
R'000 R'000 R'000 R'000
Balance at 27 December 2013 (Audited) 4 856 4 220 435 202 444 278
Total comprehensive loss for the year – 430 (152 919) (152 489)
Prior year unclaimed dividend reversed – – 181 181
Balance at 27 December 2014 (Audited) 4 856 4 650 282 464 291 970
Loss for the year – – (41 890) (41 890)
Reclassification adjustments relating to foreign operations
disposed of in the year – (4 650) 4 650 –
Dividend paid – – (122 914) (122 914)
Prior year unclaimed dividend reversed – – 16 16
Balance at 27 December 2015 (Audited) 4 856 – 122 326 127 182
NOTES
Audited Audited
year to year to
December December
2015 2014
R'000 R'000
1. Reconciliation between attributable loss and headline loss
Attributable (loss) after taxation (41 890) (152 919)
Impairment raised – 33 085
Profit on sale of assets (9 899) (23 257)
Taxation effect (reversed) – (2 752)
Headline loss attributable to ordinary shareholders (51 789) (145 843)
Attributable headline loss per share
– basic and diluted (105,3) (296,6)
2. Basis of presentation
The Group is domiciled in South Africa. The audited summarised consolidated financial results at and for the year ended
27 December 2015 comprise the company and its subsidiaries (the "Group").
The Group's principal accounting policies have been applied consistently over the current and prior financial years.
On 5 March 2014 the company announced that the board of directors had taken the decision, subject to approval by the
company's shareholders, to discontinue the operations in a phased and orderly manner during 2014 and to realise value for
the company's assets during 2014 and 2015. The decision was approved at the Annual General Meeting of the company held
on 9 May 2014. The company will be wound down and de-registered in due course. The above information highlights that
the going-concern principle is not applicable in the preparation of the company's financial statements. When the company
ceases trading the directors are of the opinion that the company will be in a position to discharge all of its liabilities, due
to the company's cash resources and to recover the assets at their carrying amounts. The effect, if any, of preparing the
financial statements, other than on the going-concern basis will be negligible. Consequently the financial statements have
been prepared on a basis consistent with IFRS which among other things, requires writing assets down to their recoverable
amounts. It also requires recognising a liability for contractual commitments that may have become onerous as a consequence
of the decision to cease trading.
The Group's summarised financial results have been prepared in accordance with the requirements of the JSE Limited
Listings Requirements for provisional reports, and the requirements of the Companies Act applicable to provisional financial
statements. The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial
Reporting Standards Council as well as, the information required by IAS 34 Interim Financial Reporting.
The auditors, Deloitte & Touche, have issued their modified opinion on the Groups' financial statements for the year ended
27 December 2015. The auditor's report contains an emphasis of matter paragraph regarding the basis of preparation used
to prepare the consolidated and separate financial statement in the current year: "Without qualifying our opinion, we draw
attention to the basis of preparation note, Note 1.2, in the financial statements regarding the basis of preparation used to
prepare the consolidated and separate financial statements in the current year". The audit was conducted in accordance
with International Standards on Auditing. This provisional report has been derived from the group financial statements and
consistent in all material respects, with the Group financial statements. A copy of their audit reports are available for inspection
at the company's' registered office. The auditors have issued a modified opinion for the annual financial statements as well
as a modified audit opinion for this extract from the annual financial statements. Any reference to future financial performance
included in this announcement, has not been reviewed or reported on by the company's auditors. The auditor's report does
not report on the commentary hereon. 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.
2015 2014
R'000 R'000
Operating lease commitment 8 2 368
COMMENTARY – UNAUDITED
The Group's results for the year ended 27 December 2015 reflect the actions taken toward the discontinuation of the Group's business, including
the sale of inventory, profits and losses on the disposal of assets, and the expenses incurred or accrued relating to the discontinuation.
Revenue totalled R15.2 million (2014: R283.9 million) and included the sale of all remaining inventory, resulting in a gross profit of R3.0 million (2014:
119.7 million). Distribution expenses totalled R1.5 million (2014: R25.7 million), and administrative expenses totalled R8.4 million (2014: R70.7 million).
The Group's expenses relating to the discontinuation of the business totalled R42.2 million (2014: R175.3 million), including salaries and wages,
general works, energy costs and retention incentives.
The Company paid Manganese Metal Company R37.5 million in full settlement of its contractual obligations related to the Pappas Quarry waste
disposal facility. R22.3 million had been provided for those obligations during 2014.
The Group realised a profit of R9.9 million on the sale of assets having a book value of R93.2 million.
Losses for the year totalled R41.8 million (2014: R152.9), and losses per share totalled 85.2 cents (2014: 311 cents). Headline losses per share for
the year were 105.3 cents (2014: 296.6 cents).
Net cash utilised by operations during the year totalled R14.6 million (2014: cash generated R77.5 million). Working capital decreased by
R93.6 million (2014: R135.5 million), and proceeds from sales of assets totalled R103.2 million (2014: R31.0 million). The Group also paid a
R2.50 per share dividend resulting in a R122.9 million cash outflow.
The Group's year-end cash balances decreased by R41.8 million and totalled R185.6 million at year-end (2014: R227.4 million).
The assets classified at year-end as non-current assets held for sale include the Nelspruit land parcels owned by the Company and those
parcels historically leased and during the year purchased by the company from Manganese Metal Company, and have a total net book value of
R 25.9 million.
At year-end, short-term provisions totalled R56.8 million (December 2014: R97.1 million) and include provisions for retrenchment costs (R7.0 million),
retention incentives (R12.4 million), and the demolition and rehabilitation of the Nelspruit plant site (R37.2 million). During December 2015, the
Company received a definitive remediation order for the Nelspruit plant site from the Department of Environmental affairs.
PROSPECT
The salvage and removal of the remaining assets at the Nelspruit plant site are expected to be completed during the first quarter of 2016, and the
demolition of remaining structures and rehabilitation of the plant site will follow and are expected to be completed during the second quarter of 2016.
On 14 October 2015 shareholders were advised that the Group had entered into an agreement for the sale of the Nelspruit plant site. The Group
was advised on 12 February 2016 that the purchaser had terminated the agreement. The Group will recommence marketing the site and will
continue with the demolition and rehabilitation now underway.
Following the sale of the Nelspruit plant site the Group expects to delist and deregister the Company and to pay a final dividend.
CASH DIVIDEND DECLARATION
The Group is pleased to announce the declaration of a final gross cash dividend of 100 cents (85 cents net of dividend withholding tax) per ordinary
share for the year ended 27 December 2015.
The dividend has been declared from income reserves. A dividend withholding tax of 15% will be applicable to all shareholders who are not exempt.
The issue share capital at the declaration date is 49 165 553 ordinary shares.
The salient dates are as follows:
Last day of trade to receive a dividend Friday, 11 March 2016
Trading "ex dividend" commences: Monday, 14 March 2016
Record date: Friday, 18 March 2016
Payment date: Tuesday, 22 March 2016
Share certificates may not be dematerialised or rematerialised between Monday, 14 March 2016 and Friday, 18 March 2016 both days inclusive.
DIRECTORATE
On 14 May 2015, the following changes to the Board of Directors were made: Mr Praveen Baijnath resigned as Chief Executive, and Mr Baijnath
was appointed a Non-independent, Non-executive Director. Mr Johan Seymore was appointed Acting Chief Executive, and Mrs Emma Nel was
appointed Acting Chief Financial Officer and Company Secretary.
On 27 November 2015, Mr Johan Seymore passed away and thereafter the following changes were made: Mr Todd Atkinson was appointed
Executive Chairman, Mrs Emma Nel was appointed Financial Director and Company Secretary, and Mr Collin Naicker was appointed as Operational
Director.
PREPARER OF FINANCIAL STATEMENTS
These summarised consolidated financial statements have been prepared by EJ Nel CA(SA) in her capacity as Financial Director of the group.
AVAILABILITY OF COMPLETE SET OF FINANCIAL STATEMENTS
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 that report together with the accompanying set of financial statements from the registered office of the Delta EMD Ltd.
TG Atkinson EJ Nel (Financial Director)
22 February 2016
DELTA EMD LIMITED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA ISIN: ZAE000132817
("Delta EMD" or "the Group")
Registered Office
15 Heyneke Street, Industrial Site, Nelspruit, 1200
Transfer Secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001, PO Box 61051, Marshalltown, 2107
Directors:
Independent non-executive: AC Hicks, BR Wright, L Matteucci
Non-Executive: P. Baijnadh
Executive Chairman: TG Atkinson(*) (Chairman) *USA
Executive: EJ Nel (CA)SA (Financial Director), C Naicker (Operations Director)
Sponsor: Rand Merchant Bank (A division of FirstRand Bank Limited) Released on 22 February 2016
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