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Audited summary consolidated financial results for the year ended 31 March 2016
DISTRIBUTION AND WAREHOUSING NETWORK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
(“DAWN” or “the group” or “the company”)
Alpha code: DAW
ISIN: ZAE000018834
E-mail: info@dawnltd.co.za
AUDITED SUMMARY CONSOLIDATED FINANCIAL RESULTS
for the year ended 31 March 2016
COMMENTARY
INTRODUCTION
DAWN manufactures and distributes quality branded hardware,
sanitaryware, plumbing, kitchen, engineering and civil products
through a national branch network in South Africa, as well as in
selected countries in the rest of Africa and Mauritius. The group
has two main operating segments, building and infrastructure,
both supported by the solutions segment.
REPORTING PERIOD
Following the sale in November 2014 of 51% of DAWN’s Watertech
and Sanware clusters to Grohe Luxemburg Four AG, Europe’s largest
and
the world’s leading single-brand manufacturer and supplier of
sanitary fittings, DAWN changed its year-end to 31 March,
resulting in a nine-month reporting period for F2015. As per JSE
Listings Requirements, the group is required to report its last
published comparative results.
These results therefore report on the 12 months to 31 March 2016
compared to the nine-month period to 31 March 2015.
GROUP STRATEGY
DAWN’s business model is to be the master distributor in targeted
industry sectors. The model’s competitive advantage centres on
the
broad disposable income and population distribution in the
markets it serves. This creates a number of barriers to entry for
competitors, such as a high establishment cost, together with a
requirement for technical expertise in its warehouse and
logistics services. Traditional carriers are not geared for
break-bulk storage and distribution. Together with DAWN’s 100%
coverage of southern African markets through its “milk-run”
distribution model together with its break-bulk and just-in-time
service, is its key competitive advantage.
PERIOD UNDER REVIEW
In the interim results to 30 September 2015 DAWN reported
significant progress in the implementation of its turnaround
strategy. However, the second half of the financial year was
severely impacted by a sharp economic slow-down and a slow-down
of government spend on water projects, which resulted in losses
in a number of businesses.
Grohe DAWN Watertech (GDW), in which DAWN holds a minority (49%)
stake, was also impacted by delayed approval of working capital
funding which disrupted the supply chain and had an impact on
earnings at the associate company investment level as well as on
the building trading segment of DAWN, GDW’s largest customer.
Lower resource prices, foreign exchange volatility and scarcity,
and political instability also impacted adversely on DAWN’s rest
of Africa business.
Thus, group sales came under severe pressure in the second half.
The management team responded by dropping prices to maintain
historical volumes. This only served to exacerbate the impact of
the dearth of sales by also reducing gross margins. Although the
group’s operating expenses were trimmed back aggressively, it has
a high fixed cost base which does not allow further cost
reductions in the short-term.
Group operating margin therefore decreased from 3,5% in H1 F2016
to a loss for F2016. The subsidiary businesses which moved into
losses were Sangio, Incledon, Pro-Max, Kitchen, DAWN Africa and
DPI International as well as associate GDW. Total losses after
tax (including GDW) amounted to R130,0 million. The company has,
therefore, decided to make significant impairments to the
carrying value of these investments in these results.
The table below summarises the impact of the impairments and
write-downs on attributable earnings:
Cents
R’m per share
Attributable loss as reported (762,9)
(318,3)
Net impairments and other HEPS add-backs
– controlled entities 155,6 64,9
Net impairments and other HEPS add-backs
– associates and joint ventures 450,2 187,8
Headline loss as reported (157,1)
(65,6)
Further write-downs undertaken
(not qualifying for HEPS add-back)
– controlled entities 155,9 65,1
Further write-downs undertaken
(not qualifying for HEPS add-back)
– associates and joint ventures – –
Core headline loss* (1,2)
(0,5)
* Core excludes asset write-downs, identified by management and
approved by the board, which stems from the impairment tests
performed on the group’s various cash-generating units, but do
not qualify for HEPS add-backs.
These losses continued into the first quarter of F2017. Under the
guidance of new management, the group prioritised plans to halt
the losses, move back into profit and bring working capital back
to normal levels. A plan to achieve this was approved by the
executive committee and the board of directors at the end of June
2016 and significant progress toward these goals is expected
during the second quarter of F2017.
Earnings for F2016 are therefore as follows:
- an operating loss before tax, interest, impairments and
derecognitions of R23,9 million (9 months F2015 a loss of
R80,1 million);
- a headline loss per share of 65,6 cents (9 months F2015 a
headline loss of 28,1 cents per share); and
- a loss per share of 318,3 cents (9 months F2015 loss of 202,1
cents per share).
INCOME STATEMENT
Revenue for the 12 months increased by 38% to R5,0 billion,
compared to the 9 months to 31 March 2015. Volumes declined by
3%, price inflation amounted to 8% with the annualisation of the
nine months adding a further notional 33%.
Gross margins decreased to 21,9% from the 23,4% achieved during
the nine months to 31 March 2015.
Net operating expenses reduced by 9%, measured against an
annualised 2015, reducing the expense to sales ratio from 34,1%
in F2015 to 22,4% in F2016. A total of R90 million in costs net
of inflation and acquisitive increases (which amounted to R168
million in real terms) have been removed during the year under
review.
Group PBIT, after the write-downs that do not qualify for
headline earnings add-backs, was a loss of R23,9 million.
Impairments include an appropriate write-down of the group’s
exposure to the rest of Africa operations.
Net finance costs increased by 2% to R37,1 million (F2015: R36,5
million) excluding the charge of R34,0 million relating to the
increase in value associated with the discovery of a written put
over the remaining 49% of the equity in Swan Plastics (see
restatements below).
Income from associates and joint ventures decreased to a loss of
R5,9 million (F2015: profit of R10,9 million) mainly as a result
of the R32,2 million loss (for DAWN’s 49%) by GDW.
As a result of the impairments and write-downs, the group’s
effective tax rate is low at -2,6%.
Non-controlling interests’ share of group earnings increased from
R1,7 million to R5,0 million, mainly reflecting an earnings
increase from Swan Plastics.
The group incurred a net loss after tax, impairments and write-
downs of R757,9 million.
STATEMENT OF FINANCIAL POSITION
The reduction in net working capital during the 12 months to 31
March 2016 amounted to R55,0 million and a further reduction is
targeted in F2017.
The group’s net working capital has come down from a high of 65
days in December 2014 to 59 days in March 2016. The group’s
stated
target for working capital is 55 days. The four days difference
amounts to R54 million. Management has, however, identified a
further R146 million of working capital reduction opportunities
(making a total of R200 million). The table below summarises the
group’s working capital movements in days, calculated on a
rolling 12-month basis.
Mar Sept Mar Dec Comment on working
2016 2015 2015 2014 capital days
Net working capital 59 57 62 65 Solid improvement
Debtors 45 51 49 46 Pressure as industry
experiences cash
constraints
Stock 71 69 82 74 R134,6 million
reduction
in stock levels; more
planned
Creditors 57 63 69 55 Creditor funding
reduced
in line with recent
stock reduction;
objective is for stock
and creditor days to
contract
The group’s net asset value decreased to R1 056,2 million as at
31 March 2016 compared to R1 884,5 million at 31 March 2015. The
large reduction in net asset value stems mainly from the net
impairments during the year, amounting to R637 million. Compared
to the group’s net interest-bearing debt, the financial position
has deteriorated to a gearing ratio of 29,5% at 31 March 2016
(8,4% at 31 March 2015).
Short-term debt amounts to R357,4 million (R277,4 million net of
cash). Absa Bank Limited has, subsequent to year-end, renewed the
R200 million revolving credit facility (out of a total of R300
million working capital facilities) and requires repayment on an
amortising profile between 7 October 2016 and 7 October 2017.
DAWN has negotiated to repay R50 million by 31 March 2017 and the
balance of R150 million between 1 April 2017 and 7 October 2017
to align repayment commitments with the cash generation of the
group.
STATEMENT OF CASH FLOWS
Cash generated from operating activities before working capital
changes was impacted by the losses incurred in the second half
and
decreased to R49,0 million (F2015: R56,6 million). Working
capital showed an inflow of R25,3 million (F2015: outflow of
R104,3 million). Net finance and tax payments amounted to R58,8
million (F2015: R59,1 million).
Investing and financing activities, however, showed a net inflow
of R53,5 million (F2015: inflow of R103,8 million). Investing
activities showed a R89,9 million inflow for the year. Included
in this number are the following main items:
- R45,4 million additions to property, plant and equipment and
intangible assets. The capital expenditure comprised spend on
the software for the new ERP system, capital expenditure on
fleet, plant and equipment and an outlay for generators, making
the group more resilient to the effects of future power
disruptions; and
- R119,5 million inflows from the repayment of loans owed to DAWN
by associate investment companies.
Financing activities, on the other hand, amounted to a net
outflow of R36,4 million and included:
- R209,2 million in proceeds from debt raising, offset by R207,0
million in repayments of various borrowings and finance leases;
- R30,9 million spent on treasury shares to acquire five million
DAWN shares in the open market during F1 H2016; and
- R7,3 million in dividend payments to non-controlling
shareholders.
The group closed with a net cash of R69,9 million at 31 March
2016 compared to a net cash of R1,4 million at 31 March 2015.
RESTATEMENTS
During the year under review the comparative results were
restated/reclassified for the following matters:
Restatement
Other
As Adden- restate-
Financial pre- dum Writ- ments/
statement viously to lease ten reclassi-
line item stated agreement put fications Restated
Statement of
changes in
equity
2014 (1 523,0) 78,5 31,2 – (1
413,3)
2015 (2 004,1) 82,4 33,4 3,8 (1
884,5)
Statement of
financial
position
Non-current
assets
Derivative
financial
instruments 4,0 – – 25,9 29,9
Deferred tax 71,1 32,1 – – 103,2
Non-current
liabilities
Derivative
financial
instruments – – (30,0) (25,9) (56,0)
Deferred profit (16,0) (23,4) – – (39,4)
Trade and
other
payables – – (3,3) – (3,3)
Operating
lease
liability – (91,6) – (13,7) (105,2)
Current
liabilities
Trade and other
payables (1 053,2) – – 15,4 (1 037,8)
Borrowings (501,6) – – (3,8) (505,4)
Operating
lease
liability – – – (1,8) (1,8)
Deferred
profit (5,8) 0,5 – – (5,3)
Restatement 1
An addendum to the existing lease agreement on the Germiston
Distribution Centre in 2009 was not disclosed to the board. As a
result, the lease liability had to be restated based on a 15-year
lease at an escalation of 8% per annum, ending in December 2023.
Payments under the operating lease are recognised as expenses on
a straight-line basis over the lease term. The expense treatment,
therefore, does not reflect the cash profile of the lease. The
difference between the cash and the expense is accounted for as a
lease liability. The lease liability of R85,8 million as at 31
March 2016 will reduce during the remaining period of the lease
to Rnil. These entries do not affect DAWN’s historical or future
cash flow and any increases or reduction in the lease liability
will not impact on DAWN’s cash flow.
Restatement 2
In August 2013, a subsidiary of DAWN gave the remaining 49%
shareholders in Swan Plastics Pty Ltd (Swan) the right to put
their shares at a 5 price earnings ratio, based on the average of
the prior two years’ earnings. This written put was not disclosed
to the board. The opposite entry to the written put liability is
represented by a debit to equity. The put represents an asset
that the minority shareholders’ equity in Swan will belong to
DAWN shareholders if the written put is triggered. The difference
between the final purchase consideration and the value of the
non-controlling interest in Swan will be accounted for as part of
the change in ownership reserve.
Restatement 3
A share-based payment obligation of R3,8 million, previously
accounted for as a liability, had to be restated as an element of
equity. This incorrect treatment was highlighted by the JSE
proactive monitoring process.
Other matters
The transactions described above in 1 and 2 were initiated and
executed at the time by certain executive directors and senior
management, respectively. Both transactions were executed without
the knowledge and approval of the board. A reportable
irregularity
has therefore been reported by the external auditors to the
Independent Regulatory Board of Auditors with respect to these
transactions.
After considering the circumstances of these transactions, as a
matter of good governance, the board has instituted the following
corrective actions:
- engaged with external legal counsel to clarify DAWN’s legal
position with respect to these matters and its relationship
with
the individuals in question, including DAWN’s right of recourse
against any relevant individuals;
- engaged with parties involved in the above matters to ensure
the
board acts in the best interests of DAWN;
- accounted for and restated the comparative results in the
annual
financial statements for these transactions; and
- the internal audit department launched detailed investigations
into these transactions.
Please refer to note 9 – restatement, reclassification and
consistency of presentation – for further disclosure.
The board is confident that it has taken and continues to take
all the necessary steps to execute its responsibilities in terms
of the Companies Act of South Africa and the principles of good
governance as contemplated by the King Code on Corporate
Governance.
OPERATIONAL OVERVIEW
Building – 51% of group revenue
The building segment consists of wholly- or majority-owned
building trading businesses, associates and joint ventures. The
building trading businesses include WHS, DAWN Kitchen, DAWN
Africa (DAT), Hamilton’s Brushware, Pro-Max Welding Consumables
and Business Development. Other associates and joint ventures are
GDW, Heunis Steel, DAT Zimbabwe and DAT Tanzania.
Revenue for building trading rose by 38% to R2,5 billion (F2015:
R1,8 billion). A 10% price increase was achieved, but volumes
declined by 3%, whilst the annualisation from nine months added a
notional 31% growth. DAWN’s focus on increasing volume over the
existing cost base resulted in the acquisition of Hamilton’s,
Grass and Gardena in the first half of the year under review.
WHS maintained profitability despite the tough trading conditions
experienced. However, meaningful losses in Pro-Max, DAWN Africa,
DAWN Kitchen Fittings and a loss on closure of WiiN detracted
from this positive performance. Trading conditions and gross
margins are expected to remain under pressure for the foreseeable
future. This segment was further negatively impacted by the loss
incurred by GDW, which also had a knock-on impact on WHS’
profitability.
Grohe experienced severe problems with its investment in China
and, consequently, did not pay sufficient attention to its South
African investment. A funding impasse caused a significant impact
on the businesses’ supply chain and factory recoveries. This was
further exacerbated by the lack of Grohe-led exports into Europe
and Asia compared to what was initially anticipated. GDW
therefore incurred a substantial R32,2 million loss for DAWN’s
49% stake in the business. Lixil, Grohe’s parent company, has
since intervened and implemented management changes. This,
together with a funding solution implemented in July 2016, should
result in GDW returning to profits in the second quarter of
F2017.
Associate Heunis Steel performed in line with expectations and
its contribution to group earnings increased by 3%.
The building segment incurred a net loss after tax, impairments
and write-downs of R494,6 million.
Infrastructure – 49% of group revenue
The infrastructure segment consists of infrastructure
manufacturing (including DPI, DPI International, Swan, Ubuntu and
Sangio) and Incledon, a trading business. Associates and joint
ventures include Simba, Fibrex and Aqualia.
Revenue amounted to R2,4 billion in the 12 months to 31 March
2016 (F2015: R1,8 billion), an increase of 38%, driven by a 6%
increase in price, but off-set by a 4% decline in volumes, as
Sangio’s HDPE pipe business, which is exposed to the declining
mining industry, and Incledon, which is exposed to declining
government water spend, came under severe pressure. The
annualisation from nine months added a notional 36% growth.
The PVC pipe manufacturers performed reasonably well, with DPI,
Swan and Ubuntu increasing profit after tax, but off a weak base
in F2015, impacted by strike and power disruptions. Back-up power
generation has since been installed. Sangio, the HDPE pipe
manufacturer, made a substantial loss, impacted by the
abovementioned mining slow-down across Africa.
Incledon came under severe pressure during the second half and
lost R220 million in revenue compared to H1 F2016, causing
overall
revenue to decline by 4% year-on-year. This was caused mainly by
the mining and civil engineering sector slow-downs. As a result
of this decline in revenue, Incledon responded by chasing sales
on price, causing gross margins to decline substantially and
pushing the business into a substantial loss. The lack of
government spend and payments drove a large part of Incledon
debtors’ book into an overdue situation.
Two associate investments in this segment, Aqualia (Mauritius)
and Simba (Tanzania) broke even. Fibrex (Angola) was impacted by
a weak economy and the lack of foreign currency, resulting in
operating losses, despite a small profit from a property
disposal. This business will be closed at the end of the first
quarter F2017.
The infrastructure segment incurred a net loss after tax,
impairments and write-downs of R219,1 million.
Solutions – 11% of group revenue
Solutions consists of DAWN Logistics (comprising DDC and Cargo),
DAWN Human Resources, DAWN Financial Solutions, DAWN Projects,
DAWN Business Systems (IT) and DAWN Marketing (DMD).
Revenue for solutions grew by 50% to R571,4 million in the 12
months to 31 March 2016 (F2015: R380,1 million). This represents
a 9% growth in price and a 7% improvement in volume, whilst the
annualisation from nine months to 12 months added a notional 34%
growth.
Logistics achieved an operational break-even, as a result of
improved operating efficiencies stemming from the new IT systems
implemented and optimised over the last couple of periods. The
group believes that the footprint of this operation can be
further
leveraged for cost and working capital optimisation. Other
services performed in line with expectation and continue to focus
on growing its non-group and rest of Africa footprint. In-group
cost-cutting initiatives led to less recruitment and training
activity for DAWN Human Resources.
The solutions segment incurred a net loss after tax, impairments
and write-downs of R44,9 million.
Head office and consolidation – -11% of group revenue
Head office consists of the head office team costs and the
consolidation entries required to account for unrealised profits
stemming from significant inter-group trading. A net profit after
tax, impairments and write-downs of R0,7 million was recorded.
OUTLOOK
New management has been introduced in key operational positions,
including the CEO position. Stephen Connelly joined the board as
interim chief executive officer on 1 June 2016, initially on a
six-month appointment, which has now been extended to 12 months.
It is anticipated that economic conditions in South Africa and
neighbouring countries will remain very difficult for some time.
Sales will therefore remain under pressure. Most of the loss-
making businesses will unfortunately continue to make losses in
Q1 F2017.
The main focus in Q2 will be:
1. WHS – increasing the gross margin;
2. Incledon – stemming losses;
3. GDW – return to profitability; and
4. Cash flow – reducing excess working capital.
On the cost front, 1 July salary increases have been foregone and
a hiring freeze instituted and other cost-cutting opportunities
are being explored. An objective has been set to move operating
profit margins in the direction of 5% in the trading and 12% in
the manufacturing businesses.
In the medium-term, duplicated activities will be eliminated and
central services costs challenged and benchmarked. Securing
supplier loyalty will be a priority. The focus of the business
will be changed to profits and returns, not sales. Non-core
businesses will be disposed of and a culture of accountability
will be instilled in the business.
The board believes that these steps, whilst not an immediate fix
for the group’s woes, should deliver benefits for stakeholders in
the medium-term.
Any forward-looking statement in these results have not been
reviewed or audited by the company’s auditors.
CHANGES TO THE BOARD AND MANAGEMENT TEAM
The following changes have taken place at board level at DAWN:
- the financial director, Dries Ferreira, resigned from DAWN on
14
July 2016, but agreed to remain in employment until 31 October
2016 to ensure a smooth transition;
- the appointment of Hanré Bester on 14 July 2016 as acting
financial director until a permanent appointment is made; and
- the risk and compliance officer, an executive director, Jan
Beukes, resigned from DAWN on 14 July 2016, but agreed to
remain
In employment until 31 October 2016 to ensure a smooth
transition.
Other management team changes
Departures Arrivals
Derek Tod Stephen Connelly
(chief executive officer) (interim chief executive
officer)
Resigned 31 May 2016 Appointed 1 June 2016
Collin Bishop
(chief operating officer)
Resigned 31 May 2015
Gerhard Kotzee (chief executive Stephen du Toit
infrastructure and Africa and (non-board member)
board member) Appointed 1 April 2016
Resigned 29 February 2016
Board of directors
Departures Arrivals
Diederik Fouché (chairperson) Appointed 1 November 2015
Saleh Mayet (audit committee Appointed 29 May 2015
chairperson, independent
non-executive)
George Nakos (non-executive) Appointed 12 November 2015
Stephen Connelly (interim Appointed 1 June 2016
chief executive officer)
Hanré Bester Appointed 14 July 2016
(acting financial director)
René Roos (executive director) 6 years’ service
Lou Alberts (remuneration 15 years’ service
committee chairperson,
independent non-executive)
Veli Mokoena (non-executive) 10 years’ service (including
previous term)
Dinga Mncube 2 years’ service
(independent non-executive)
The board wishes to thank the outgoing board members for their
contribution to DAWN over the years and welcomes the new board
members who have already started making a meaningful contribution
to the group.
For and on behalf of the board
Diederik Fouché Hanré Bester
Non-executive chairman Acting financial director
14 July 2016
Germiston
AUDITED SUMMARY CONSOLIDATED INCOME STATEMENT
for the 12 months ended 31 March 2016
Audited
Audited restated
12 months 9 months
ended ended
31 March 31 March
2016 2015
R’000 R’000
Revenue 4 993 092 3 616 640
Cost of sales (3 897 870) (2 771 312)
Gross profit 1 095 222 845 328
Operating expenses (1 161 020) (945 223)
Other operating income 41 850 19 830
Operating (loss)/profit before
impairments and derecognitions of
previously held interests (23 948) (80 065)
Net (loss)/gain on derecognition of
subsidiaries (4 592) 637 370
Impairments (632 818) (102 982)
Operating (loss)/profit (661 358) 454 323
Finance income 3 460 15 710
Finance expenses (74 530) (52 194)
(Loss)/profit after net financing costs (732 428) 417 839
Share of (loss)/profit in investments
accounted for using the equity method (5 891) 10 877
(Loss)/profit before taxation (738 319) 428 716
Income tax (expense)/income (19 613) 23 328
(Loss)/profit from continuing operations (757 932) 452 044
Profit from discontinued operations – 27 438
(Loss)/profit for the year (757 932) 479 482
(Loss)/profit attributable to:
Owners of the parent (762 936) 479 120
Non-controlling interests 5 004 362
(Loss)/profit for the year (757 932) 479 482
Earnings per share (cents) (318,31) 202,11
Diluted earnings per share (cents) (317,34) 200,25
AUDITED SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 12 months ended 31 March 2016
Audited
Audited restated
12 months 9 months
ended ended
31 March 31 March
2016 2015
R’000 R’000
(Loss)/profit for the year (757 932) 479 482
Other comprehensive income
Items that will not be reclassified to
profit or loss:
Effects of retirement benefit obligations 1 009 (43)
Tax–related components (282) 12
727 (31)
Items that may be subsequently
reclassified to profit or loss:
Exchange differences recycled through
profit/loss (6 611) (2 972)
Exchange differences on translating
foreign operations 626 277
Cash flow hedging reserve (1 023) –
Tax-related components 286 –
(6 722) (2 695)
Total other comprehensive loss (5 995) (2 726)
Total comprehensive (loss)/income (763 927) 476 756
Total comprehensive (loss)/income
attributable to:
Owners of the parent (768 931) 476 394
Non-controlling interests 5 004 362
(763 927) 476 756
Total comprehensive income
attributable to equity shareholders
arising from:
Continuing operations (768 931) 448 956
Discontinued operations – 27 438
(768 931) 476 394
AUDITED SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March 2016
Audited Audited
Audited restated restated
31 March 31 March 30 June
2016 2015 2014
R’000 R’000 R’000
ASSETS
Non-current assets
Property, plant and
equipment 236 278 252 379 208 621
Intangible assets 66 433 149 060 175 326
Investments in associates
and joint ventures 453 496 913 635 141 883
Derivative financial
instruments 34 380 29 890 –
Deferred tax assets 98 400 103 157 70 069
888 987 1 448 121 595 899
Current assets
Inventories 800 082 930 543 665 107
Trade and other receivables 910 020 1 144 320 1 007 731
Cash and cash equivalents 80 006 197 770 154 123
Derivative financial
instruments 249 44 223
Current tax assets 6 300 3 880 7 988
1 796 657 2 276 557 1 835 172
Assets of disposal group
classified as
held-for-sale – 34 337 1 212 274
Total assets 2 685 644 3 759 015 3 643 345
EQUITY AND LIABILITIES
Equity
Capital and reserves
attributable to equity
holders of the company
Share capital 2 422 2 422 2 422
Share premium 373 748 373 748 373 748
Retained income 646 222 1 417 371 983 627
Treasury shares (30 875) – (6 733)
Share-based payment reserve 39 561 65 915 40 256
Hedging reserve (737) – –
Foreign currency translation
reserve (6 267) (282) 2 413
Change in ownership reserve (8 020) (8 378) (17 989)
Retirement benefit obligation
reserve 494 (233) (202)
Share capital and
reserves 1 016 548 1 850 563 1 377 542
Non-controlling interests 39 664 33 974 35 756
Total equity 1 056 212 1 884 537 1 413 298
Liabilities
Non-current liabilities
Borrowings 75 859 65 471 447 090
Derivative financial
instruments 89 454 55 980 28 111
Deferred profit 34 076 39 403 41 000
Deferred tax liability 22 185 17 969 22 804
Retirement benefit obligation 5 100 6 035 5 820
Share-based payment
liabilities 4 883 – –
Operating lease liabilities 110 363 105 236 98 643
Trade and other payables 7 114 3 338 3 123
349 034 293 432 646 591
Current liabilities
Trade and other payables 890 581 1 037 780 974 319
Borrowings 357 381 505 385 303 943
Operating lease liabilities 2 776 1 754 –
Derivative financial
instruments 8 664 – 23
Deferred profit 5 327 5 327 5 393
Current tax liabilities 7 728 12 463 2 872
Share-based payment
liabilities 7 941 – –
1 280 398 1 562 709 1 286 550
Liabilities directly
associated with assets
held-for-sale – 18 337 296 906
Total liabilities 1 629 432 1 874 478 2 230 047
Total equity and
liabilities 2 685 644 3 759 015 3 643 345
Net asset value per
share (cents) 440,66 794,97 602,64
Net tangible asset value
per share (cents) 412,95 788,68 527,88
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 12 months ended 31 March 2016
Attributable to owners of the parent
Share-
based
Share Share Treasury payment
capital premium shares reserve
R’000 R’000 R’000 R’000
Balance at
1 July 2014
as reported 2 422 373 748 (6 733) 40 256
Restatements – – – –
Restatement 1 –
Operating lease
liabilities and
deferred profit – – – –
Restatement 2 –
Written put – – – –
Balance at
1 July 2014
as restated 2 422 373 748 (6 733) 40 256
Total comprehensive
income for the period – – – –
Profit for the period – – – –
– Continuing
operations – – – –
– Discontinued
operations – – – –
Other comprehensive
income for the period – – – –
Dividends paid – – – –
Total contributions by
and distributions to
owners of the company
recognised directly
in equity – – 6 733 25 659
Share-based payment
– charge for the
period – – – 30 592
Share-based payment
– vesting of options – – 14 717 (14 717)
Treasury shares
acquired – – (7 984) –
Dividends paid to
non-controlling
interests – – – –
Transactions with
non-controlling
interests – – – –
Business combinations – – – –
Transfer from
liabilities – – – 9 560
Derecognition of
subsidiary – – – 224
Derecognition of
joint venture – – – –
Foreign currency
translation reserve – – – –
Balance at
31 March 2015
as restated 2 422 373 748 – 65 915
Balance at
1 April 2015
as reported 2 422 373 748 – 69 695
Restatements – – – (3 780)
Restatement 1 to 3
– Prior year impact – – – –
Restatement 1 –
Operating lease
liabilities and
deferred profit – – – –
Restatement 2
– Written put – – – –
Restatement 3 –
Acquisition vendor – – – (3 780)
Balance at
1 April 2015
as restated 2 422 373 748 – 65 915
Total comprehensive
income for the year – – – –
Profit for the year – – – –
Other comprehensive
income for the year – – – –
Dividends paid – – – –
Total contributions
by and distributions
to owners of the
company recognised
directly in equity – – (30 875) (26 354)
Share-based payment
– charge for the year – – – 27
Treasury shares acquired – – (30 875) –
Transfer to liability – – – (26 381)
Transactions with
non-controlling
interests – – – –
Business combinations – – – –
Balance at
31 March 2016 2 422 373 748 (30 875) 39 561
Attributable to owners of the parent
Foreign Change Retire-
currency in ment
trans- owner- benefit
Hedging lation ship obligation
reserve reserve reserve reserve
R’000 R’000 R’000 R’000
Balance at
1 July 2014
as reported – 2 413 (17 989) (202)
Restatements – – – –
Restatement 1 –
Operating lease
liabilities and
deferred profit – – – –
Restatement 2 –
Written put – – – –
Balance at
1 July 2014
as restated – 2 413 (17 989) (202)
Total comprehensive
income for the period – (2 695) – (31)
Profit for the period – – – –
– Continuing
operations – – – –
– Discontinued
operations – – – –
Other comprehensive
income for the period – (2 695) – (31)
Dividends paid – – – –
Total contributions by
and distributions to
owners of the company
recognised directly
in equity – – 9 611 –
Share-based payment
– charge for the
period – – – –
Share-based payment
– vesting of options – – – –
Treasury shares
acquired – – – –
Dividends paid to
non-controlling
interests – – – –
Transactions with
non-controlling
interests – – (8 057) –
Business combinations – – – –
Transfer from
liabilities – – – –
Derecognition of
subsidiary – – 17 172 –
Derecognition of
joint venture – – 496 –
Foreign currency
translation reserve – – – –
Balance at
31 March 2015
as restated – (282) (8 378) (233)
Balance at
1 April 2015
as reported – (282) (8 378) (233)
Restatements – – – –
Restatement 1 to 3
– Prior year impact – – – –
Restatement 1 –
Operating lease
liabilities and
deferred profit – – – –
Restatement 2
– Written put – – – –
Restatement 3 –
Acquisition vendor – – – –
Balance at
1 April 2015
as restated – (282) (8 378) (233)
Total comprehensive
income for the year (737) (5 985) – 727
Profit for the year – – – –
Other comprehensive
income for the year (737) (5 985) – 727
Dividends paid – – – –
Total contributions
by and distributions
to owners of the
company recognised
directly in equity – – 358 –
Share-based payment
– charge for the year – – – –
Treasury shares acquired – – – –
Transfer to liability – – – –
Transactions with
non-controlling
interests – – 358 –
Business combinations – – – –
Balance at
31 March 2016 (737) (6 267) (8 020) 494
Attributable to
owners of the parent
Equity Non-
attribu- control-
Retained table to ling
earnings company interests Total
R’000 R’000 R’000 R’000
Balance at
1 July 2014
as reported 1 093 315 1 487 230 35 756 1 522 986
Restatements (109 688) (109 688) – (109 688)
Restatement 1 –
Operating lease
liabilities and
deferred profit (78 452) (78 452) – (78 452)
Restatement 2 –
Written put (31 236) (31 236) – (31 236)
Balance at
1 July 2014
as restated 983 627 1 377 542 35 756 1 413 298
Total comprehensive
income for
the period 479 120 476 394 377 476 771
Profit for the
period 479 120 479 120 377 479 497
– Continuing
operations 451 682 451 682 362 452 044
– Discontinued
operations 27 438 27 438 15 27 453
Other comprehensive
income for the
period – (2 726) – (2 726)
Dividends paid (40 017) (40 017) – (40 017)
Total contributions
by and distributions
to owners of the
company recognised
directly in equity (5 359) 36 644 (2 159) 34 485
Share-based payment
– charge for the
period 3 599 34 191 – 34 191
Share-based payment
– vesting of
options (8 958) (8 958) – (8 958)
Treasury shares
acquired – (7 984) – (7 984)
Dividends paid to
non-controlling
interests – – (447) (447)
Transactions with
non-controlling
interests – (8 057) (2 538) (10 595)
Business combinations – – 727 727
Transfer from
liabilities – 9 560 – 9 560
Derecognition of
subsidiary – 17 396 – 17 396
Derecognition of
joint venture – 496 – 496
Foreign currency
translation reserve – – 99 99
Balance at
31 March 2015
as restated 1 417 371 1 850 563 33 974 1 884 537
Balance at
1 April 2015
as reported 1 533 177 1 970 149 33 974 2 004 123
Restatements (115 806) (119 586) – (119 586)
Restatement 1 to 3
– Prior year
impact (109 688) (109 688) – (109 688)
Restatement 1 –
Operating lease
liabilities and
deferred profit (3 976) (3 976) – (3 976)
Restatement 2
– Written put (2 142) (2 142) – (2 142)
Restatement 3 –
Acquisition vendor – (3 780) – (3 780)
Balance at
1 April 2015
as restated 1 417 371 1 850 563 33 974 1 884 537
Total comprehensive
income for the
year (762 936) (768 931) 4 589 (764 342)
Profit for the
year (762 936) (762 936) 5 004 (757 932)
Other comprehensive
income for the year – (5 995) (415) (6 410)
Dividends paid (7 260) (7 260) – (7 260)
Total contributions
by and distributions
to owners of the
company recognised
directly in equity (953) (57 824) 686 (56 723)
Share-based payment
– charge for the year (953) (926) – (926)
Treasury shares
acquired – (30 875) – (30 875)
Transfer to liability – (26 381) – (26 381)
Transactions with
non-controlling
interests – 358 (823) (465)
Business combinations – – 1 924 1 924
Balance at
31 March 2016 646 222 1 016 548 39 664 1 056 212
AUDITED STATEMENT OF CASH FLOWS
for the 12 months ended 31 March 2016
Audited
Audited restated
12 months 9 months
ended ended
31 March 31 March
2016 2015
R’000 R’000
Cash flows from operating activities
Cash generated from operations 74 306 (240 910)
Finance income received 3 460 11 839
Finance expense paid (41 318) (52 403)
Income tax paid (20 950) (18 453)
Dividends received – –
Net cash generated from/(utilised in)
operating activities 15 498 (299 927)
Cash flows from investing activities
Additions to property, plant and
equipment (41 534) (46 414)
Additions and development of
intangible assets (3 847) (29 200)
Proceeds on disposals of property,
plant and equipment 6 245 14 182
Acquisition of businesses through
business combinations (7 003) (43 642)
Acquisition of interest in associates – (20 982)
Loan advances granted to joint
ventures and associates – (64 204)
Loan proceeds from joint ventures
and associates 119 487 –
Proceeds on derecognition of investment
in Grohe DAWN Watertech – 880 000
Disposal of held-for-sale asset 16 000 –
Dividends received from
associates/joint ventures 567 –
Net cash generated by
investing activities 89 915 689 740
Cash flows from financing activities
Proceeds from borrowings 209 178 235 852
Repayment of borrowings (179 129) (726 051)
Instalment sale payments (15 342) (24 865)
Finance lease payments (12 525) (9 733)
Treasury shares acquired (30 875) (7 984)
Acquisition of non-controlling
interest (465) (12 168)
Dividends paid to non-controlling
interest holders (7 260) (447)
Dividends paid – (40 017)
Net cash utilised in
financing activities (36 418) (585 413)
Total cash movement for the year 68 995 (195 600)
Translation effects on foreign cash
and cash equivalents balances (531) (518)
Cash and cash equivalents of
held-for-sale group derecognized – (4 282)
Cash and cash equivalents of disposal
group held-for-sale at end of the year – 80 063
Cash and cash equivalents at
beginning of the year 1 428 121 765
Cash and cash equivalents at
end of the year 69 892 1 428
Consolidated
AUDITED SEGMENTAL ANALYSIS
for the 12 months ended 31 March 2016
BUILDING
Discon-(3)
Continuing tinued
operations operations Total
R’000 R’000 R’000
12 months ended
31 March 2016
Revenue 2 530 920 – 2 530 920
Depreciation and
amortization (11 974) – (11 974)
Operating (loss)/profit
before impairments
and derecognitions of
previously held interests (54 128) – (54 128)
Impairments and
derecognitions of
previously held interests (410 406) – (410 406)
Operating (loss)/profit
after impairments
and derecognitions of
previously held interests (464 534) – (464 534)
Net finance expense (25 766) – (25 766)
Share of (losses)/profit
from associates
and joint ventures (12 171) – (12 171)
Tax income/(expense) 7 880 – 7 880
Net (loss)/profit after
tax from continuing
operations (494 591) – (494 591)
Assets 1 157 172 – 1 157 172
Liabilities 1 394 930 – 1 394 930
Capital expenditure(2) 6 379 – 6 379
9 months ended
31 March 2015
(Restated)
Revenue 1 826 897 334 681 2 161 578
Depreciation and
amortization (9 544) (9 660) (19 204)
Operating profit/(loss)
before impairments and
derecognition of previously
held interests 30 750 37 521 68 271
Impairments and
derecognitions of
previously held interests (9 606) – (9 606)
Operating profit/(loss)
after impairments and
derecognitions of
previously held interests 21 144 37 521 58 665
Net finance
(expense)/income (20 318) (3 077) (23 395)
Share of profit/(losses)
from associates and
joint ventures 18 751 1 214 19 965
Tax (expense)/income (3 633) (9 731) (13 364)
Net profit/(loss) after
tax from continuing
operations 15 944 – 15 944
Net profit after tax
from discontinued
operations – 25 913 25 913
Assets 1 591 137 – 1 591 137
Liabilities 1 344 514 – 1 344 514
Capital expenditure(2) 8 325 35 917 44 242
Corporate
office(1)
and other
Infra- DAWN reconciling
structure Solutions items
R’000 R’000 R’000
12 months ended
31 March 2016
Revenue 2 420 004 571 360 (529 192)
Depreciation and
amortization (34 017) (23 053) (368)
Operating (loss)/profit
before impairments
and derecognitions of
previously held interests (1 871) 4 586 27 465
Impairments and
derecognitions of
previously held interests (156 583) (65 829) (4 592)
Operating (loss)/profit
after impairments
and derecognitions of
previously held interests (158 454) (61 243) 22 873
Net finance expense (32 981) (1 885) (10 438)
Share of (losses)/profit
from associates
and joint ventures 4 304 1 976 –
Tax income/(expense) (31 965) 16 216 (11 744)
Net (loss)/profit after
tax from continuing
operations (219 096) (44 936) 691
Assets 961 776 582 561 (15 865)
Liabilities 747 848 649 354 (1 162 700)
Capital expenditure(2) 55 049 82 508 (3 997)
9 months ended
31 March 2015
(Restated)
Revenue 1 751 379 380 061 (341 697)
Depreciation and
amortization (25 232) (13 365) (180)
Operating profit/(loss)
before impairments and
derecognition of previously
held interests 8 044 (2 847) (113 895)
Impairments and
derecognitions of
previously held interests (720) – 544 714
Operating profit/(loss)
after impairments and
derecognitions of
previously held interests 7 324 (2 847) 430 819
Net finance
(expense)/income (20 600) (2 047) 6 481
Share of profit/(losses)
from associates and
joint ventures (8 079) 205 –
Tax (expense)/income 3 125 1 269 21 974
Net profit/(loss) after
tax from continuing
operations (18 230) (3 421) 457 751
Net profit after tax
from discontinued
operations – – 1 525
Assets 1 250 276 592 332 325 270
Liabilities 838 975 612 051 (921 062)
Capital expenditure(2) 50 442 34 722 22
Discon-(3)
tinued
operations Total(4)
R’000 R’000
12 months ended
31 March 2016
Revenue – 4 993 092
Depreciation and
amortization – (69 412)
Operating (loss)/profit
before impairments
and derecognitions of
previously held interests – (23 948)
Impairments and
derecognitions of
previously held interests – (637 410)
Operating (loss)/profit
after impairments
and derecognitions of
previously held interests – (661 358)
Net finance expense – (71 070)
Share of (losses)/profit
from associates
and joint ventures – (5 891)
Tax income/(expense) – (19 613)
Net (loss)/profit after
tax from continuing
operations – (757 932)
Assets – 2 685 644
Liabilities – 1 629 432
Capital expenditure(2) – 139 939
9 months ended
31 March 2015
(Restated)
Revenue (334 681) 3 616 640
Depreciation and
amortization 9 660 (48 321)
Operating profit/(loss)
before impairments and
derecognition of previously
held interests (39 638) (80 065)
Impairments and
derecognitions of
previously held interests – 534 388
Operating profit/(loss)
after impairments and
derecognitions of
previously held interests (39 638) 454 323
Net finance
(expense)/income 3 077 (36 484)
Share of profit/(losses)
from associates and
joint ventures (1 214) 10 877
Tax (expense)/income 10 324 23 328
Net profit/(loss) after
tax from continuing
operations – 452 044
Net profit after tax
from discontinued
operations – 27 438
Assets – 3 759 015
Liabilities – 1 874 478
Capital expenditure(2) (35 917) 93 511
(1) Other reconciling items consist of corporate and
consolidation adjustments. These predominantly include
elimination of intergroup sales, profits, losses and
intergroup receivables and payables and other unallocated
assets and liabilities contained within the vertically
integrated group. Corporate office and other reconciling
items is not considered to be an operating segment.
(2) Includes expenditure on property, plant and equipment and
intangibles. Government grants received are deducted from the
capital expenditure amount.
(3) Discontinued operations include results from the Watertech
group of companies as well as consolidation and elimination
adjustments related to the Watertech group of companies.
(4) ‘Total’ excludes the building segment’s discontinued
operations amount.
NOTES TO THE AUDITED SUMMARY CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These consolidated annual financial statements comprise a
summary of the audited consolidated financial statements of
the group for 12 months ended 31 March 2016 that was approved
by the board on 14 July 2016.
The summary consolidated financial statements are prepared in
accordance with the requirements of the JSE Limited’s (JSE)
Listings Requirements for summary financial statements and
the requirements of the Companies Act applicable to summary
financial statements. The JSE requires summary financial
statements to be prepared in accordance with the framework
concepts, the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the SAICA
Financial Reporting Guides as issued by the Accounting
Practices Committee and must also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the
consolidated financial statements from which the summary
consolidated financial statements were derived are in terms
of IFRS and are consistent with the accounting policies
applied in the preparation of the previous consolidated
annual financial statements. The preparation of the summary
consolidated annual financial statements by Yolandi van den
Berg (CA(SA)), senior group financial accountant, has been
supervised by the acting financial director, Hanré Bester
(CA(SA)).
The directors take full responsibility for the preparation of
the provisional report and that the financial information has
been correctly extracted from the underlying annual financial
statements.
This summarised report is extracted from audited information,
but is not itself audited. The annual financial statements
were audited by PricewaterhouseCoopers Inc., who expressed an
unmodified opinion thereon. The audited annual financial
statements and the auditor’s report thereon are available for
inspection at the company’s registered office.
The auditors’ report on the annual financial statement
contained the following paragraph with respect to a
reportable irregularity:
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
We report that we have identified certain items which
constitute reportable irregularities (RI) in terms of the
Auditing Profession Act and have reported such matters to the
appropriate regulatory authority. Details relating to these
RI’s are more fully set out in note 10 to the summary
financial statements. The RIs are no longer continuing.
2. EARNINGS PER ORDINARY SHARE
BASIC
Basic earnings per ordinary share is calculated by dividing
the profit attributable to equity holders of the company by
the weighted average number of ordinary shares in issue
during the year, excluding ordinary shares acquired by the
company, incentive shares and treasury shares.
DILUTED
Diluted earnings per ordinary share is calculated by
adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential
ordinary shares.
Restated
12 months 9 months
ended ended
31 March 31 March
2016 2015
Weighted average number of ordinary
shares in issue (’000)
Number of shares in issue at the
end of the year 242 243 242 243
242 243 242 243
Less: Treasury shares held in a
subsidiary at the end of the
year – weighted (2 557) (5 186)
Weighted average number of ordinary
shares in issue (’000) 239 686 237 057
Add: Shares to be issued in terms of
share incentive schemes 731 2 206
Weighted average number of ordinary
shares for diluted earnings per
share (’000) 240 417 239 263
Basic earnings per share (cents) (318,31) 202,11
From continuing operations (cents) (318,31) 190,54
Attributable earnings (R’000) (762 936) 451 682
Weighted average number of
ordinary shares in issue (’000) 239 686 237 057
From discontinued operations (cents) – 11,57
Attributable earnings (R’000) – 27 438
Weighted average number of
ordinary shares in issue (’000) – 237 057
Fully diluted earnings per
share (cents) (317,34) 200,25
From continuing operations (cents) (317,34) 188,78
Attributable earnings (R’000) (762 936) 451 682
Weighted average number of ordinary
shares in issue (’000) 240 417 239 263
From discontinued operations (cents) – 11,47
Attributable earnings (R’000) – 27 438
Weighted average number of
ordinary shares in issue (’000) – 239 263
Headline earnings (R’000)
Attributable earnings (762 936) 479 120
Adjustment for the after-tax and
non-controlling interest effects of:
Net profit on disposal of property,
plant and equipment (1 623) (1 051)
Impairment of intangible assets 127 480 96 915
Impairment of property, plant
and equipment 47 729 720
Impairment of assets held-for-sale – 5 347
Impairment of other assets 453 715 –
Tax effect on disposal of property,
plant and equipment and impairment of
intangible assets (trademarks) (20 545) (9 498)
Non-controlling interest (949) (919)
Net loss/(profit) on derecognition
of previously held interest 4 592 (637 370)
Headline earnings adjustments related
to associates and joint ventures (4 579) 232
Headline earnings adjustments related
to disposal group – (4)
Headline earnings (157 116) (66 508)
Headline earnings per share (cents) (65,55) (28,06)
From continuing operations (cents) (65,55) (39,63)
Headline earnings (R’000) (157 116) (93 942)
Weighted average number of
shares in issue (’000) 239 686 237 057
From discontinued operations (cents) – 11,57
Headline earnings (R’000) – 27 434
Weighted average number of shares
in issue (’000) – 237 057
3. PROPERTY, PLANT AND EQUIPMENT
Furniture
Land and Plant and and
buildings machinery fixtures
R’000 R’000 R’000
Reconciliation of
property, plant and
equipment – 2016
Balance at the beginning
of the year 37 031 136 695 25 394
Additions 6 778 56 834 5 479
Additions through business
combinations (note 9) – 4 044 29
Disposals (1 087) (1 774) (429)
Disposals of subsidiaries – – (217)
Transfers 70 (615) 545
Foreign exchange movements (42) 340 (131)
Government grant received (2 417) (5 874) –
Impairments (12 948) (33 232) (1 541)
Depreciation (4 440) (27 101) (9 536)
Balance at the end of
the year 22 945 129 317 19 593
Reconciliation of property,
plant and equipment – 2015
Balance at the beginning
of the period 30 111 109 155 25 591
Additions 6 004 40 066 6 539
Additions through business
combinations (note 9) 6 199 2 415 4 384
Disposals (129) (21) (488)
Disposals of subsidiaries (148) – (2 492)
Transfers (1 282) 1 311 79
Foreign exchange movements (137) 43 (15)
Impairments (195) (525) –
Depreciation (3 392) (15 749) (8 204)
Balance at the end of
the period 37 031 136 695 25 394
Motor
vehicles Total
R’000 R’000
Reconciliation of
property, plant and
equipment – 2016
Balance at the beginning
of the year 53 259 252 379
Additions 26 780 95 871
Additions through business
combinations (note 8) 121 4 194
Disposals (1 332) (4 622)
Disposals of subsidiaries – (217)
Transfers – –
Foreign exchange movements (81) 86
Government grant received – (8 291)
Impairments (8) (47 729)
Depreciation (14 316) (55 393)
Balance at the end of
the year 64 423 236 278
Reconciliation of property,
plant and equipment – 2015
Balance at the beginning
of the period 43 764 208 621
Additions 23 360 75 969
Additions through business
combinations (note 8) 5 512 18 510
Disposals (10 726) (11 364)
Disposals of subsidiaries (251) (2 891)
Transfers (108) –
Foreign exchange movements (146) (255)
Impairments – (720)
Depreciation (8 146) (35 491)
Balance at the end of
the period 53 259 252 379
Depreciation expense of R23,2 million (2015: R13,8 million)
has been charged in cost of goods and services sold, R9,7
million (2015: R4,7 million) in transportation expenses and
R22,5 million (2015: R17,0 million) in operating expenses.
The group received grants from the Department of Trade and
Industry (DTI) under its Manufacturing Competitiveness
Enhancement Programme (MCEP) for the construction of its
long-term assets. The MCEP is one of the key action
programmes of the Industrial Policy Action Plan of the DTI.
The MCEP encourages manufacturers to upgrade their production
facilities in a manner that sustains employment and maximises
value-addition in the short and medium-term. MCEP grants to
the value of R5,9 million (2015: R nil) have been deducted
from the carrying value of machinery and equipment and R2,4
million (2015: R nil) have been deducted from the carrying
value of land and buildings.
Assets acquired under instalment sale and finance lease
agreements are encumbered as security for repayment of the
instalment sale and finance lease liabilities.
Lease rentals amounting to R98,6 million (2015: R79,9
million) relating to the lease of land and buildings and
R13,7 million (2015: R11,0 million) relating to the lease of
plant, equipment and vehicles are included in the income
statement.
IMPAIRMENTS
31 March 2016
Furniture
Land and Plant and and
buildings machinery fixtures
R’000 R’000 R’000
Impairments breakdown
Building 2 267 3 540 –
Pro-Max Welding Consumables
Proprietary Limited 706 3 540 –
DAWN Africa Trading
Mozambique LDA 1 561 – –
Infrastructure 1 900 21 318 –
Sangio Pipe Proprietary
Limited 1 900 21 318 –
Solutions 8 781 8 374 1 541
DAWN Distribution Centre,
a division of Wholesale
Housing Supplies Proprietary
Limited 8 781 8 374 1 541
12 948 33 232 1 541
Motor
vehicles Total
R’000 R’000
Impairments breakdown
Building 8 5 815
Pro-Max Welding Consumables
Proprietary Limited 8 4 254
DAWN Africa Trading
Mozambique LDA – 1 561
Infrastructure – 23 218
Sangio Pipe Proprietary
Limited – 23 218
Solutions – 18 696
DAWN Distribution Centre,
a division of Wholesale
Housing Supplies Proprietary
Limited – 18 696
8 47 729
Property, plant and equipment to the value of R47,7 million
was impaired during 2016, consisting of leasehold
improvements over property of R12,9 million, plant and
machinery of R33,2 million, furniture and fittings of R1,5
million and R0,008 million of motor vehicles. During 2015
impairment of property, plant and equipment of R0,7 million
related to Pipex Plastics Botswana Proprietary Limited.
Impairments in the building, infrastructure and solutions
segments amounted to R5,8 million, R23,2 million and R18,7
million, respectively.
These assets were impaired on the basis that the discounted
cash flows did not support the carry value of the property,
plant and equipment of the businesses.
Pro-Max Welding Consumables Proprietary Limited, Distribution
and Warehousing Network Africa Proprietary Limited and Sangio
Pipe Proprietary Limited had impairments in the prior year
relating to intangibles. The further impairments were
necessitated by a deterioration in the markets the entities
operate in, further losses and reduction in turnover volume.
Due to reduced volumes, but greater handling cost, the assets
in DAWN Distribution Centre were impaired.
4. INTANGIBLE ASSETS
Indefinite life
Trademarks
and brand
Goodwill names
R’000 R’000
At 31 March 2016
Balance at the beginning of the year 52 040 17 166
Additions – –
Additions through business
combinations (note 9) 3 348 –
Interest capitalised – –
Government grants received – –
Impairments (54 013) (17 166)
Amortisation – –
Balance at the end of the year 1 375 –
At 31 March 2015
Balance at the beginning of the period 66 650 17 166
Additions – –
Additions through business
combinations (note 9) 47 691 –
Interest capitalised – –
Impairments (62 301) –
Amortisation – –
Balance at the end of the period 52 040 17 166
Defined life
Customer
Trade- relation-
marks ships Software Total
R’000 R’000 R’000 R’000
At 31 March 2016
Balance at the
beginning of the
year 11 370 17 137 51 347 149 060
Additions – – 73 927 73 927
Additions through
business combi–
nations (note 36) – 1 179 – 4 527
Interest capitalised – – 1 986 1 986
Government grants
received – – (21 568) (21 568)
Impairments (3 918) (5 151) (47 232) (127 480)
Amortisation (2 560) (5 182) (6 277) (14 019)
Balance at the
end of the year 4 892 7 983 52 183 66 433
At 31 March 2015
Balance at the
beginning of the
period 22 696 34 839 33 975 175 326
Additions – – 17 542 17 542
Additions through
business combi–
nations (note 36) 8 414 7 383 – 63 488
Interest
capitalised – – 2 449 2 449
Impairments (15 766) (18 848) – (96 915)
Amortisation (3 974) (6 237) (2 619) (12 830)
Balance at the
end of the
period 11 370 17 137 51 347 149 060
Amortisation expense of R14,0 million (2015: R12,8 million)
is included in operating expenses. Borrowing costs of R2,0
million (2015: R2,4 million) directly attributable to the
qualifying assets pertaining to the Enterprise Resource
Planning project, which take a substantial period of time
before it is brought into use, were capitalised.
IMPAIRMENTS
Details relating to impairment of intangible assets were as
follows:
Trade- Indefinite
Goodwill marks life
R’000 R’000 R’000
Building 5 453 – 5 453
Hamilton’s Brushware
Proprietary Limited 2 105 – 2 105
Boutique Baths
Proprietary Limited 3 348 – 3 348
DAWN Business Development,
a division of Wholsesale
Housing Supplies Proprietary
Limited – – –
WHS Trading, a division of
Wholesale Housing Supplies
Proprietary Limited – – –
Infrastructure 48 560 17 166 65 726
Ubuntu Plastics
Proprietary Limited 6 037 – 6 037
Incledon Proprietary
Limited (IPS division) 2 250 – 2 250
Incledon Proprietary Limited
(Incledon division) 40 273 17 166 57 439
Solutions – – –
DAWN Business Systems,
a division of Wholesale
Housing Supplies
Proprietary Limited – – –
54 013 17 166 71 179
Customer
Trade- relation-
marks ships Software
R’000 R’000 R’000
Building 3 165 3 852 83
Hamilton’s Brushware
Proprietary Limited 2 547 2 652 –
Boutique Baths
Proprietary Limited – 983 –
DAWN Business Development,
a division of Wholsesale
Housing Supplies Proprietary
Limited 618 – –
WHS Trading, a division of
Wholesale Housing Supplies
Proprietary Limited – 217 83
Infrastructure 753 1 299 –
Ubuntu Plastics
Proprietary Limited 753 1 267 –
Incledon Proprietary
Limited (IPS division) – – –
Incledon Proprietary Limited
(Incledon division) – 32 –
Solutions – – 47 149
DAWN Business Systems,
a division of Wholesale
Housing Supplies
Proprietary Limited – – 47 149
3 918 5 151 47 232
Defined
life Total
R’000 R’000
Building 7 100 12 553
Hamilton’s Brushware
Proprietary Limited 5 199 7 304
Boutique Baths
Proprietary Limited 983 4 331
DAWN Business Development,
a division of Wholsesale
Housing Supplies Proprietary
Limited 618 618
WHS Trading, a division of
Wholesale Housing Supplies
Proprietary Limited 300 300
Infrastructure 2 052 67 778
Ubuntu Plastics
Proprietary Limited 2 020 8 057
Incledon Proprietary
Limited (IPS division) – 2 250
Incledon Proprietary Limited
(Incledon division) 32 57 471
Solutions 47 149 47 149
DAWN Business Systems,
a division of Wholesale
Housing Supplies
Proprietary Limited 47 149 47 149
56 301 127 480
Intangible assets totalling R7,3 million were impaired in
Hamilton’s Brushware Proprietary Limited (Hamilton’s).
Hamilton’s specialises in the manufacturing and retail
distribution of brushware. These intangible assets were
impaired on the basis that the discounted cash flows did not
support the carry value of the non-monetary assets of the
business. Synergies identified at acquisition did not
materialise, further exacerbated by the current economic
outlook.
Intangible assets totalling R4,3 million were impaired in
Boutique Baths Proprietary Limited (Boutique Baths). Boutique
Baths specialises in the manufacturing and distribution of
unique, luxury baths. These intangible assets were impaired
on the basis that the business is not aligned with DAWN's
model of distribution and wholesale on an economies of scale
basis and did not meet the return criteria set at acquisition
date.
Intangibles totalling R0,9 million were impaired in Wholesale
Housing Supplies (Business Development and WHS Trading
divisions). DAWN Business Development and WHS Trading are the
wholesale distribution arms of DAWN focussing on the
sanitaryware and hardware business. These intangible assets
were impaired on the basis that the discounted cash flows did
not support the carry value of the business units to which it
relates to.
Ubuntu Plastics Proprietary Limited fabricates pipe and pipe
fittings in both PVC and HDPE markets. These intangible
assets were impaired on the basis that the discounted cash
flows did not support the carry value of the non-monetary
assets of the business, mainly due to a slowdown in the HDPE
market, also experienced in other areas of DAWN over the last
two years.
IPS and Incledon, both divisions of Incledon Proprietary
Limited, are the wholesale arm of the infrastructure segment.
Intangibles in this business were impaired due the losses
incurred, mainly due to reduced government and mining spend,
as well as losing market share.
Impairments of R47,1 million in the solutions segment
consisted mainly of impairments to the recently developed IT
software project in Incledon and DAWN Distribution Centres,
where the the discounted cash flows did not support the carry
value of the non-monetary assets of the business unit.
IMPAIRMENT OF INTANGIBLE ASSETS
Details relating to impairment of intangible assets were as
follows:
Trade- Indefinite
Goodwill marks life
R’000 R’000 R’000
Building 43 336 – 43 336
Pro-Max Welding Consumables
Proprietary Limited 9 609 – 9 609
Africa Saffer Trading
Proprietary Limited 29 464 – 29 464
Saffer Union (West Africa)
Limited 4 263 – 4 263
Infrastructure 18 965 – 18 965
Sangio Pipe Proprietary
Limited 18 965 – 18 965
62 301 – 62 301
Customer
Trade- relation-
marks ships Software
R’000 R’000 R’000
Building 4 497 3 477 –
Pro-Max Welding Consumables
Proprietary Limited 4 497 3 477 –
Africa Saffer Trading
Proprietary Limited – – –
Saffer Union (West Africa)
Limited – – –
Infrastructure 11 269 15 371 –
Sangio Pipe Proprietary
Limited 11 269 15 371 –
15 766 18 848 –
Defined
life Total
R’000 R’000
Building 7 974 51 310
Pro-Max Welding Consumables
Proprietary Limited 7 974 17 583
Africa Saffer Trading
Proprietary Limited – 29 464
Saffer Union (West Africa)
Limited – 4 263
Infrastructure 26 640 45 605
Sangio Pipe Proprietary
Limited 26 640 45 605
34 614 96 915
AST is the wholesale distribution business covering the rest
of Africa and operates similarly to the South African trading
businesses. The control of AST is critical for the group to
expand into Africa and to align the growth strategy into
Africa. The step-up of DAWN’s interest, from a 51% joint
venture to a 90% subsidiary, triggered new intangible assets
which had to be recognised. These intangible assets were
impaired on the basis that the consideration paid did not
support the discounted cash flows of the business. Future
expectations relating to business performance were also not
materially different from the prior year, where an impairment
of the investment in joint venture was accounted for. The
SUWA acquisition was forced due to the fact that there was a
contractual obligation to exit out of Nigeria as well as to
settle a guarantee provided by DAWN before it could exit.
Intangible assets to the value of R29,5 million were impaired
in the AST group and R4,2 million on SUWA, a subsidiary in
the AST group.
Pro-Max was acquired to enhance and complement the wholesale
of welding equipment already established in the wholesale
distribution model. The Pro-Max impairment was due to the
short delivery against an earn-out target not being achieved
as well as a business partner who did not share DAWN’s views
in running the business. The business partner subsequently
absconded and, on further consequential investigations,
certain anomalies were uncovered which necessitated the
impairment.
Intangible assets to the value of R45,6 million were impaired
at Sangio Pipe Proprietary Limited (Sangio Pipe), a company
in the infrastructure segment, consisting of R19,0 million of
goodwill, R11,3 million of trademarks and R15,4 million of
customer relationships. The additional 51% in Sangio Pipe, a
high density polyethylene (HDPE) manufacturer, was acquired
to complement the existing PVC and HDPE pipe ranges in the
DAWN group. The impairment arose due to the slowdown in the
economy and, specifically, in the mining industry as well as
a slowdown in exports.
5. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Reconciliation of investments in associates and joint
ventures
Joint
Associates ventures Total
R’000 R’000 R’000
As at 31 March 2016
Balance at the beginning of
the year 884 359 29 276 913 635
Share of losses (9 096) (1 966) (11 062)
Share of losses prior
to amortisation (4 702) (1 966) (6 668)
Amortisation of intangible
assets (net of deferred tax) (4 246) – (4 246)
Share of losses allocated
against loan account (148) – (148)
Foreign currency translation
reserve (385) 2 089 1 704
Dividend received + – (567) (567)
Impairment of investments
– Grohe DAWN Watertech (384 642) – (384 642)
– Fibrex S.A.R.L. (48 736) – (48 736)
– Aqualia DPI
Proprietary Limited – (2 630) (2 630)
– DPI Simba Limited – (14 206) (14 206)
Balance at the end
of the year 441 500 11 996 453 496
As at 31 March 2015
Balance at the beginning
of the year 91 526 50 357 141 883
Share of profits/(losses) 15 335 (2 508) 12 827
Share of profits/(losses)
prior to amortisation 17 355 (2 508) 14 847
Amortisation of intangible
assets (net of deferred tax) (2 020) – (2 020)
Share of losses allocated
against loan account – – –
Foreign currency translation
reserve 2 480 1 164 3 644
Loan capital advancement 8 454^ 194 8 648
Acquisitions 766 564# 8 305* 774 869
Derecognition of investment
in Distribution and
Warehousing Network Africa
Proprietary Limited (DAT)
(formerly Africa Saffer
Trading Proprietary
Limited (AST)) – (28 236) (28 236)
Balance at the end of the year 884 359 29 276 913 635
+ Dividend received by DPI Holdings Proprietary Limited from
Aqualia DPI Proprietary Limited.
# Acquisitions relate to the 49% re-acquired in the Grohe
DAWN Watertech group for an amount of R741,7 million, a 49%
share in Grome for R19,5 million and a 49% share in CPT for
R5,2 million.
* Acquisitions relate to investments held by the DAT group
(formerly AST group) in DAT Tanzania and DAT Zimbabwe to
the value of R8,3 million included in the business
combination of DAT (formerly AST).
^ Relates to loans advanced to Incledon Proprietary Limited
(formerly IPS & Distribution Proprietary Limited).
Impairment of investments
31 March 2016
Associates
Impairment of investments in associates in the Building
segment relates to investments in Grohe DAWN Watertech
Proprietary Limited (GDW) and in the Infrastructure segment
in Fibrex S.A.R.L. (Fibrex).
GDW consists of the Watertech companies, mainly situated in
South Africa, and includes brands like Cobra, ISCA, Grohe in
South Africa, Vaal, Libra, Apex and Exipro. During October
2014, a transaction to dispose of 51% to Grohe Luxembourg
Four S.A. (Grohe) was concluded. Synergies, including export
opportunities, did not materialise. Management disruptions,
supply chain and funding shortfalls caused severe losses,
which will take some time to correct. This exacerbated price
and volume pressures.
Fibrex, a pipe factory in Angola experienced a reducing
turnover profile over the last number of years, with major
pressures in respect of political instability, reduction in
infrastructure spend by government, increased local
competition and availability of foreign exchange, all of
which contributed to the impairment.
In both instances value-in-use calculations indicated that
discounted cash flows did not support the carry value of the
entities’ non-monetary assets nor its carry value.
Joint ventures
Impairment of investments in joint ventures occurred in the
Infrastructure segment in respect of Aqualia DPI Proprietary
Limited and DPI Simba Limited.
Aqualia DPI Proprietary Limited is situated in Mauritius and
the reduction in demand for infrastructure spend in the
captive market, with reduced export opportunities, resulted
in negative returns.
DPI Simba Limited is situated in Tanzania and political
instability and elections dampened the demand for
infrastructure spend and DPI Simba Limited experienced
negative returns for consecutive years.
In both instances value-in-use calculations indicated that
discounted cash flows did not support the carry value of the
entities’ non-monetary assets nor its carry value.
6. BORROWINGS
31 March 31 March
2016 2015
R’000 R’000
Non-current
Interest-bearing borrowings
Bank borrowings 9 409 4 978
Instalment sale liabilities 25 354 37 633
Finance lease liabilities 38 453 17 847
73 216 60 458
Non-interest-bearing borrowings
Related parties and non-controlling
shareholders’ loans 1 343 276
Acquisition vendors 1 300 2 237
Other borrowings – 2 500
2 643 5 013
Total non-current borrowings 75 859 65 471
Current
Interest-bearing borrowings
Bank overdraft and call loans 10 114 196 342
Bank borrowings 199 889 6 224
Instalment sale liabilities 20 024 21 534
Finance lease borrowings 18 834 6 826
Directors’ and family members’ loans 5 329 5 634
Trade finance 86 228 226 531
Other borrowings 10 578 30 305
350 996 493 396
Non-interest-bearing borrowings
Other borrowings 4 884 4 072
Acquisition vendors 1 300 7 780
Related parties and non-controlling
shareholders’ loans 201 137
6 385 11 989
Total current borrowings 357 381 505 385
Total borrowings 433 240 570 856
Other interest-bearing borrowings
bear an interest rate varying
between 2,82% and 9,25% (2015:
varying between 2,7% and 9,25%).
The security provided can be summarised
as follows:
Inventory General notarial bonds 739 688
–
Accounts
receivable Cession of book debts 655 483 58
652
1 395 171 58
652
The security listed in the table
covers the group’s:
Revolving credit facility 200 000 200
000
Asset finance 116 415 103
591
316 415 303
591
31 March 2016
A revolving credit facility of R200 million was granted with
Absa Bank Limited at 15 October 2015.
The current facility ends 7 October 2016 and has been re-
negotiated to 7 October 2017. The new facility has similar
characteristics but will have a quarterly step-down of R25
million per quarter in respect of the revolving credit
facility (RCF) starting 7 October 2016 and ending 7 July
2017.
Accounts receivable have been ceded and a general notarial
bond has been registered over inventory.
The details of the covenant measures are as follows:
Covenant measures Required 2016 Required
2015
Total debt/EBITDA < 2.5:1 In breach n/a
n/a
Interest cove > 4.0:1 In breach n/a
n/a
Accounts receivable
and inventory > 3.0:1 4.3
Accounts receivable
– CGIC covered
debtors > 1.5:1 4.8
As indicated above DAWN has breached some of its covenants
and
accordingly approached Absa for a waiver of the relevant
covenant measures.
Absa consented to the non-compliance (breach) of the
covenants
and waived the event of default.
The pricing has provisionally been indicated and reflects a
deteriorated credit position as well as movements in the
general yield curve.
Security requirements remain unchanged.
The carrying amount of the loan in default is R200 million
(R200 million of a RCF) and Rnil general banking limit
(R100 million of a general banking facility).
7. DERIVATIVE FINANCIAL INSTRUMENTS
Fair value estimation
The fair value of forward foreign exchange contracts is
determined using quoted forward exchange rates to terminate
the contracts at the statement of financial position date.
Derivative financial instruments
The table below analyses financial instruments carried at
fair
value, by valuation method. The different levels have been
defined as follows:
- Quoted prices (unadjusted) in active markets for identical
assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1
that
are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from
prices) (level 2).
- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs)
(level
3).
31 March 31 March
2016 2015
Level R’000 R’000
ASSETS
Non-current assets
Put option – Grohe
DAWN Watertech 3 34 380 29 890
Current assets
Forward foreign exchange
contracts – valued at fair
value through profit/loss 2 249 44
Total assets 34 629 29 934
LIABILITIES
Non-current liabilities
Call option – Grohe
DAWN Watertech 25 430 25 940
Written put – Swan Plastics
Proprietary Limited 3 64 024 30 040
Total non-current liabilities 89 454 55 980
Current liabilities
Forward foreign exchange
contracts – valued at fair
value through profit/loss 2 7 272 –
Forward foreign exchange
contracts – designated as cash
flow hedges 2 1 392 –
Total current liabilities 8 664 –
Total liabilities 98 118 55 980
* Refer to note 10 for details regarding restatements,
reclassifications and consistency of presentation
disclosure.
The fair value of financial instruments traded in active
markets is based on quoted market prices at the statement of
financial position date. A market is regarded as active if
quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service, or
regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length
basis. The quoted market price used for financial assets held
by the group is the current bid price. These type of
instruments are included in level 1. DAWN carries no level 1
financial instruments.
The fair value of financial instruments that are not traded
in an active market (for example, over-the-counter derivatives)
is determined by using valuation techniques. These valuation
techniques maximise the use of observable market data where
it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to
fair value an instrument are observable, the instrument is
included in level 2. If one or more of the significant inputs is not
based on observable market data, the instrument is included
in level 3.
Specific valuation techniques used to value financial
instruments include:
- Quoted market prices or dealer quotes for similar
instruments.
- The fair value of interest rate swaps is calculated as the
present value of the estimated future cash flows based on
observable yield curves.
- The fair value of forward foreign exchange contracts is
determined using forward exchange rates at the statement of
financial position date, with the resulting value
discounted back to present value.
- Other techniques, such as discounted cash flow analysis,
are used to determine fair value for the remaining financial
instruments.
All of the resulting fair value estimates are included in
level 2.
31 March 2016
The settlement dates on open forward exchanges contracts
range between one and six months from 31 March 2016.
31 March 2015
The settlement dates on open forward exchange contracts range
between one and four months from 31 March 2015.
Hedge reserve
At 31 March 2016, the group held derivative financial
instruments that were designated as cash flow hedges of
future forecast transactions. These were hedging of:
- Future capital expenditure payments by forward foreign
exchange contracts
- Future inventory payments by forward foreign exchange
contracts
Call and put option – Grohe DAWN Watertech
The Watertech transaction included a call option in favour of
Grohe to acquire an additional 24,1% indirect shareholding in
the Watertech companies from DAWN after a ten-year period
and, if such option is exercised by Grohe, or if Grohe’s
shareholding has otherwise increased to 75,1%, the option for
DAWN to put its remaining 24,9% indirect interest in the
Watertech companies to Grohe.
Put option of R34,4 million and a call option of R25,4
million were recognised at their fair values. A 50%/50%
probability was assumed and the consideration in future will
be determined as an earnings multiple.
Written put – Swan Plastics
A written put relating to Swan Plastics Proprietary Limited
(Swan) had to be accounted for. In August 2013, a subsidiary
of DAWN gave the remaining 49% shareholders in Swan the right
to put their shares at a 5 price earnings ratio based on the
average of the prior two years’ earnings. After six years
there will be a deemed offer and a deemed acceptance of the
remaining 49%. This written put was not disclosed to the
board. At inception the valuation is accounted for in
retained earnings as part of equity and the profit and loss
impact is accounted for as a finance expense and an
employment expense.
The written put is disclosed in derivatives and an employment
liability in trade and other payables – non-current.
8. OPERATING LEASE LIABILITIES AND COMMITMENTS
Operating lease commitments
31 March 31 March
2016 2015
R’000 R’000
Capital commitments
Capital expenditure contracted for
at the reporting date but not yet
incurred and recognised in the
financial statements is as follows:
Motor vehicles 4 178 3 442
Intangible assets – software 5 512 10 153
Total capital commitments 9 690 13 595
Restated*
31 March 31 March
2016 2015
R’000 R’000
Operating lease liabilities
Non-current 110 363 105 236
Current 2 776 1 754
113 139 106 990
The future aggregate minimum lease
payments under non-cancellable
operating leases are as follows:
No later than one year 103 550 96 461
Later than one year and not
later than five years 484 556 493 440
Later than five years 70 500 147 107
658 606 737 008
* Refer to note 10 for details regarding restatements,
reclassifications and consistency of presentation
disclosure.
9. BUSINESS COMBINATIONS
31 March 2016
Boutique Baths Proprietary Limited
A 76% share was acquired in Boutique Baths Proprietary
Limited (Boutique Baths) for a consideration of R7 million.
Boutique Baths specialises in the manufacturing and
distribution of unique, luxury baths. The effective date of
the transaction was 1 April 2015.
Boutique Baths contributed operating profit of R0,7 million
and revenue of R11,8 million since the acquisition date.
The amount of net assets acquired amounted to R5,6 million
and non-controlling interests of R1,9 million was recognised.
Goodwill recognised on this acquisition amounts to R3,3
million. Intangible assets have been allocated in terms of
IFRS 3(R).
Non-controlling interest has been calculated based on the
proportional share in net assets. The goodwill is not
expected to be deducted for income tax purposes.
The fair value of assets acquired, liabilities assumed,
intangibles assets and the non-controlling interest at the
acquisition date are set out below.
Boutique
Baths
Proprietary
Limited
Consideration at acquisition date: R’000
Cash 7 006
Total purchase consideration 7 006
Recognised amounts of identifiable Fair
assets acquired and liabilities value
assumed: R’000
Property, plant and equipment 4 194
Customer relationships 1 179
Inventory 1 611
Trade and other receivables 691
Cash and cash equivalents 3
Assets 7 678
Trade and other payables (1 450)
Deferred tax liabilities (330)
Provisions and accruals (316)
Liabilities (2 096)
Total identifiable net assets 5 582
Less: Non-controlling interest (1 924)
Goodwill 3 348
Purchase consideration 7 006
Cash flow from acquisitions
Total purchase consideration 7 006
Less: Cash and cash equivalents acquired (3)
Total cash outflow from acquisitions 7 003
31 March 2015
Pro-Max group (Pro-Max)
A 60% share was acquired in Pro-Max (Pro-Max Welding
Consumables Proprietary Limited and Weld-D Proprietary
Limited) for a provisional cash consideration of R8,4
million.
The cash consideration to be paid was dependent on Pro-Max
meeting certain targets as set out in the sale of shares
agreement between the group and Pro-Max. Pro-Max did not
achieve the targets and the acquisition vendor of R8,4
million was reversed through profit and loss.
Pro-Max specialises in the manufacturing and distribution of
welding equipment and consumables. The effective date of the
transaction was 1 July 2014.
Pro-Max contributed operating profit of R3,6 million and
revenue of R125,9 million since the acquisition date.
The amount of net liabilities acquired amounted to R6,9
million and non-controlling interests of R0,9 million was
recognised.
The total fair value of identified intangible assets is R9,1
million. Goodwill recognised on this acquisition amounts to
R9,6 million. The total goodwill amount, trademarks to the
value of R4,5 million and customer relationships of R3,5
million were impaired as at 31 March 2015. A further 14,16%
was acquired during February 2015 for a cash consideration of
R2,5 million. This was accounted for as a transaction with
non-controlling interest and charged to the changes in
ownership reserve. The R2,5 million is payable in full by 1
September 2015.
Hamilton’s Brushware SA Proprietary Limited (Hamilton’s)
On 1 December 2014 the group acquired a 69% share in
Hamilton’s Brushware SA Proprietary Limited for a cash
consideration of R10 million. Hamilton’s specialises in the
manufacturing and retail distribution of brushware.
Hamilton’s contributed operating profit of R0,97 million
and revenue of R18,4 million since the acquisition date.
If the acquisition
had occurred on 1 July 2014, group revenue would have been
R28,1 million more, and operating profit for the period would
have increased by R1,4 million. The amount of net assets
acquired amounted to R0,9 million and non-controlling
interests of R2,3 million was recognised. Total fair value of
intangibles recognised are R6,6 million, comprising customer
relationships and tradenames.
The total goodwill attributed to this transaction amounts to
R2,1 million.
Apex Valves (South Africa) Proprietary Limited (Apex Valves)
An additional 39,53% shareholding was acquired in Apex Valves
(South Africa) Proprietary Limited (Apex Valves) on 30 July
2014 in addition to the 60,47% previously owned. This
resulted in the group obtaining 100% control over Apex Valves.
A cash consideration of R6 million was paid on 31 October 2014.
Africa Saffer Trading Proprietary Limited (AST)
The group acquired an additional 39% shareholding in AST as
at 31 October 2014 for a cash consideration of R17,7 million.
The 51% interest disclosed as an investment in joint venture
was derecognised. Subsequently, AST was rerecognised as a
subsidiary.
The group realised a net gain of R15,0 million on this
transaction, consisting of a R5,0 million loss on
derecognition of the joint venture and a R20,0 million gain
on re-recognition as a subsidiary.
The total goodwill attributed to this transaction amounts to
R29,5 million and was impaired.
The AST group contributed an operating loss of R14,8 million
and revenue of R61,6 million since the acquisition date.
If the acquisition had occurred on 1 July 2014, group revenue
would have been R62,4 million more, and operating profit for
the period would have decreased by R1,0 million.
IPS & Distribution Proprietary Limited (IPS)
An additional 51% was purchased in IPS as at 1 January 2015
for a cash consideration of R51. The 49% disclosed as an
investment in associate was derecognised. Subsequently, IPS
was rerecognised as a 100% owned subsidiary.
The total goodwill attributed to this transaction amounts to
R2,3 million.
IPS contributed an operating loss of R2,7 million and revenue
of R30,8 million since the acquisition date.
Saffer Union (West Africa) Limited (SUWA)
The group acquired an additional 50% shareholding in SUWA as
at 31 March 2015 for a cash consideration of R5,2 million.
This resulted in the group obtaining 100% control over SUWA
and recognised it as a subsidiary. SUWA is part of the AST
group. If the acquisition occurred on 1 July 2014, group
revenue would have been R5,5 million more and operating
profit for the period would have decreased by R21,8 million.
The amount of net assets acquired amounted to R1 million. No
identifiable intangibles were recognised. Total goodwill
attributed to this transaction amounts to R4,3 million and
was subsequently impaired.
The fair value of assets acquired, liabilities assumed,
intangibles assets and the non-controlling interest at the
acquisition date are set out below.
Hamiltons Africa IPS &
Brush- Saffer Saffer Distri-
ware SA Trading Union bution
Proprie- Proprie- (West Proprie-
Pro-Max tary tary Africa) tary
group Limited Limited Limited Limited Total
R’000 R’000 R’000 R’000 R’000 R’000
Conside-
ration
at acqui-
sition
date
Cash – 10 000 17 658 5 220 – 32 878
Fair value
of
previously
held
interest – – 20 080 – – 20 080
Loan amount
acquired
as part of
acquisition – (4 521) – – – (4 521)
Contingent
conside-
ration (acqui-
sition
vendor) 8 359 – – – – 8 359
Total
purchase
conside-
ration 8 359 5 479 37 738 5 220 – 56 796
Recog-
nised
amounts
of identi-
fiable
assets
acquired
and lia-
bilities
assumed:
Fair Fair Fair Fair Fair Fair
value value value value value value
R’000 R’000 R’000 R’000 R’000 R’000
Property,
plant
and
equip-
ment 8 008 2 100 7 064 201 1 129 18 502
Trade-
marks 5 139 3 275 – – – 8 414
Customer
relation-
ships 3 974 3 409 – – – 7 383
Invest-
ments in
joint
ventures
– equity
accounted – – 8 305 – – 8 305
Deferred
taxation 219 222 560 – 6 417 7 418
Inven-
tory 30 623 12 875 54 385 3 719 26 386 127 988
Trade
and
other
receiv-
ables 35 727 12 126 50 747 14 11 861 110 475
Cash
and
cash
equi-
valents 26 4 845 4 504 447 5 986 15 808
Assets 83 716 38 852 125 565 4 381 51 779 304 293
Borrow-
ings (3 780) (14 337) (35 630) – (20 711) (74 458)
Trade
and
other
pay-
ables (50 730) (15 428) (58 786) (1 924) (32 178) (159 047)
Current
tax
lia-
bili-
ties (3 442) (591) (2 981) – – (7 014)
Deferred
tax
liabi-
lities (2 552) (1 859) (494) – – (4 905)
Bank
over-
draft (22 514) – (4 058) – – (26 572)
Provi-
sions
and
accruals(1 081) (912) (17 833) (1 500) (1 139) (22 465)
Liabili-
ties (84 099) (33 127)(119 782) (3 424) (54 029) (294 461)
Total
iden-
tifi-
able
net
assets (383) 5 725 5 783 957 (2 250) 9 832
Less:
Non-
control-
ling
interest (867) (2 351) 2 491 – – (727)
Goodwill 9 609 2 105 29 464 4 263 2 250 47 691
Purchase
consi-
dera-
tion 8 359 5 479 37 738 5 220 – 56 796
Cash
flow
from
acqui-
sitions
Total
purchase
conside-
ration 8 359 5 479 37 738 5 220 – 56 796
Less:
Cash and
cash equi-
valents
ac-
quired 22 488 (4 845) (446) (447) (5 986) 10 764
Less:
Loan
amount
acquired
as part
of acqui-
sition – 4 521 – – – 4 521
Less: Fair
value of
previously
held
interest – – (20 080) – – (20 080)
Less:
Contingent
conside-
ration (8 359) – – – – (8 359)
Total
cash
outflow/
(inflow)
from
acquisi-
tions 22 488 5 155 17 212 4 773 (5 986) 43 642
10. RESTATEMENT, RECLASSIFICATION AND CONSISTENCY OF PRESENTATION
RESTATEMENTS (NOTES 1 TO 3)
1. Restatement 1 – Operating lease liability (note 8) and
deferred profit
An operating lease liability is required for leases with
escalation clauses. An addendum to the existing lease
agreement on the Germiston Distribution Centre in 2009
was not disclosed to the board. As a result, the lease
operating liability (note 8) and related deferred tax had
to be restated based on a minimum 15-year lease period at
an escalation of 8% per annum, ending in December 2023. To
improve disclosure, the operating lease liability has been
disclosed as a separate item on the face of the statement
of financial position and a description of the liability
is included in note 8.
Deferred profit relating to the initial sale of the
Germiston Distribution Centre had to be restated based on
a 15-year amortising profile instead of 10 years as
previously reported. This is in line with the operating
lease liability. Deferred profit and the relating deferred
tax were restated.
The financial impact in the affected periods are as
follows:
31 March 30 June
2015 2014
R’000 R’000
Statement of changes in equity (3 976) (78 452)
2. Restatement 2 – Written put (note 7)
A written put relating to Swan Plastics Proprietary
Limited (Swan) had to be accounted for. In August 2013, a
subsidiary of DAWN gave the remaining 49% shareholders in
Swan the right to put their shares at a 5 price earnings
ratio based on the average of the prior two years’
earnings. After six years there will be a deemed offer and
a deemed acceptance of the remaining 49%. This written put
was not disclosed to the board. At inception the valuation
is accounted for in retained earnings as part of equity
and the profit and loss impact is accounted for as a
finance expense and an employment expense. The written put
is disclosed in derivatives (note 7) and an employment
liability in trade and other payables – non-current.
The financial impact in the affected periods are as
follows:
31 March 30 June
2015 2014
R’000 R’000
Statement of changes in equity (2 143) (31 236)
3. Restatement 3 – Acquisition vendor disclosure in share-
based payment reserve
An obligation was raised as a share-based payment
obligation in equity to acquire the remaining non-
controlling interest shareholding of 18,1% in DAWN Human
Resource Solutions Proprietary Limited. The above
treatment transferring the liability to equity was
incorrect as per paragraph 4 of IFRS 2. DAWN has updated
the statement of changes in equity (SOCIE) and share-based
payment obligation. This incorrect treatment was
highlighted by the JSE proactive monitoring process.
The financial impact in the affected periods are as
follows:
31 March 30 June
2015 2014
R’000 R’000
Statement of changes in equity (3 780) –
RECLASSIFICATIONS (NOTES 4 TO 8)
4. Grohe put
During 2015 the Grohe put valuation was calculated based
on a Black Scholes valuation model. A more appropriate
valuation model namely, Monte Carlo valuation method, was
used. During the prior year a net put asset was disclosed.
To enhance disclosure, the put was disclosed as an asset
and the call as a liability in the current year. The
valuation was re-performed for the comparative period and
a call option disclosed under assets and a put option
disclosed under liabilities was recognised. The net amount
remained unchanged with no profit and loss impact.
5. Consulting fees and share-based payment disclosure (SOCIE)
Consulting fees should have been disclosed as a share-
based payment expense under IFRS 2 for Collin Bishop in
respect of services rendered for the Grohe DAWN Watertech
transaction. This incorrect treatment was highlighted by
the JSE proactive monitoring process.
6. Acquisition and delivery of treasury shares (SOCIE)
Historically DAWN disclosed the movement in treasury
shares between acquisition and delivery of shares and in
the SOCIE they were set-off against each other. IAS 1.15
however, requires fair presentation through faithful
representation of the effects of transactions, other
events and conditions that occurred during a financial
period. IAS 1.106(d) specifically requires the SOCIE to
reflect a reconciliation separately disclosing the changes
between the equity position at the beginning and end of
the year. The restatement separates the disclosure in the
SOCIE. This incorrect treatment was highlighted by the JSE
proactive monitoring process.
7. Treasury shares purchased (cash flow)
Treasury shares were historically incorrectly included in
investing activities and have been reclassified to
financing activities. This incorrect treatment was
highlighted by the JSE proactive monitoring process.
8. Acquisition of non-controlling interests (cash flow)
Acquisition of non-controlling interest was historically
incorrectly included in investing activities and has been
reclassified to financing activities. This incorrect
treatment was highlighted by the JSE proactive monitoring
process.
CONSISTENCY OF PRESENTATION (NOTE 9)
9. Tax impact in equity (SOCIE)
The tax impact in equity relating to treasury shares and
share-based payment have been identified separately and
aligned with the applicable category instead of a separate
line item where it was offset. Capital Gains Tax (CGT)
relating to the disposal of treasury shares is accounted
for in equity on the basis that at a group level shares
are disclosed at cost and delivered at cost. There is
therefore no resultant CGT charge at group level. DAWN has
disclosed the CGT difference against the share-based
payment – vesting of options line in SOCIE. The tax impact
relating to the difference in tax treatment between group
(equity-settled) and company (cash-settled) is accounted
for in equity. DAWN has disclosed the equity/cash-settled
difference against the share-based payment – charge for
the period line in SOCIE. This incorrect treatment was
highlighted by the JSE proactive monitoring process.
OTHER MATTERS
The transactions described above in 1 and 2 were initiated
and executed at the time by certain executive directors and
senior management, respectively. Both transactions were
executed without the knowledge and approval of the board. A
reportable irregularity has therefore been reported by the
external auditors to the Independent Regulatory Board of
Auditors with respect to these transactions. The external
auditors have also confirmed to the Independent Regulatory
Board of Auditors that these irregularities are not
continuing. After considering the circumstances of these
transactions, as a matter of good governance, the board has
instituted the following corrective actions:
– engaged with external legal counsel to clarify DAWN’s
legal position with respect to these matters and its
relationship with the individuals in question, including
DAWN’s right of recourse against any relevant individuals;
– engaged with parties involved in the above matters to
ensure the board acts in the best interests of DAWN;
– accounted for and restated the comparative results in the
annual financial statements for these transactions; and
– the internal audit department launched detailed
investigations the into these transactions.
The board is confident that it has taken and continues to
take all the necessary steps to execute its responsibilities
in terms of the Companies Act of South Africa and the
principles of good governance as contemplated by the King
Code on Corporate Governance.
IMPACT ON INCOME STATEMENT
Restated Reported
31 March 31 March
2015 2015 Difference
Note R’000 R’000 R’000
Operating expenses 1, 2 (945 223) (939 836) (5 387)
Administration and
selling expenses 1 (552 079) (546 906) (5 173)
Other operating
expenses 2 (46 288) (46 074) (214)
Other operating income 3 862 4 211 (349)
Operating profit/
(loss) before
impairments and
de-recognition of
previously held
interest 1, 2 (80 065) (74 329) (5 736)
Operating profit/
(loss) 1, 2 454 323 460 059 (5 736)
Finance expense 2 (52 194) (50 266) (1 928)
Profit/(loss) after
net finance costs 1, 2 417 839 425 503 (7 664)
Profit/(loss) before
taxation 1, 2 428 716 436 380 (7 664)
Income tax
(expense)/income 1, 2 23 328 21 782 1 546
Profit/(loss) from
continuing operations 1, 2 452 044 458 162 (6 118)
Profit/(loss) for
the period 1, 2 479 482 485 600 (6 118)
Profit attributable to:
Owners of the parent 1, 2 479 120 485 238 (6 118)
Profit/(loss) for
the period 479 482 485 600 (6 118)
CONSOLIDATED AND SEPARATE STATEMENT OF COMPREHENSIVE INCOME
Restated Reported
31 March 31 March
2015 2015 Difference
Note R’000 R’000 R’000
Profit for the year 1, 2 479 482 485 600 (6 118)
Total comprehensive
income 1, 2 476 756 482 874 (6 118)
Total comprehensive
income attributable to:
Owners of the parent 1, 2 476 394 482 512 (6 118)
1, 2 476 756 482 874 (6 118)
Total comprehensive
income attributable
to equity shareholders
arising from:
Continuing operations 1, 2 448 956 455 074 (6 118)
1, 2 476 394 482 512 (6 118)
IMPACT ON STATEMENT OF FINANCIAL POSITION
Restated Reported
31 March 31 March
2015 2015 Difference
Note R’000 R’000 R’000
Non-current assets
Derivative financial
instruments 4 29 890 3 950 25 940
Deferred tax assets 1 103 157 71 101 32 056
1, 4 1 448 121 1 390 125 57 996
Total assets 1, 4 3 759 015 3 701 019 57 996
Opening retained
earnings 2014 1, 2 983 627 1 093 315 (109 688)
Opening retained
earnings 2015 1, 2 1 417 371 1 533 177 (115 806)
Share-based payment
reserve 3 65 915 69 695 (3 780)
Share capital and
reserves 1 850 563 1 970 149 (119 586)
Total equity 1 884 537 2 004 123 (119 586)
Non-current liabilities
Derivative financial
instruments 2, 4 55 980 – 55 980
Deferred profit 39 403 16 013 23 390
Operating lease
liability 1 105 236 – 105 236
Trade and other
payables 3 338 – 3 338
293 432 105 488 187 944
Current liabilities
Trade and other
payables 1 1 037 780 1 053 210 (15 430)
Operating lease
liability 1 1 754 – 1 754
Borrowings 3 505 385 501 605 3 780
Deferred profit 1 5 327 5 793 (466)
Total liabilities 1 874 478 1 696 896 177 582
Total equity and
liabilities 3 759 015 3 701 019 57 996
IMPACT ON STATEMENT OF CHANGES IN EQUITY
Share-
based
Treasury payment Retained
shares reserve earnings
Note R’000 R’000 R’000
RESTATED
Balance at
30 June 2014 1, 2 – – 983 627
Total comprehensive
income for the year 1, 2 – – 479 120
Profit for the year 1, 2 – – 479 120
Continuing operations 1, 2 – – 451 682
Total contributions
by and distributions
to owners of the
company recognised
directly in equity – 25 659 –
Share-based payment
– charge for the
period 3, 9 – 30 592 3 599
Share-based payment
– vesting of
options 6, 7, 9 14 717 (14 717) (8 958)
Treasury shares
acquired 5 (7 984) – –
Balance at
31 March 2015 – 65 915 1 417 371
REPORTED
Balance at
30 June 2014 – – 1 093 315
Total comprehensive income
for the year – – 485 238
Profit for the year – – 485 238
Continuing operations – – 457 800
Total contributions
by and distributions
to owners of the
company recognised
directly in equity – 29 439 –
Share-based payment
– charge for
the period – 22 608 –
Share-based payment
– vesting of
options 6 733 (6 733) –
Tax impact
in equity – – (5 359)
Treasury shares
acquired – – –
Balance at
31 March 2015 – 69 695 1 533 177
Equity Non-
attribu- control–
table to ling
company interest Total
R’000 R’000 R’000
RESTATED
Balance at
30 June 2014 1 377 542 35 756 1 413 298
Total comprehensive
income for the year 476 394 377 476 771
Profit for the year 479 120 377 479 497
Continuing operations 451 682 362 452 044
Total contributions
by and distributions
to owners of the
company recognised
directly in equity 36 644 – 34 485
Share-based payment
– charge for the
period 34 191 – 34 191
Share-based payment
– vesting of
options (8 958) – (8 958)
Treasury shares
acquired (7 984) – (7 984)
Balance at
31 March 2015 1 850 563 33 974 1 884 537
REPORTED
Balance at
30 June 2014 1 487 230 35 756 1 522 986
Total comprehensive income
for the year 482 512 377 482 889
Profit for the year 485 238 377 485 615
Continuing operations 457 800 362 458 162
Total contributions
by and distributions
to owners of the
company recognised
directly in equity 40 424 – 38 265
Share-based payment
– charge for
the period 22 608 – 22 608
Share-based payment
– vesting of
options – – –
Tax impact
in equity (5 359) – (5 359)
Treasury shares
acquired – – –
Balance at
31 March 2015 1 970 149 33 974 2 004 123
Share-
based
Treasury payment Retained
shares reserve earnings
Note R’000 R’000 R’000
DIFFERENCE
Balance at
30 June 2014 2, 3 – – (109 688)
Total comprehensive
income for the year 2, 3 – – (6 118)
Profit for the year 2, 3 – – (6 118)
Continuing
operations 2, 3 – – (6 118)
Total contributions
by and distributions
to owners of the
company recognised
directly in – (3 780) –
Share-based payment
– charge for the
period 5, 8 – 7 984 3 599
Share-based payment
– vesting of
options 5, 8 7 984 (7 984) (8 958)
Treasury shares
acquired 1, 7 (7 984) – –
Tax impact in equity 8 – – 8 958
Balance at
31 March 2015 – (3 780) (115 806)
Equity Non-
attribu- control–
table to ling
company interest Total
R’000 R’000 R’000
DIFFERENCE
Balance at
30 June 2014 (109 688) – (109 688)
Total comprehensive
income for the year (6 118) – (6 118)
Profit for the year (6 118) – (6 118)
Continuing
operations (6 118) – (6 118)
Total contributions
by and distributions
to owners of the
company recognised
directly in (3 780) – (3 780)
Share-based payment
– charge for the
period 11 583 – 11 583
Share-based payment
– vesting of
options (8 958) – (8 958)
Treasury shares
acquired (7 984) – (7 984)
Tax impact in equity 8 958 – 8 958
Balance at
31 March 2015 (119 586) – (119 586)
IMPACT ON STATEMENT OF CASH FLOWS
Restated Reported
31 March 31 March
2015 2015 Difference
Note R’000 R’000 R’000
Cash flows from
investing activities
Treasury shares
acquired 7 – (7 984) 7 984
Acquisition of
non-controlling
interests 8 – (12 168) 12 168
Net cash generated by
investing activities 689 740 669 588 20 152
Cash flows from financing
activities
Treasury shares
acquired 7 (7 984) – (7 984)
Acquisition of
non-controlling
interests 8 (12 168) – (12 168)
Net cash utilised
in financing
activities (585 413) (565 261) (20 152)
11. EVENTS AFTER THE REPORTING PERIOD
Changes to the board of directors
Chief executive officer
As announced on SENS on 26 April 2016, Derek Tod has taken a
decision to retire as chief executive officer, effective 31
May 2016. He has agreed with the board that he will
participate in an organised hand-over to the board and
interim
chief executive officer, as and when required.
Stephen Connelly, who was appointed to the board as
independent non-executive director on 1 April 2016, has
accepted the role of interim chief executive officer of DAWN,
effective 1 June 2016. He will fulfil this role until the
board has selected a permanent successor to Derek Tod. He
will
also assist the DAWN executive committee in the turnaround
strategy, which commenced recently.
The board will immediately commence with the process of
identifying and appointing a permanent successor and will in
this process consider both internal and external candidates.
Chief financial officer
The chief financial officer, Dries Ferreira, resigned from
DAWN on 14 July 2016, but agreed to remain in employment
until
31 October 2016 to ensure a smooth transition. Hanré Bester
(CA (SA), MCom (Tax)), the group financial manager who
joined DAWN during 2010, has been appointed as acting
financial director until a permanent placement can be made.
Risk and compliance officer
The risk and compliance officer and executive director, Jan
Beukes, resigned from DAWN on 14 July 2016, but agreed to
remain in employment until 31 October 2016 to ensure a smooth
transition. A suitable replacement will be recruited in due
course.
Borrowings – covenants
DAWN has breached some of its covenants and accordingly
approached Absa for a waiver of the relevant covenant
measures. On 28 June 2016 Absa consented to the non-
compliance
(breach) of covenants and waived the event of default.
DAWN’s current facility ends on 7 October 2016 and has been
re-negotiated to 7 October 2017. The new facility has similar
characteristics, but will have a quarterly step-down of R25
million per quarter in respect of the revolving credit
facility (RCF) starting 7 October 2016 and ending 7 July
2017.
The pricing has provisionally been indicated and reflects a
deteriorated credit position as well as movements in the
general yield curve.
Security requirements remain unchanged.
The carrying amount of the loan in default is R200 million
(R200 million of a RCF) and Rnil of a general banking limit
(R100 million of a general banking facility).
Disposal
Braveheart Financial Services Proprietary Limited – a DAWN
investment of 30% was sold to the majority shareholder on 30
May 2016 for an amount of R1 million.
DISTRIBUTION AND WAREHOUSING NETWORK LIMITED
Incorporated in the Republic of South Africa
Registration number 1984/008265/06
(“DAWN” or “the group” or “the company”)
Alpha code: DAW
ISIN: ZAE000018834
E-mail: info@dawnltd.co.za
Registered office:
Cnr Barlow Road and Cavaleros Drive, Jupiter Ext 3, Germiston,
1401
Directors:
Diederik Fouché* (chairman), Stephen Connelly (interim chief
executive officer), Lou Alberts^, George Nakos*, Hanré Bester
(acting financial director), Saleh Mayet ^, Dinga Mncube ^, Veli
Mokoena*, René Roos
* Non-executive ^ Independent non-executive
Preparer:
Prepared by Yolandi van den Berg (CA(SA)), senior group financial
accountant, under the supervision of Hanré Bester (CA(SA)),
acting financial director
Company secretary:
iThemba Governance and Statutory Solutions (Pty) Ltd
Transfer secretaries:
Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Marshalltown, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor:
Deloitte & Touche Sponsor Services (Pty) Ltd
Date: 15/07/2016 07:05:00 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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