Wrap Text
Reviewed results for year ended 30 September 2016 and dividend declaration
Marshall Monteagle PLC
(Incorporated in Jersey)
(Registration number: 102785)
(External registration number: 2010/024031/10)
JSE Code: MMP ISIN: JE00B5N88T08
(“Marshall Monteagle” or “the Company” or “the Group")
Provisional announcement of reviewed results for the year ended 30th September 2016 and proposed dividend
declaration
Introduction
The Directors report satisfactory results for the year ended 30th September 2016, a year characterised by stiff currency
headwinds and a challenging economic environment.
Marshall Monteagle’s objective is to achieve capital growth internationally and pay a steadily progressive dividend over
the long term from a diversified range of investments. The Group holds portfolios of leading investments in the U.S.A.,
U.K., Europe and the Far East as well as commercial properties in the U.S.A. and South Africa. The Group’s import and
distribution businesses operate internationally and in South Africa include interests in food processing and logistics.
Results of continuing operations
Group revenue for the twelve months to 30th September 2016 decreased by 7% to US$ 241,933,000 compared to
US$259,133,000. Had currencies remained constant sales would have increased by 11%.
Group profit before tax decreased by 15% to US$8,276,000 from US$9,727,000. The decrease in margins on trading was
partially offset by a gain of US$2,300,000 on the disposal of investment property. Investment property revaluations were
lower, US$918,000 compared with US$2,313,000 the previous year, reflecting the reduction in the investment property
portfolio.
Headline earnings per share decreased 75% to 2.3 US cents (2015 – 9.3 US cents) as a result of the matters mentioned
above.
The Directors are proposing a second interim (final) dividend of 1.9 US cents, (2015 – 1.8 US cents) making a total of 3.7
US cents (2015 – 3.6 US cents) for the year. Details and salient dates of the dividend will be published early in the new
year.
Net assets attributable to shareholders increased by 7% from US$62,864,000 (US$1.75per share) to US$67,195,000
(US$1.87per share) at 30th September 2016, due to successful investment strategies and a comparable Rand exchange rate
at the reporting dates. US$1.32 of net assets per share – 71% (2015 – 57%) are held in Europe, U.S.A. and the Middle
East. The remaining assets, equivalent to US$0.55 per share – 29% (2015 – 43%) are held in South Africa.
Import and Distribution
Our import and distribution businesses in food and household consumer products continue to perform well in a constantly
changing and challenging consumer environment. Multiple retailers continue to apply pressure on their international
supplier base and we are constantly reviewing our supply-chain to ensure that we remain the most cost effective solution
from factory to shelf. During the twelve month period under review we experienced extremely volatile currency
movements and raw material pricing, but we are well positioned to navigate these exogenous factors. This division
continues to provide procurement, supply chain and risk management services to multiple retailers, wholesalers and
manufacturers in Southern and Central Africa, South America, the Middle East and China. We remain committed to
working with suppliers of quality raw materials, skilled technologists and first world production facilities.
Our Metals and Minerals business continues to make extremely good progress and we are developing new partnerships
with miners in Southern Africa and end users on an international basis. During the first half of the financial year under
review we witnessed a total meltdown in commodity prices, specifically metals, minerals and energy products, placing
these commodities at 16 year lows. As a result, even the most experienced global trading companies were totally
overwhelmed by market forces beyond their control and many marginal players were forced out of business. A major
global rebalancing of supply and demand has taken place during the second six months with commodity prices improving
significantly over this period. This division provides fully integrated logistics, marketing, finance and shipping services
to the Southern African mining industry and is placing significant focus on chrome and manganese. We are committed to
partnering with producers who require a professional all-encompassing solution from collection ex mine through to
delivery to end users on an international basis.
Import and Distribution (continued)
Our Tool & Machinery import and distribution businesses had a disappointing year mainly due to the restructure and sale
of a non-profitable subsidiary. The South African market remains subdued and highly competitive. We do not expect to
see an improvement in the short term. Following the restructuring of this business, it is expected to return to profit in
2017. Our Australian business incurred a loss prior to sale of US$304,000 (2015 full year – US$434,000) and a loss of
US$474,000 was incurred on the sale.
Investment Portfolio
Our investment portfolios continue to perform well and now include our unlisted investment in Heartstone Inns Ltd
following the capital reduction and distribution of these shares by our former associated company Halogen Holdings plc.
We continue to hold a concentrated list of quality listed international equities that we believe will outperform the market
in the long term. These listed investments had a market value at the year-end of US$23,169,000 (2015 –
US$20,042,000).
Property Portfolio
During 2016 we completed the sale of six properties in Durban, South Africa and the sale of five properties in Cape
Town, South Africa for the gross amount of $8,848,000. The gain on the sale amounted to $2,300,000 and the net
proceeds are earmarked for further property in the USA. There are no plans to dispose of any more investment properties,
other than the sale mentioned below which completed after the year end. The Group’s remaining commercial and light
industrial property portfolio had a satisfactory year despite an ailing economy in South Africa. The secured loan on our
property in San Diego has been repaid early and a new secured loan of US$6,300,000 has been drawn down, at a reduced
interest rate of 3.6% (previously 6%) fixed for 10 years.
Events after the Reporting Date
On 1 November, 2016, an investment property in Cape Town, South Africa was disposed of for $1,208,000 which was
settled in cash. The property was valued at $1,189,000 and post-tax profit attributable to the investment property was
$46,000 for the year ended 30 September 2016.
Dividend
The directors are proposing a second interim (final) dividend of 1.9 US cents, (2015 – 1.8 US cents) making a total of 3.7
US cents (2015 – 3.6 US cents) for the year. Details and salient dates of the dividend will be published early in the new
year.
Changes to the Board
It was with great sadness that we announced on 23rd November 2016, the death of Mr L.H. Marshall. He was a highly
valued member of the management team who brought a wealth of experience, knowledge and common sense to the Group
along with strong principles. Mr E.J. Beale will provide cover for the role of Finance Director for an interim period.
Group Personnel
These results could not have been achieved without the hard work of all our employees and the Board thank them most
sincerely for their efforts and contribution during the year.
Prospects
We expect that the year ahead will bring further uncertainty to global markets and continuing commodity and exchange
rate volatility. The Board remain comfortable that our strong balance sheet and cautious approach to business will enable
us to continue to prosper.
Any reference to the Group’s future financial performance included in this announcement has not been reviewed nor
reported on by the Company’s auditors.
E. J. Beale
Chairman
D.C. Marshall
Chief Executive
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30th September 2016 2015
Reviewed Audited
Continuing operations US$000 US$000
Profit or Loss:
Group revenue 1 241,933 259,133
Other income 2 5,588 3,646
247,521 262,779
(Decrease)/Increase in inventories of finished goods and work in (4,220) 6,614
progress
Purchases of finished goods, raw materials and consumables (187,762) (213,976)
Employee benefit expenses (14,259) (15,055)
Depreciation and amortisation expenses (744) (802)
Other expenses 3 (29,789) (27,479)
Share of associated companies results 31 (16)
Finance expense (2,502) (2,338)
Profit before tax 1 8,276 9,727
Taxation (2,992) (2,627)
Profit for the year on continuing operations 5,284 7,100
Discontinued operations
Loss after tax of discontinued operations 4 (304) (434)
Loss on disposal of discontinued operations 4 (474) -
Profit for the year 4,506 6,666
Profit attributable to owners of the parent 3,153 4,819
Profit attributable to non-controlling interests 1,353 1,847
Basic and fully diluted earnings per share (US cents) 5 8.8c 13.4c
Basic and fully diluted earnings per share (US cents) – continuing 5 10.5c 14.0c
activities
Other Comprehensive (Expense)/Income :-
Items that may be reclassified subsequently to profit and loss :-
Exchange differences on translation into US Dollars of the
financial statements of foreign entities (369) (7,441)
Reclassification of previously recognised exchange losses on
disposal of Australian operations 157 -
Unrealised gain on revaluation of available for sale investments 3,185 (487)
Less applicable tax (365) 73
Reclassification of previously recognised profits on disposal of
available for sale investments (40) (149)
Total of items that may be reclassified 2,568 (8,004)
Items that will not be reclassified subsequently to profit and loss :-
Commercial property fair value adjustments 236 363
Less applicable tax (114) (41)
Share of associated company’s other comprehensive income - 444
122 766
Total Other Comprehensive Expense 2,690 (7,238)
Total Comprehensive Income 7,196 (572)
Total Comprehensive Income attributable to owners of the 5,618 (816)
parent
Total Comprehensive Income attributable to non-controlling
interests 1,578 244
Condensed Consolidated Statement of Changes in Equity
Ordinary Total Non-
share Share Other Retained Shareholders’ controlling Group
capital premium reserves earnings interests interests Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000
Year ended 30th September 2015
Profit after tax - - 4,879 (60) 4,819 1,847 6,666
Other Comprehensive Expense - - (5,635) - (5,635) (1,603) (7,238)
Total Comprehensive Income - - (756) (60) (816) 244 (572)
Transactions with shareholders
Dividends paid - - - (1,291) (1,291) (1,116) (2,407)
Balances at start of year 8,964 23,606 (105) 32,506 64,971 9,448 74,419
Balances at end of year 8,964 23,606 (861) 31,155 62,864 8,576 71,440
Year ended 30th September 2016
Profit after tax - - (4,323) 7,476 3,153 1,353 4,506
Other Comprehensive Expense - - 2,465 - 2,465 225 2,690
Total Comprehensive Income - - (1,858) 7,476 5,618 1,578 7,196
Transactions with shareholders
Disposal of interests (note 4) - - - - - (633) (633)
Dividends paid - - - (1,287) (1,287) (1,519) (2,806)
Balances at start of year 8,964 23,606 (861) 31,155 62,864 8,576 71,440
Balances at end of year 8,964 23,606 (2,719) 37,344 67,195 8,002 75,197
Condensed Consolidated Statement of Financial Position
at 30th September 2016 2015
Reviewed Audited
US$000 US$000
Assets
Non-current assets
Investment property 20,460 27,472
Property, plant and equipment 9,237 8,919
Goodwill 180 179
Intangible assets 523 521
Deferred taxation 1,559 1,140
Investment in associated companies 6 185 2,383
Investments 7 25,382 20,042
57,526 60,656
Current assets
Inventories 24,051 28,859
Accounts receivable 41,697 38,277
Other financial assets 326 551
Tax recoverable 359 158
Cash and bank balances 30,916 18,644
97,349 86,489
Investment property held for sale 8 1,189 -
Total assets 156,064 147,145
Current liabilities
Financial liabilities (59,546) (55,514)
Other financial liabilities (848) (293)
Financial liabilities secured on the investment property held
for sale 8 (251) -
Tax payable (1,777) (1,903)
Total current liabilities (62,422) (57,710)
Net current assets 36,116 28,779
Total assets less current liabilities 93,642 89,435
Non-current liabilities
Financial Liabilities (12,351) (11,671)
Deferred taxation (6,094) (6,324)
75,197 71,440
Capital and reserves
Called up share capital 8,964 8,964
Share premium account 23,606 23,606
Other reserves (2,719) (861)
Retained earnings 37,344 31,155
Equity attributable to owners of the parent 67,195 62,864
Non-controlling interests 8,002 8,576
75,197 71,440
Condensed Consolidated Statement of Cashflow
for the year ended 30th September 2016 2015
Reviewed Audited
US$000 US$000
Profit for the year 4,506 6,666
Adjustments
Taxation 2,992 2,627
Loss on disposal of discontinued operations 474 -
Depreciation 753 835
Share of associates (31) 16
Finance expense 2,502 2,338
Other income (5,589) (3,646)
Other expense – fair value adjustments and losses on disposal 343 248
5,950 9,084
Changes in working capital
Decrease/(increase) in inventories 3,770 (5,800)
Decrease/(increase) in receivables 3,612 (6,976)
(Decrease)/increase in payables (3,687) 11,606
Cash generated by operations 9,645 7,914
Finance expense (2,502) (2,338)
Taxation paid (3,904) (1,544)
Cash inflow from operating activities 3,239 4,032
Investment activities
Purchase of and improvements to tangible non-current assets (2,241) (2,705)
Proceeds of disposal of tangible assets 9,737 84
Acquisition of investments (613) (2,088)
Proceeds of disposal of investments 446 1,165
Cashflow on disposal of discontinued operations (62) -
Dividends received 556 519
Interest received 1,004 712
Cash inflow/(outflow) from investment activities 8,827 (2,313)
Cash inflow before financing 12,066 1,719
Financing activities
Drawdown of new long term loans 6,300 2,820
Repayment of long term loans (5,098) (1,667)
Dividends paid – Group shareholders (1,287) (1,291)
Dividends paid – non-controlling interests of subsidiaries (1,518) (1,116)
Cash outflow from financing activities (1,603) (1,254)
Increase in cash and cash equivalents 10,463 465
Cash and cash equivalents at 1st October 10,068 10,340
Effect of foreign exchange rate changes 13 (737)
Cash and cash equivalents at 30th September 20,544 10,068
EXPLANATORY NOTES
1) SEGMENTAL REPORTING
For management purposes the Group is organised on a worldwide basis into the following main business segments
grouped by similar businesses and services:
Import and distribution Trade in tools, food and household consumer products primarily imports to, and
exports from, South Africa.
Property Investment properties in U.S.A. and South Africa.
Investments in associated Companies involved in marketing and merchandising.
companies
Excluded from the segmental Mainly transactions relating to the share portfolios, profits on disposals of tangible
analysis are other activities and intangible non-current assets local head office costs, and interest.
There are no sales between business segments and businesses carrying out similar trade and services are grouped in the
same segments.
Segmental analysis of results Revenue 2016 Revenue 2015
US$000 Result US$000 Result
US$000 US$000
238,869 5,858 255,184 8,477
Import and distribution *
Property 3,064 871 3,949 1,613
Share of associated companies results - 31 - (16)
Continuing operations 241,933 6,760 259,133 10,076
Discontinued operations
Import and distribution - Australia 526 (308) 1,462 (420)
Property - Australia - (5) - (12)
242,459 6,447 260,595 9,642
Loss on disposal (474)
Other Expense (1,572) (1,667)
Other Income 5,590 3,659
Finance expense (2,502) (2,338)
Taxation (2,983) (2,630)
Profit for the year 4,506 6,666
* Includes sales to the Group’s major customers representing 10% or more of Group revenue:
2016 2015
US$000 US$000
Company A 130,144 133,074
Company B 26,761 37,598
Segment assets consist of property, plant and equipment, inventories and receivables and exclude cash balances. Segment
liabilities are operating liabilities and exclude items such as taxation and borrowings. Unallocated assets and liabilities
are investments, holding company assets and liabilities, cash balances, taxation and borrowings. Capital expenditure
comprises additions to property, plant and equipment.
Assets Liabilities Net assets/ Capital Depreciation
(liabilities) expenditure charge
US$000 US$000 US$000 US$000 US$000
Segmental analysis of net assets 30th September 2016
Import and distribution 73, 467 (47,800) 25,667 1,874 755
Property 23,450 (1,094) 22,356 367 8
Investment in associated companies 185 - 185 - -
Unallocated (including cash, tax and debt) 58,962 (31, 973) 26,989 - -
Continuing operations 156,064 (80,867) 75,197 2,241 763
Discontinued operations:-
Import and distribution - - - - 9
Property - - - - 5
Consolidated total 156,064 (80,867 75,197 2,241 777
Segmental analysis of net assets 30th September 2015
Import and distribution 72,375 (47,314) 25,061 2,439 797
Property 28,440 (963) 27,477 265 12
Investment in associated companies 2,230 - 2,230 - -
Unallocated (including cash, tax and debt) 41,711 (27,013) 14,698 - -
Continuing operations 144,756 (75,290) 69,466 2,704 809
Discontinued operations: 1,450 (414) 1,036 1 26
Property 893 (1) 892
Unallocated 46 - 46
Consolidated total 147,145 (75,705) 71,440 2,705 835
The Group operates in the following geographic areas.
Europe
Location of part of the Group’s import and distribution business, the non-trading parent company and most of the Group's
investment portfolio.
Australia
Previously location for part of the Group's import and distribution business
Middle East
Location for part of the Group’s import and distribution business.
United States
Part of the Group's property portfolio and some of the Group’s investment portfolio are located here.
South Africa
Location of the bulk of the Group's import and distribution business and part of the Group’s property portfolio.
2016 2015
Group Total Capital Group Total Capital
Revenue Net assets expenditure Revenue net assets expenditure
US$000 US$000 US$000 US$000 US$000 US$000
Europe 30,779 27,773 - 36,867 22,421 -
Middle East 1,526 504 2 4,829 591 -
United States 1,187 15,986 295 1,139 10,821 223
Total outside South Africa 33,492 44,263 297 42,835 33,833 223
South Africa 208,441 30,934 1,944 216,288 35,925 2,481
Total continuing operations 241,933 75,197 2,241 259,123 69,758 2,704
Australia 526 - - 1,472 1,682 1
Total 242,459 75,197 2,241 260,595 71,440 2,705
Total assets (before non-controlling interests) and capital expenditure are shown by the geographical area in which the
assets are located.
2016 2015
US$000 US$000
2) OTHER INCOME
Investment property revaluations 1,002 2,313
Gain on disposal of investment property 2,300 -
Gain on disposal of non-current tangible assets 24 -
Recovery of impairment on non-current asset 20 -
Fair value adjustments on derivative instruments 1 1
Dividend income 556 519
Interest income and other income 1,072 708
Exchange gains 590 -
Profit on disposal of investments 23 105
Total income – continuing operations 5,588 3,646
Other income – discontinued operations 2 13
5,590 3,659
3) OTHER EXPENSES
2016 2015
US$000 US$000
Revaluation of investment property (84) -
Loss on disposal of investments (18) -
Fair value adjustments on tangible assets and listed investments (36) (31)
Fair value adjustment on unlisted investment (200) -
Impairment of property, plant and equipment - (215)
Loss on disposal of non-current tangible assets (5) (2)
Fair value adjustments and losses on disposal (343) (248)
Exchange losses (5) -
Administration and other expenses (29,441) (27,231)
(29,789) (27,479)
Administration and other expenses include :-
Operating lease costs
Premises 1,322 1,417
Plant, equipment and vehicles 40 64
Auditors’ fees of the Company and its subsidiaries
Audit related 412 456
Other 3 11
4) DISPOSAL OF AUSTRALIAN OPERATIONS
The Group sold its Australian operations, Queensland Tool and Machinery Distributors (Pty) Ltd (owned
50.1%) and QTM Property Holdings Ltd (owned 50.1%) during the year.
Detail of disposal US$000
Property, plant and equipment 1,132
Inventories 1,427
Accounts receivable 255
Cash 61
Accounts payable (1,196)
Deferred tax (94)
Less minority interests (633)
Net disposal 952
Proceeds (478)
Loss on disposal 474
The disposal proceeds are repayable over 4 years, in equal annual instalments from 1 April 2017, or at any time in full.
Interest is payable at 3% p.a. on the balance outstanding.
The results of operations to the date of disposal, and the comparative amounts for the prior year, included in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income were:
2016 2015
US$000 US$000
Revenue 526 1,462
Expenses (839) (1,894)
Loss before tax (313) (432)
Taxation 9 (3)
Loss after tax (304) (435)
Loss attributable to owners of the parent (152) (218)
Loss attributable to non-controlling interests (152) (217)
Cashflows from discontinued operations
2016 2015
US$000 US$000
Cashflows from :-
Operating activities (377) (351)
Investing activities 31 14
Financing activities 357 119)
Net cash inflows/(outflows) 11 (218)
5) EARNINGS PER SHARE
2016 2015
Basic earnings per share 8.8c 13.4c
Basic (loss) per share on discontinued operations (1.7)c (0.6)c
Basic earnings per share on continuing operations 10.5c 14.0c
Headline earnings per share 1.9c 8.7c
Headline earnings per share on continuing operations 2.3c 9.3c
Headline earnings per share on discontinued operations (0.4)c (0.6)c
Reconciliation of basic earnings on continuing operations US$000 US$000
Basic earnings on continuing and discontinued operations 3,153 4,819
Share of losses of discontinuing operations 152 218
Loss on disposal of discontinuing operations 474 -
Basic earnings on continuing operations 3,779 5,037
Earnings per share and headline earnings per share are based on the result attributable to shareholders of the
Company and on the weighted average of shares in issue 35,857,512 (2014 – 35,857,512).
Reconciliation between basic and headline earnings per share US$000 US$000
Basic earnings on continuing and discontinued operations 3,153 4,819
Adjusted for:
Gain on disposal if investment property, net of tax of US$46,000 (2,346) -
Investment property revaluation, net of tax effect of US$196,000
(US$501,000) (722) (1,812)
Loss on disposal of Australian operations, including previously recognised
exchange losses of US$157,000 474 -
(Recovery of)/Provision for impairment of non-current assets (20) 246
Reclassification of previously recognised gains on disposal of available for
sale investments (40) (149)
Effect of change in rate of tax 185 -
(Profit)/Loss on disposal of non-current tangible assets (19) 2
Headline earnings 665 3,106
Reconciliation between basic and headline earnings per share on US$000 US$000
continuing operations
Basic earnings on continuing operations 3,779 5,037
Adjusted for:
Gain on disposal if investment property, net of tax of US$46,000 (2,346) -
Investment property revaluation, net of tax effect of US$196,000
(US$501,000) (722) (1,812)
(Recovery of)/Provision for impairment of non-current assets (20) 246
Reclassification of previously recognised gains on disposal of available for
sale investments (40) (149)
Effect of change in rate of tax 185 -
(Profit)/Loss on disposal of non-current tangible assets (19) 2
Headline earnings – continuing operations 817 3,324
6) INVESTMENTS IN ASSOCIATED COMPANIES
The group no longer has an investment in its associate, Halogen Holdings PLC following a distribution by Halogen
of all of its investment in Heartstone Inns Ltd (“Heartstone”) to Halogen’s shareholders as part of a capital
reduction. As a result the Group has an investment of 15% of Heartstone, which is disclosed as an unlisted
investment.
7) INVESTMENTS
Investments include listed investments with a fair value of US$ 23,169,000 (2015 – US$ 20,042,000) and the
unlisted investment in Heartstone with a fair value of US$ 2,213,000 (2015 – nil).
The unlisted investment in Heartstone is carried at fair value which is calculated based on the net asset value per
share less a discount of 10% to take into account the illiquidity of this holding in a private company. A change in
the discount percentage of 5% would change the fair value by US$121,000. The Group owns 1,641,309 Ordinary
Shares in Heartstone representing 15% of its issued Ordinary Shares. Heartstone prepares accounts to 31
December in Pounds Sterling and its latest published audited financial statements for 2015 showed the following
key performance indicators:
2015 2014
£’000 £’000
Revenue 8,212 6,474
Gross Profit 2,731 2,083
Pub EBITDA 1,361 1,021
Pub EBITDA Margin 16.6% 15.8%
Company adjusted EBITDA 767 527
Company EBITDA Margin 9.3% 8.1%
Property, plant and equipment 18,016 15,409
Net debt 3,490 2,051
Net debt/property, plant and equipment 19.4% 13.3%
Company adjusted EBITDA represents operating profit before interest, tax, revaluation/impairments, depreciation,
amortisation, gains on sale of non-current assets and exceptional costs. Pub EBITDA represents operating profit
of the pub estate and has been calculated as company adjusted EBITDA after adding back the company’s head
office costs.
The value of property, plant and equipment is supported by an independent professional valuation.
This is the only financial asset valued using a Level 3 fair value measurement approach. The cost was
US$2,413,000 and a fair value adjustment of US$200,000 has been made against this fair value.
8) NON-CURRENT ASSETS HELD FOR SALE
On 1 November 2016, an investment property in Cape Town, South Africa, was disposed of for US$1,208,000
which was settled in cash. The property was valued at US$1,189,000 and post tax profit attributable, to be
accounted for in the year ended September 2016, was US$46,000.
9) FINANCIAL INSTRUMENTS
The categories of financial instruments used by the Company are:
2016 2015
US$000 US$000
Financial assets
Available for sale carried at fair value
Investments – listed 23,169 20,042
- unlisted 2,213 -
25,382 20,042
Carried at fair value through profit & loss
Forward foreign exchange contracts 70 135
Loans and accounts receivable at amortised cost
Accounts receivable 41,697 38,641
Cash at bank 30,916 18,644
72,613 57,285
Financial liabilities
Carried at amortised cost
Trade and other payables - current 49,199 47,231
- non-current 12,048 11,671
Bank overdrafts 10,372 8,576
71,619 67,478
Carried at fair value through profit or loss
Forward foreign exchange contracts 739 -
Fair Value hierarchy
IFRS13 requires disclosure of fair value measurements under the following hierarchy:
Listed prices (unadjusted) in active markets for identical assets or liabilities – Level 1
Inputs other than listed 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
The level of fair value hierarchy within the asset or liability is categorised is determined on the basis of the lower
input that is significant to the fair value measurement. Financial assets and liabilities are classified in their entirety
into one of the three levels.
Listed investments are stated at fair value based on listed prices in active markets and are considered Level 1
financial instruments.
The unlisted investment is carried at fair value and considered Level 3. The detail of the fair value assessment is
set out in note 6 above. There are no other financial assets or liabilities which are measured using a Level 3
approach.
Foreign exchange contracts are considered Level 2 financial instruments. Fair value is determined by market value
quotes received from independent financial institutions.
Accounts receivable and accounts payable due within one year are carried at amortised cost which approximates to
their fair values at the year-end.
The carrying value of bank loans payable in more than one year approximates to their fair values. This is due to
the loans all attracting market related interest rates, and thus the effect of discounting (using a market rate interest
rate) when applying the effective interest rate method would result in no real difference between the fair value
determined and the carrying value of the bank loans.
10) SECURED LIABILITIES
Overdrafts of US$10,372,000 (2015 - US$8,576,000) are included in current liabilities. Group long-term financial
liabilities are secured on various properties and bear interest at commercial rates.
11) CAPITAL COMMITMENTS
Group capital expenditure in the year was US$2,241,000 (2015 – US$2,705,000). There were no capital
expenditure commitments at 30th September 2016 (2015 – nil).
12) BASIS OF PREPARATION
This provisional report has been prepared in accordance with the framework, concepts and the measurement and
recognition requirements of International Financial Reporting Standards, applicable legal and regulatory
requirements of The Companies (Jersey) Law, 1991, the Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council, the Listing Requirements of the JSE Limited , the financial reporting
guides issued by the Accounting Practices Committee of the South African Institute of Chartered Accountants (the
“SAICA Financial Reporting Guides”) and contains the information required by IAS 34 Interim Financial
Reporting. The accounting policies applied in this provisional announcement are consistent with those adopted and
disclosed in the Group's annual report for the year ended 30th September 2015.
Responsibility Statement
The directors take full responsibility for the preparation of the provisional report and the financial information has been
correctly extracted from the underlying annual financial statements.
Review Report
This provisional report for the year ended 30 September 2016 was prepared under the supervision of the Chairman, Mr E
J Beale, following the death of the Finance Director, Mr L H Marshall, and has been reviewed by the Company's auditor,
Saffery Champness, who expressed an unmodified review conclusion thereon. The review opinion is available for
inspection at the registered office of the Company. The audited annual report will be mailed to shareholders in early
2017.
22 December 2016
Johannesburg
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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