MASTER PLASTICS LIMITED - Condensed Audited Consolidated Results for the Financial Year ended 28 February 2018

Release Date: 02/05/2018 14:32
Code(s): MAP
 
Wrap Text
Condensed Audited Consolidated Results for the Financial Year ended 28 February 2018

MASTER PLASTICS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2016/323930/06)
Share code: MAP
ISIN: ZAE000242921
("Master Plastics" or "the Company" or "the Group")

Condensed audited consolidated results for the financial year ended 28 February 2018

KEY HIGHLIGHTS
* Earnings per share ("EPS") and Headline Earnings per share ("HEPS") of 29.5 cents - 24.5% higher than the
  Pre-Listing Statement Forecast of 23.7 cents.
* Return on Average Capital Employed ("ROCE") of 20.2%.
* Gearing at 0.6%.
* Net Tangible Asset Value per share of 157.0 cents.

COMMENTARY
GROUP OVERVIEW
Master Plastics is involved in the manufacture and provision of specific products and solutions to customers 
operating in the agricultural, food, produce, dairy and general industrial markets. Its offering extends beyond 
traditional plastic products, also being a participant in the supply and design of undercover farming nets and 
structures and geotextile fibres for concrete reinforce-ment. The Group will continue to explore opportunities 
to better service its chosen end markets and provide a broader range of its customers’ requirements.

Having invested a significant amount of time and financial resources in the first half of the financial year -
following its unbundling from Astrapak Limited - establishing and enhancing the operational platform in order 
to support the Group’s strategic plans, the Group was able to translate this into a strong operational and 
financial performance in the second half of the year, resulting in a full year performance well ahead of the 
forecast for the full financial year as presented in Annexure 5 of the Pre-Listing Statement published on 
5 May 2017 ("PLS"). The operations have remained focused on the execution of the strategies set and these have 
remained relevant and have proven to be key in ensuring that the businesses remain resilient and perform ahead 
of the plan, despite challenging market conditions. All three of the underlying operations, being Barrier Film 
Converters Proprietary Limited, Peninsula Packaging and Plusnet-Geotex (the latter two both divisions of Master 
Plastics) are profitable and continue to enjoy a preferred supplier status in many of their chosen market 
segments.

CORPORATE OVERVIEW
The following events of a corporate nature occurred during the financial year end 28 February 2018:
* Declared a R75.0 million dividend to parent prior to unbundling.
* Unbundled from parent group and listed on the AltX Exchange of the JSE on 24 May 2017.
* Repurchased a total of 17.6 million shares at a total consideration of R4.1 million.
* Management acquired > 10% equity interest in the open market.
* A new Chairman and a new Independent Non-Executive Director appointed to the Board of Directors of Master 
  Plastics ("the Board") on 13 October 2017.
* Grant Thornton appointed as external auditors effective 19 December 2017.
* Approved a facility and capacity expansion program for the Plusnet-Geotex operation to be affected during 
  the first half of the 2019 financial year.


PRE-LISTING STATEMENT FORECAST FOR 2018
The Group significantly outperformed the PLS forecast, reporting a headline income of R36.4 million and HEPS of 
29.5 cents compared to the PLS forecast headline income of R28.7 million and HEPS of 23.7 cents.

Trading conditions over the period were much more difficult than originally anticipated and specifically issues 
with polymers – both on pricing and availability – and generally a weaker economy provided the Group and the 
industry with some significant challenges, especially over the second half of the year. The diligent focus on 
execution of the Group strategy however enabled Master Plastics to advance and deliver results ahead of the 
PLS forecast in all its key performance indicators. The PLS is available for download on the website of the 
company, details of which also appear in this announcement.


FINANCIAL RESULTS
As the Group was only established in the last two months of the 2017 financial year, the comparatives presented and 
reported for the financial period ended 28 February 2017 are not comparable. The PLS forecast provided for the 
financial year ending 28 February 2018 is directly comparable to the actual result reported.

Revenue and cost management remains an ongoing challenge in difficult economic conditions. The Group has however 
continued to benefit from emerging trends in core defensive and niche market segments which, together with a focus 
on efficiencies and waste management, has allowed the Group to report revenue of R504.5 million and to improve its 
level of profitability as is reflected in both the normalised earnings before interest, taxation, depreciation and 
amortisation ("EBITDA") and normalised profit before interest and taxation ("PBIT") margins of the Group, with 
margins of 12.9% and 10.0% respectively having been reported. Both EBITDA and EBIT margins achieved are well ahead 
of the PLS forecast of 10.9% and 8.0% respectively. The Group has reported an EBITDA of R65.3 million against the 
PLS forecast of R54.8 million and a PBIT of R50.4 million, being 24.4% ahead of the PLS forecast of R40.5 million.

The Group has reported basic and headline earnings of R36.4 million or 29.5 cents per share, this given a weighted 
average number of shares in issue of 123 399 075 for the year. During the year the Group repurchased a total number 
of 17 596 018 shares, which included 14 096 018 shares repurchased from the Astrapak Limited Linked Unit Trust Scheme 
and Astrapak Gauteng Proprietary Limited at R0.01 per share, with the balance of 3 500 000 shares being acquired in 
the open market. At the date of this announcement, all the repurchased shares have been delisted. This has resulted 
in an overall reduction of the number of issued shares in the Company from 135 131 250 at the beginning of the year 
to 117 535 232 at the reporting date.

Notwithstanding the payment of a R75.0 million dividend on 12 May 2017 to its then parent prior to its unbundling, 
R4.1 million spent on share repurchases and capital expenditure of R26.3 million during the year, the Group remained 
only marginally geared over the year and at the end of the reporting period and accordingly a net interest expense of 
only R0.3 million has been reported, with gearing at 0.6% at 28 February 2018. The Group reported an effective tax 
rate of 25.5% for the year, the difference to the statutory tax rate of 28% being mainly due to certain permanent 
differences associated with government incentives and changes to tax balances acquired. The Group has a total of 
R34.4 million in tax losses available for utilisation in future periods and these should be fully utilised over time 
based on forecasted levels of profitability.

The Group generated R42.8 million in cash from operations after working capital changes that reflects the adverse 
financial and cash impact of polymer pricing and strategies adopted to compensate for continuing polymer supply 
issues in the market. Capital expenditure of R26.3 million was incurred during the period, of which an amount of 
R13.2 million was financed through existing asset-based finance facilities. A further R33.3 million in capital 
expenditure has been committed, but not yet spent as at the reporting date, to support growth in the Groups’ chosen 
markets and the customer base. The investment philosophy of the Group remains to invest in assets, businesses and 
markets with the potential to deliver superior earnings and sustainable long-term growth.

Return on average capital employed achieved was 20.2%, and net tangible asset value per share at the reporting dates 
was R1.57.


PROSPECTS
The Group will continue to focus on the execution of its stated business strategy and look to invest further in 
opportunities to enhance efficiency and in support of organic growth being led by the customer base.

Whilst the local economy is expected to recover moderately over the next year or two, growth will remain subdued amid 
the uncertainty around land expropriation policies, critical water shortages and an everescalating cost of living for 
consumers. As the Group is a supplier of products and solutions to the food,produce and agricultural markets in general 
these factors are expected to continue to impact the business.

The Board however remains confident that the exposure to more defensive market segments and a continued focus on 
operational performance and organic growth will continue to support and underwrite strategic efforts through the 
business cycle.


ACCREDITATIONS AND CERTIFICATIONS
The Group remains committed to transformation and is confident of at least retaining its Level 4 (Empowered Supplier) 
accreditation obtained in accordance with the Codes of Good Practice issued in terms of section 91(1) of the Broad-
Based Black Economic Empowerment Act 53 of 2003 (gazetted 11 October 2013). The Group is currently in the process of 
completing its reaccreditation process and will announce its new rating during the month of May 2018.

Given the markets served by the Group and the increased focus after recent events relating to food contamination in 
the country, the appropriate accreditations and adherence thereto remains a significant focus within the Group and 
its customer base. The Group remains fully accredited and has continued to invest time and resources into a culture 
of health and safety. This means that its existing and any future customer base can continue to source packaging 
from the Group with the necessary confidence. The businesses operating in the food sector are either British Retail 
Consortium Global Standard for Food Safety (BRC) or Food Safety System Certification 22000 (FSSC 22000) accredited, 
depending on what has been prescribed by its respective customer bases.


CHANGES TO THE BOARD
Appointments:
The following directors were appointed to the Board on 13 April 2017 in preparation for its unbundling:
• Ms P Langeni as Independent Non-Executive Chairman;
• Ms S Ratlhagane as Executive Director, Chief Financial Officer and Company Secretary;
• Mr T Mokgatlha as Independent Non-Executive Director;
• Mr G Steffens as Independent Non-Executive Director;
• Mr C McDougall as Independent Non-Executive Director; and
• Mr P Botha as Non-Executive Director.

Mr P Rowse was appointed as an Alternate Director to Mr P Botha on 11 September 2017.

Mr T Mokgatlha, already an Independent Non-Executive Director of the Company, was appointed as Independent Non-Executive 
Chairman on 13 October 2017 following the resignation of Ms P Langeni to pursue other business interests.

Mrs S Masinga was appointed as an Independent Non-Executive Director on 13 October 2017.

Resignations:
• Ms P Langeni resigned as Chairperson and Independent Non-Executive Director on 2 October 2017.


SUBSEQUENT EVENTS
The Board is not aware of any other facts or circumstances that is material to the appreciation of this report that may 
have occurred between 28 February 2018 and the date of this report.


DIVIDEND DECLARATIONS
On 12 May 2017, Master Plastics declared a dividend of R75.0 million to Astrapak Limited, its sole shareholder at the 
date of the dividend declaration. As stated in the PLS the Group will initially focus on reinvesting for growth and 
accordingly no further dividend will be declared and paid in respect of the financial year ended 28 February 2018.


APPROVAL AND PREPARATION
The Condensed Audited Consolidated Financial Statements presented herein have been prepared under the direction and 
supervision of the Chief Financial Officer, Salome Ratlhagane CA (SA) and present a summary of the complete set of 
consolidated financial statements of the Group as approved by the Board on 30 April 2018. These Condensed Audited 
Consolidated Financial Statements are extracted from audited information but are not themselves audited. The Board 
takes full responsibility and confirm that the Condensed Audited Consolidated Financial Statements presented herein 
has been correctly extracted from the audited consolidated financial statements of the Group.

The auditors, Grant Thornton, have issued an unmodified audit opinion on the complete consolidated financial statements 
of the Group and the separate financial statements of the Company. A copy of the report and the Group consolidated, and 
separate Company financial statements are available for inspection at the Company’s registered office.


DOCUMENTS
This announcement and the PLS are both available on the Master Plastics’ website: www.masterplasticsgroup.com, or from 
the registered office of the Company, or its Corporate and Designated Adviser Merchantec Capital, Monday to Friday 
08:30 to 16:30.


ACKNOWLEDGEMENT AND APPRECIATION
The Board would like to express its appreciation to Ms Langeni for her services to the Group and to all stakeholders 
for their continued commitment, efforts and support.


On behalf of the Board

Manley Diedloff                                           Salome Ratlhagane
Chief Executive Officer                                   Chief Financial Officer

Johannesburg
2 May 2018


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                     Audited           Audited    
                                                                   financial         financial     
                                                                  year ended      period ended    
                                                                 28 February       28 February    
(R’000)                                               Notes             2018              2017    
Revenue                                                  10          504 479             9 347    
Cost of sales                                                       (386 249)           (7 382)    
Gross profit                                                         118 230             1 965    
Administrative and other expenses                                    (39 293)           (2 453)    
Distribution and selling costs                                       (29 834)             (421)    
Profit/(loss) from operations                            11           49 103              (909)    
Investment income                                                      1 211               103    
Finance cost                                                          (1 499)               (2)    
Profit/(loss) before taxation                                         48 815              (808)    
Taxation (expense)/benefit                                           (12 460)              226    
Profit/(loss) for the period                                          36 355              (582)    
Other comprehensive profit/(loss)                                          -                 -    
Total comprehensive profit/(loss) for the period                      36 355              (582)    
                                                                                                  
Basic earnings/(loss) per ordinary share (cents)         13            29,46             (13,9)    


RECONCILIATION OF HEADLINE EARNINGS

                                                                     Audited          Audited
                                                                   financial        financial
                                                                  year ended     period ended    
                                                                 28 February      28 February    
(R’000)                                               Notes             2018             2017    
                                                                                                 
Profit/(loss) attributable to                                  
ordinary shareholders                                                 36 355             (582)    
Headline earnings adjustment                                              55                -    
Profit on sale of plant and equipment                                   (300)               -    
Impairment of plant and equipment                                        377                     
Tax effect of adjustments                                                (22)               -    
Headline earnings/(loss) attributable                          
to ordinary shareholders                                              36 410             (582)    
Headline earnings/(loss) per                                   
ordinary share (cents)                                   13            29,51            (13,9)    


CONDENSED CONSOOLIDATED STATEMENT OF FINANCIAL POSITION                                     
                                                                       Audited           Audited    
                                                                    financial         financial     
                                                                    year ended      period ended    
                                                                   28 February       28 February    
(R’000)                                               Notes               2018              2017    
Assets                                                                                              
Non-current assets                                                     153 525           154 407    
Property, plant and equipment                             4            148 216           145 759    
Deferred taxation assets                                                 5 309             8 648    
Current assets                                                         174 407           211 656    
Inventories                                                             59 962            46 260    
Trade and other receivables                               4             97 917            71 214    
Cash and cash equivalents                                 7             15 985            94 182    
Taxation asset                                                             543                 -    
Assets classified as held-for-sale                        5              8 985               214    
Total assets                                                           336 917           366 277    
Equity and liabilities                                                                              
Total equity                                                           184 512           227 238    
Equity attributable to ordinary                                 
shareholders of the parent                                9            184 512           227 238    
Non-current liabilities                                                 44 057            43 759    
Long-term interest-bearing debt                           6              9 117             5 974    
Long-term financial liability                             8             15 528            15 528    
Deferred taxation liabilities                                           19 412            22 257    
Current liabilities                                                    108 348            95 280    
Trade and other payables                                  4            100 289            87 393    
Short-term interest-bearing debt                          6              8 059             6 843    
Taxation payable                                                             -             1 044    
Total equity and liabilities                                           336 917           366 277    
                                                                
                                                                
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY          
                                                                       Audited           Audited    
                                                                     financial         financial     
                                                                    year ended      period ended    
                                                                   28 February       28 February    
(R’000)                                               Notes               2018              2017    
Opening balance                                                        227 238                 -    
Comprising:                                                                                         
Ordinary share capital                                                 235 404                 -    
Common control reserve on acquisition                     9             (7 584)                -    
of equity interests in subsidiaries                                                                 
Retained loss                                                             (582)                -    
                                                                                                    
Movements:                                                             (42 726)          227 238    
Ordinary share capital issued                                                -           235 404    
Ordinary share capital repurchased                                      (4 081)                -    
Common control reserve on acquisition                                        -            (7 584)    
of equity interests in subsidiaries                                                                 
Profit/(loss) for the period                                            36 355              (582)    
Dividend paid to parent prior to unbundling                            (75 000)                -    
Closing balance                                                        184 512           227 238    
Comprising:                                                                                         
Ordinary share capital                                                 231 323           235 404    
Common control reserve on acquisition                     9             (7 584)           (7 584)    
of equity interests in subsidiaries                                                                 
Retained loss                                                          (39 227)             (582)    
Total equity                                                           184 512           227 238    
                                                                  

CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS                        
                                                                        Audited          Audited   
                                                                      financial        financial   
                                                                     year ended     period ended    
                                                                    28 February      28 February    
(R’000)                                                     Note           2018             2017    
Cash generated from/(utilised by) operations before 
working capital changes                                                  66 041             (664)    
(Increase)/decrease in working capital                                  (23 253)           2 830    
Net interest and taxation paid                                          (13 841)            (663)    
Dividend paid to parent prior to unbundling                             (75 000)               -    
Net cash (outflow)/inflow from operating activities                     (46 053)           1 503    
Additions to property, plant and equipment                              (13 239)          (1 118)    
Acquisition of business - cash balances acquired                              -           93 797    
Payment of contingent purchase consideration                             (6 224)               -    
Proceeds on disposal of plant and equipment                                 300                -    
Net cash (outflow)/inflow from investing activities                     (19 163)          92 679    
Repayment of interest bearing debt                                       (8 900)               -    
Repurchase of ordinary shares                                            (4 081)               -    
Net cash inflow from financing activities                               (12 981)               -    
Net (decrease)/increase in cash and cash equivalents                    (78 197)          94 182    
Net cash and cash equivalents at beginning of the period                 94 182                -    
Net cash and cash equivalents at end of the period             7         15 985           94 182    


SEGMENTAL ANALYSIS
A segmentation of the financial information has been reported for the year ended 28 February 2018.

As the financial information reported on for the period ended 28 February 2017 relates only to 1 (one) month’s trading 
and is mainly attributable to the business of Barrier Film Converters Proprietary Limited and due to the timing of the
transactions of which Master Plastics acquired the underlying operations, a segmentation of the financial information 
reported would not be meaningful for the period ended 28 February 2017.

A segmentation of the financial information for the year ended 28 February 2018 is presented below:


(R’000)                             Food & Produce      Construction      Industrial      Total Group    
Revenue for segment                        346 391            92 929          65 158          504 479    
Revenue for external customers             346 391            92 929          65 158          504 479    
Profit from operations                      36 540             7 883           4 680           49 103    
Profit before taxation                      36 563             7 561           4 691           48 815    
Total assets                               233 690            40 233          62 994          336 917    
Total liabilities                          118 415            19 946          14 044          152 405    
Capex                                       20 364             5 261             872           26 497    
Depreciation                                10 353             1 377           3 163           14 893    


SUPPLEMENTARY INFORMATION
                                                                  Audited                    Audited    
                                                                financial                  financial 
                                                               year ended               period ended    
                                                              28 February                28 February    
                                                                     2018                       2017    
Number of ordinary shares in issue -                              117 535                    135 131    
net of repurchases (‘000)                                                                               
Weighted average number of ordinary shares                        123 399                    135 131    
in issue over period (‘000)                                                                             
Net asset value per share (cents)                                     157                        168    
Net tangible asset value per share (cents)                            157                        168    
Closing share price (cents)                                           165                          -    
Market capitalisation (R million)                                     194                          -    
Net interest-bearing debt/(cash) as                                  0,6%                     (35,8%)    
percentage of equity (%)                                                                                
Net interest-bearing (debt)/ cash                                 (1 191)                     81 365    
Long-term interest-bearing debt                                   (9 117)                    (5 974)    
Short-term interest-bearing debt                                  (8 059)                    (6 843)    
Cash and cash equivalents                                          15 985                     94 182    
Return on average capital employed (ROCE)                           20,2%                      (0,7%)    
                                                                                                        
Normalised Earnings/(loss) before interest, taxation,              65 291                      (664)    
depreciation and amortisation ("Normalised EBITDA")**                                                   
Profit/(loss) from operations                                      49 103                      (909)    
Depreciation                                                       14 893                        245    
Earnings/(loss) before interest, taxation, depreciation            63 996                      (664)    
and amortisation ("EBITDA")                                                                             
Profit on sale of plant and equipment                               (300)                          -    
Impairment of plant and equipment                                     377                          -    
 IFRS 2 Share Appreciation Rights Expense                           1 218                          -    
Normalised EBITDA margin                                            12,9%                      (7,1%)    
                                                                                                        
Normalised Profit/(loss) from operations**                         50 398                       (909)    
Normalised Profit/(loss) from operations margin                     10,0%                      (9,7%)   
** Normalised EBITDA and Normalised Profit/(loss) from Operations are determined by adjusting the reported EBITDA 
   and Profit from operations numbers for those items deemed to be non-recurring, capital in nature or in view of 
   the Company distorts the reporting of the sustainable profitability of the Group. The adjustables used in 
   determining the Normalised Profit/(loss) from operations are the same as those used for purposes of determining 
   the Normalised EBITDA.

NOTES TO THE CONDENSED AUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF CONSOLIDATION
   The condensed audited consolidated financial statements are presented in accordance with the framework concepts 
   and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the 
   SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting 
   Pronouncements as issued by the Financial Reporting Standards Council, as well as the requirements of the 
   Companies Act of South Africa and the JSE Limited’s Listings Requirements. The condensed audited consolidated 
   financial statements also contain, at a minimum the information required by International Accounting Standard 34 
   Interim Financial Reporting. The accounting policies used in the preparation of these results are in accordance 
   with IFRS and are consistent in all material respects with those used in the audited consolidated and separate 
   financial statements for the period ended 28 February 2017. Standards and interpretations that were effective 
   were adopted. These did not have a significant impact on the financial statements.

2. COMPARATIVE FIGURES
   The condensed audited consolidated financial statements for the financial period ended 28 February 2017 has 
   been presented. The comparative period, due to the timing of the establishment of the Group and its unbundling, 
   covers only one month’s trading by some of the Group’s entities and the result are therefore not directly 
   comparable.

3. ESTABLISHMENT OF THE MASTER PLASTICS GROUP
   In line with Astrapak Limited’s resolved strategy aimed at becoming a focused rigid packaging business and 
   pursuant to an offer from RPC plc, the Astrapak Board resolved to unbundle Master Plastics to its ordinary 
   shareholders by way of a distribution in specie in terms of section 46(1)(a)(ii) of the Companies Act and 
   section 46 of the Income Tax Act. In order to give effect to this and prior to the implementation of the 
   unbundling, Master Plastics was incorporated and a number of companies and/or assets were disposed of to 
   Master Plastics through a series of asset-for-share-transactions at the end of January 2017 and February 2017, 
   which resulted in the establishment of the Master Plastics Group. The Master Plastics Group has accordingly only 
   been trading for a period of 1 month during the comparative period ending 28 February 2017. The Group was 
   unbundled and listed on the AltX exchange of the JSE on 24 May 2017.

   The asset-for-share-transactions and a breakdown of the assets and liabilities so acquired by Master Plastics 
   is presented below and are accounted for as a common control transaction in terms of IFRS.

                                                                   Rand Value of      No. of no par value
                                                                   shares issued            shares issued    
   Shares and share claims acquired                                                                          
   31 January 2017(100% voting interest)                                                                     
   Barrier Film Convertors Proprietary Limited                            79 650                   36 446    
   Micawber 430 Proprietary Limited                                        6 912                    8 954    
   Micawber 451 Proprietary Limited                                        6 511                    6 746    
                                                                          93 073                   52 146    
   Businesses acquired as at 28 February 2017:                                                               
   Peninsula Packaging                                                    75 279                   22 277    
   Plusnet-Geotex                                                         25 431                   22 277    
   Property letting enterprises                                           24 806                   16 154    
   Astrapak Investments                                                   16 815                   22 277    
                                                                         142 331                   82 985    
   Total purchase consideration and number of shares issued              235 404                  135 131    

   The following assets and liabilities were acquired by Master Plastics Group as a result of the aforementioned 
   transactions:
                                                                           R’000    
                                                                                    
   Properties                                                             22 238    
   Plant and equipment                                                   122 862    
   Deferred tax assets                                                     7 938    
   Inventory                                                              46 133    
   Trade and other debtors                                                73 851    
   Cash and cash equivalent                                               93 797    
                                                                                    
   Long-term interest bearing debt                                       (5 974)    
   Long term financial liability                                        (15 528)    
   Deferred tax liabilities                                             (23 581)    
   Trade and other creditors                                            (87 073)    
   Short-term interest bearing debt                                        (643)    
   Net asset value acquired                                              227 820    
   Common Control reserve                                                  7 584    
   Share issue                                                           235 404    
   Cash acquired                                                          93 797    

                                                        Audited           Audited    
                                                      financial         financial     
                                                     year ended      period ended    
                                                    28 February       28 February    
                                                           2018              2017    
   (R’000)                                                                           
4. Property, plant and equipment                                                     
   Opening net carrying value                           145 759                 -    
   Additions                                             26 252             1 118    
   Additions- restructuring (per note 3)                      -           145 100    
   Assets classified as held-for-sale -          
   properties excess to requirements                     (8 739)             (214)    
   Impairment of item of machinery due           
   to redundancy                                           (163)                -    
   Depreciation                                         (14 893)             (245)    
   Closing net carrying value                           148 216           145 759    
                                                                                     
   Capital expenditure for the period                    26 252             1 118    
   Capital commitments                                                               
   - contracted not spent                                33 316             5 520    
   - authorised not contracted                                -                 -    
A total of R16.12 million of the contracted but not yet spent total above has been paid by the finance provider in 
the form of progress payments made to suppliers of equipment. The Group has accordingly recognised both an asset and 
a corresponding liability as part of Trade and other receivables and Trade and other payables for this amount.


5. Assets-held-for-sale
   The assets held for sale relate to assets that are being disposed of:
   Opening balance at the beginning of the period           214                 -    
   Assets classified as held-for-sale -excess                             
   production equipment                                       -               214    
   Property*                                                246                      
   Property transferred from property, plant                              
   and equipment                                          8 739                      
   Assets previously held-for-sale now impaired            (214)                -    
   Assets-held-for-sale at the end of the period          8 985               214    
    *Property additions capitalised to assets held-for-sale
   Assets-held for-sale at end of the period represent land and buildings which are deemed excess to requirements by 
   the Group. Management is committed to a plan to sell the asset and has actively marketed the property for sale at 
   a price that is reasonable in relation to the property’s current fair value. An independent broker has been 
   appointed to market the properties on the Group’s behalf.

6. Long-term and short-term interest bearing debt
   Long-term and short-term interest bearing debt represent asset based finance liabilities which are measured at 
   amortised cost using the effective interest rate method.

7. Cash and cash equivalents
   Bank balances                                         15 985            94 182    

8. Long-term financial liability
   Long-term financial liability                         15 528            15 528    

   The long-term financial liability, reflected at fair value, represents the estimated final payment that will be 
   due to the vendor of Coralline Investments Proprietary Limited. This estimated amount was recalculated at the 
   end of 28 February 2018 based on the actuals for the February 2017 and February 2018 financial years and the 
   forecast for the financial year ending 28 February 2019 and remains unchanged from the comparative period. The 
   original transaction occurred prior to the disposal of the Plusnet-Geotex business to Master Plastics by Astrapak 
   Limited in preparation of the unbundling. The final amount will be determined upon finalisation of the Group 
   audited results for the financial year ended 28 February 2019, which is anticipated to be towards the end of 
   May 2019. The amount finally due will therefore be recalculated based on the agreed valuation formula and the 
   actual results achieved over the financial years ended 28 February 2017 to 28 February 2019 and could accordingly 
   still vary from the amount of the financial liability currently reported. The final amount due will be settled over 
   2 financial years, with 70% being settled in May 2019 and the balance on 28 February 2021. The long-term financial 
   liability is classified as a level 3 fair value in terms of the fair value hierarchy and has been discounted to 
   its present value at a rate of 10%.

9. Common Control Reserve                                    
   The common control reserve arose on the acquisition of equity interest by Master Plastics in Barrier Film 
   Convertors Proprietary Limited, Micawber 430 Proprietary Limited and Micawber 451 Proprietary Limited in terms of 
   the restructure detailed in note 3 and represents the differential between the net asset value acquired and the 
   value of the shares issued for such net asset value by Master Plastics, which value represented the carrying value 
   in the books of the parent.
                                                            Audited               Audited    
                                                          financial             financial     
                                                         year ended          period ended    
                                                        28 February           28 February    
                                                               2018                  2017    
   (R’000)                                                                                   
10 Revenue                                                                                   
   Revenue for the group                                    529 089                 9 347    
   Transactions with other entities in                                      
   the group                                                (24 610)                    -    
   Revenue for external customers                           504 479                 9 347    

11 Profit/(loss) from operations                                                             
   Profit/(loss) from operations has been determined                                         
   after taking the following items into account:                                            
   Profit on disposal of plant and equipment                    300                     -    
   Auditors remuneration                                        811                   104    
   Depreciation                                              14 893                   245    
   Staff costs                                               87 239                 2 908    
   Retirement benefit                                         4 709                   134    
   Rental expense                                             9 230                   438    
   Foreign exchange losses realised                             313                     -    
   Impairment of machinery due to redundancy                    377                     -    
   IFRS 2 Share Appreciation Rights Expense                   1 218                     -    

12.Segmental analysis 
   As the financial period ended 28 February 2017 consisted only of 1 month’s trading, mainly attributable to the business 
   of Barrier Film Convertors Proprietary Limited, and due to the timing of the transaction in terms of which Master 
   Plastics acquired the underlying operations , a segmentation of the financial information reported for the period ended 
   28 February 2017 would not be meaningful and has therefore not been presented. The segmental analysis has been presented 
   for the financial year ended 28 February 2018.

   13.Basic earnings/(loss) per ordinary share and Headline earnings/(loss) per ordinary share
   Basic earnings/(loss) per ordinary share is calculated by dividing the profit/(loss) attributable to ordinary 
   shareholders of Master Plastics by the weighted average number of shares in issue over the period that the attributable 
   profit or loss was generated.

   Headline earnings/(loss) per ordinary share is calculated by dividing the headline earnings/(loss) attributable to 
   ordinary shareholders of the parent by the weighted average number of shares in issue over the period that the headline 
   earnings/(loss) was generated.

14.Subsequent events
   The Board is not aware of any other facts or circumstances material to the appreciation of this report that may have 
   occurred between 28 February 2018 and the date of this report.

Master Plastics Limited  
Registration Number 2016/323930/06

Registered Office: 
1410 Eglin Office Park, Eglin Road, Sunninghill, Johannesburg, South Africa

Business Address: 
1410 Eglin Office Park, Eglin Road, Sunninghill, Johannesburg, South Africa

Directors: 
TV Mokgatlha** (Chairman), M Diedloff (Chief Executive Officer), S Ratlhagane (Chief Financial Officer), P C Botha*, 
G Z Steffens**, C I McDougall**, S Masinga**
** Independent Non-Executive Director * Non-Executive Director

Company Secretary: 
S Ratlhagane

Transfer Secretaries: 
Computershare Investor Services Proprietary Limited

Auditors: 
Grant Thornton Johannesburg Partnership (Chartered Accountants)

Corporate Advisor and Designated Advisor: 
Merchantec Capital, 2nd Floor, North Block Hyde Park Office Towers, Jan Smuts Avenue, Hyde Park

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