Wrap Text
Audited results for the year ended 28 February 2017
Calgro M3 Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2005/027663/06)
Share code: CGR, ISIN: ZAE000109203
("Calgro M3" or "the Company" or "the Group")
Audited results for the year ended 28 February 2017
Overview of results
Revenue increased 29.12% to R1.6 billion (2016: R1.2 billion)
NAV per share up 23.78% to 798.35 cents (2016: 645.00 cents)
Cash on hand increased by 200.69% to R240.8 million (2016: R80.1 million)
Gross profit margin constant at 21.49% (2016: 20.89%)
Net debt to equity 41.82% (2016: 59.30%)
HEPS declined 4.23% to 133.08 cps (2016: 138.96 cps)
The Group is proud to announce that it was fatality free, despite growth in both employees
and sub-contractors
Condensed Consolidated Statement of Comprehensive Income
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Revenue 1 554 680 1 204 064
Cost of sales (1 220 517) (952 517)
Gross profit 334 163 251 547
Other income 16 600 19 466
Other expenses (3 700) (5 757)
Administrative expenses (118 098) (105 089)
Operating profit 228 965 160 167
Share of profit of joint ventures and associates
- net of tax 6 269 67 234
Net finance income/(cost) (1 925) 11 874
Profit before tax 233 309 239 275
Taxation (63 176) (46 090)
Profit after taxation 170 133 193 185
Profit after taxation and other comprehensive
income attributable to:
- Owners of the parent 169 156 194 176
- Non-controlling interests 977 (991)
170 133 193 185
Profit after taxation attributable to:
Equity holders of the Company 169 156 194 176
Earnings per share - cents 133.06 152.77
Headline earnings per share - cents 133.08 138.96
Fully diluted earnings per share - cents 129.00 150.45
Fully diluted headline earnings per share - cents 129.02 136.85
Earnings Reconciliation
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Determination of headline and diluted earnings
Attributable profit 169 156 194 176
Loss on disposal of property 25 79
Gain on deemed disposal of interest in joint venture - (17 631)
Headline and diluted headline earnings 169 181 176 624
Determination of earnings and diluted earnings
Attributable profit 169 156 194 176
Earnings and diluted earnings 169 156 194 176
Number of ordinary shares ('000) 128 150 127 100
Weighted average shares ('000) 127 126 127 100
Fully diluted weighted average shares ('000) 131 127 129 062
Condensed Consolidated Statement of Financial Position
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Assets
Non-current assets
Property, plant and equipment 5 806 3 827
Deferred income tax asset 14 847 13 788
Intangible assets 159 690 159 039
Investment in joint ventures and associates 12 349 6 080
Investment property 6 519 -
199 211 182 734
Current assets
Inventories 595 990 453 093
Construction contracts and work in progress 1 387 537 923 520
Trade and other receivables 276 198 285 893
Other current assets 45 054 17 189
Cash and cash equivalents 240 765 80 071
2 545 544 1 759 766
Total assets 2 744 755 1 942 500
Equity and liabilities
Equity
Stated capital 116 256 96 022
Share-based payment reserve 60 847 47 922
Retained income 846 079 676 923
1 023 182 820 867
Non-controlling interests (101) (1 078)
Total equity 1 023 081 819 789
Non-current liabilities
Deferred income tax liability 302 358 241 041
302 358 241 041
Current liabilities
Borrowings 571 646 538 463
Other current liabilities 847 670 343 207
1 419 316 881 670
Total liabilities 1 721 674 1 112 711
Total equity and liabilities 2 744 755 1 942 500
Net asset value per share - cents 798.35 645.00
Net tangible asset value per share - cents 673.73 519.87
Condensed Consolidated Statement of Cash Flows
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Cash generated from operating activities
Cash generated from operations 292 068 101 799
Finance income 16 727 7 930
Finance cost (63 167) (57 339)
Tax paid (7 444) (16 879)
Net cash generated from operating activities 238 184 35 511
Cash flows invested in investing activities
Purchase of property, plant and equipment (867) (3 310)
Proceeds from the sale of investment property - 5 807
Purchase of intangible assets (52) (31)
Acquisition of business (4 500) -
Acquisition of subsidiary (93 000) (142 998)
Loans advanced to joint ventures and associates (18 472) (1)
Net cash invested in investing activities (116 891) (140 533)
Cash flows from financing activities
Proceeds of borrowings 239 809 260 000
Repayment of borrowings (206 915) (213 585)
Equity received in advance* 6 507 8 113
Net cash from financing activities 39 401 54 528
Net increase/(decrease) in cash and cash equivalents 160 694 (50 494)
Cash and cash equivalents at the beginning
of the year 80 071 130 565
Cash and cash equivalents at the end of the year 240 765 80 071
* This relates to cash received for the subscription of shares issued under the
Calgro M3 Executive Share Scheme.
Condensed Consolidated Statement of Changes in Equity
Share-
based
Stated payment Retained
R'000 capital reserve income
Balance at 1 March 2015 96 022 - 482 747
Share-based payment/reserve movements - 47 922 -
Total comprehensive income for the
year ended 29 February 2016 - - 194 176
Balance at 1 March 2016 96 022 47 922 676 923
Share-based payment/reserve movements 20 234 12 925 -
Total comprehensive income for the
year ended 28 February 2017 - - 169 156
Balance at 28 February 2017 116 256 60 847 846 079
Non-
control-
ling Total
R'000 Total interests equity
Balance at 1 March 2015 578 769 (87) 578 682
Share-based payment/reserve movements 47 922 - 47 922
Total comprehensive income for the
year ended 29 February 2016 194 176 (991) 193 185
Balance at 1 March 2016 820 867 (1 078) 819 789
Share-based payment/reserve movements 33 159 - 33 159
Total comprehensive income for the
year ended 28 February 2017 169 156 977 170 133
Balance at 28 February 2017 1 023 182 (101) 1 023 081
Condensed Segment Report for the Group
Property Professional Memorial
R'000 Development Services Parks Total
February 2017
Total segment revenue 1 538 914 11 449 4 317 1 554 680
Revenue from joint
ventures and associates 435 241 - - 435 241
Combined revenue 1 974 155 11 449 4 317 1 989 921
Operating profit 222 445 8 107 1 250 231 802
Finance costs (21 263) - (656) (21 919)
Adjusted profit before tax 201 182 8 107 594 209 883
February 2016
Segment revenue 1 183 419 19 990 655 1 204 064
Revenue from joint
ventures and associates 1 089 144 - - 1 089 144
Combined revenue 2 272 563 19 990 655 2 293 208
Operating profit 151 495 15 891 (1 894) 165 492
Finance costs (18 742) - (36) (18 778)
Adjusted profit before tax 132 753 15 891 (1 930) 146 714
Property Professional Memorial
R'000 Development Services Parks Total
February 2017
Assets per segment 2 014 212 8 045 129 844 2 152 101
Goodwill 154 801 4 155 695 159 651
Investment property - - 6 519 6 519
Property, plant and
equipment - - 2 404 2 404
Inventories 475 764 - 120 226 595 990
Work in progress - 3 890 - 3 890
Construction contracts 1 383 647 - - 1 383 647
February 2016
Assets per segment 1 433 723 16 938 84 908 1 535 569
Goodwill 154 801 4 155 - 158 956
Inventories 368 185 - 84 908 453 093
Work in progress - 12 783 - 12 783
Construction contracts 910 737 - - 910 737
Additional Information
A reconciliation of adjusted profit/(loss) before tax is provided as follows:
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Adjusted profit before tax for reportable segments 209 883 146 714
Group overhead cost (2 837) (5 326)
Share of profit of joint ventures and associates 6 269 67 234
Profit before tax, net finance income/(cost) 213 315 208 622
Net finance income/(cost) 19 994 30 653
Profit before tax 233 309 239 275
Reportable segment assets are reconciled to total assets as follows:
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Segment assets for reportable segments 2 152 101 1 535 570
Unallocated:
Deferred tax 14 847 13 788
Investment property - -
Property, plant and equipment 3 401 3 827
Intangible assets excluding goodwill 40 83
Investment in joint ventures and associates 12 349 6 080
Loans to joint ventures 26 451 2 700
Loans and receivables - -
Current tax receivable 18 603 14 488
Trade and other receivables 276 198 285 893
Cash and cash equivalents 240 765 80 071
Total asset per the consolidated statement of
financial position 2 744 755 1 942 500
Reportable segment liabilities are reconciled to total liabilities as follows:
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Segment liabilities for reportable segments - -
Unallocated:
Borrowings 571 646 538 463
Deferred tax 302 358 241 041
Current tax 9 420
Trade and other payables 847 661 342 787
Total liabilities per the consolidated statement
of financial position 1 721 674 1 122 711
Related Party Transactions
Audited Audited
year ended year ended
28 February 29 February
R'000 2017 2016
Compensation paid to key employees and personnel 60 894 67 448
Finance income from related parties 10 368 22 388
Contract revenue received from joint ventures 203 119 799 930
Services fees received from joint ventures 10 843 21 183
Commentary
Nature of business
Calgro M3 is a property developer, focused on the lower end of the residential market
involved in large scale integrated developments, real estate investments (rental units) and the
development and establishment of private memorial parks.
Introduction
The Group has strategically repositioned itself in anticipation of tough economic conditions
by diversifying into other sectors within the Integrated Residential Development business, as
well as Memorial Parks and the Real Estate Investment Trust ("REIT"). This was done to
ensure that risk is optimally mitigated and managed in these uncertain times, setting a solid
foundation for future growth. While navigating the current business landscape, as well as
diversifying risk across sectors and businesses, the Group has remained focused on
maintaining the underlying theme of property development that is synonymous with Calgro M3.
The Integrated Residential Development business experienced a challenging year, which
resulted in lower than expected growth. Private sector exposure was increased to enhance
flexibility. In late 2016, it joined forces with SA Corporate Real Estate to build what we believe
is set to become one of the biggest, residential Real Estate Investment Trusts ("REIT") in
South Africa in the coming five to six years with a planned asset base of R10 billion to
R15 billion. This will yield annuity income to the Group in future which will stabilise "lumpy"
cash flows generally associated with property development.
We are still firmly committed to achieving our goal of an equal profit contribution from our
three businesses, being integrated residential developments (which includes professional
services), real estate investments and the memorial parks, over the medium to long term.
Given the political and economic landscape in South Africa, the short-term goal will be to
build each of these businesses responsibly, while remaining cautious of potential pitfalls.
As reported in the interim period, the emphasis this year was on ensuring the effective
roll-out of the current project pipeline, rather than growing it. While we might not have added
a lot of projects to the pipeline in the current year, we have invested time in exploring new
ground-breaking projects that will pave the way for future growth.
The Group remains cautious with respect to tying up too much capital in these long-term
projects. Management has investigated various structures to acquire properties and projects
without large upfront capital investment that is usually associated with a traditional outright
purchase.
Operational and financial performance
Property Developments
The Group currently have in excess of 7 000 units under construction. To manage risk and
exposure, infrastructure installation during the 2017 financial year was contained to
5 239 opportunities. This results in the total number of available, serviced opportunities
being in excess of 8 000. The Group will continue to prioritise the installation of new
infrastructure in the 2018 financial year to ensure sustained growth in the future.
This year the Witpoortjie project won the Gauteng Govan Mbeki award for the "Best
Affordable Project". We are encouraged that our newer projects are being positively
recognised along with our flagship project, Fleurhof. With thirteen of our residential projects
in the ground, ten of these projects contributed towards the Group's revenue. While Fleurhof
made the single biggest contribution, our newer projects are starting to make a meaningful
contribution to our financial results.
Government remains committed to the roll-out of catalytic and mega housing projects with
Calgro M3 being well-positioned to benefit in this regard. The Group has also managed to
create critical scale in the construction of units to the private sector through the development
of the phase 1 units for the REIT. The larger construction volumes have enabled the Group to
benefit from cost savings through volume discounts and enhanced negotiating power. It is
not the intention for all private sector sales to be sold to the REIT. A minimum of 50% of the
Group's private private sector sales will remain focused on the open market.
The "Captain Calgro" marketing campaign is aimed at educating the private sector on the
advantages of home ownership, as well as the pitfalls and associated financial implications.
This, together with other marketing efforts, has resulted in an increase of more than 30% in
open market sales. The positive effect of the campaign has already been evidenced by
clients becoming more aware of their credit records and how to manage it, resulting in a
general increase in the quality of sales being presented to the banks. We are, however,
cautious that irrespective of this increased quality, the credit rating downgrade of the banks
will impact on the affordability of our clients.
Professional Services
The Professional Services segment continued to add value to the turnkey business model.
The turnkey model has been the backbone of the Calgro Group and was one of the key
factors in establishing the REIT. The Group uses this model to create income-generating
assets at a more attractive yield, by reducing costs throughout the development phase. This
segment primarily services the internal integrated residential property development business.
Memorial Parks
Memorial Parks continued to grow, generating a profit for the 2017 financial year, with grave
sales steadily increasing on a weekly basis. Management is positive that this business will
begin making a more substantial contribution to profits in future financial years. A call
centre concentrating primarily on sales is close to being established, and is expected to
be operational by June 2017.
The acquisition of Fourways Memorial Park during the year enhanced our operating
knowledge of the sector, assisting with unlocking and fast-tracking growth in this segment.
The Group is planning to add two to three new memorial parks in the near future.
Financial review
The shift in focus towards the private sector has resulted in a temporary delay in combined
revenue and profit as the Group does not start construction on any open market units unless
they are sold. Although the open market sales have increased by 31.5% year-on-year, the
construction of most of these units only started, on a staggered basis, from August 2016.
The full impact of the increased sales numbers does therefore not reflect in the current revenue
line. However, it is expected that the majority of this revenue will be reflected over the next
six to twelve months.
A portion of the 29.12% increase in revenue to R1.5 billon is due to Fleurhof Ext 2 (Pty) Ltd
being accounted for as a subsidiary of the Group and no longer as a joint venture. The effect
of the consolidation is an increase in revenue, cost of sales and gross profit of the Group, as
well as a decrease in share of profits from joint ventures and associates. The tax rate of the
Group is also impacted by this consolidation as share of profits from joint ventures and
associates are accounted for net of tax.
Combined revenue (revenue from subsidiaries, joint ventures and associates) provides a
better indication of the operational growth, as the Group manages all operational matters for
these entities. Combined revenue decreased by 13.23% during the year, evidencing the
slowdown in operations, especially infrastructure expenditure that generally represents a
large portion of revenue.
Revenue during the current year was further impacted by labour, contractor and community
unrest at the Fleurhof, Jabulani and South Hills projects due to negotiations for increased
labour rates outside the normal cycle as well as the increased use of local SMMEs. This
delayed construction for a period of up to four months at some of the sites.
The gross margin is in line with the previous year and within the targeted band of 20% to 25%.
The decrease in gross margin from the interim results is due to a combination of the
transactions below and not because of increased infrastructure installation as would normally
be the case:
- Increase in resources within the construction team to enable the Group to roll-out the
expected volume of units over the medium-term has resulted in an increase in expenses;
- Reduced margins, compared to standard group margins, relating to the Jabulani CBD
project as a result of the dissolution agreement of Aquarella Investments 265 (Pty) Ltd (a
joint venture). Additional details on this transaction are outlined below; and
- Summerset bulk deal was agreed at a very low margin, coupled with a tight construction
timeline. The decision to develop these 246 units at a reduced margin was based on a larger
strategic decision for the Group. This transaction:
- unlocked a strategic entry into KwaZulu-Natal (Bridge City project); and
- enabled the Group to liquidate part of its cluster land portfolio and utilise the funds to
develop and fast track larger-scale integrated developments that will produce an increased
yield.
Administrative expenses increased by 12.38% from the prior year to R118.1 million (2016:
R105.1 million). This is mainly attributable to increased marketing and advertising expenditure.
The increase in marketing costs is supported by an increased focus on open market sales
and includes activities such as:
- Rebranding and marketing campaigns;
- Captain Calgro educational campaign to consumers;
- 24/7 call centre for marketing and after sales support;
- Increased Memorial Parks marketing and open days; and
- Establishment of an in-house marketing department to complement the existing sales
department.
Finance income declined in the current year mainly due to the consolidation of Fleurhof into
the Group. Total finance costs for the year increased by 9.62% to R65.2 million (2016:
R59.4 million) in line with increases in borrowings and interest rates.
Basic earnings per share ("EPS") decreased by 12.90% to 133.06 cents per share (2016:
152.77 cps). Similarly, headline earnings per share ("HEPS") decreased by 4.23% to
133.08 cents per share (2016: 138.96 cps).
Fourways Memorial Park acquisition
During the 2017 financial year, the Group acquired 100% of Fourways Memorial Park for an
undiscounted consideration of R22 million, payable over three years. Fair value of the
identifiable assets acquired amounted to R19.7 million and resulted in an increase in
investment property, inventory, property, plant and equipment and deferred revenue related
to future maintenance activities. Goodwill amounting to R694 804 was recognised because
of market expertise and relationships within the private memorial park sector which was
acquired and will benefit the Group. Fourways Memorial Park has 13 103 burial sites
remaining with an expected average sales price of R30 000 per grave.
Aquarella Investments 265 (Pty) Ltd ("Aquarella")
Towards the end of the financial year, the Group entered into a dissolution agreement with
the joint shareholders of Aquarella for no cash consideration. Assets and liabilities within the
entity were allocated to the individual shareholders in order for each shareholder to achieve a
suitable return on their investment. The Group obtained Jabulani Parcel C (to be developed
for the REIT), Parcel A (to be developed for International Housing Solutions) and Parcel K (the
contract with Gauteng Province is in the process of being finalised as an extension of the
current successful Jabulani Hostels project) as well as a corresponding liability for the
purchase of the properties. The liability will be settled through the construction of units.
Inventories
During the year, the Group acquired:
- The Kwa Nobuhle property for a total undiscounted purchase price of R74 million;
- Jabulani Parcel K land as part of the Aquarella unbundling transaction for R115.8 million; and
- Fourways Memorial Park for R22 million.
Both the Kwa Nobuhle and Fourways Memorial Park acquisitions were purchased on
deferred payment arrangements and have resulted in a corresponding increase in trade and
other payables.
Construction contracts
The R472.9 million increase in the carrying value of construction contracts to R1.3 billion at
year-end is due to several key transactions throughout the financial year which include:
- Sectional title units at Fleurhof with a total sales consideration of R68 million (excluding
VAT), which were complete at year-end but due to regulatory delays the registration was
delayed to April and May 2017;
- Construction of the Summerset development amounting to R141.9 million was practically
complete at year-end but only to be handed over in May 2017;
- Acquisition of Jabulani Parcel A and C as part of the Aquarella dissolution agreement;
- R130 million of construction on Fleurhof infrastructure and subsidised top structures that
was only received after year-end; and
- All units constructed for the REIT are undertaken on a turnkey basis.
Trade and other payables
Trade and other payables increased substantially by 147.29% to R847.7 million (2016:
R342.8 million). This increase is associated to deposits received totalling R287.5 million for
the construction of the Summerset project and rental units for the REIT which will realise
upon completion of these units. These will not result in future cash outflows.
The purchase of land in Kwa Nobuhle and Jabulani Parcel A, C and K, as well as Fourways
Memorial Park, on a deferred basis accounts for approximately R204 million of the increase
from the prior year. The land purchases are repayable over the next four to five years.
Cash flow, cash and cash equivalents and borrowings
With thirteen active projects in the Group, cash flow management is vital. Hands-on cash
flow management has resulted in cash and cash equivalents increasing significantly by
200.69% from the previous year. Net cash generated from operating activities increased to
R238,2 million from R35,5 million in 2016. Net cash flow for the year increased to healthy
levels, despite the Group making the final payment of R93 million for the purchase of Fleurhof
Ext 2 (Pty) Ltd in the current year. The increased private sector construction adds pressure to
the Group's working capital requirements, as in most cases the associated cash flow is only
received by the Group once a completed unit is handed over to the client. With several cash
positive projects, the Group was able to fund the purchase of Fleurhof Ext 2 (Pty) Ltd, as well
as continue the construction of the open market units without increasing its borrowing
requirements substantially.
The Group manages its finances through a central treasury function which is financed
through debt instruments. The Group issued R239.8 million new instruments during the year
and repaid instruments to the value of R206.9 million. The terms of the instruments currently
in issue range from three months to five years. Calgro M3 has assessed many other financing
alternatives and is satisfied that these debt instruments prove to be the most cost-effective
solution for working capital requirements.
As property developers, we usually also disclose the "adjusted cash flow from operations"
which considers certain "capital" items. The "capital" items referred to include any long-term
investment in projects that will support growth in the future. Examples of these items would
include land purchased as well as bulk or link infrastructure installed.
Total long-term investment in projects for the year amounted to R61.5 million which
decreased substantially, decreasing from the R155 million invested in the prior year. This is
primarily due to cash flow pressures from the Fleurhof acquisition, execution of the pipeline
and increased private sector construction. The adjusted cash generated from operations is
R353.6 million which consists of R292.1 million from the traditional calculation, plus capital
investment added back of R61.5 million.
Prospects
Given that this report was written as South Africa experiences a sovereign downgrade, it has
made Calgro M3 strategically reassess the way the Group can assist those in need to buy
homes. We believe that banks may possibly institute the call for upfront deposits. Even at
levels as low as 10%, the typical Calgro M3 customer will not be able to fund such upfront
payment. The Group is investigating various options in this regard to assist our customers in
securing these deposits.
Going forward, we acknowledge that there will be a tightening of spend across the economy;
however, the need for housing and rental opportunities is vast; and given the strong pipeline,
Calgro M3 remains confident that the business remains in a strong position to continue to
sell housing, while at the same time growing the rental business.
The Memorial Parks business has shown much improved growth and coupled with the
marketing drive, we are confident that it will continue to show steady results and provide the
Group with strong annuity income.
Calgro M3 believes that interest rates relating to new facilities will increase before the South
African Reserve Bank officially increases interest rates because of the credit downgrade on
the banks. We believe we are approaching a period where interest rates will come under
increased pressure resulting in more stringent criteria on consumers applying for new finance
as the banks' cost of capital increases with their respective downgrades.
The same applies to finance at a Group level. It will come down to the availability of capital
and to a lesser extent, the price. The Group will continue to look at local and international
markets to secure additional long-term instruments, as well as renewing expiring facilities.
With construction and infrastructure currently being installed for nearly 7 000 homes, the
Group is not only assisting with the eradication of the housing backlog, but also assisting
with job creation. Various training and skills development programmes will be launched in the
next six to twelve months that will support the upliftment of our people and will drive
sustainability in the medium to long term.
What is, however, certain is that our business already looks different to six weeks ago and
will continue to adapt according to risk. We believe the biggest risk mitigating strategy for our
business is our team's hands-on approach and ability to quickly adapt. We believe our
continued success will be determined by this, as well as our ability to make decisions under
pressure and take calculated risks.
Disclaimer: Statements contained in this announcement, regarding the prospects of the Group,
have not been reviewed or audited by the Group's external auditors.
Sustainability
A detailed Sustainability Report can be found on the Calgro M3 website at http://www.calgrom3.com.
We would like to specifically make mention of our investment in corporate social initiatives
and human capital development where we have a large educational and skills development
focus. Our philosophy with respect to skills development and education is to equip our youth
with the knowledge tools to ensure success in their lives. We are passionate about our
investment being longlasting and effective for future generations. During the current year, we
boosted our investment in social and enterprise development.
Safety
The Group is pleased to report that from an occupational health and safety perspective, it
was once again fatality-free despite growth in both activity and workforce numbers. The
Group continues to strive for a safe, harm-free working environment.
Board of Directors and operational management
The Board remain confident in the ability, knowledge and competence of the newly appointed
executive management team.
Manda Nkuhlu joined the Board as an Executive Director. Having been with the Company
since 2014, Manda brings extensive knowledge and experience in dealing with the public
sector in the residential property development sector.
Annual report and notice of annual general meeting
The Company's integrated annual report containing the audited annual financial statements
for the year ended 28 February 2017 and the notice of annual general meeting are available
on the Company's website hosted at http://www.calgrom3.com from today and will be posted to
shareholders on or about 26 May 2017.
Appreciation
There is no doubt that the past year was a challenging one. The tenacity, commitment and
hard work of our staff and senior management is appreciated even more in times such as
this. What we are exceptionally proud of, is that we continue to build a business from the
heart, doing the right thing, and assisting Government in ensuring there are houses for the
people of our country. Awards received during the year are dedicated to our staff, for the
hard work and commitment shown over the years.
We would like to thank the Board for their guidance, wisdom and support as well as our
fellow executives for the leadership role they execute across the business. We would also
like to say a special word of thanks to all our stakeholders for their continued support.
Notes
1. Basis of preparation
The summarised consolidated financial statements are prepared in accordance with the
requirements of the JSE Limited Listings Requirements and the requirements of the Companies
Act applicable to summarised financial statements. The Listings Requirements require
summarised consolidated financial statements to be prepared in accordance with the
framework concepts and the measurement and recognition requirements of International
Financial Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Pronouncements as issued by the
Financial Reporting Standards Council and to 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 summarised consolidated
financial statements were derived are in terms of International Financial Reporting Standards
and are consistent with those accounting policies applied in the preparation of the previous
consolidated annual financial statements.
The consolidated financial statements were internally compiled by UK Kissoon Singh CA(SA)
and M Esterhuizen CA(SA) under the supervision of WA Joubert CA(SA) and were approved
by the Board on 12 May 2017.
2. Independent audit
The summarised consolidated financial statements are extracted from audited information,
but are not itself audited. The consolidated annual financial statements were audited by
PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The audited
consolidated annual financial statements and the auditor's report thereon are available for
inspection at the Company's registered office. The directors take full responsibility for the
preparation of the summarised consolidated financial statements and the financial information
has been correctly extracted from the underlying annual financial statements.
3. Dividends
Management believes that cash should be retained to fund growth within the Group, with a
specific goal of assisting Government in the eradication of the housing backlog. Cash
retention is important to ensure investment into future projects as well as reduced reliance
on debt finance. The Board has therefore resolved not to declare a dividend for this reporting
period.
WJ Lategan
(Chief Executive Officer)
Waldi Joubert
(Financial Director)
Johannesburg
15 May 2017
Directors
PF Radebe (Chairperson)*#
WJ Lategan (Chief Executive Officer)
FJ Steyn
WA Joubert (Financial Director)
W Williams
VJ Klein*#
H Ntene*#
RB Patmore*#
ME Gama*#
BP Malherbe*
MN Nkuhlu
HC Cameron*#
* Non-executive
# Independent
Registered office
Calgro M3
Ballywoods Office Park
33 Ballyclare Drive
Bryanston
2196
Private Bag X33, Craighall, 2024
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg
2001
PO Box 61051, Marshalltown, 2107
Sponsor
Grindrod Bank Limited
Auditors
PricewaterhouseCoopers Inc.
Website
http://www.calgrom3.com
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