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DELTA EMD LIMITED - Audited Consolidated Results For The Fifteen Months Ended 27 March 2019

Release Date: 27/06/2019 17:23
Code(s): DTA     PDF:  
 
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Audited Consolidated Results For The Fifteen Months Ended 27 March 2019

DELTA EMD LIMTED
Registration number: 1919/006020/06
Income tax number: 9375057719
Share code: DTA       ISIN: ZAE000132817
("DELTA EMD" or "the Group")

AUDITED CONSOLIDATED RESULTS
FOR THE FIFTEEN MONTHS ENDED 27 MARCH 2019   


SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                                       Audited - Fifteen    Audited - Twelve
                                                                                               months to           months to
                                                                                                27 March         27 December
                                                                                                    2019                2017
                                                                            Notes                  R'000               R'000  
Net interest received                                                                              6 443               6 203   
Administrative expenses                                                                         (10 906)             (2 320)   
Impairment on assets held for sale                                                              (15 949)                   -   
Expenses related to discontinuation of business                                                  (4 248)             (2 223)   
Loss on sale of investment                                                                       (2 874)                   -   
Rental and other income                                                                            2 880               2 299   
(Loss)/profit for the period before taxation                                                    (24 654)               3 959   
Taxation                                                                                               8               (623)   
(Loss)/profit for the period                                                                    (24 646)               3 336   
Total comprehensive (loss)/profit for the period                                                (24 646)               3 336   
Attributable to equity holders of parent company                                                                               
(Loss)/profit for the period                                                                    (24 646)               3 336   
Total comprehensive (loss)/profit for the period                                                (24 646)               3 336   
Headline (loss)/profit attributable to ordinary shareholders                    1                (5 823)               3 336   
Attributable (loss)/earnings per share (cents)                                                                                 
- basic and diluted                                                                               (50.1)                 6.8   


SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                                                                 Audited             Audited   
                                                                                                27 March         27 December   
                                                                                                    2019                2017  
                                                                                                   R'000               R'000   
ASSETS                                                                                                                         
Current assets                                                                                                                 
Trade and other receivables                                                                            -                 808   
Bank balances and cash                                                                            77 707              80 649   
Non-current assets held for sale                                                                       -              25 949   
Total assets                                                                                      77 707             107 406   
EQUITY AND LIABILITIES                                                                                                         
Total shareholders' funds                                                                         36 423              95 352   
Current liabilities                                                                                                            
Trade and other payables                                                                           6 883               3 283   
Short-term provisions                                                                                  -               8 763   
Taxation payable                                                                                       -                   8   
Dividends payable                                                                                 34 401                   -   
Total equity and liabilities                                                                      77 707             107 406   


SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                       Audited - Fifteen    Audited - Twelve
                                                                                               months to           months to
                                                                                                27 March         27 December   
                                                                                                    2019                2017 
                                                                                                   R'000               R'000   
Cash utilised by trading                                                                        (12 156)             (2 244)   
Movement in current and non-current provision                                                    (8 763)             (7 273)   
Decrease/(increase) in working capital                                                             8 081            (19 393)   
Cash utilised by operations                                                                     (12 838)            (28 910)   
Net interest received                                                                              6 443               6 203   
Taxation paid                                                                                          -               (474)   
Cash outflow from operating activities                                                           (6 395)            (23 181)   
Proceeds on sale of investment                                                                    12 500                   -   
Net increase/(decrease) in cash and cash equivalents                                               6 105            (23 181)   
Bank balances and cash at beginning of period                                                     80 649             103 830   
Cash included in sale of share transaction                                                       (9 047)                   -   
Bank balances and cash at end of period                                                           77 707              80 649   


SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                  Share
                                                                                capital
                                                                                    and      Accumulated
                                                                                premium           profit               Total
                                                                                  R'000            R'000               R'000  
Balance at 27 December 2016                                                       4 856           87 160              92 016   
Profit for the year                                                                   -            3 336               3 336   
Balance at 27 December 2017                                                       4 856           90 496              95 352   
Loss for the period                                                                   -         (24 646)            (24 646)   
Prior year unclaimed dividend reversed                                                -              118                 118   
Dividend declared                                                                     -         (34 401)            (34 401)   
Balance at 27 March 2019                                                          4 856           31 567              36 423   


Notes
                                                                                       Audited - Fifteen    Audited - Twelve
                                                                                               months to           months to 
                                                                                                   March            December   
                                                                                                    2019                2017   
                                                                                                   R'000               R'000   
1.  Reconciliation between attributable (loss)/earnings and headline (loss)/earnings                                          
    Attributable (loss)/profit after taxation                                                   (24 646)               3 336   
    Impairment on assets held for sale                                                            15 949                   -   
    Loss on sale of investment                                                                     2 874                   -   
    Headline (loss)/earnings attributable to ordinary shareholders                               (5 823)               3 336   
    Attributable headline (loss)/earnings per share (cents)                                                                    
    - basic and diluted                                                                           (11.8)                 6.8   
    Number of shares in issue ('000)                                                              49 166              49 166   
    Weighted number of shares in issue ('000)                                                     49 166              49 166   


2.  Basis of presentation
    The Group is domiciled in South Africa. The audited consolidated financial results at and for the fifteen months ended 27 March
    2019 comprise the company and its subsidiaries (the 'Group'). Given the current state of winding down of the operations of the
    Group there are no operating segments per the requirements of IFRS 8 on operating segments.

    The only remaining non-current asset held by the Group at year-end December 2017 was the plant site located in Nelspruit.

    During 2017 and 2018 remediation of the Nelspruit plant site continued in terms of the order received during December 2015
    from the Department of Environmental Affairs. Progress reports on the work undertaken in terms of the order were submitted to
    the Department of Environmental Affairs as required. An independent evaluation of the remediation work completed in terms of
    the order was undertaken during the first quarter of 2018.

    The company has actively marketed the site for over 20 months, during this period no substantial, unconditional offers were
    received for the plant site. At year-end December 2017 the independent valuators report indicated that carrying the site at
    cost was not inappropriate. Subsequent to the December 2017 year-end, the company had received unconditional offers from
    potential buyers indicating realisable prices to the value of R10 million. Based on experience trying to sell the site for several years
    and the prices from potential buyers the directors decided to impair the value of the plant site from R25 949 000 to R10 000 000.

    The Group's principal accounting policies have been applied consistently over the current and prior financial years. The company
    has considered the impact of IFRS 9 and IFRS 15 on the results and concluded that it will have no material effect.

    On 5 March 2014, the company announced that the board of directors had taken the decision, subject to approval by the
    company's shareholders, to discontinue the operations in a phased and orderly manner during 2014 and to realise value for the
    company's assets during 2014 to 2018. The decision was approved at the Annual General Meeting of the company held on
    9 May 2014. At the general meeting held on 10 June 2019 the shareholders approved the payment of a special dividend which
    will constitute the disposal of the greater part of Delta EMD's assets, the voluntary winding up of Delta EMD, the appointment of
    the liquidator and delisting from the JSE of the Delta EMD shares.

    The above information highlights that the group is no longer a going concern, and in line with the requirements of IAS 1
    Presentation of the financial statements, the annual financial statements have not been prepared as a going concern. The
    group has, amongst other things, assessed the value of assets for impairment and analysed the need to recognise a liability for
    contractual commitments that may have become onerous as a consequence of the decision to cease trading. There are no non-
    current assets remaining in Delta EMD to reclassify in terms of IFRS 5. The directors intend to delist Delta EMD from the JSE in
    July 2019, the winding up of the group has been conducted by way of shareholders voluntary winding-up in terms of section 80
    of the Companies Act. The directors are of the opinion that the company will be in a position to discharge all of its liabilities, due
    to the company's cash resources.

    The financial statements have been prepared on a basis consistent with IFRS which among other things, requires writing assets
    down to their recoverable amounts. It also requires recognising a liability for contractual commitments that may have become
    onerous as a consequence of the decision to cease trading.

    Basis of preparation
    The Group's summarised consolidated audited financial results have been prepared by EJ Nel CA(SA), Financial Director,
    in accordance with the requirements of the JSE Limited Listings Requirements for preliminary financial statements, and the
    requirements of the Companies Act applicable to summarised consolidated financial statements. The Listings Requirements require
    preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements
    of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices
    Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council and as a minimum contain the
    information required by IAS 34: Interim Financial Reporting.

    The auditors, Deloitte & Touche, have issued their modified audit opinion on the consolidated financial statements for the fifteen
    months ended 27 March 2019. The auditors report contains an emphasis of matter paragraph: "Without qualifying our opinion,
    we draw attention to Note 15 to the financial statements regarding the proposed voluntary wind-up of the company's operations,
    planned deregistration and the basis of preparation of the financial statements. The basis of preparation is consistent with
    International Financial Reporting Standards and further describes that the going-concern assumption is not appropriate to the
    company". The preliminary report has been derived from the consolidated financial statements and consistent in all material
    respects, with the consolidated financial statements. Copies of the modified audit opinion, the audited consolidated financial
    statements together with accompanied summarised financial statements are available for inspection at the Company's registered
    office. Any reference to future financial performance included in this announcement, has not been audited or reported on by the
    Company's auditors. The auditor's report does not necessarily report on all of the information contained in this announcement.
    Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor's engagement, they
    should obtain a copy of the auditor's report together with the accompanying financial information from the company's registered
    office.

3.  Subsequent events
    A circular was issued to the shareholders on 18 April 2019 requesting the shareholders to approve the distribution of a major
    portion of the company's assets to the shareholders as a special dividend and approving the delisting and voluntary liquidation
    of the company. At the general meeting held on 10 June 2019 shareholders approved the payment of a special dividend which
    constitute the disposal by Delta EMD of the greater part of its assets, the voluntary winding-up of Delta EMD, the appointment
    of the liquidator and the delisting from the JSE of the Delta EMD shares. The results of this meeting were published on SENS on
    10 June 2019 and in the press on 11 June 2019.

COMMENTARY
The Group realised a loss for the fifteen months of R24.6 million (2017: Profit R3.3 million).

The Group's expenses as reported at 27 December 2018 remain unchanged except for the administrative expenses that include the
operating expenses for the three months to 27 March 2019 as well a provision for all the expenses related to the voluntary winding-up,
delisting and liquidation of the company.

Net cash utilised by operations during the fifteen months totalled R12.8 million (2017: R28.9 million).

The Group's year cash balances at the end of the fifteen months decreased by R2.9 million from R80.6 million to R77.7 million.
On 23 April 2019 a dividend of R34.4 million was paid from this cash balance.

Total assets employed by the Group at year-end, including cash balances, totalled R77.7 million (2017: R107.4 million). Net asset value
per share at year-end was 74 cents (2017: 194 cents).

PROSPECTS
The Group's only remaining asset is its cash balances. At the general meeting held on 10 June 2019 shareholders approved the payment
of a special dividend which constitute the disposal by Delta EMD of the greater part of its assets, the voluntary winding-up of Delta EMD,
the appointment of the liquidator and the delisting from the JSE of the Delta EMD shares. The results of this meeting were published on
SENS on 10 June 2019 and in the press on 11 June 2019. Finalisation announcement will be published once all conditions precedent
have been fulfilled, including the issue of Compliance certificate by the Takeover Regulation Panel.

As set out in the detailed timetable in the circular dated Thursday, 18 April 2019, the Delta EMD shares will be delisted from JSE at
commencement of trade on Tuesday, 23 July 2019.

DIRECTORATE
No change.

PREPARER OF FINANCIAL STATEMENTS
These summarised consolidated financial statements have been prepared by EJ Nel CA(SA) in her capacity as Financial Director of the Group.

AVAILABILITY OF COMPLETE SET OF FINANCIAL STATEMENTS
Shareholders are advised that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy
of the auditor's report together with the accompanying set of financial statements from the registered office of the Delta EMD Limited.


TG Atkinson                                                          EJ Nel (Financial director)
27 June 2019


Registered office
15 Heyneke Street, Industrial Site, Nelspruit, 1200

Transferred Secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196

Directors:
Independent non-executive: AC Hicks, BR Wright, L Matteucci
Non-executive: P Baijnath
Chairman: TG Atkinson* (Chairman) *USA
Financial Director: EJ Nel CA(SA) (Financial director)

Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited



Date: 27/06/2019 05:23:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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