Afrimat Limited (“Afrimat” or “the company” or “the group”) (Incorporated in the Republic of South Africa)
(Registration Number: 2006/022534/06) Share code: AFT ISIN code: ZAE000086302
®
Reviewed condensed consolidated
provisional financial results
for the year ended 29 February 2016
GROWTH
through diversification
Highlights
Contribution from operations margin 16,3%
HEPS up 15,5% to 156,6 cents
Net debt:equity ratio 3,5%
NAV per share of 720 cents
Final dividend per share 41 cents
Return on net operating assets 32,5%
www.afrimat.co.za
Commentary
Basis of preparation
The reviewed condensed consolidated provisional financial results (“financial statements”) for the year ended 29 February
2016 (“year”) contain, as a minimum, the information required by IAS 34: Interim Financial Reporting and have been
prepared in accordance with the frameworks concepts and measurement and recognition requirements of the International
Financial Reporting Standards (“IFRS”), the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee, JSE Listings Requirements and in the manner required by the South African Companies Act No. 71 of 2008, as
amended. The accounting policies and method of computation applied in preparation of the financial statements are in
accordance with IFRS and are consistent with those applied in the audited annual financial statements for the year ended
28 February 2015.
The financial statements have been prepared under the supervision of the Financial Director, PGS de Wit CA(SA).
Introduction
The group continues to deliver good results driven by its diversification strategy as well as its cost reduction and efficiency
improvement initiatives.
In line with the diversification strategy, Afrimat entered into an agreement on 9 October 2015 to acquire lime and associated
products producer, Cape Lime Proprietary Limited (“Cape Lime”). The conditions precedent to this agreement were met on
31 March 2016.
Financial results
Headline earnings increased by 15,2%, translating into headline earnings per share of 156,6 cents (2015: 135,6 cents). This
solid improvement in earnings resulted from a strong performance of the mineral producing operations across all regions. The
group was successful in increasing its operating margin to 16,3% from 14,0% and improving its cash generated from
operations to R320,3 million from R261,6 million through its efficiency improvement drive.
Improved efficiencies, cost reduction and the disposal of marginal businesses in the prior year, contributed further to this
improvement in earnings. A shift towards more valuable products in the product mix enhanced earnings, but was affected by
overall lower sales volumes. Operating expenses include the cost of additional resources required to increase the group’s
compliance capability and costs associated to establish the operations in Mozambique.
Operational review
All processing plants are fully operational and strategically positioned to deliver excellent service to the group’s customers. In
respect of aggregates, Afrimat offers flexible services, which are supplemented by mobile mining and crushing equipment.
Labour relations continued to be satisfactory during the year under review. The group is committed to creating and sustaining
harmonious relationships in the workplace and addressing issues pro-actively.
The Mining & Aggregates/Minerals segment benefited from a good improvement from the traditional aggregates business.
However, after the closure of Highveld Steel and other market dynamics, the Gauteng market showed a marginal slowdown.
In line with Afrimat’s strategy to diversify, new greenfield projects were initiated in the Northern Cape, Mpumalanga and
Mozambique. These projects were impacted by the decline in commodity prices, which resulted in the postponement of major
projects.
The Concrete Based Products segment was impacted by lower revenue reflecting a tough environment. Management has
been focusing on initiatives to reduce costs and to increase market share, resulting in positive results during the second half
of the year.
Business development
New business development remains a key component of the group’s growth strategy. The dedicated business development
team continues to successfully identify and pursue opportunities in existing markets, as well as in anticipated new high growth
areas in southern Africa.
Acquisition
Subsequent to the reporting date, the acquisition of Cape Lime became unconditional following the regulatory approval for
the acquisition. The effective date of the acquisition is 31 March 2016.
B-BBEE
Existing BEE shareholders and the Afrimat BEE Trust in aggregate hold 26,1% of Afrimat’s issued shares. Transformation
remains a key focus area for the group and excellent progress has been made in meeting the Mining Charter and B-BBEE
targets.
1
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
Dividend
The group’s dividend policy is to maintain a 2,75 times dividend cover. A final dividend of 41,0 cents per share
(2015: 37,0 cents per share) for the year was declared on 18 May 2016. The dividend payable to shareholders who are
subject to dividend tax is 34,85 cents per share (2015: 31,45 cents per share).
Prospects
The group is well positioned to capitalise on its strategic initiatives, which include continued growth from an excellent asset
base, selective acquisitions and greenfield expansion projects. The acquisition of Cape Lime effective 31 March 2016, will
complement and augment Afrimat’s industrial minerals product offering and further expand its range of unique products.
Operational efficiency initiatives aimed at expanding volumes, reducing costs and developing the required skill levels of all
employees will continue across all operations.
Afrimat expects the current subdued business climate to continue with the group’s growth driven by the successful execution
of its proven strategy, recent acquisitions and a wider product offering to the market.
Auditor’s review
This report has been reviewed by the company’s auditor, Mazars. Their unmodified opinion is available for inspection at the
company’s registered office. Their review was conducted in accordance with ISRE 2410 “Review of interim financial
information performed by the independent auditor of the entity”.
The auditor’s report does not necessarily report on all of the information contained in this report. 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 issuer’s registered office.
On behalf of the board
MW von Wielligh
Chairman
AJ van Heerden
Chief Executive Officer
19 May 2016
Dividend declaration
Notice is hereby given that a final gross dividend, No. 18 of 41,0 (2015: 37,0) cents per share, in respect of the year ended
29 February 2016, was declared on Wednesday, 18 May 2016.
There are 143 262 412 shares in issue at reporting date of which 1 918 751 are held in treasury. The total dividend payable
is R58,7 million (2015: R53,0 million).
The board has confirmed by resolution that the solvency and liquidity test as contemplated by the Companies Act, No. 71 of
2008, as amended, has been duly considered, applied and satisfied. This is a dividend as defined in the Income Tax Act, 1962,
and is payable from income reserves. The South African dividend tax rate is 15,0%. The dividend payable to shareholders
who are subject to dividend tax and shareholders who are exempt from dividend tax is 34,85 cents and 41,0 cents per share,
respectively. The income tax number of the company is 9568738158.
Relevant dates to the final dividend are as follows:
Last day to trade cum dividend
Friday, 3 June 2016
Commence trading ex dividend
Monday, 6 June 2016
Record date
Dividend payable
Friday, 10 June 2016
Monday, 13 June 2016
Share certificates may not be dematerialised or rematerialised between Monday, 6 June 2016 and Friday, 10 June 2016, both
dates inclusive.
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
2
Condensed consolidated statement of profit or loss and other comprehensive income
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
Change
%
(1,4)
Revenue
1 969 786
1 998 600
Cost of sales
(1 349 584)
(1 472 007)
Gross profit
Operating expenses
Profit/(loss) on disposal of plant and equipment
620 202
(299 445)
931
526 593
(252 360)
(484)
17,8
Contribution from operations
Impairment of property, plant and equipment (note 2)
Impairment of goodwill (note 3)
Profit on disposal of business (note 11)
321 688
–
(1 300)
–
273 749
(1 555)
–
7 853
17,5
Operating profit
Investment revenue
Finance costs
Share of losses of joint venture
Share of profit of associate
320
21
(22
(4
388
779
625)
487)
67
280 047
16 604
(22 464)
(987)
178
14,4
Profit before tax
Income tax expense (note 5)
315 122
(90 930)
273 378
(73 036)
15,3
24,5
Profit for the year
224 192
200 342
11,9
Profit attributable to:
Owners of the parent
Non-controlling interests
222 128
2 064
198 104
2 238
224 192
200 342
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Net change in fair value of available-for-sale
financial assets
Income tax effect on available-for-sale financial assets
Currency translation differences (note 4)
Income tax effect on currency translation differences
91
(17)
91
(7)
213
(58)
(561)
180
Other comprehensive income for the year, net of tax
158
(226)
Total comprehensive income for the year
224 350
200 116
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
222 286
2 064
197 878
2 238
224 350
200 116
156,2
153,8
139,0
136,2
Note to statement of profit or loss and other comprehensive income:
Shares in issue:
Total shares in issue
Treasury shares (note 12)
143 262 412
(1 918 751)
143 262 412
(505 829)
Net shares in issue
141 343 661
142 756 583
Weighted average number of net shares in issue
142 239 928
142 524 228
Diluted weighted average number of shares
144 451 506
145 495 989
Earnings per share:
Earnings per ordinary share (cents)
Diluted earnings per ordinary share (cents)
3
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
12,1
12,4
12,9
Reconciliation of headline earnings
Profit attributable to owners of the parent
(Profit)/loss on disposal of plant and equipment attributable to owners
of the parent
Profit on disposal of business (note 11)
Impairment of property, plant and equipment (note 2)
Impairment of goodwill (note 3)
Total income tax effects
Headline earnings per ordinary share (“HEPS”) (cents)
Diluted HEPS (cents)
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
222 128
198 104
(935)
–
–
1 300
261
484
(7 853)
1 555
–
992
222 755
193 282
15,2
156,6
154,2
135,6
132,8
15,5
16,1
Change
%
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
4
Condensed consolidated statement of financial position
Assets
Non-current assets
Property, plant and equipment
Investment property
Intangible assets
Goodwill
Investment in associate
Other financial assets (note 10)
Deferred tax
Total non-current assets
Current assets
Inventories
Current tax receivable
Trade and other receivables
Other financial assets (note 10)
Cash and cash equivalents
Total current assets
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
763
3
16
133
724
3
18
134
156
040
550
194
250
156 424
20 754
856
040
845
494
380
158 228
25 274
1 093 368
1 065 117
132 702
7 968
295 552
875
117 241
126 804
8 867
287 976
783
78 124
554 338
502 554
1 647 706
1 567 671
Equity and liabilities
Equity
Stated capital
Business combination adjustment
Treasury shares
263 611
(105 788)
(40 181)
295 328
(105 788)
(8 056)
Net issued stated capital
Other reserves
Retained earnings
117 642
8 619
892 088
181 484
7 506
748 010
Attributable to equity holders of parent
Non-controlling interests
1 018 349
6 737
937 000
12 437
Total equity
Total assets
1 025 086
949 437
Liabilities
Non-current liabilities
Borrowings (note 9)
Deferred tax
Provisions
47 321
108 387
75 565
56 775
105 708
67 323
Total non-current liabilities
231 273
229 806
Current liabilities
Borrowings (note 9)
Current tax payable
Trade and other payables
Obligation of share of joint venture’s losses
Bank overdraft
65
2
277
5
39
564
607
832
466
878
65 646
5 946
262 983
979
52 874
Total current liabilities
391 347
388 428
Total liabilities
622 620
618 234
1 647 706
1 567 671
Total equity and liabilities
Note to statement of financial position:
Net asset value per share (cents)
720
656
Net tangible asset value per share (cents)
615
549
112 885
(77 363)
122 421
(25 250)
35 522
97 171
3,5
10,2
Total borrowings
Overdraft less cash and cash equivalents/(surplus cash)
Net debt
Net debt:equity ratio (%)
5
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
Condensed consolidated statement of cash flows
Cash flows from operating activities
Cash generated from operations
Interest revenue
Dividends received
Finance costs
Tax paid
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
399 373
25 429
197
(18 465)
(86 195)
348 968
13 502
119
(19 391)
(81 552)
Net cash inflow from operating activities
320 339
261 646
Acquisition of property, plant and equipment
Proceeds on disposal of property, plant and equipment
Purchase of financial assets
Proceeds on sale of financial assets
Proceeds on disposal of business (note 11)
Consideration paid for shares held in treasury by Infrasors (note 13)
Acquisition of businesses
(131 264)
14 310
(2 101)
–
–
–
–
(162
23
(32
14
10
Net cash outflow from investing activities
(119 055)
(146 854)
(50 100)
(3 747)
(9 647)
–
(9 536)
(76 141)
(14 509)
(8 343)
–
(220)
(48 617)
(58 730)
Repurchase of Afrimat shares
Acquisition of additional non-controlling interest (note 13)
Infrasors treasury buy back (note 13)
Equity related cost on share cancellation by Infrasors
Net movement in borrowings (note 9.2)
Dividends paid (note 6.2)
Net cash outflow from financing activities
468)
198
413)
288
800
(245)
(14)
(149 171)
(130 419)
Net increase/(decrease) in cash and cash equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts at the beginning of the year
52 113
25 250
(15 627)
40 877
Cash, cash equivalents and bank overdrafts at the end of the year
77 363
25 250
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
6
Condensed consolidated statement of changes in equity
Stated
capital
R’000
Balance at 1 March 2014
Changes:
Additional non-controlling interest acquired due to:
– Infrasors Holdings Limited (note 13)
– Afrimat Aggregates (Trading) Proprietary Limited (note 13)
– Delf Silica Coastal Proprietary Limited (note 13)
Increase in effective shareholding in Infrasors due to:
– Increase in shares held in treasury by Infrasors (note 13)
Acquisition of non-controlling interest in:
– Afrimat Mozambique Limitada
Equity-related cost on Infrasors treasury shares cancelled
Share-based payments
Purchase of treasury shares
Settlement of employee Share Appreciation Rights exercised and reserve transfer, net of tax
Treasury shares issued to non-executive directors
Profit for the year
Other comprehensive income for the year
323 176
–
–
–
–
–
–
–
–
(27 912)
64
–
–
Net change in fair value of available-for-sale financial assets
Income tax effect
Currency translation differences (note 4)
Income tax effect
–
–
–
–
Dividends paid (note 6.2)
–
Balance at 28 February 2015
Changes:
Additional non-controlling interest acquired due to:
– Infrasors Holdings Limited (note 13)
Increase in effective shareholding in Infrasors due to:
– Increase in shares held in treasury by Infrasors (note 13)
Share-based payments
Purchase of treasury shares
Settlement of employee Share Appreciation Rights exercised and reserve transfer, net of tax
Profit for the year
Other comprehensive income for the year
Net change in fair value of available-for-sale financial assets
Income tax effect
Currency translation differences (note 4)
Income tax effect
Dividends paid (note 6.2)
Balance at 29 February 2016
7
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
295 328
–
–
–
–
(31 717)
–
–
–
–
–
–
–
263 611
Business
combination
adjustment
R’000
Treasury
shares
R’000
Other
reserves
R’000
Retained
earnings
R’000
Non-controlling
interests
R’000
Total
equity
R’000
(105 788)
(10 692)
6 562
610 509
14 196
837 963
–
–
–
–
–
–
–
–
–
(751)
(2 756)
(1 050)
(779)
(1 236)
(1 771)
(1 530)
(3 992)
(2 821)
–
–
–
(33)
(212)
(245)
–
–
–
–
–
–
–
–
–
–
–
(14 509)
13 289
3 856
–
–
–
–
10 663
–
(2 937)
(6 556)
–
(226)
–
(220)
–
–
2 937
–
198 104
–
1
–
–
–
–
–
2 238
–
1
(220)
10 663
(14 509)
(14 623)
(2 636)
200 342
(226)
–
–
–
–
–
–
–
–
213
(58)
(561)
180
–
–
–
–
–
–
–
–
213
(58)
(561)
180
–
–
–
(58 730)
–
(58 730)
(105 788)
(8 056)
7 506
748 010
12 437
949 437
–
–
–
(1 899)
(1 848)
(3 747)
–
–
–
–
–
–
–
–
(50 100)
17 975
–
–
–
4 676
–
(3 721)
–
158
(4 331)
–
–
3 721
222 128
–
(5 316)
–
–
–
2 064
–
–
–
–
–
–
–
–
–
91
(17)
91
(7)
–
–
–
–
–
–
–
–
(9
4
(50
(13
224
647)
676
100)
742)
192
158
91
(17)
91
(7)
–
–
–
(75 541)
(600)
(76 141)
(105 788)
(40 181)
8 619
892 088
6 737
1 025 086
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
8
Notes
1.
Change
%
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
(0,9)
(2,9)
1 409 937
559 849
1 422 305
576 295
(1,4)
1 969 786
1 998 600
30,2
(36,0)
116 374
2 733
89 355
4 267
27,2
119 107
93 622
1,0
(3,1)
1 526 311
562 582
1 511 660
580 562
(0,2)
2 088 893
2 092 222
281 838
40 878
(1 028)
220 255
55 051
(1 557)
321 688
273 749
87,6
12,7
(0,3)
80,5
20,1
(0,6)
100,0
100,0
20,0
7,3
16,3
15,5
9,6
13,7
981 224
219 012
447 470
951 196
197 688
418 787
1 647 706
1 567 671
303 175
67 375
252 070
304 720
56 110
257 404
622 620
618 234
105 880
23 411
1 973
136 144
19 138
7 186
131 264
162 468
Segment information
Revenue
External sales
Mining & Aggregates/Minerals*
Concrete Based Products
Intersegment sales
Mining & Aggregates/Minerals*
Concrete Based Products
Total revenue
Mining & Aggregates/Minerals*
Concrete Based Products
Contribution from operations
Mining & Aggregates/Minerals*
Concrete Based Products
Other
Contribution from operations split (%)
Mining & Aggregates/Minerals*
Concrete Based Products
Other
Contribution from operations margins on external revenue (%)
Mining & Aggregates/Minerals*
Concrete Based Products
Overall contribution
Other Information
Assets
Mining & Aggregates/Minerals*
Concrete Based Products
Other
Liabilities
Mining & Aggregates/Minerals*
Concrete Based Products
Other
Capital expenditure (excluding acquisitions through business combinations)
Mining & Aggregates/Minerals*
Concrete Based Products
Other
* Comprising Industrial Minerals, Contracting Services and Aggregates. Segment header named to include “Minerals”, with no change to
segment composition.
9
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
2.
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
–
(1 555)
(1 300)
–
22 922
58 738
18 625
53 007
81 660
71 632
22 922
53 007
(388)
18 625
40 113
(8)
75 541
600
58 730
–
76 141
58 730
123 996
182 114
79 585
2 296
74 048
2 562
81 881
76 610
Impairment of property, plant and equipment
Impairment of property, plant and equipment
An impairment loss was recognised in the previous year, relating to property,
plant and equipment items written off at Delf Silica Coastal Proprietary
Limited after the disposal of the assets and business of this subsidiary as
a going concern.
3.
Impairment of goodwill
Impairment of goodwill
An impairment was recognised relating to goodwill at Scottburgh Quarries
Proprietary Limited due to declining financial returns.
4.
Currency translation differences
Foreign currency transactions relating to the Mozambique operations are
translated into the presentation currency (ZAR or R) by means of translating
assets and liabilities at closing rate at the date of the statement of financial
position and income and expenses at average exchange rate for the year and
recognising all resulting exchange differences in other comprehensive income.
5.
Income tax expense
The effective tax rate of the group increased from 26,7% in February 2015
to 28,9% in the current year mainly due to losses made in the Mozambique
operations on which no tax reversal was made and deferred tax assets which
had been recognised for the first time in the previous year.
6.
Dividends
6.1 Afrimat Limited dividends paid/declared in respect of the current
year profits
Interim dividend paid
Final dividend declared/paid
6.2 Dividends cash flow
Current year interim dividend paid
Previous year final dividend paid
Dividends received on treasury shares
Dividends paid by subsidiaries to non-controlling shareholders
7.
Authorised capital expenditure
Not yet contracted for
– Property, plant and equipment
8.
Depreciation and amortisation
Depreciation
Amortisation
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016 10
Notes (continued)
9.
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
122 421
68 754
(78 290)
171 038
53 566
(102 183)
112 885
122 421
47 321
65 564
56 775
65 646
112 885
122 421
68 754
(78 290)
53 566
(102 183)
(9 536)
(48 617)
137 775
19 524
136 200
22 811
157 299
159 011
156 424
875
158 228
783
157 299
159 011
–
–
–
634
2 313
7 853
–
10 800
Borrowings
9.1 Capital net movement
Opening balance
New borrowings
Repayments
Closing balance
Analysis as per statement of financial position
Borrowings non-current
Borrowings current
9.2 Analysis as per statement of cash flows
New borrowings
Repayments
10. Other financial assets
Funding provided to Afrimat employees (BEE share purchase scheme)
Rehabilitation fund trusts and other
Analysis as per statement of financial position
Non-current other financial assets
Current other financial assets
Included in the above balance, are investments in environmental insurance
policies of R13,2 million (2015: R11,8 million) measured at fair value. The fair
value of unquoted unit trusts is derived using the adjusted net asset method.
The adjusted net asset method determines the fair value of the investment in
the unit trust by reference to the fair value of the individual assets and liabilities
recognised in a unit trust’s statement of financial position. The significant
inputs to the adjusted net asset method are the fair values of the individual
assets and liabilities whose fair value is derived from quoted market prices in
active markets. The fair values are indirectly derived from quoted prices in
Level 1, and therefore included in Level 2 of the fair value hierarchy.
11. Proceeds on disposal of business
Net book value of property, plant and equipment disposed
Net book value of inventory disposed
Profit on disposal of business
The business including all assets of Prima Quarries Namibia Proprietary Limited has been disposed of as a going
concern with effect from 1 October 2014.
The business of Delf Silica Coastal Proprietary Limited was sold as a going concern with effect from 1 September
2014.
11 Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
Number of shares
29 February
2016
28 February
2015
Opening balance
Utilised for share appreciation rights scheme
Issued to non-executive directors
Purchased during the year
505 829
(1 069 171)
–
2 482 093
1 048 676
(1 214 712)
(240 000)
911 865
Closing balance
1 918 751
505 829
12. Movement in number of treasury shares
13. Acquisition of additional non-controlling interest
Infrasors Holdings Limited
During the year, Afrimat acquired a further 2 774 774 ordinary shares on the open market at an average price of 135
cents per ordinary share. Infrasors acquired a further 7 135 511 ordinary shares on the open market, at an average price
of 135 cents per ordinary share.
Afrimat
Aggregates
(Trading)
Proprietary
Limited
R’000
2016
Additional non-controlling
interest acquired
Premium paid on additional
shares acquired in subsidiary
after initial acquisition
2015
Additional non-controlling
interest acquired
Premium paid on additional
shares acquired in subsidiary
after initial acquisition
Infrasors
Holdings
Limited
R’000
Infrasors
Holdings
Limited
– Treasury
buy back
R’000
Total
R’000
–
1 848
5 316
7 164
–
–
1 899
4 331
6 230
–
–
3 747
9 647
13 394
1 236
1 771
779
212
3 998
Delf Silica
Coastal
Proprietary
Limited
R’000
–
2 756
1 050
751
33
4 590
3 992
2 821
1 530
245
8 588
14. Business combination
The group acquired 100% of the issued ordinary shares of Cape Lime Proprietary Limited (“Cape Lime acquisition”) for
R282,6 million, settled in shares of R23,6 million and cash of R259,0 million, with effect from 31 March 2016. The effect
of the acquisition will be reflected in the results for the financial year ending 28 February 2017.
Cape Lime
R’000
Acquisition information is as follows:
Unaudited pro forma profit after tax assuming the business combination for full year
Unaudited pro forma revenue assuming the business combination for full year
Acquisition costs included in operating expenses for the year ended 29 February 2016
29 542
156 381
209
The initial accounting for this business combination was incomplete at the time of this announcement. Further
disclosure required in terms of IFRS 3, such as the fair value of assets acquired and liabilities assumed, have not been
disclosed as the effective date financials and valuations have not been finalised.
Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016 12
Notes (continued)
15. Events after reporting date
Cape Lime Proprietary Limited
Afrimat entered into an agreement in respect of the acquisition of 100% of the issued ordinary shares of lime and
associated products producer, Cape Lime on 9 October 2015. The acquisition was subject to a due diligence process
and approval by the competition authorities and the Department of Mineral Resources. At the reporting date, the
conditions precedent to the contract had not yet been satisfied and therefore Afrimat had no control over Cape Lime.
All conditions were met on 31 March 2016 and the aggregate purchase consideration paid for the acquisition of Cape
Lime was R282,6 million and was settled in cash amounting to R259,0 million and the reissuing of treasury shares
of R23,6 million. Included in the purchase consideration was an interest amount of R6,6 million. The original cash
consideration of R252,4 million bore interest at the Standard Bank of South Africa Limited’s prime overdraft rate less
2 percent from 10 December 2015 in the event that all approvals were received from the authorities.
Infrasors Holdings Limited
On 31 March 2016, a special shareholders’ meeting was held and the following special resolutions were passed without
modification: conversion of the company to a private company; conversion of ordinary shares to no par value ordinary
shares; cancellation of 7 333 011 treasury shares held by Infrasors Management Services Proprietary Limited; and
replacing the company’s Memorandum of Incorporation.
16. Contingencies
Guarantees to the value of R80,9 million (2015: R64,0 million) were supplied by Standard Bank of South Africa Limited
to various parties, including the Department of Mineral Resources and Eskom.
Guarantees to the value of R9,8 million (2015: R9,8 million) were supplied by FirstRand Bank Limited to various parties,
including the Department of Mineral Resources and Eskom.
Guarantees to the value of R23,5 million (2015: R27,6 million) by Lombard’s Insurance Group, R1,4 million
(2015: R0,6 million) by ABSA Bank Limited and R2,7 million (2015: R2,7 million) by SIG Guarantee Acceptances
Proprietary Limited were supplied to various parties, including the Department of Mineral Resources, Eskom and
Chevron South Africa Proprietary Limited.
These guarantees are in respect of environmental rehabilitation and will only be payable in the event of default by
the group.
A contingent liability exists due to the uncertain timing of cash flows with regards to future local economic development
(“LED”) commitments made to the Department of Mineral Resources in respect of companies with mining rights. These
commitments are dependent on the realisation of the future agreed upon LED projects. Future commitments amount
to R5,3 million (2015: R7,5 million). An accrual has been raised in respect of commitments made up to the end of the
financial year.
Reviewed
year ended
29 February
2016
R’000
Audited
year ended
28 February
2015
R’000
8 811
19 565
588
2 997
2 896
48
17. Related parties
Loan balance owing by associate
Loan balance owing by joint venture
Interest received from associate
13 Afrimat Reviewed condensed consolidated provisional financial results for the year ended 29 February 2016
Notes
Directors
MW von Wielligh*^ (Chairman)
AJ van Heerden (CEO)
PGS de Wit (FD)
GJ Coffee
L Dotwana*
F du Toit*
PRE Tsukudu*^
JF van der Merwe*^
HJE van Wyk*^
* Non-executive director ^ Independent
Registered office
Tyger Valley Office Park No. 2
Cnr. Willie van Schoor Avenue
and Old Oak Road
Bellville, 7530
(PO Box 5278, Tyger Valley, 7536)
Sponsor
Bridge Capital Advisors Proprietary Limited
27 Fricker Road
Illovo, 2196
(PO Box 651010, Benmore, 2010)
Auditors
Mazars
Mazars House
Rialto Road
Grand Moorings Precinct
Century City, 7441
(PO Box 134, Century City, 7446)
Transfer secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Company secretary
M Swart
Tyger Valley Office Park No. 2
Cnr. Willie van Schoor Avenue
and Old Oak Road
Bellville, 7530
(PO Box 5278, Tyger Valley, 7536)