To view the PDF file, sign up for a MySharenet subscription.

AFRIMAT LIMITED - Reviewed condensed consolidated provisional financial results for the year ended 28 February 2019

Release Date: 23/05/2019 07:05
Code(s): AFT     PDF:  
 
Wrap Text
Reviewed condensed consolidated provisional financial results for the year ended 28 February 2019

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 28 February 2019

Highlights
- Group revenue up 24,6% to R3,0 billion
- Headline earnings per share ('HEPS') up 29,6% to 234,1 cents
- Operating profit margin 15,9%
- Final dividend per share of 62,0 cents
- Return on net operating assets 25,4%
- Net debt:equity ratio improved from 35,5% to 23,8%

Commentary

Basis of preparation
The condensed consolidated financial statements are prepared in accordance with the requirements of 
the JSE Limited Listings Requirements for provisional reports and the requirements of the Companies 
Act of South Africa. The Listings Requirements require provisional reports 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 
condensed consolidated financial statements are in terms of IFRS and are consistent with those 
applied in the previous consolidated annual financial statements, except for the implementation of 
IFRS 9: Financial Instruments and IFRS 15: Revenue from Contracts with Customers. Details of the
implementation of these standards are disclosed in note 19.

The financial statements have been prepared under the supervision of the Chief Financial Officer 
('CFO'), PGS de Wit CA(SA).

Introduction
The group continues to deliver satisfactory results supported by its diversification strategy
despite very difficult trading conditions experienced by the Construction Materials businesses.
The political uncertainty and economic slowdown experienced during the last quarter of the previous 
financial year continued during the current year and impacted the Construction Materials businesses 
the most. The Bulk Commodities segment, consisting of the Demaneng iron ore mine, contributed 
positively to the group results, which offset the lower performance of the Construction Materials 
businesses. The Industrial Minerals segment performance was slightly down after a slow first half of 
the year and a better second half.

Financial results
Headline earnings per share grew by 29,6% from 180,7 cents to 234,1 cents per share. Industrial 
mineral producing operations across all regions as well as the iron ore business were the main 
contributors to the satisfactory results.

Net cash from operating activities increased by 46,4% to R410,5 million (excluding once-off
employee-related accruals of R79,5 million, in relation to the Afrimat BEE Trust, paid in the prior
year), which resulted in a decrease of the net debt:equity ratio from 35,5% in the prior year to
23,8% in the current year. Goodwill in Afrimat Concrete Products Proprietary Limited, in 
KwaZulu-Natal/Free State, to the amount of R20,5 million was impaired during the year. Further
changes to goodwill relate to the finalisation of the purchase price allocation of Afrimat Demaneng 
Proprietary Limited ('Demaneng').

Operational review
All operating units remain strategically positioned to deliver excellent service to the group's
customers, whilst acting as an efficient hedge against volatile local business conditions. The
product range is well diversified to include aggregates and concrete-based products as
construction materials and limestone, dolomite and silica as industrial minerals as well as iron
ore as bulk commodities.

Labour relations continued to be satisfactory during the period under review, with no labour
action having occurred during the year. The group remains committed to creating and sustaining
harmonious relationships in the workplace and addressing issues proactively.

The Bulk Commodities segment, consisting of the Demaneng iron ore mine, delivered an exceptional 
contribution to the group results. The business completed the recommissioning of both its dense 
media separation ('DMS') plants during the first half of the year and completed the expansion of 
the load-out facility, reaching stable production volumes during the second half of the year. 
The business also experienced favourable pricing towards the latter part of the current year.

Industrial Minerals businesses across all regions delivered solid results, although the impact of
the economic slow down in the construction sector was experienced by the Lyttelton mine.

The Construction Materials segment felt the brunt of the slowdown in economic activity, with
the KwaZulu-Natal and Gauteng businesses being impacted the most. The KwaZulu-Natal
business successfully completed a restructuring process during the year in order to improve the
business. The Western Cape aggregates business continued to deliver solid results. In
Mozambique, the business mainly supplied construction materials to a resettlement village in
the north of the country. The Emfuleni Clinker Ash Dump, situated in Vereeniging and close to
Afrimat's customers, will ensure an additional three to four-year lifespan for both Clinker
Supplies Proprietary Limited ('Clinker') and SA Block Proprietary Limited. Clinker continues to
investigate further options in order to secure additional resources for the group.

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.

Afrimat announced on 8 April 2019 that the company has made a non-binding indicative offer
('NBIO') to purchase the entire issued share capital of Universal Coal plc ('Universal'), a
company listed on the Australian Stock Exchange, with operations in South Africa, for a
maximum purchase price of A$0,40 for each Universal share held. The NBIO is subject to
various conditions precedent, including the completion of a due diligence by the company, the
finalisation of financing arrangements and board and shareholder approval in respect of the
proposed transaction.

The due diligence on Universal is currently in progress.

For further details, refer to the SENS announcement published by the company on 8 April 2019.

B-BBEE
Existing BEE shareholders and the Afrimat BEE Trust in aggregate hold 32,6% of Afrimat's
issued shares.

Notwithstanding the fully empowered ownership platform in line with the Mining Charter
requirements, the group remains dedicated to enhancing all aspects of B-BBEE on an ongoing
basis. Afrimat is committed to a bottom-up approach to transformation and has had a successful
year in terms of sustained training, skills development and all-round employee upliftment.

Dividend
The group's dividend policy is to maintain a 2,75 times dividend cover. A final dividend of 62,0
cents per share (2018: 42,0 cents) for the year was declared on 22 May 2019. The dividend
payable to shareholders who are subject to dividend tax is 49,6 cents per share (2018: 33,6
cents per share). Total dividends for the year amount to 81,0 cents per share (2018: 62,0 cents
per share).

Prospects
The group is well positioned to capitalise on its strategic initiatives. It foresees continued growth
from an excellent asset base, and expects further expansion of its range of unique products.
The continuation of selective acquisitions is expected to deliver good results.

Operational efficiency initiatives aimed at expanding volumes, reducing costs and developing the 
required skill levels across all employees, remains a key focus in all operations.

Afrimat expects the current business climate to continue with the group's future growth driven by
the successful execution of its proven strategy, recent acquisitions and a wider product offering
to the market.

Auditor's reports
These condensed consolidated financial statements for the year ended 28 February 2019 have
been reviewed by PricewaterhouseCoopers Inc., who expressed an unmodified review conclusion. 
A copy of the auditor's review report is available for inspection at the company's registered office 
together with the financial statements identified in the auditor's report.

The auditor's report does not necessarily report on all of the information contained in this
announcement/financial results. 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                         AJ van Heerden
Chairman                                Chief Executive Officer

22 May 2019

DIVIDEND DECLARATION
Notice is hereby given that a final gross dividend, No 24 of 62,0 cents per share, in respect of
the year ended 28 February 2019, was declared on Wednesday, 22 May 2019.

There are 143 262 412 shares in issue at reporting date, of which 7 572 503 are held in treasury. 
The total dividend payable is R88,8 million (2018: R60,2 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 20,0%. The dividend payable to shareholders who are subject 
to dividend tax and shareholders who are exempt from dividend tax is 49,6 cents and 62,0 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                                                  Tuesday, 11 June 2019
Commence trading ex dividend                                                  Wednesday, 12 June 2019
Record date                                                                      Friday, 14 June 2019
Dividend payable                                                                Tuesday, 18 June 2019

Share certificates may not be dematerialised or rematerialised between Wednesday, 12 June 2019 and 
Friday, 14 June 2019, both dates inclusive.

Condensed consolidated statement of profit or loss and other comprehensive income

                                                                                   Restated       
                                                                    Reviewed        audited       
                                                                  year ended     year ended       
                                                                 28 February    28 February       
                                                                        2019           2018    Change
                                                                       R'000          R'000*        %
Revenue*                                                           2 966 399      2 380 994      24.6
Cost of sales*                                                    (2 043 234)    (1 623 629)  
Gross profit                                                         923 165        757 365      21.9
Operating expenses                                                  (451 497)      (406 205)  
Profit on disposal of plant and equipment                              3 538            638   
Other income                                                          12 189              -   
Other net gains and losses                                             4 225              -   
Impairment of property, plant and equipment (refer to note 2)              -         (1 399)  
Impairment of goodwill (refer to note 3)                             (20 468)             -   
Operating profit                                                     471 152        350 399      34.5
Finance income                                                        14 771         32 930   
Finance costs                                                        (66 706)       (59 432)  
Share of profit/(loss) of associate and joint venture                  2 326             (8)  
Profit before tax                                                    421 543        323 889      30.2
Income tax expense (refer to note 5)                                (117 328)       (78 511)  
Profit for the year                                                  304 215        245 378      24.0
Profit attributable to:                                                                       
Owners of the parent                                                 301 363        245 668    
Non-controlling interests                                              2 852           (290)   
                                                                     304 215        245 378    
Other comprehensive income                                                                     
Items that may be subsequently reclassified to profit or loss                                  
Net change in fair value of available-for-sale financial assets            -            183    
Currency translation differences (refer to note 6)                    (1 430)           961    
Income tax effect relating to these items                                  -            (41)   
Items that will not be reclassified to profit or loss                                          
Net change in fair value of equity instruments at fair value                                   
through other comprehensive income                                        35                             
Income tax effect relating to these items                                 (8)             -    
Other comprehensive income for the year, net of tax                   (1 403)         1 103    
Total comprehensive income for the year                              302 812        246 481      22.9
Total comprehensive income attributable to:                                                    
Owners of the parent                                                 299 960        246 771    
Non-controlling interests                                              2 852           (290)   
                                                                     302 812        246 481    
Earnings per share:                                                                           
Earnings per ordinary share (cents)                                    221.0          180.3      22.6
Diluted earnings per ordinary share (cents)                            219.5          179.0      22.6
Note to statement of profit or loss and other                   
comprehensive income                                            
Shares in issue:                                                                              
Total shares in issue                                             143 262 412   143 262 412   
Treasury shares (refer to note 8)                                  (7 572 503)   (6 654 039)  
Net shares in issue                                               135 689 909   136 608 373   
Weighted average number of net shares in issue                    136 387 043   136 271 264   
Diluted weighted average number of shares                         137 285 229   137 248 315   

* Comparative information has been reclassified. Refer to note 20 for further disclosure.

Reconciliation of headline earnings
                                                                     Reviewed       Audited  
                                                                   year ended    year ended  
                                                                  28 February   28 February  
                                                                         2019          2018    Change
                                                                        R'000         R'000         %
Profit attributable to owners of the parent                           301 363       245 668  
Profit on disposal of plant and equipment attributable                                       
to owners of the parent                                                (3 538)         (638) 
Impairment of property, plant and equipment                                                  
(refer to note 2)                                                           -         1 399  
Impairment of goodwill (refer to note 3)                               20 468             -  
Total income tax effects of adjustments                                   991          (213) 
                                                                      319 284       246 216      29.7
Headline earnings per ordinary share ('HEPS') (cents)                   234.1         180.7      29.6
Diluted HEPS (cents)                                                    232.6         179.4      29.7

Condensed consolidated statement of financial position

                                                                                             Restated
                                                                               Reviewed       audited
                                                                             year ended    year ended
                                                                            28 February   28 February
                                                                                   2019          2018
                                                                                  R'000         R'000*
Assets                                                                    
Non-current assets                                                        
Property, plant and equipment                                                 1 469 837     1 417 845
Investment property                                                               3 040         3 040
Intangible assets*                                                              221 873       243 970
Investment in associate and joint venture                                           164           183
Other financial assets (refer to note 7)                                         56 698        59 446
Deferred tax                                                                     33 680        55 115
Total non-current assets                                                      1 785 292     1 779 599
Current assets                                                            
Inventories                                                                     261 249       242 124
Current tax receivable                                                           13 250         9 181
Trade and other receivables                                                     435 458       391 603
Cash and cash equivalents                                                       191 763       112 208
Total current assets                                                            901 720       755 116
Total assets                                                                  2 687 012     2 534 715
Equity and liabilities                                                    
Equity                                                                    
Stated capital                                                                  258 292       266 985
Treasury shares                                                                 (85 822)      (59 660)
Net issued stated capital                                                       172 470       207 325
Other reserves                                                                  (94 391)      (99 900)
Retained earnings                                                             1 320 087     1 111 915
Attributable to equity holders of the parent                                  1 398 166     1 219 340
Non-controlling interests                                                        11 351         9 980
Total equity                                                                  1 409 517     1 229 320
Liabilities                                                               
Non-current liabilities                                                   
Borrowings (refer to note 9)                                                    235 542       271 954
Deferred tax                                                                    214 576       207 583
Provisions                                                                      141 080       130 288
Total non-current liabilities                                                   591 198       609 825
Current liabilities                                                       
Borrowings (refer to note 9)                                                    148 004       165 004
Other financial liabilities (refer to note 10)                                    9 480        21 856
Current tax payable                                                               4 143        11 485
Trade and other payables*                                                       390 517       407 022
Bank overdraft                                                                  134 153        90 203
Total current liabilities                                                       686 297       695 570
Total liabilities                                                             1 277 495     1 305 395
Total equity and liabilities                                                  2 687 012     2 534 715
Note to statement of financial position:                                  
Net asset value per share (cents)                                                 1 030           893
Net tangible asset value per share (cents)                                          867           714
Total borrowings                                                                393 026       458 814
(Surplus cash)/overdraft less cash and cash equivalents                         (57 610)      (22 005)
Net debt                                                                        335 416       436 809
Net debt:equity ratio (%)                                                          23.8          35.5

* Comparative information was amended due to a measurement period adjustment relating to business 
  combinations, refer to note 12.

Condensed consolidated statement of cash flows

                                                                               Reviewed       Audited
                                                                             year ended    year ended
                                                                            28 February   28 February
                                                                                   2019          2018
                                                                                  R'000         R'000
Cash flows from operating activities
Cash generated from operations                                                  551 722       344 542
Interest revenue                                                                 14 320        31 623
Dividends received                                                                   58            54
Finance costs                                                                   (58 565)      (52 752)
Tax paid                                                                        (97 051)     (122 507)
Net cash inflow from operating activities                                       410 484       200 960
Cash flows from investing activities                                                      
Acquisition of property, plant and equipment                                    (93 889)     (118 918)
Proceeds on disposal of property, plant and equipment                            14 369        22 975
Purchase of financial assets                                                       (444)      (68 060)
Acquisition of businesses (refer to note 12)                                          -         4 228
Net cash outflow from investing activities                                      (79 964)     (159 775)
Cash flows from financing activities                                                      
Repurchase of Afrimat shares                                                    (30 981)      (13 552)
Acquisition of additional non-controlling interest                               (9 014)      (37 521)
Proceeds from borrowings (refer to note 9.2)                                    144 635       300 000
Repayment of borrowings (refer to note 9.2)                                    (309 847)     (119 871)
Repayment of other financial liabilities                                         (3 488)      (25 143)
Dividends paid (refer to note 14.2)                                             (86 220)      (96 240)
Net cash (outflow)/inflow from financing activities                            (294 915)        7 673
Net increase in cash and cash equivalents and bank overdrafts                    35 605        48 858
Cash, cash equivalents and bank overdrafts at the beginning of the year          22 005       (26 853)
Cash, cash equivalents and bank overdrafts at the end of the year                57 610        22 005

Condensed consolidated statement of changes in equity

                                                                                  Non-               
                                 Stated  Treasury      Other    Retained   controlling          Total  
                                capital    shares   reserves    earnings     interests         equity
                                  R'000     R'000      R'000       R'000         R'000          R'000
Balance at 1 March 2017         285 842   (70 999)  (101 263)  1 085 792         7 547      1 206 919
Total comprehensive income    
Profit for the year                   -         -          -     245 668          (290)       245 378
Other comprehensive income    
for the year                          -         -      1 103           -             -          1 103
Net change in fair value      
of available-for-sale         
financial assets                      -         -        183           -             -            183
Income tax effect                     -         -        (41)          -             -            (41)
Currency translation          
differences (refer to note 6)         -         -        961           -             -            961
Total comprehensive income            -         -      1 103     245 668          (290)       246 481
Transaction with owners       
of the parent                                                       
Contributions and             
distributions                                                             
Share-based payments                  -         -      5 456           -             -          5 456
Purchase of treasury shares           -   (13 552)         -           -             -        (13 552)
Settlement of employee share  
appreciation rights exercised 
and reserve transfer, net     
of tax                          (20 357)   11 391     (5 196)      5 196             -         (8 966)
Dividends paid (refer to      
note 14.2)                            -         -          -     (95 600)         (640)       (96 240)
Total contributions and       
distributions                   (20 357)   (2 161)       260     (90 404)         (640)      (113 302)
Changes in ownership          
interests                                                              
Initial non-controlling       
interest acquired             
(refer note 12)                       -         -          -           -       (64 257)       (64 257)
Additional non-controlling    
interest acquired due to:                            
- Infrasors                           -         -          -        (104)           83            (21)
- Afrimat Bulk Commodities        1 500    13 500          -     (19 268)        1 768         (2 500)
- Afrimat Demaneng                    -         -          -    (109 769)       65 769        (44 000)
Total changes in ownership    
interest                          1 500    13 500          -    (129 141)        3 363       (110 778)
Total transactions with       
owners of parent                (18 857)   11 339        260    (219 545)        2 723       (224 080)
Balance at 28 February 2018   
as originally presented         266 985   (59 660)   (99 900)  1 111 915         9 980      1 229 320
Change in accounting policy   
(refer to note 19)                    -         -          -     (10 812)            -        (10 812)
Restated balance at           
1 March 2018                    266 985   (59 660)   (99 900)  1 101 103         9 980      1 218 508
Total comprehensive           
income                                                   
Profit for the year                   -         -          -     301 363         2 852        304 215
Other comprehensive income    
for the year                          -         -     (1 403)          -             -         (1 403)
Net change in fair value of   
equity instruments at         
fair value                       
through other comprehensive   
income                                -         -         35           -             -             35
Income tax effect                     -         -         (8)          -             -             (8)
Currency translation                           
differences (refer to note 6)         -         -     (1 430)          -             -         (1 430)
Total comprehensive income            -         -     (1 403)    301 363         2 852        302 812
Transactions with owners                       
of the parent                                        
Contributions and             
distributions                                               
Share-based payments, net     
of tax                                -         -      9 286           -             -          9 286
Purchase of treasury shares           -   (30 981)         -           -             -        (30 981)
Settlement of employee Share  
Appreciation Rights exercised 
and reserve transfer,         
net of tax                       (8 693)    4 819     (2 374)      2 374             -         (3 874)
Dividends paid (refer to      
note 14.2)                            -         -          -     (84 745)       (1 475)       (86 220)
Total contributions and       
distributions                    (8 693)  (26 162)     6 912     (82 371)       (1 475)      (111 789)
Changes in ownership          
interests                                                            
Additional non-controlling    
interest acquired due to:                                      
- Infrasors                           -         -          -          (8)           (6)           (14) 
Total changes in              
ownership interest                    -         -          -          (8)           (6)           (14)
Total transactions with       
owners of parent                 (8 693)  (26 162)     6 912     (82 379)       (1 481)      (111 803)
Balance at 28 February 2019     258 292   (85 822)   (94 391)  1 320 087        11 351      1 409 517
                                                                                                                                        
Notes

1.  Segment information
    The segments of the group have been identified by business segment. Operating segments are 
    reported in a manner consistent with the internal reporting provided to the chief operating 
    decision-maker. The chief operating decision maker, who is responsible for allocating resources 
    and assessing performance of the operating segments, has been identified as the executive 
    directors. Aggregation of segments has been determined on the basis of product outputs with 
    similar attributes; by considering the nature of products and services, production processes and 
    the type of class of customer for the products and services.

    At 1 March 2018, the executive committee, being the chief decision-making body, amended the basis 
    upon which the various businesses within the group are reported as a result of changes to the 
    executive management of the group. This aligned into three main operational pillars with five 
    segments being allocated to these pillars, based on the market use of products.

    Industrial Minerals, previously reflected within the Aggregates segment, is separately disclosed. 
    The rationale for the change was that over the years the Industrial Minerals business has become 
    an integral contributor to the group and serves a different market to Construction Materials.

    The principal services and products of each of these segments are as follows:
    - Construction Materials: Comprises Aggregates, Concrete-Based Products and Contracting 
      operations;
    - Industrial Minerals: Comprises limestone, dolomite and industrial sand (previously included 
      within the Aggregates segment); and
    - Bulk Commodities: Iron Ore.
                                                                                              Restated 
                                                                               Reviewed        audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                   Change          2019           2018
                                                                        %         R'000          R'000*
    Revenue
    External sales
    Construction Materials                                            5.7     1 739 496      1 645 252
    Industrial Minerals                                              (2.7)      544 705        559 757
    Bulk Commodities                                                287.6       682 198        175 985
                                                                     24.6     2 966 399      2 380 994
    Intersegment sales                                                                    
    Construction Materials                                                      126 316        100 237
    Industrial Minerals                                                          18 462              -
    Bulk Commodities                                                                  -              -
                                                                                144 778        100 237
    Total revenue                                                                         
    Construction Materials                                                    1 865 812      1 745 489
    Industrial Minerals                                                         563 167        559 757
    Bulk Commodities                                                            682 198        175 985
                                                                              3 111 177      2 481 231
    Operating profit                                                                      
    Construction Materials                                                      190 182        274 580
    Industrial Minerals                                                          78 012         88 393
    Bulk Commodities                                                            201 329        (33 443)
    Services                                                                      1 629         20 869
                                                                                471 152        350 399
    Operating profit margin on external revenue (%)                                       
    Construction Materials**                                                       10.9           16.7
    Industrial Minerals                                                            14.3           15.8
    Bulk Commodities                                                               29.5          (19.0)
    Overall operating profit                                                       15.9           14.7
    Other information                                                                     
    Assets                                                                                
    Construction Materials                                                    1 080 543      1 072 080
    Industrial Minerals                                                         610 521        582 634
    Bulk Commodities                                                            467 230        382 777
    Services                                                                    528 718        497 224
                                                                              2 687 012      2 534 715
    Liabilities                                                                           
    Construction Materials                                                      358 604        324 707
    Industrial Minerals                                                         131 860         88 224
    Bulk Commodities                                                             56 370         81 989
    Services***                                                                 730 661        810 475
                                                                              1 277 495      1 305 395
    Depreciation and amortisation                                                         
    Construction Materials                                                       81 478         73 105
    Industrial Minerals                                                          28 233         27 504
    Bulk Commodities                                                             32 656         20 042
    Services                                                                      3 974          3 642
                                                                                146 341        124 293
    Capital expenditure (excluding acquisitions                                           
    through business combinations)                                                        
    Construction Materials                                                      110 643        114 080
    Industrial Minerals                                                          63 593         40 707
    Bulk Commodities                                                             25 975         41 633
    Services                                                                      7 332          5 800
                                                                                207 543        202 220
 
    *   Prior year figures were restated to reflect the amended basis in which various businesses 
        within the group are reported. A classification misstatement between revenue and cost of sales 
        of R75,8 million has been corrected in FY2018 (refer to note 20 for further disclosure).
    **  Excluding goodwill impairment, 12,1%.
    *** Includes the R300,0 million amortising five-year facility with SBSA and FNB.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
2.  Impairment of property, plant and equipment                                           
    Impairment of property, plant and equipment                                       -          1 399

    In the prior year an impairment loss was recognised, relating to property, plant and equipment 
    items written off at Afrimat Aggregates (KZN) Proprietary Limited and Afrimat Contracting 
    International Proprietary Limited.
                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
3.  Impairment of goodwill                                                       20 468              -

    After performing the annual goodwill impairment test of Afrimat Concrete Products Proprietary 
    Limited, it was determined that the carrying value of the reporting unit exceeded its fair value, 
    resulting in a R20,5 million goodwill impairment. This is mainly due to the reduction in sales 
    volumes as a result of small medium enterprises entering the market adding to the level of
    competition.
                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
4.  Depreciation and amortisation                                                         
    Depreciation                                                                144 712        122 566
    Amortisation                                                                  1 629          1 727
                                                                                146 341        124 293

5.  Income tax expense
    The effective tax rate of the group increased from 24,2% to 27,8% in the current year. This was 
    mainly due to the quantum of income tax deducted from expenditure actually incurred in settlement 
    of the shares exercised in the Share Appreciation Rights Scheme as well as the reversal of 
    previously raised deferred tax assets in Delf Sand Proprietary Limited and Afrimat Silica 
    Proprietary Limited. Included in the available income tax losses of R531,1 million 
    (2018: R522,1 million) are tax losses of R73,9 million (2018: R32,8 million), which are available 
    for set-off against future taxable income but not raised due to the improbability of the 
    realisation of related tax benefits. Furthermore, the available income tax losses include a tax 
    loss of R345,3 million (2018: R340,5 million) relating to Afrimat Demaneng Proprietary Limited, 
    also not raised due to pre-acquisition tax losses not acknowledged.

6.  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 the closing 
    rate at the date of the statement of financial position and income and expenses at average 
    exchange rates for the year and recognising all resulting exchange differences in other 
    comprehensive income. Exchange differences arising on monetary items that form part of the 
    group's net investment in the Mozambique operations are recognised in other comprehensive income, 
    whilst all other translations including those on short-term receivables, are recognised in 
    profit or loss.
    
                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
7.  Other financial assets                                                                
    Financial assets at fair value through other comprehensive income             2 734              -
    Available-for-sale financial assets                                               -         20 684
    Financial assets at fair value through profit or loss                        50 025         30 573
    Financial assets at amortised cost                                            3 939          8 189
                                                                                 56 698         59 446
    Non-current other financial assets                                           56 698         59 446
    Current other financial assets                                                    -              -
                                                                                 56 698         59 446
 
    Refer to note 13 for fair value disclosure of other financial assets.

                                                                                 Number of shares
 
                                                                            28 February    28 February
                                                                                   2019           2018
8.  Movement in number of treasury shares                                                 
    Opening balance                                                           6 654 039      7 187 643
    Utilised for Share Appreciation Rights Scheme                              (183 036)      (473 106)
    Utilised to purchase minority shares in Afrimat Bulk Commodities                  -       (535 714)
    Purchased during the year                                                             
    Afrimat Aggregates Operations Proprietary Limited ('AAO')                   209 000        475 216
    Afrimat Management Services Proprietary Limited ('AMS')                     892 500              -
    Closing balance                                                           7 572 503      6 654 039

    The Afrimat BEE Trust (indirectly through Afrimat Empowerment Investments Proprietary Limited) 
    holds, on an unencumbered basis, 6 653 854 shares representing 4,64% of the issued share capital 
    of the company.

    AMS holds 397 700 shares, as nominee for the absolute benefit of the participants of the 
    company's Forfeitable Share Plan ('FSP').

    The remaining 494 800 shares held in AMS are held for the purposes of the company's Share 
    Appreciation Rights Scheme.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
9.  Borrowings                                                                            
    9.1   Capital net movement                                                            
          Opening balance                                                       436 958        174 089
          Acquired through business combination                                       -          2 895
          New borrowings                                                        256 435        379 845
          Repayments                                                           (309 847)      (119 871)
          Closing balance                                                       383 546        436 958
          Analysis as per statement of financial position                                 
          Borrowings non-current                                                235 542        271 954
          Borrowings current                                                    148 004        165 004
                                                                                383 546        436 958
    9.2   Analysis as per statement of cash flows                                         
          New borrowings                                                        144 635        300 000
          Repayments                                                           (309 847)      (119 871)
                                                                               (165 212)       180 129

          In the prior year, the group financed debt included in the general bank facilities into a 
          R300,0 million amortising five-year term facility with SBSA and FNB, bearing interest 
          linked to the three-month Jibar rate and payable in quarterly instalments commencing 
          30 November 2017.
  
          During the current year an amount equal to R60,0 million of the original R300,0 million 
          facility commitment, which had previously been repaid by the company, was redrawn. On the 
          last repayment date of the year, the group prepaid an amount of R100,0 million to the 
          five-year term facility, from internally generated cash flows.
  
          During the current year, the group financed plant and machinery with SBSA to fund capital 
          expenditure and working capital requirements to support the growth and expansion of the 
          group. The financed plant and machinery was purchased in preceding years and would have 
          been included in the 'additions' of those respective years. A vehicle asset facility of 
          R109,6 million over 36 months at prime rate minus 1,15% repayable in monthly instalments 
          of capital and interest, was agreed upon for this purpose.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
10. Other financial liabilities                                                            
    Net capital proceeds owing to Afrimat BEE Trust participants                  9 480         12 968
    Deferred liability: Demaneng minorities                                           -          8 888
                                                                                  9 480         21 856

    Upon implementation of the Afrimat Rainbow Capital ('ARC') transaction, the beneficiaries of the 
    trust received their respective consideration net of liabilities and ceased to be participants 
    under the current BEE scheme. This liability exists due to an amount owing to beneficiaries whom 
    could not be traced, mostly deceased individuals. Afrimat is in the process of tracking these 
    beneficiaries to ensure payment occurs timeously.

    On 22 August 2017, the group announced on SENS that Afrimat had concluded a sale of shares and 
    claims agreement with the minorities of Afrimat Demaneng Proprietary Limited and Diro Iron Ore 
    Proprietary Limited ('Demaneng') to acquire the remaining 40% stake in Demaneng as from 
    15 August 2017. The purchase consideration of R44,0 million was payable in nine tranches as 
    follows: eight monthly instalments of R5,0 million per month for eight consecutive months 
    commencing 15 August 2017; and R4,0 million in one final instalment. The deferred liability was 
    repaid during the current year.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
11. Authorised capital expenditure
    Contracted after year-end, but not provided for
    Property, plant and equipment                                                 2 928          6 771
    Not yet contracted for                                                      
    Property, plant and equipment                                               194 697        177 144
    Total authorised capital expenditure                                        197 625        183 915

    Authorised capital expenditure is to be funded from surplus cash and bank financing.

12. Acquisition of businesses
    Afrimat Demaneng Proprietary Limited and Diro Iron Ore Proprietary Limited ('Demaneng')
    In the prior year, the group acquired 60% of the issued shares of Demaneng, as well as a cession 
    and delegation agreement with Investec Limited to purchase all of its security. On 13 July 2017, 
    all conditions precedent, including section 11 approval from the Department of Mineral Resources 
    ('DMR'), were fulfilled and the agreement became unconditional. On 22 August 2017, the group
    announced on SENS that Afrimat had concluded a sale of shares and claims agreement with the 
    minorities of Demaneng to acquire the remaining 40% stake in Demaneng from 15 August 2017 for an 
    aggregate purchase consideration of R44,0 million. The acquisition complemented and augmented 
    Afrimat's product offering and further expanded its footprint across South Africa. Given the 
    nature of Demaneng's reserves and the access to infrastructure, together with Afrimat's existing 
    competencies, the transaction allows the ability to leverage the combined strengths which 
    resulted in developing new revenue opportunities for Afrimat in the iron ore space.

    Details of the acquisition are as follows:

                                                                                                 F2018
                                                                                                 Total 
                                                                                                 R'000
    Carrying amount/fair value of net assets acquired:                                     
    Property, plant and equipment*                                                             304 374
    Other financial assets                                                                      17 557
    Inventories                                                                                 12 446
    Trade and other receivables                                                                  8 804
    Borrowings                                                                                (307 852)
    Trade and other payables**                                                                 (66 996)
    Provisions                                                                                 (20 294)
    Deferred tax liability                                                                     (53 454)
    Current tax payable                                                                         (4 542)
    Cash and cash equivalents                                                                    5 228
    Net assets                                                                                (104 729)
    Additional non-controlling interest acquired                                                64 257
    Goodwill**                                                                                  40 472
    Consideration paid                                                                               -
    Net cash inflow from acquisition of subsidiary:                                          
    Cash and cash equivalents acquired                                                           5 228
                                                                                                 5 228
                                                                                           
    Pro forma revenue assuming the business combination for the full period                
    ended 28 February 2018                                                                     274 647
    Pro forma loss after tax assuming the business combination for the full period         
    ended 28 February 2018                                                                    (103 836)
    Revenue included in results                                                                251 773
    Loss after taxation included in results                                                    (38 790)
    Acquisition costs (including business rescue costs) included in operating              
    expenses for the period ended 28 February 2018                                               5 782

    *  Property, plant and equipment includes the fair value of mining assets of R169,7 million 
       acquired.
    ** Measurement period adjustment - during the reporting period, the comparative information was 
       retrospectively adjusted to decrease trade and other payables offset by a decrease in goodwill, 
       at the acquisition date, by R55,9 million in the process of finalising the accounting for this 
       business combination.
   
    At acquisition, the fair value of trade and other receivables was R8,8 million and includes trade 
    receivables of R8,0 million. An amount of R8,8 million is reflected as neither impaired nor 
    past due.

    Bethlehem Quarry and ancillary businesses from WG Wearne Limited ('Wearne')
    Wearne Aggregates Proprietary Limited and Wearne Readymix Concrete Proprietary Limited, both wholly 
    owned subsidiaries of Wearne, entered into an agreement with Afrimat Aggregates (KZN) Proprietary 
    Limited and Afrimat Concrete Products Proprietary Limited, both wholly owned subsidiaries of 
    Afrimat, on 6 July 2016 to dispose of the Bethlehem quarry and ancillary businesses as a going 
    concern for R28,0 million. Furthermore, Wearne also agreed to dispose of Erf 4038, Bethlehem, 
    Free State to Rodag Holdings Proprietary Limited, a wholly owned subsidiary of Afrimat, for 
    R2,0 million. The effective date of the transaction was 17 October 2016.

    Details of the acquisition are as follows:

                                                                                         F2018
                                                                          
                                                                                   Wearne
                                                                             - additional
                                                                              acquisition        Total
                                                                                    R'000        R'000
    Carrying amount/fair value of net assets acquired:                       
    Property, plant and equipment*                                                  1 000        1 000
    Net assets*                                                                     1 000        1 000
    Consideration paid                                                                         
    Cash                                                                            1 000        1 000
    Total consideration                                                             1 000        1 000
    Net cash outflow from acquisition of subsidiary:                                           
    Cash consideration paid**                                                      (1 000)      (1 000)
                                                                                   (1 000)      (1 000)
 
    *  Property, plant and equipment includes the fair value of R1,0 million mining assets acquired.
    ** An amount of R1,0 million was payable on the approval of section 11 by the Department of 
       Mineral Resources.

13. Fair value estimation
    Fair value determination
    The following table presents the financial assets that are measured at fair value:

                                                                         Level 1    Level 2    Level 3            
                                                                           R'000      R'000      R'000
    At 28 February 2019                                                           
    Assets                                                                        
    Investment property*                                                       -          -      3 040
    At fair value through other comprehensive income                              
    Equity securities**                                                       71          -          -
    Environmental funds***                                                     -      2 663          -
    At fair value through profit or loss                                          
    Unit trusts***                                                             -     50 025          -
    Trade receivables****                                                      -     52 522          -
    Total assets                                                              71    105 210      3 040
    At 28 February 2018                                                
    Assets                                                             
    Investment property*                                                       -          -      3 040
    Available-for-sale financial assets                                
    Equity securities**                                                      128          -          -
    Environmental funds***                                                     -     20 556          -
    At fair value through profit or loss                               
    Unit trusts***                                                             -     30 573          -
    Total assets                                                             128     51 129      3 040

    *    The fair value was determined based on the price per square metre for similar properties 
         derived from observable market data.
    **   This fair value was based on quoted market prices at the end of the reporting period.
    ***  The fair value was derived using the adjusted net asset method. The adjusted net asset method 
         determines the fair value of the investment by reference to the fair value of the individual 
         assets and liabilities recognised in the unit trust's/environmental fund's statement of 
         financial position.
    **** The fair value was determined using the three-month forward looking commodity prices and 
         foreign exchange rates as at the end of the reporting period.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
14. Dividends                                                                             
    14.1   Afrimat Limited dividends paid/declared in respect of                          
           the current year profits                                                       
           Interim dividend paid                                                 27 220         28 652
           Final dividend declared/paid                                          88 823         60 170
                                                                                116 043         88 822
    14.2   Dividends cash flow                                                            
           Current year interim dividend paid                                    27 220         28 652
           Previous year final dividend paid                                     60 170         71 631
           Dividends received on treasury shares                                 (2 645)        (4 683)
                                                                                 84 745         95 600
           Dividends paid by subsidiaries to                                              
           non-controlling shareholders                                           1 475            640
                                                                                 86 220         96 240
           The company has declared the following                                         
           cash distributions to shareholders:                                                     
           Interim dividend paid (cents)                                           19.0           20.0
           Final dividend declared/paid (cents)                                    62.0           42.0
           Distributions paid (cents)                                              81.0           62.0

15. Events after reporting date
    Subsequent to the reporting date, the company made a non-binding indicative offer ('NBIO') to 
    purchase the entire issued share capital of Universal Coal plc ('Universal'), a company listed 
    on the Australian Stock Exchange, with operations in South Africa, for a maximum purchase price 
    of A$0,40 for each Universal share held. The NBIO is subject to various conditions precedent, 
    including the completion of a due diligence by the company, the finalisation of financing 
    arrangements and board and shareholder approval in respect of the proposed transaction.

16. Contingencies
    Guarantees to the value of R73,7 million (2018: R87,5 million) were supplied by SBSA to various 
    parties, including the DMR and Eskom, respectively during the year under review.

    Guarantees to the value of R25,1 million (2018: R73,9 million) were supplied by FNB to various 
    parties, including the DMR and Eskom, respectively during the year under review.

    Guarantees to the value of R1,6 million (2018: R1,6 million) by Lombard's Insurance Group, 
    R0,9 million (2018: R0,5 million) by ABSA, R116,6 million (2018: R94,2 million) by Centriq 
    Insurance Innovation and R2,7 million (2018: R2,7 million) by SIG Guarantee Acceptances 
    Proprietary Limited were supplied to various parties, including the DMR, Eskom and Chevron 
    South Africa Proprietary Limited.

    The majority of 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 DMR 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 R8,3 million (2018: R10,3 million). An accrual has 
    been raised in respect of commitments made up to the end of the year.

    The company received notice on 31 March 2017 from the Competition Commissioner that it had 
    referred a complaint to the Competition Tribunal ('Tribunal'), alleging that the company, 
    through its wholly owned subsidiary, Clinker Supplies Proprietary Limited ('Clinker'), has 
    engaged in an abuse of dominance by allegedly charging excessive prices. After taking legal 
    advice and considering the complaint, the company is of the opinion that
    there is no merit to the complaint and will therefore vigorously defend itself before the 
    Tribunal. The Competition Commission is ordering an administrative penalty equal to 10% of 
    affected turnover for F2016 which equates to R16,3 million. The company awaits a final hearing 
    date to be set by the Tribunal.

    The company received notice on 27 February 2019 from the South African Revenue Service ('SARS'), 
    in terms of which SARS demands payment of R74,3 million from Afrimat Demaneng Proprietary Limited 
    ('Demaneng'). The company submits that the debts owed to SARS prior to the commencement of 
    business rescue proceedings have been settled in full as envisaged in the business rescue plan. 
    On 13 March 2019, the company requested SARS to permanently write off the outstanding balance, 
    in accordance with the provisions of section 197 and section 198 of the Tax Administration Act. 
    After taking legal advice and considering the claim, the company is of the opinion that there is 
    no merit to the claim and will therefore vigorously defend itself against SARS. The probability 
    of outflow is remote and no liability has been raised.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
17. Commitments                                                                          
    Operating leases - as lessee (expenses)                                              
    Minimum lease payments due                                                           
    No later than one year                                                       11 604          7 847
    Later than one year and no later than five years                             21 918         18 428
                                                                                 33 522         26 275
 
    Operating lease payments represent rentals payable by the group for quarries, other premises, 
    motor vehicles and equipment. Certain leases carry standard escalation clauses in line with 
    inflation. The lease terms are between one and five years, and the majority of lease agreements 
    are renewable at the end of the lease period at market rates. All rental agreements exceeding 
    five years have a notice period of six months and therefore not disclosed above.

                                                                               Reviewed        Audited
                                                                             year ended     year ended
                                                                            28 February    28 February
                                                                                   2019           2018
                                                                                  R'000          R'000
18. Related parties                                                                       
    Loan balance owing by associate                                               7 777         10 151
    Loan balance owing by joint venture                                          11 884         31 011
    Interest received from associate                                                574            484
    Interest received from joint venture                                          1 971            887

    The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses 
    a lifetime expected loss allowance for all receivables. This resulted in an increase of the loss 
    allowance on 1 March 2018 by R10,8 million for the loan owing by joint venture. The loss allowance 
    increased by a further R8,9 million during the current year.

19. New and amended accounting standards
    New and amended standards adopted by the group
    A number of new or amended standards became applicable for the current reporting period and the 
    group changed its accounting policies. The group applied the modified retrospective approach in 
    adopting the following standards:
    - IFRS 9: Financial Instruments; and
    - IFRS 15: Revenue from Contracts with Customers.

    The impact of the adoption of IFRS 15 and IFRS 9 is presented below.

    Standard    Subject
    IFRS 15     Revenue from Contracts with Customers

    The group adopted IFRS 15 from 1 March 2018 using the modified retrospective transition method and 
    has therefore not restated the comparatives for FY2018. In terms of IFRS 15 revenue is recognised 
    based on the satisfaction of specifically identified performance obligations, when control of goods 
    or services transfers to a customer.

    Presentation of assets and revenue related to bulk commodities sales:
    - The group's sales of bulk commodities are provisionally priced. At the point of recognition of 
      revenue, Afrimat Demaneng Proprietary Limited, a wholly owned subsidiary of Afrimat Limited, 
      estimates the amount and recognises the revenue at the best estimate (three-month forward looking 
      rate is considered to be the best estimate) of the amount expected to be received. In terms of 
      the agreement with Kumba International Trading S.A.R.L, the commodity prices used in the 
      calculation of the revenue of bulk commodities are based on the average daily prices during the 
      month prior to the relevant month of delivery.
    - Previously the receivable was fair valued when the price was fixed at the end of the third month. 
      The fair value adjustment was recognised in the statement of comprehensive income as an 
      adjustment to revenue.
    - The fair value changes due to market variability (that is changes in the commodity prices and 
      exchange rates) are not in the scope of IFRS 15 and can therefore not be
      presented as revenue from contracts with customers. These movements are accounted for as other 
      revenue and disclosed separately from revenue from contracts with customers.
    - Although there has been a change in the presentation and disclosure of other revenue within the 
      revenue note, no measurement change is relevant and therefore no impact on opening retained income.
  
    Standard    Subject
    IFRS 9      Financial Instruments

    IFRS 9 replaces the multiple classification and measurement models in IAS 39: Financial 
    Instruments: Recognition and measurement with a single model that has initially only two 
    classification categories: amortised cost and fair value and introduces new rules for hedge 
    accounting and a new impairment model for financial assets.

    The group adopted IFRS 9 from 1 March 2018 using the modified retrospective transition method 
    and therefore comparative figures have not been restated.

    (i) Classification and measurement
        The classification of financial assets under IFRS 9 is based on the business model in which 
        a financial asset is managed and its contractual cash flow characteristics. On 1 March 2018, 
        management assessed which business models applied to each of the financial assets held by the 
        group and has classified these financial instruments in the appropriate IFRS 9 categories.

        - A component of the group's equity instruments that were previously classified as available-
          for-sale satisfied the conditions for classification as at fair value through other 
          comprehensive income ('FVOCI');
        - Equity instruments previously measured at fair value through profit or loss ('FVPL') will 
          continue to be measured on the same basis under IFRS 9; and
        - The majority of the group's debt instruments that were previously classified as loans and 
          receivables at amortised cost satisfied the conditions for classification as financial 
          assets measured at amortised cost.
    
          The effects of this reclassification is presented below:

                                                  IAS 39 categories             IFRS 9 categories
                                    
                                                                Available 
                                             Loans and           for sale   Amortised  
                                           receivables    FVPL     ('AFS')       cost     FVPL   FVOCI
                                    Notes        R'000   R'000      R'000       R'000    R'000   R'000
        Opening balances
        Other financial assets
        Loans and receivables                    8 189       -          -       8 189        -       -
        AFS                             1            -       -     20 684           -   18 008   2 676
        FVPL                            1            -  30 573          -           -   30 573       -
        Trade receivables*              2      368 318       -          -     336 888   31 430       -
        Cash and cash equivalents              112 208       -          -     112 208        -       -
        
        * Excluding prepayments and value-added taxation.
    
    1.  Reclassification from available-for-sale to FVPL
        Investments in insurance policies of R18,0 million were reclassified from available-for-sale 
        assets to financial assets at FVPL. No related fair value gains were transferred from other 
        reserves to retained earnings.

    2.  Reclassification from loans and receivables to FVPL
        Provisionally priced receivables related to the sale of bulk commodities were measured at 
        FVPL from the date of recognition up until date of settlement, as it fails the amortised cost 
        requirement of cash flows representing solely payment of principal and interest. Previously 
        these receivables were disclosed as loans and receivables.

  (ii)  Impairment of financial assets
        IFRS 9 replaced the incurred credit losses model in IAS 39 with a forward-looking expected 
        credit loss ('ECL') model to calculate impairments of financial assets. It was applied to 
        financial assets classified at amortised cost, lease receivables and loan commitments. In 
        assessing the impairment that should be raised under the ECL model on these financial assets, 
        credit enhancements such as insurance held against loans and receivables were taken into 
        account in the ECL model.

   (a)  Trade and other receivables
        The increase in the impairment provision from the incurred loss model to ECL amounted to 
        R10,8 million (net of taxation) relating to loans to the group's joint venture on 
        1 March 2018 upon adoption of IFRS 9.

        The adjustment of the loss allowance for trade and other receivables
        on transition to IFRS 9 was found to be immaterial.

   (b)  Cash and cash equivalents
        While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, 
        the identified impairment loss was immaterial.
    
                                                                   28 February 
                                                                          2018                 1 March
                                                                 As originally     IFRS 9         2018                       
                                                                     presented        ECL     Restated
                                                                         R'000      R'000        R'000                       
        Opening balances                                                      
        Current assets                                          
        Trade and other receivables (measured                   
        at amortised cost                                       
                                                                       368 318    (12 042)     356 276
        Equity                                                  
        Retained earnings                                       
                                                                    (1 111 915)    10 812   (1 101 103)
        Non-current liabilities                               
        Deferred tax                                          
                                                                      (207 583)    (1 230)    (208 813)

 (iii)  Financial liabilities
        There was no impact on the group's accounting for financial liabilities, as the new 
        requirements only affected the accounting for financial liabilities that are designated at 
        fair value through profit or loss and the group does not have any such liabilities.
        
        Impact of standards issued but not yet applied by the group

        Standard     Subject
        IFRS 16      Leases

        IFRS 16 was issued in January 2016. It will result in almost all leases being recognised on 
        the balance sheet, as the distinction between operating and finance leases is removed. Under 
        the new standard, an asset (the right to use the leased item) and a financial liability to 
        pay rentals are recognised. The only exceptions are short-term and low-value leases.

        The accounting of lessors will not significantly change.

        The standard will affect primarily the accounting for the group's operating leases. As at 
        the reporting date, the group has non-cancellable operating lease commitments of 
        R33,5 million, refer to note 17. The group estimates that approximately 20% to 22% of these 
        relate to payments for short-term and low-value leases which will be recognised on a 
        straight-line basis as an expense in profit or loss.

        The group has assessed the affect of the difference in treatment of variable lease payments 
        and the extension and termination options. The estimate of the effect of the adoption of the 
        new standard is as follows:

                                                                                                 R'000
        Property, plant and equipment                                                           16 885
        Lease liability                                                                        (21 150)
        Retained earnings (opening balance)                                                      4 265

        Mandatory for financial years commencing on or after 1 January 2019. The group will apply 
        the new standard on 1 March 2019. The group intends to apply the simplified approach which 
        means that the cumulative impact of the adoption will be recognised in retained earnings as 
        of 1 March 2019 and that the comparatives will not be restated.

        There are no other standards that are not yet effective that would be expected to have a 
        material impact on the entity in the current or future reporting periods and on foreseeable 
        future transactions.

20. Comparative information
    Certain comparative figures were inaccurately reflected and have been reclassified. The 
    classification error had no impact on the profit for the year, neither the statement of 
    financial position.

    Statement of profit or loss and other comprehensive income
    The misstatement related to the recording of freight and shipping for all foreign sales in 
    Demaneng to the landing port. Foreign sales in Demaneng are made on a free-on-board basis and 
    risks and rewards pass at the loading  port. The company has however previously recorded freight 
    and shipping to the landing port and recorded a corresponding amount in cost of sales. The 
    company had no obligation to deliver to the landing port.

    The effect of the reclassification is as follows:

                                                                            28 February 2018
                                                             
                                                               As originally    Reclassi-
                                                                   presented     fication     Restated
                                                                       R'000        R'000        R'000
    Revenue                                                        2 456 782      (75 788)   2 380 994
    Cost of sales                                                 (1 699 417)      75 788   (1 623 629)
                                                                                        -
  
General information

Directors
MW von Wielligh*# (Chairman)
AJ van Heerden (CEO)
PGS de Wit (CFO)
GJ Coffee*
L Dotwana*
PRE Tsukudu*#
JF van der Merwe*#
HJE van Wyk*#
JH van der Merwe*#
HN Pool*#
FM Louw*#
* Non-executive director  
# Independent

Registered office
Tyger Valley Office Park No. 2
Cnr. Willie van Schoor Avenue and Old Oak Road
Tyger Valley, 7530
(PO Box 5278, Tyger Valley, 7536)

Sponsor
Bridge Capital Advisors Proprietary Limited
50 Smits Road, Dunkeld, 2196
(PO Box 651010, Benmore, 2010)

Auditor
PricewaterhouseCoopers Inc.
PWC Building
Capital Place, 15 - 21 Neutron Avenue
Technopark
Stellenbosch, 7600
(PO Box 57, Stellenbosch, 7599)

Transfer secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)

Company secretary
M Swart
Tyger Valley Office Park No. 2
Cnr. Willie van Schoor Avenue and Old Oak Road
Tyger Valley, 7530
(PO Box 5278, Tyger Valley, 7536)

http://www.afrimat.co.za

Date: 23/05/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story