CLOVER BEVERAGES LIMITED

Document Sample
CLOVER BEVERAGES LIMITED Powered By Docstoc
					                      CLOVER BEVERAGES LIMITED
UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
2
Directorate                                                                           Administration

Non-executive Directors                                  Company registration number
JAH Bredin $                                             2000/000301/06
DK Smith $
                                                         Registered office
Executive Directors                                      200 Constantia Drive, Constantia Kloof, 1709
JH Vorster (Chairman)
CP Lerm (Dr) (Chief Operating Officer)                    Postal address
LJ Botha                                                 PO Box 6161
HB Roode                                                 Weltevreden Park
                                                         1715
Alternative Non-executive Director
HPF du Preez $                                           Telephone
                                                         011 471 1400
Company Secretary
HB Roode                                                 Telefax
                                                         011 471 1504
Group Audit Committee
DK Smith (Chairman)                                      Website
TA Wixley                                                www.clover.co.za

$ Member of Financial Oversight and Risk Committee       External Auditors
                                                         Ernst & Young Inc, Johannesburg
All the Directors are South African citizens
                                                         Bankers
                                                         First National Bank of Southern Africa Limited

                                                         Attorneys
                                                         Werksmans
                                                         Roestoff and Kruse
                                                         Schwartz North
                                                         Kocks and Dreyer

                                                         Trading in unlisted shares
                                                         Details pertaining to the stockbrokers can be obtained at:
                                                         www.clover.co.za




                                                     3
4
FINANCIAL OVERVIEW
Clover Beverages continued on its track of strong volume growth and
outperformed national market growth in most of its brands. Overall volumes
grew by 7,3% when compared to the corresponding period of the previous
year. This was achieved despite the economic downswing and adverse
weather conditions during December that hampered the consumption of
beverages.

This growth, assisted by inflationary selling price increases and weakened
international commodity prices, which directly affects the cost of packaging
and other raw materials, improved the gross profit margin considerably.

This resulted in good fall-through and operating income increased by 55%
to R62,4 million. Interest earned reduced by 59% to R4,6 million after a
substantial dividend payment during January 2009. Net income for the
period ended at R48,2 million or 30% up on the same period last year.

We aim to continue the growth in the next six months and we will continue
to stretch our brands with new product line launches and a concerted effort
to reduce costs all along the supply chain.

The Company’s application of the amended IAS1, which requires certain
disclosures and classifications that are different to those used in the past,
necessitated the restatement of some of the comparative figures in the
interim financial statements.




JH Vorster                                Dr CP Lerm
Chairman                                  Chief Operating Officer




                                                                               5
INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 December 2009




                                                              Unaudited         Unaudited/         Notes    Audited/
                                                                                 restated                   restated

                                                                    Six months ended                       Year ended

                                                         31 December 2009     31 December 2008             30 June 2009

                                                                    R’000                R’000                    R’000

 Continuing operations

 Sales of product                                                 551 287              479 412                  970 669

 Rendering of services                                                476                     –                     889

 Royalties                                                            858                  519                     1 018

 Revenue                                                          552 621              479 931                  972 576

 Cost of sales                                                    (341 881)            (312 058)                (620 057)

 Gross profit                                                      210 740              167 873                  352 519

 Other income                                                             –                165                      889

 Selling and distribution expenses                                (142 979)            (124 531)                (251 701)

 Administration expenses                                            (3 986)              (2 919)                  (7 304)

 Restructuring cost                                                 (1 206)                   –                           –

 Other operating expenses                                             (214)                (330)                    (339)

 Operating profit                                                   62 355               40 258                    94 064

 Finance income                                                     4 640               11 254                    14 775

 Profit before tax                                                  66 995               51 512                  108 839

 Income tax expense                                                (18 759)             (14 424)     5           (31 292)

 Profit for the period                                              48 236               37 088                    77 547

 Comprehensive income

 Income/Expense                                                           –                   –                           –

 Total comprehensive income for the period, net of tax             48 236               37 088                    77 547

 Earnings per share (cents) - ordinary shares                         16,1                 12,4      6              25,9

 Diluted earnings per share (cents) - ordinary shares                 16,1                 12,4      6              25,9




                                                          6
                                INTERIM STATEMENT OF FINANCIAL POSITION
                                                                                              as at 31 December 2009




                                            Unaudited                Unaudited        Notes          Audited

                                                             As at                                     As at

                                       31 December 2009          31 December 2008                  30 June 2009

                                                  R’000                    R’000                           R’000

Assets

Non-current assets

Property, plant and equipment                    15 858                   18 195        8                 17 097

Intangible assets                                 3 268                      398                           3 379

Other investments                                        –                 3 500                                  –

                                                 19 126                   22 093                          20 476

Current assets

Inventories                                      39 391                   45 074                          34 898

Trade and other receivables                     250 471                  272 016                         222 804

Income tax receivable                             2 318                    1 553                               377

Cash and cash equivalents                        59 581                   21 457                           9 129

                                                351 761                  340 100                         267 208

Total assets                                    370 887                  362 193                         287 684



Equity and liabilities

Issued share capital                             15 000                   15 000        7                 15 000

Retained earnings                               277 552                  308 137                         248 696

                                                292 552                  323 137                         263 696

Non-current liabilities

Provisions                                          865                      848                               670

Deferred tax liability                            1 969                    2 013                           2 210

                                                  2 834                    2 861                           2 880

Current liabilities

Trade and other payables                         75 411                   36 153                          20 977

Provisions                                              90                       42                            131

                                                 75 501                   36 195                          21 108

Total liabilities                                78 335                   39 056                          23 988

Total equity and liabilities                    370 887                  362 193                         287 684




                                        7
INTERIM STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 December 2009




                                                Notes   Share capital   Retained earnings   Total

                                                                R’000             R’000         R’000

 Balance at 1 July 2008                                        15 000           284 609       299 609

 Profit for the period                                                            37 088        37 088

 Dividends paid                                   9                              (13 560)      (13 560)

 Balance at 31 December 2008                                   15 000           308 137       323 137

 Profit for the period                                                            40 459        40 459

 Dividends paid                                   9                              (99 900)      (99 900)

 Balance at 30 June 2009                                       15 000           248 696       263 696

 Profit for the period                                                            48 236        48 236

 Dividends paid                                   9                              (19 380)      (19 380)

 Balance at 31 December 2009                                   15 000           277 552       292 552




                                            8
                                                                   INTERIM CASH FLOW STATEMENT
                                                                                          for the six months ended 31 December 2009




                                                                          Unaudited          Unaudited/        Audited/restated
                                                                                              restated

                                                                                Six months ended                  Year ended

                                                                       31 December 2009   31 December 2008       30 June 2009

                                                                                R’000               R’000                 R’000

Operating activities

Profit before tax from continuing operations                                     66 995              51 512              108 839

Adjustments to reconcile profit before tax to net cash flow

Adjustment for non cash items

Depreciation and impairment of property, plant and equipment                     1 554               1 773                3 145

Amortisation and impairment of intangible assets                                  111                   53                  572

Movement in provisions                                                            154                 (123)                (212)

Loss on disposal and scrapping of assets                                              –                   –                 107

Other adjustments

Finance income                                                                  (4 640)            (11 254)             (14 775)

Working capital adjustments

Increase in inventories                                                         (4 493)            (10 808)                (632)

(Increase)/decrease in trade and other receivables                             (78 585)            (29 975)               9 376

Increase/(decrease) in trade and other payables                                 35 054               4 915              (10 261)

Income taxes paid                                                              (20 941)            (18 780)             (34 279)

Net cash flow (used in)/from operating activities                                (4 791)            (12 687)              61 880

Cash flows from investing activities

Call loans repaid by holding company                                            50 918              31 422               41 283

Proceeds from sale of tangible assets                                                 –                   –                  17

Interest received                                                                4 640              11 254               14 775

Capital expenditure: tangible assets                                              (315)               (377)                (771)

Net cash flow from investing activities                                          55 243              42 299               55 304

Cash flows from financing activities

Dividends paid                                                                        –            (13 560)            (113 460)

Net cash flows used in financing activities                                             –            (13 560)            (113 460)

Net increase in cash and cash equivalents                                       50 452              16 052                3 724

Cash and cash equivalents at the beginning of the period                         9 129               5 405                5 405

Cash and cash equivalents at the end of the period                              59 581              21 457                9 129




                                                               9
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS


 1 Corporate information                                                            presented as a single line. In addition, the standard introduces
    Clover Beverages Limited (the “Company”) is a company incorporated              the statement of comprehensive income: it presents all items of
    and domiciled in South Africa.                                                  recognised income and expense, either in one single statement, or
                                                                                    in two linked statements. The Company has elected to present one
    The unaudited interim condensed financial statements of Clover                   statement.
    Beverages Limited for the six months ended 31 December 2009 were
    authorised for issue in accordance with a resolution of the Directors         • IAS 23 Borrowing Costs (Revised)
    on 10 March 2010.                                                               The standard has been revised to require capitalisation of
 2 Basis of presentation and accounting policies                                    borrowing costs on qualifying assets and the Company has
                                                                                    amended its accounting policy accordingly. In accordance with
2.1 Basis of preparation                                                            the transitional requirements of the standard this has been
    The interim condensed financial statements for the six months ended              adopted as a prospective change. Therefore, borrowing costs
    31 December 2009 have been prepared in accordance with IAS 34                   will be capitalised on qualifying assets with a commencement
    Interim Financial Reporting.                                                    date on or after 1 January 2009. No changes have been made
                                                                                    for borrowing costs incurred prior to this date that have been
    The interim condensed financial statements do not include all
                                                                                    expensed.
    the information and disclosures required in the annual financial
    statements, and should be read in conjunction with the Company’s              • IAS 32 Financial Instruments: Presentation and IAS1 Puttable
    annual financial statements as at 30 June 2009.                                  Financial Instruments and Obligations Arising on Liquidation
2.2 Significant accounting policies                                                  The standards have been amended to allow a limited scope
                                                                                    exception for puttable financial instruments to be classified as
    The accounting policies adopted in the preparation of the interim
                                                                                    equity if they fulfil a number of specified criteria. The adoption
    condensed financial statements are consistent with those followed in
                                                                                    of these amendments did not have any impact on the financial
    the preparation of the Company’s annual financial statements for the
                                                                                    position or performance of the Company.
    year ended 30 June 2009, except for the adoption of new standards
    and interpretations as of 1 January 2009, noted below:                        • IFRIC 13 Customer Loyalty Programmes
    • IFRS 2 Share-based Payment - Vesting Conditions and                           This interpretation requires customer loyalty credits to be accounted
      Cancellations                                                                 for as a separate component of the sales transaction in which
                                                                                    they are granted. A portion of the fair value of the consideration
      The standard has been amended to clarify the definition of vesting
                                                                                    received is allocated to the award credits and deferred. This is
      conditions and to prescribe the accounting treatment of an award
                                                                                    then recognised as revenue over the period that the award credits
      that is effectively cancelled because a non-vesting condition is not
                                                                                    are redeemed. The Company does not have any customer loyalty
      satisfied. The adoption of this amendment did not have any impact
                                                                                    programmes in place.
      on the financial position or performance of the Company.
                                                                                  • IFRIC 9 Reassessment of Embedded Derivatives and IAS 39
    • IFRS 7 Financial Instruments: Disclosures
                                                                                    Financial Instruments: Recognition and Measurement
      The amended standard requires additional disclosure about fair
                                                                                    These amendments to IFRIC 9 require an entity to assess whether
      value measurement and liquidity risk. Fair value measurements
                                                                                    an embedded derivative must be separated from a host contract
      are to be disclosed by source of inputs using a three level
                                                                                    when the entity reclassifies a hybrid financial asset out of the fair
      hierarchy for each class of financial instrument. In addition, a
                                                                                    value through profit of loss category. This assessment is to be
      reconciliation between the beginning and ending balance for Level
                                                                                    made based on circumstances that existed on the later of the date
      3 fair value measurements is now required, as well as significant
                                                                                    the entity first became a party to the contract and the date of any
      transfers between Level 1 and Level 2 fair value measurements.
                                                                                    contract amendments that significantly change the cash flows of
      The amendments also clarify the requirements for liquidity risk
                                                                                    the contract. IAS 39 now states that if an embedded derivative
      disclosures.
                                                                                    cannot be reliably measured, the entire hybrid instrument must
    • IFRS 8 Operating Segments                                                     remain classified as at fair value through profit of loss.
      This standard requires disclosure of information about the                  • IFRIC 16 Hedges of a Net Investment in a Foreign Operation
      Company’s operating segments and replaces the requirement
                                                                                    The interpretation is to be applied prospectively. IFRIC 16 provides
      to determine primary (business) and secondary (geographical)
                                                                                    guidance on the accounting for a hedge of a net investment. As
      reporting segments of the Company. Adoption of this standard did
                                                                                    such it provides guidance on identifying the foreign currency risks
      not have any effect on the financial position or performance of the
                                                                                    that qualify for hedge accounting in the hedge of a net investment,
      Company. The Company determined that the operating segments
                                                                                    where within the Company the hedging instruments can be held in
      were the same as the business segments previously identified
                                                                                    the hedge of a net investment and how an entity should determine
      under IAS14 Segment Reporting. All of the company’s products
                                                                                    the amount of foreign currency gain or loss, relating to both the net
      constitute beverages and are grouped into the beverages operating
                                                                                    investment and the hedging instrument, to be recycled on disposal
      segment.
                                                                                    of the net investment. The Company has elected to recycle the gain
    • IAS 1 Revised Presentation of Financial Statements                            or loss that arises from the direct method of consolidation, which
      The revised standard separates owner and non-owner changes                    is the method the Company uses to complete its consolidation. As
      in equity. The statement of changes in equity includes only details           the Company did not dispose of any net investment it has had no
      of transactions with owners, with non-owner changes in equity                 impact on the financial position or results.


                                                                             10
                NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS


• IFRIC 17 Distribution of Non-cash Assets to Owners                                • IAS 38 Intangible Assets: Expenditure on advertising and
  This interpretation is effective for annual periods beginning on                    promotional activities is recognised as an expense when the
  or after 1 July 2009 with early application permitted. It provides                  Company either has the right to access the goods or has received
  guidance on how to account for non-cash distributions to owners.                    the service. This amendment has no impact on the Company,
  The interpretation clarifies when to recognise a liability, how to                   because it does not enter into such promotional activities.
  measure it and the associated assets, and when to derecognise                       The reference to there being rarely, if ever, persuasive evidence to
  the asset and liability. The Company does not expect IFRIC 17 to                    support an amortisation method of intangible assets other than a
  have an impact on the financial statements as the Company has not                    straight-line method has been removed. The Company reassessed
  made non-cash distributions to shareholders in the past.                            the useful lives of its intangible assets and concluded that the
• IFRIC 18 Transfers of Assets from Customers                                         straight-line method was still appropriate.

  This interpretation is to be applied prospectively to transfers of                  The amendments to the following standards below did not have any
  assets from customers received in periods beginning on or after                     impact on the accounting policies, financial position or performance
  1 July 2009. IFRIC 18 applies to all entities that receive from                     of the Company:
  customers an item of property, plant and equipment or cash for                    • IFRS 5 Non-current Assets Held for Sale and Discontinued
  the acquisition or construction of such items. These assets must                           Operations
  then be used to connect the customer to a network or to provide                   • IFRS 7 Financial Instruments: Disclosures
  ongoing access to a supply of goods or services of both. However,
  if the transfer is a government grant or the asset is used in a service           • IAS 8   Accounting Policies, Change in Accounting Estimates and
  concession arrangement, the interpretation will not apply.                                  Error

  Improvements to IFRSs                                                             • IAS 10 Events after the Reporting Period

  In May 2008 the board of IFRIC issued its first omnibus of                         • IAS 16 Property, Plant and Equipment
  amendments to its standards, primarily with a view to removing                    • IAS 18 Revenue
  inconsistencies and clarifying wording. There are separate
                                                                                    • IAS 19 Employee Benefits
  transitional provisions for each standard. The adoption of the
  following amendments resulted in changes to accounting policies,                  • IAS 20 Accounting for Government Grants and Disclosures of
  but did not have any impact on the financial position or performance                        Government Assistance
  of the Company.                                                                   • IAS 27 Consolidated and Separate Financial Statements
• IAS 1 Presentation of Financial Statements: Assets and liabilities                • IAS 28 Investment in Associates
  classified as held-for-trading in accordance with IAS 39 Financial
                                                                                    • IAS 31 Interest in Joint Ventures
  Instruments: Recognition and Measurement are not automatically
  classified as current in the statement of financial position. The                   • IAS 34 Interim Financial Reporting
  Company amended its accounting policy accordingly and analysed                    • IAS 36 Impairment of Assets
  whether Management’s expectation of the period of realisation of
                                                                                    • IAS 39 Financial Instruments: Recognition and Measurement
  financial assets and liabilities differed from the classification of the
  instrument. This did not result in any re-classification of financial            3 Segment analysis
  instruments between current and non-current in the statement of                   All products constitute beverages and are sold in similar markets
  financial position.                                                                grouped into the beverages operating segment. Clover Beverages
• IAS 16 Property, Plant and Equipment: Replace the term “net selling               operates mainly in the geographical area of South Africa. The revenue
  price” with “fair value less costs to sell”. The Company amended its              and assets of the operations outside South Africa are insignificant.
  accounting policy accordingly, which did not result in any change in           4 Seasonality of results
  the financial position.
                                                                                    The Company’s operating results from normal trading activities for
• IAS 23 Borrowing Costs: The definition of borrowing costs is                       the first semester are traditionally better than those for the second
  revised to consolidate the two types of items that are considered                 semester. High sales volumes during the December festive season,
  components of “borrowing costs” into one - the interest expense                   and November in anticipation of the festive season, are much higher
  calculated using the effective interest rate method calculated in                 than Easter sales volumes during the second semester. Beverage
  accordance with IAS 39. The Company has amended its accounting                    volumes are also higher during the warm spring and summer months.
  policy accordingly which did not result in any change in its financial
  position.




                                                                            11
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS




                                                                                                         Unaudited          Unaudited/        Audited/Restated
                                                                                                                             restated

                                                                                                      31 December 2009    31 December 2008      30 June 2009

                                                                                                                R’000               R’000               R’000

 5   Income tax expense

     Current income tax

     Current income tax charges                                                                                (18 997)            (14 759)            (31 433)

     Deferred income tax

     Relating to origination and reversal of temporary differences                                                238                 335                 141

     Income tax expense                                                                                        (18 759)            (14 424)            (31 292)

 6   Earnings and diluted earnings per share

     Profit attributable to equity shareholders                                                                 48 236              37 088              77 547

                                                                                                      Number of shares    Number of shares    Number of shares

     Weighted average number of issued ordinary shares                                                    300 000 000         300 000 000         300 000 000

                                                                                                       Cents per share     Cents per share     Cents per share

     Earnings per share – ordinary shares                                                                         16,1                12,4                25,9

     There are no instruments in issue that could have a dilutive effect, and therefore the diluted
     earnings per share equal the earnings per share.




                                                                                       12
                      NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS




                                                                                                           Unaudited          Unaudited/        Audited/Restated
                                                                                                                               restated

                                                                                                        31 December 2009    31 December 2008      30 June 2009

                                                                                                                  R’000               R’000               R’000

7     Ordinary share capital and premium

      Authorised share capital

      400 million ordinary shares with a par value of 5 cents each                                               20 000              20 000              20 000

      Issued share capital

      300 million ordinary shares with a par value of 5 cents each                                               15 000              15 000              15 000

8     Movement in property, plant and equipment

      Additions                                                                                                     315                 377                 771

      Disposals – net book value                                                                                       –                   –              ( 120)

      Depreciation                                                                                               ( 1 554)            ( 1 773)            ( 3 145)

      Total movement in property, plant and equipment                                                            ( 1 239)            ( 1 396)            ( 2 494)

9     Dividends

      Dividends declared during the six month period

      To ordinary shareholders                                                                                   19 380              13 560             113 460

                                                                                                         Cents per share     Cents per share     Cents per share

      Dividends per share

      To ordinary shareholders                                                                                      6,5                 4,5                37,8

                                                                                                                  R’000               R’000               R’000

      Dividends paid during the six month period

      To ordinary shareholders                                                                                         –             13 560             113 460

      The dividend for 2009 of 6,46 cents per share ( R 19,4 million) was approved on 30 October 2009
      and paid on 6 January 2010.

10    Capital commitments

      There were no capital commitments at the end of the period under review                                          –                   –                     –

11    Related parties

      With regard to business done with related parties, the following transactions took place
      during the year:

(a)   Interest received from Clover S.A. (Pty) Limited (holding company)                                          4 640              11 254              14 775

(b)   Fees paid to Clover S.A. (Pty) Limited for services provided (production, distribution,                   205 750             184 603             359 712
      administration)

(c)   Amounts due by Group companies to Clover Beverages Limited                                                252 539             280 364             222 804

(d)   Amounts due to Clover S.A. (Pty) Limited                                                                   50 247              30 892               8 695

      Compensation of Directors

(a)   Compensation of Executive Directors and Key Management Personnel                                            2 347               1 332               5 205

(b)   Compensation of Non-executive Directors                                                                       215                 177                 331

12    Events after the statement of financial position date

      No significant events occurred after the statement of financial position date

13    Contingent liabilities

      No contingent liabilities were identified under the period of review or during the prior periods




                                                                                        13
14
15

				
DOCUMENT INFO