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ENDURING PARTNERSHIPS

SUMMARISED AUDITED
ANNUALFINANCIAL STATEMENTS
FOR THE YEAR ENDED
28FEBRUARY 2015 AND
DIVIDENDANNOUNCEMENT

Performance at a glance
Revenue R913.4 million

0.2%

Profit from operating activities R56.2 million

2.8%

Cash generated by operations R145.1 million

37.7%
8.7%

Debt equity ratio

17.5%

Borrowing capacity utilised

Corporate information
Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
JSE share code: CRG
ISIN code: ZAE000001764
(Cargo Carriers or the company or the group)
Registered office
11A Grace Road, Mountainview,
Observatory, Johannesburg, 2198

By order of the board


Arbor Capital Company Secretarial Proprietary Limited
Company secretary
19 May 2015
Board of directors
SP Mzimela* (Chairperson), A E Franklin*, BBFraser#,
MJ Vuso*, V Raseroka*, GDBolton (Executive),
MJBolton (CEO), SMaharaj (CFO)
#

Share transfer secretaries


Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)

non-executive director

* independent non-executive director

Sponsor
Arbor Capital Sponsors Proprietary Limited

www.cargocarriers.co.za

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Financials
Condensed consolidated statement of comprehensive income
2015
R000

2014
R000

909 699
3 728

911 375
3 707

913 427
(573 561)
(214 076)
(69 588)

915 082
(561 502)
(221 916)
(73 856)

56 202
(518)
(2 469)
1 265

2 920

57 808
6 334
(10 554)
8 576
1 137
3 218

Profit before finance income and finance cost


Finance income
Finance cost

57 400
6 378
(18 351)

66 519
6 472
(23 162)

Profit before tax


Taxation

45 427
(15 501)

49 829
(3 759)

29 926

46 070

Turnover
Other income
Revenue
Operating and administration costs
Employment costs
Depreciation of property, plant and equipment
Profit from operating activities
(Loss)/profit on disposal of property, plant and equipment
Impairment of assets
Revaluation of investment properties
Dividend income
Profits from associates and joint ventures

Profit for the year


Other comprehensive income:
Items not to be reclassified to profit or loss in subsequent periods:
Revaluation of owner occupied properties
Income tax effect
Income tax effect of property adjustments
Change in estimated base cost for CGT purposes
Other comprehensive income to be reclassified to profit or loss
insubsequent periods:
Exchange differences on translation of foreign operations

6 052
(783)

4 333
(770)
(1 774)
2 857

(1 615)

3 601

Other comprehensive income for the year, net of tax

3 654

8 247

Total comprehensive income for the year, net of tax

33 580

54 317

Total comprehensive income, net of tax attributable to:


Equity holders of the parent
Non-controlling interest

32 065
1 515

53 729
588

Total comprehensive income for the year, net of tax

33 580

54 317

Profit for the year attributable to:


Equity holders of the parent
Non-controlling interest

28 411
1 515

45 482
588

29 926

46 070

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Financials

continued

Financial information
2015
R000

2014
R000

Dividend per share (cents)


interim dividend declared during the year
final dividend declared after year end

6.0
20.0

15.0
40.0

Total dividends

26.0

55.0

Basic and diluted earnings per share (cents)


Adjustments (cents):
Loss/(profit) on disposal of property, plant and equipment
Impairment of assets
Revaluation of investment properties

146.4

234.4

Basic and diluted headline earnings per share (cents)

155.1

229.3

229 814
40 104

217 524
99 766

17.5

45.9

Group borrowings
Borrowing capacity of the group (R000)
Borrowing capacity utilised (R000)
Borrowing capacity utilised (%)
Capital commitments (R000)
Net asset value per share (cents)
Ordinary shares in issue (closing and weighted average) (000)

1.9
12.7
(5.9)

(23.5)
54.4
(36.0)

2 279

2 166

19 406

19 406

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Segmental analysis
Revenue
Industrial
Agricultural
Aviation
Supply chain services
Property

Profit before finance income and finance cost


Industrial
Agricultural
Aviation
Supply chain services
Property

Non-current assets (excluding deferred tax)


Industrial
Agricultural
Aviation
Supply chain services
Property

2015
R000

2014
R000

796 616
74 770
3 193
35 681
3 167

761 630
113 529
3 242
33 212
3 469

913 427

915 082

55 174
157
1 020
(3 375)
4 424

57 985
(9 847)
3 671
(2 629)
17 339

57 400

66 519

319 822
45 186
11 733
1 339
130 451

370 826
45 499
12 139
1 214
109 640

508 531

539 318

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Financials

continued

Condensed consolidated statement of financial position


ASSETS
Non-current assets
Property, plant and equipment
Investment properties
Investment in associates
Investment in joint ventures
Deferred taxation
Current assets
Trade and other receivables
Inventories
Cash and short-term deposits
Non-current assets held for sale

2015
R000

2014
R000

448 146
25 735
26 778
7 872
15 296

487 092
24 470
22 953
4 803
18 481

523 827

557 799

167 948
15 230
134 412

150 190
16 989
116 341

317 590

283 520

20 799

11 702

Total assets

862 216

853 021

EQUITY AND LIABILITIES


Equity
Share capital
Non-distributable reserves
Distributable reserves
Equity attributable to equity holders of the parent
Non-controlling interest

194
56 547
385 332
442 073
17 555

194
51 796
368 212
420 202
14 846

Total equity

459 628

435 048

95 232
3 010
3 881
93 713

98 954
5 721
2 781
107 019

195 836

214 475

118 741
80 803
7 208

92 309
109 088
2 101

206 752

203 498

862 216

853 021

Non-current liabilities
Deferred taxation
Contingent consideration
Provisions
Interest-bearing loans and borrowings
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Taxation
Total equity and liabilities

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Condensed consolidated statement of changes in equity


Equity
Foreign
attributable
Asset
currency
to equity
NonShare revaluation translation
Other Distributable holders of controlling
capital
reserve*
reserve* reserve*
reserves the parent
interest
R000
R000
R000
R000
R000
R000
R000
Balance at 1 March 2013
Total comprehensive income
Profit for the year
Other comprehensive income
Disposal of assets and transfer
between reserves
Exchange differences realised on
dissolution of foreign subsidiary
Post tax transfer of revaluation
ofinvestment properties

Total
equity
R000

194

60 049
4 646

4 646

6 196
3 601

3 601

50

306 777
45 482
45 482

373 266
53 729
45 482
8 247

16 493
588
588

389 759
54 317
46 070
8 247

(20 878)

(6 291)

27 169

(2 641)

2 641

7 064

(7 064)

(6 793)

(6 793)

(2 235)

(9 028)

Balance at 28 February 2014


Total comprehensive income
Profit for the year
Other comprehensive income
Transfer between reserves
Dissolution of foreign subsidiary
Purchase of negative equity from
non-controlling interest
Post tax transfer of revaluation
ofinvestment properties
Dividends paid

194

50 881
5 269

5 269

865
(1 615)

(1 615)

50

(50)

368 212
28 411
28 411

50
(73)

420 202
32 065
28 411
3 654

(73)

14 846
1 515
1 515

435 048
33 580
29 926
3 654

(73)

(1 194)

(1 194)

1 194

1 147

(1 147)
(8 927)

(8 927)

(8 927)

Balance at 28 February 2015

194

57 297

(750)

385 332

442 073

17 555

459 628

Dividends paid

* represents non-distributable reserves.

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Financials

continued

Condensed consolidated statement of cash flows


2015
R000

2014
R000

891 901
(746 777)

897 634
(792 244)

Cash generated by operations


Finance income
Finance cost
Dividends paid
Dividend income
Tax paid

145 124
6 378
(18 351)
(8 927)

(10 254)

105 390
6 472
(23 162)
(9 028)
1 137
(4 085)

Cash flows from operating activities


Cash flows from financing activities
Cash flows from investing activities
Payment of contingent consideration
Movement in loan to associates and joint ventures
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment

113 970
(41 591)
(51 252)
(3 251)
(3 974)
(53 269)
9 242

76 724
(50 091)
5 047
(1 437)
57
(64 133)
70 560

Increase in cash and cash equivalents


Cash and cash equivalents at the beginning of the year
Foreign exchange movement during the year

21 127
116 341
(3 056)

31 680
84 780
(119)

Cash and cash equivalents at the end of the year

134 412

Cash receipts from customers


Cash paid to suppliers and employees

116 341

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Commentary
Review
The group remained resilient through the
tough trading conditions such as strike
action, labour unrest and the depreciation of
the South African Rand and related African
currencies against the US dollar, producing
asatisfactory set of results.
The groups turnover remained fairly constant
while profit from operating activities declined
moderately by 2.8%. The industrial segments
revenue increased 4.6%, however, this did not
translate into operating profits which were
affected by exchange losses incurred by our
Zambian subsidiary. The agricultural
segments revenue declined 34.1% while its
operating profits increased 101.6%, largely
influenced by the disposal and exit from its
underperforming Malelane and tomato
harvesting business. The property segments
profits show a 74.5% decline, due to the prior
year being influenced by a high profit from the
sale of the Alrode property and a higher
revaluation surplus.
Net finance costs decreased 28.3% to
R11.9million, benefiting from the 20.8%
reduction in finance costs relating to an
instalment sales agreement approaching
settlement maturity. Finance income
decreased 1.5% due to the low interestbearing US dollar accounts which constitute
R47.6 million of the cash and short-term
deposits at year end.

Diluted earnings and headline earnings
pershare decreased 37.5% (234.4 cents per
share to 146.4 cents per share) and 32.4%
(229.3 cents per share to 155.1 cents per
share) respectively, largely affected by a
more normalised tax charge of

34.1%(2014:7.5%). The prior year tax


benefited from areduction in the deferred tax
provision relatedto capital gains tax base
cost reassessments. The reduction in
earnings has correspondingly reduced the
final dividend payable to 20.0cents per
share.

Prospects
A low economic growth outlook combined
with difficult market conditions is expected to
place current trading and profitability levels
under strain. The debt to equity ratio has
decreased to a conservative 8.7%, placing
the group in an ideal position to pursue its
organic and acquisitive growth objectives.
The year ahead is expected to be challenging,
however, the group intends to remain
steadfast and continue to enhance
stakeholder value.

Basis of preparation
The condensed consolidated financial
statements for the year ended 28 February
2015 have been prepared in accordance with
the recognition and measurement criteria of
International Financial Reporting Standards
(IFRS), IAS 34 Interim Financial Reporting, the
Listings Requirements of the Johannesburg
Stock Exchange and the requirements of the
Companies Act 71 of 2008, as amended.
These condensed consolidated financial
statements do not include all the information
and disclosures required in the annual
financial statements, and should be read in
conjunction with the groups annual financial
statements as at 28February 2015 which is
expected to be available to shareholders
towards the end of May 2015. The annual
financial statements were compiled under

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

Commentary

continued

the supervision of the chief financial officer,


Mr S Maharaj CA(SA)/HDipTax.
The accounting policies are consistent in
allmaterial respects with that of the prior
financial period, except for the following
amendments to IFRS: IFRS 10 Consolidated
Financial Statements (Investment entities);
IAS 32 Financial Instruments: Presentation
(Right to off-set); IAS 36 Impairment of
Assets (Disclosure of Recoverable amount);
IAS 39 Financial Instruments: Recognition
and Measurement (Novation of derivatives);
and IFRIC 21 Levies (New Standard). None of
which significantly impacted the financials
ofthe group.

Fair values of financial


instruments
The fair value measurement of Level 2
financial instruments have been determined
in accordance with appropriate valuation
techniques, including recent market
transaction and other valuation models.
Significant inputs include market yield curves
and exchange rates. There is no difference
between the fair value and carrying value of
financial assets and liabilities not presented
below due to either the short-term nature of
these items, or the fact that they are priced
at variable interest rates.

The following table provides the fair value measurement hierarchy of the groups assets and liabilities:
GROUP

Non-current assets
Property, plant and equipment
Investment properties
Non-current assets held for sale
Non-current liabilities
Contingent consideration
Interest-bearing loans and borrowings

There have been no transfers between


Level2 and Level 3 during the period.
Themovement in the contingent liability
ismainly a result of fair value adjustments
and the payment reflected in the cash flow.

Independent auditors report


The annual financial statements have been
audited by Ernst & Young Inc. and their

Fair value
measurement

2015
R000

2014
R000

Level 2
Level 2
Level 2

448 146
25 735
20 799

487 092
24 470
11 702

Level 3
Level 2

3 010
93 713

5 721
107 019

unqualified audit opinion is available on


request from the company secretary or at
Cargo Carriers Limiteds registered office.
This summarised report is extracted from the
audited information, but is not itself audited.
The directors take full responsibility for the
preparation of this provisional report and are
satisfied that the financial information has
been correctly extracted from the underlying

Summarised audited annual financial statements


for the year ended 28 February 2015 and dividend announcement

annual financial statements. The groups


integrated annual report will be available by
the end of May 2015.

Dividend declaration

Notice is hereby given that a gross final cash


dividend (number 48) of 20.0 cents per share
(2014: 40.0 cents per share) has been
declared for the year ended 28 February 2015.
The dividend has been declared out of income
reserves. The dividend will be subject to a
dividend withholding tax rate of 15% or
3.0cents per ordinary share. As no STC
credits are available for utilisation,
shareholders, unless exempt or qualifying
fora reduced withholding tax rate, will receive
a net dividend of 17.0 cents per share.
Cargo Carriers tax reference number is
9900156713 and the number of ordinary
shares in issue at the declaration date
is20000 000.
The salient dates for the dividend will be as
follows:
Last date to trade
cum dividend
Friday, 5 June 2015
Shares commence
trading ex the
dividend
Monday, 8 June 2015
Record date (date
shareholders are
recorded in the
shareregister)
Friday, 12 June 2015
Payment date
Monday, 15 June 2015
Share certificates may not be dematerialised or
rematerialised between Monday, 8 June 2015
and Friday, 12 June 2015 both dates inclusive.

Events after the reporting


period
The company accepted an offer before
yearend to sell its majority shareholding
inaforeign subsidiary to the minority
shareholder. The suspensive conditions in
the offer were not met by the buyer after
year end and as a result the sale was not
concluded at the issue date of these
financialstatements. The results of this
foreign subsidiary for the year ended
28February 2015 is included in the industrial
sector in the segment report in note 26.
Thetransaction was not treated as a
discontinued operation in the annual
financialstatements, as the probability of
thetransaction being concluded per the
initialsuspensive conditions was not
assessed as highly probable.
A letter of intent for the purchase of the
companys minority shareholding in a
SouthAfrican associate company was
received after year end from the majority
shareholder. It is expected that the sale
transaction will be concluded during the
nextfinancial year. The financial results of
theassociate are presented under the
agricultural sector in the segment report
innote 26.

Appointment of independent
non-executive director
Mr Vincent Raseroka was appointed as an
independent non-executive director and
member of the remuneration, nominations
and audit and risk committee with effect
from 18 July 2014.

www.cargocarriers.co.za