SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): October 24, 1996
FIRST SOUTH AFRICA CORP., LTD.
- --------------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
BERMUDA
- --------------------------------------------------------------------------------
(state or other jurisdiction of incorporation)
0-27494 N/A
- ------------------------------ ----------------------------------------
(Commission file number) (IRS employer identification no.)
Clarendon House, Church Street, Hamilton HM CX, Bermuda
- --------------------------------------------------------------------------------
(address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (441) 295-1422
Not Applicable
- --------------------------------------------------------------------------------
(former name or former address, if changed since last report)
-1-
Item 7. Financial Statements and Exhibits
- ------ ---------------------------------
(a) Financial Statements of Business Acquired
Provided herein on pages F-1 to F-14 are the following
financial statements of Astoria Bakery CC ("ABCC") and
Astoria Bakery Lesotho (Proprietary) Limited ("ABL"):
(i) Unaudited Combined Balance Sheet at June 30, 1996;
(ii) Unaudited Combined Statements of Income for the
four months ended June 30, 1996 and 1995;
(iii) Unaudited Combined Statements of Cash Flows for
the four Months ended June 30, 1996 and 1995;
(iv) Notes to the Unaudited Combined Financial
Statements for the four months ended June 30, 1996
and 1995;
(v) Audited Combined Balance Sheet at February 29,
1996;
(vi) Audited Combined Statements of Income for the
years ended February 29, 1996 and February 28,
1995;
(vii) Audited Combined Statements of Cash Flows for the
years ended February 29, 1996 and February 28,
1995;
(viii) Audited Combined Statements of Changes in
Stockholders' Investment for the years ended
February 29, 1996 and February 28, 1995; and
(ix) Notes to the Audited Combined Financial Statements
for the years ended February 29, 1996 and February
28, 1995.
(b) Pro Forma Financial Information
Provided herein on pages F-15 to F-17 are the following pro
forma consolidated financial statements for First South
Africa Corp., Ltd., ABCC and ABL:
(i) Unaudited Pro Forma Consolidated Balance Sheet at
June 30, 1996;
-2-
(ii) Unaudited Pro Forma Consolidated Statement of
Income for the year ended June 30, 1996; and
(iii) Notes to Unaudited Pro Forma Balance Sheet and
Statement of Income for the year ended June 30,
1996.
(c) Exhibits
Exhibit
Number Description
------ -----------
2.1* Sale of Business Agreement between Astoria Bakery
CC, Wolfgang Burre, Astoria Bakery (Proprietary)
Limited, First South African Holdings
(Proprietary) Limited and First South Africa
Corp., Ltd.
2.2 Amended Sale of Business Agreement between Astoria
Bakery CC, Wolfgang Burre, Astoria Bakery
(Proprietary) Limited, First South African
Holdings (Proprietary) Limited and First South
Africa Corp., Ltd.
- --------
* The document was filed as an exhibit to the original Form 8-K.
-3-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST SOUTH AFRICA CORP., LTD.
By: __________________________
Clive Kabatznik
President
Date: March __, 1997
-4-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST SOUTH AFRICA CORP., LTD.
By: /s/ Clive Kabatznik
--------------------------
Clive Kabatznik
President
Date: March __, 1997
-3-
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
UNAUDITED COMBINED BALANCE SHEET AT JUNE 30, 1996
- --------------------------------------------------------------------------------
June 30,
1996
$
ASSETS
Current assets
Cash on hand 282 614
Receivables 429 518
Allowances for bad debts -
----------
429 518
Inventories (note 2) 151 418
Prepaid expenses and other current assets 70 193
----------
Total current assets 933 743
Property, plant and equipment 2 665 807
Less : Accumulated depreciation (1 144 250)
----------
1 521 557
Goodwill 5 191
Loans to stockholders 116 027
----------
2 576 518
LIABILITIES AND STOCKHOLDERS' INVESTMENT ==========
Current liabilities
Bank overdraft payable 435 822
Trade accounts payable 543 449
Other provisions and accruals 546 054
Income taxes payable 48 751
----------
Total current liabilities 1 574 076
Long term debt 294 155
Loans from stockholders -
----------
Total liabilities 1 868 231
Stockholders' investment
Capital stock
Astoria Bakery: Members' contribution 96
Astoria Bakery Common stock, M1 par value -
Lesotho: authorised 1 000 shares, issued 100
shares in 1996 and 1995 32
Retained earnings 881 502
Foreign currency translation adjustments (173 343)
----------
2 576 518
==========
F-1
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
UNAUDITED COMBINED STATEMENTS OF INCOME
FOR THE FOUR MONTHS ENDED JUNE 30, 1996 AND 1995
- --------------------------------------------------------------------------------
June 30, June 30,
1996 1995
$ $
Revenues 2 085 260 2 337 179
--------- ---------
Operating expenses
Cost of sales 927 450 1 038 098
Selling, general and administrative costs 967 165 1 178 696
--------- ---------
1 894 615 2 216 794
--------- ---------
Operating income 190 645 120 385
Other income 16 074 15 420
Interest expenses (10 748) (16 183)
--------- ---------
Income before income taxes 195 971 119 622
Provision for taxes on income (22 850) (4 120)
--------- ---------
Net income 173 121 115 502
Retained earnings at beginning of the period 708 381 640 569
--------- ---------
Retained earnings at end of period 881 502 756 071
========= =========
F-2
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
UNAUDITED COMBINED STATEMENTS OF CASH FLOWS
FOR THE FOUR MONTHS ENDED JUNE 30, 1996 AND 1995
- --------------------------------------------------------------------------------
For For
June 30, June 30,
1996 1995
$ $
Cash flows from operating activities:
Net income 173 121 115 502
Adjustments to reconcile net income
to cash provided by
operating activities:
Depreciation 137 942 139 739
Effect of changes in assets and liabilities 467 205 137 873
------- -------
Net cash provided by operating activities 778 268 393 114
------- -------
Cash flows from investing activities:
Net additions to fixed assets (726 062) (481 668)
------- -------
Cash flows from financing activities:
Net borrowings/(repayments) in bank
overdraft 231 907 (222 978)
Net proceeds of long term debt 86 682 37 371
Net (repayments)/borrowings in loans from
stockholders (256 433) 285 602
Net repayments in short term debt (40 138) (55 375)
------- -------
Net cash provided by financing activities 22 018 (44 620)
------- -------
Effect of exchange rate changes on cash (28 399) (2 828)
Net increase/(decrease) in cash on hand 45 825 (46 762)
Cash on hand at beginning of period 236 789 317 081
------- -------
Cash on hand at end of period 282 614 270 319
======= =======
F-3
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
NOTES TO THE UNAUDITED COMBINED FINANCIAL STATEMENTS
FOR THE FOR MONTHS ENDED JUNE 30, 1996 AND 1995
- --------------------------------------------------------------------------------
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unaudited Interim Financial Statements
The accompanying unaudited combined financial statements of the
company have been prepared in accordance with generally accepted
accounting principles for interim financial information and in
accordance with Article 10 Regulation S-X. Accordingly they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, the unaudited interim combined financial
statements contain all adjustments, consisting of normal recurring
accruals, necessary to present fairly the financial position of the
company at June 30, 1996 and the results of operations and cash flows
for the periods presented.
Results for interim periods are not necessarily indicative of results
to be expected for the full year.
These financial statements should be read in conjunction with the
financial statements and notes included in the Form 10-K for the
period ended June 30, 1996.
2 INVENTORY
Inventory for the period ended June 30, consists of the following:
June 30,
1996
$
Ingredients and work in progress 132 585
Packaging 12 976
Fuel 5 857
-------
151 418
=======
3 CONTINGENT LIABILITIES
South African secondary tax on companies at 12.5 percent is payable
on all future dividend declarations.
4 EVENTS SUBSEQUENT TO JUNE 30, 1996
Subsequent to June 30, 1996 an agreement was reached to dispose of
100 percent of the equity of Astoria Bakery Lesotho (Proprietary)
Limited and the business of Astoria Bakery CC to First South African
Holdings (Proprietary) Limited, a subsidiary of First South Africa
Corp., Ltd, an entity under common control.
F-4
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
AUDITED COMBINED BALANCE SHEET AT FEBRUARY 29, 1996
- --------------------------------------------------------------------------------
February 29,
1996
$
ASSETS
Current assets
Cash on hand 236 789
Receivables 521 932
Allowances for bad debts -
---------
521 932
Inventories 186 788
Prepaid expenses and other current assets 38 333
---------
Total current assets 983 842
Property, plant and equipment 2 204 614
Less : Accumulated depreciation (1 140 113)
---------
1 064 501
Goodwill 5 871
---------
2 054 214
=========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
Bank overdraft 234 108
Current portion of long term debt 44 786
Trade accounts payable 720 525
Other provisions and accruals 26 476
Income taxes payable 29 637
---------
Total current liabilities 1 055 532
Long term debt 235 940
Loans from stockholders 154 911
---------
Total liabilities 1 446 383
Stockholders' investment
Capital stock
Astoria Bakery CC: Members' contributions 96
Astoria Bakery Lesotho
(Proprietary) Limited: Common stock, M1 par
value -authorised
100 000 shares, issued
100 shares in 1996,
1995 and 1994 32
Retained earnings 708 381
Foreign currency translation adjustments (100 678)
---------
2 054 214
=========
F-5
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
AUDITED COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
February 29, February 28,
1996 1995
$ $
Revenues 7 200 784 6 315 976
--------- ---------
Operating expenses
Cost of sales 3 679 122 3 177 357
Selling, general and administrative costs 3 471 915 2 972 818
--------- ---------
7 151 037 6 150 175
--------- ---------
Operating income 49 747 165 801
Other income 69 448 38 354
Interest expense (42 951) (63 163)
--------- -------
Income before income taxes 76 244 140 992
Provision for taxes on income (8 432) (28 029)
--------- -------
Net income 67 812 112 963
Retained earnings at beginning of year 640 569 527 606
--------- -------
Retained earnings at end of year 708 381 640 569
========= =======
F-6
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
AUDITED COMBINED STATEMENTS OF CASH FLOWS FOR THE
YEARS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
For For
February 29, February 28,
1996 1995
$ $
Cash flows from operating activities:
Net income 67 812 112 963
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 157 861 137 502
Net gain on sale of assets (13 233) (5 950)
Effect of changes in assets and liabilities 229 033 (153 866)
-------- --------
Net cash provided by operating activities 441 473 90 649
Cash flows from investing activities: -------- --------
Net additions to fixed assets (639 494) (171 684)
-------- --------
Cash flows from financing activities:
Net (repayments)/borrowings in bank overdraft (419 532) 11 411
Net proceeds/(repayments) of long term debt 188 468 (20 979)
Net borrowings in loans from stockholders 372 387 387 870
Net (repayments)/borrowings in short term debt (8 068) 5 543
-------- --------
Net cash provided by financing activities 133 255 383 845
-------- --------
Effect of exchange rate changes on cash (15 526) (4 137)
-------- --------
Net (decrease)/increase in cash on hand (80 292) 298 673
Cash on hand at beginning of year 317 081 18 408
-------- --------
236 789 317 081
======== ========
F-7
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
AUDITED COMBINED STATEMENTS OF CHANGES IN
STOCKHOLDERS' INVESTMENT FOR THE YEARS ENDED
FEBRUARY 29, 1996 AND FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
Capital stock
Capital stock Astoria Bakery Foreign currency
Astoria Lesotho (Pty) Retained translation
Bakery CC Ltd earnings adjustments Total
$ $ $ $ $
Balance at February 28, 1994 96 32 527 606 (44 602) 483 132
Net income - - 112 963 - 112 963
Translation adjustment - - - (19 704) (19 704)
-- ------- -------
Balance at February 28, 1995 96 32 640 569 (64 306) 576 391
Net income - 67 812 - 67 812
Translation adjustment - - - (36 372) (36 372)
-- -- ------- ------- -------
Balance at February 29, 1996 96 32 708 381 (100 678) 607 831
== == ======= ======= =======
F-8
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
FOR THE YEARS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1995
- --------------------------------------------------------------------------------
1 BUSINESS AND FORMATION OF THE COMPANIES
Astoria Bakery CC and Astoria Bakery Lesotho (Proprietary) Limited
("the Companies") were registered in February 1992 and March 1979
respectively, and both conduct the business of industrial bakers.
2 SUMMARY OF ACCOUNTING POLICIES
The financial statements have been prepared in conformity with
Generally Accepted Accounting practice in the United States of
America, on the historical cost basis and incorporate the following
significant accounting policies:
Foreign currency translation
The functional currency is that of South African Rands. Accordingly
the following rates of exchange have been used for translation
purposes:
o Assets and liabilities are translated to United States
Dollars using the exchange rates at the balance sheet date.
o Common stock is translated to United States Dollars using
the historical exchange rates at the dates of issuance.
o Revenues, expenses, gains and losses are translated to
United States Dollars using weighted average exchange rates
during the year.
The resultant translation adjustments are reported in the components
of stockholders' investment designated as "Foreign currency
translation adjustments."
Foreign assets and liabilities
Transactions in foreign currencies arise as a result of plant,
equipment and raw materials purchased from foreign countries.
Transactions in foreign currencies are accounted for at the rates
ruling at the transaction dates. Exchange gains and losses are
charged to the income statement during the period in which they
occur. Foreign assets and liabilities of the Companies which are not
denominated in South African Rands are converted into South African
Rands at the exchange rates ruling at the financial year end or the
rates of forward cover purchased. Forward cover is purchased to hedge
the currency exposure on foreign liabilities.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Cost is determined on the following basis:
F-9
o Raw materials and consumable stores are valued at cost
using the FIFO formula.
o Work in progress and finished goods are valued at direct
raw material cost plus labour costs and related
manufacturing overhead expenses.
o Redundant and slow-moving inventory is identified and
written down with regard to its estimated economic or
realisable value.
Property, plant and equipment
Improvements to leasehold property, plant, machinery, vehicles,
equipment and furniture and fittings are depreciated on the straight
line basis so that the cost of the assets is written off over their
estimated useful lives.
The following periods are considered appropriate:
Period
Years
-----
Improvements to leasehold properties 10
Plant, machinery and equipment 3 - 5
Vehicles 5
Furniture and fittings 7 - 10
Intangible assets
Goodwill represents the excess of the cost of acquisition over the
fair values of the net identifiable assets acquired when the entity
was formed. Goodwill is recognised as an asset in the balance sheet.
Gross revenue
Gross revenue comprises the gross invoiced value of sales in respect
of trading operations, before discounts, and excludes value added
taxation. The company recognises revenue on the accrual basis upon
delivery of the products to the customers.
Income taxes
Income tax expenses is based on reported earnings before income
taxes. Deferred income taxes represent the impact of temporary
differences between the amounts of assets and liabilities recognised
for financial reporting purposes and such amounts recognised for tax
purposes. Deferred taxation is provided on the comprehensive basis
and is measured by applying currently enacted tax laws. No provision
for deferred tax has been raised as the amounts recognised for
financial reporting purposes approximate those recognised for tax
purposes.
Fair value of financial instruments
As at the end of February 1996 the carrying value of accounts
receivable and accounts payable approximate their fair value.
3 INVENTORIES
Inventories for the year ended February 29, consist of the following:
F-10
February 29,
1996
$
Ingredients and work in progress 163 556
Packaging 16 007
Fuel 7 225
--------
186 788
========
4 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
Accumulated Net book
Cost depreciation value
February 29, February 29, February 29,
1996 1996 1996
$ $ $
Leasehold improvements 107 426 (26 252) 81 174
Plant, machinery and - owned 1 243 783 (645 816) 597 967
equipment - leased 30 078 (24 063) 6 015
Vehicles - owned 601 666 (341 703) 259 963
- leased 66 396 (37 881) 28 515
Furniture and fittings 155 265 (64 398) 90 867
--------- --------- ---------
2 204 614 (1 140 113) 1 064 501
========= ========= =========
Depreciation 157 861
=========
Certain plant and equipment is encumbered as security for liabilities of the
Companies (refer note 7).
5 LONG TERM DEBT
February 29,
1996
$
Findevco (Proprietary) Limited - Instalment sale agreements 207 346
Payable monthly at an effective rate of interest of 17,56% per annum
Nedbank instalment sale agreements 15 013
Payable in 36 monthly instalments of R1,596.18, payable from 1 March
1996 until 1 February 1999 with an effective interest rate of 18,5% per annum
Finance lease liabilities 58 367
Payable monthly at effective interest rates varying from 16,44% to 22,25% per annum -------
280 726
Less : current portion (44 786)
-------
Total long term debt 235 940
=======
The Findevco loan is secured by a first mortgage bond over land and
buildings of a fellow close corporation.
The instalment sale agreements are secured over certain assets having
a book value of $34 530.
6 LOANS FROM STOCKHOLDERS
February 29,
1996
$
Loans from stockholders 154 911
=======
These loans are classified as long term. They do not bear interest
and have no fixed repayment date.
F-11
7 OPERATING LEASES
Astoria Bakery CC and Astoria Bakery Lesotho (Proprietary) Limited
lease factory buildings and equipment under operating leases. These
leases expire over the next five years.
In most cases, management expects that in the normal course of
business, the leases will be renewed or replaced by other leases.
The following schedule shows the composition of total rental expense
for all operating leases except those with a term of one month or
less:
February 29, February 28,
1996 1995
$ $
Minimum rentals 257 123 254 859
======= =======
8 OTHER INCOME
Other income includes, interest received, profits on disposal of
assets, rental income and discounts received.
9 INTEREST EXPENSE
February 29, February 28,
1996 1995
$ $
Current bank account 42 951 63 163
====== ======
10 INCOME TAXES
Income taxes are accounted for under Statement of Financial
Accounting Standards No. 109 "Accounting for Income Tax" ("SFAS
109"), an asset and liability method. SFAS requires the recognition
of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the tax bases and
financial reporting bases of the Company's assets and liabilities. In
addition, SFAS 109 requires the recognition of future tax benefits,
such as net operating loss carry forwards, to the extent realisation
of such benefit is more likely than not.
The provision for income taxes charged to continuing operations was
as follows:
February 29 February 28,
1996 1995
$ $
Current
South African 8 432 28 029
----- ------
Total current taxes 8 432 28 029
-----
Deferred
South African - -
----- ------
Total deferred taxes - -
----- ------
Provision for taxes on income 8 432 28 029
===== ======
The provision for taxes on income differs from the amount of income
tax determined by applying the applicable South African statutory
income tax rate to pre-tax income from continuing operations as a
result of the following differences:
F-12
February 29, February 28,
1996 1995
% %
South African statutory tax rate 35,0 35,0
Capital gains/disallowable expenditure (4,0) 0,1
Prior year underprovision - 4,4
Timing differences not provided for (17,6) (5,5)
Utilisation of operating loss carry forwards 12,4 -
Foreign tax rate differential (14,7) (14,1)
---- ----
Effective tax rate 11,1 19,9
==== ====
11 CASH FLOWS
The changes in assets and liabilities consist of the following:
February 29, February 28,
1996 1995
$ $
Increase in receivables (44 379) (157 686)
Increase in inventories (75 412) (19 968)
Decrease/(increase) in prepaid expenses and
other current assets 79 615 (83 157)
Increase in trade accounts payable 261 625 85 640
Increase in other provisions and accruals 7 796 8 607
(Decrease)/increase in income taxes payable (212) 12 697
------- -------
229 033 (153 866)
======= =======
Supplemental disclosures of cash flow
information:
Interest paid 42 951 63 163
====== =======
Income taxes paid 8 644 15 332
====== =======
12 EMPLOYMENT BENEFITS
The majority of permanent salaried and waged staff belong to the
Astoria Bakery Pension Fund, which is underwritten by Southern Life
Assurance. The retirement fund is a defined contribution plan, and by
nature of this fund there can be no unfunded obligation or
responsibility of the employer.
The Companies participate in medical aid schemes which provide
medical cover for employees on an annual basis. Neither the Companies
nor the medical aid are liable for post retirement medical costs. The
Companies have no liability for employees' medical costs in excess of
the contributions to the medical fund.
Amounts contributed by the Companies to the funds and charged to
pension costs and medical aid costs were as follows:
February 29, February 28,
1996 1995
$ $
Pension costs 63 833 51 825
====== ======
Medical aid contributions 40 997 34 677
====== ======
13 CONTINGENT LIABILITIES
South African secondary tax on companies at 12.5 percent is payable
on all future dividends declared.
F-13
14 EVENTS SUBSEQUENT TO FEBRUARY 29, 1996
Subsequent to the year end, an agreement was reached to sell 100% of
the equity of Astoria Bakery Lesotho (Proprietary) Limited and the
business of Astoria Bakery CC to First South African Holdings
(Proprietary) Limited, a subsidiary of First South Africa Corp., Ltd,
an entity under common control.
F-14
FIRST SOUTH AFRICA CORP., LTD
PRO FORMA CONSOLIDATED BALANCE SHEET
(unaudited)
- --------------------------------------------------------------------------------
Combined Astoria
Bakery CC and
Consolidated Astoria Bakery
Company Lesotho (Pty) Ltd Pro Forma Pro Forma
June 30, 1996 June 30, 1996 Adjustments Consolidated
$ $ $ $
ASSETS
Current assets
Cash on hand 4 682 035 282 614 (2 766 196) 2 198 453
Receivables 5 833 542 429 518 - 6 263 060
Allowances for bad debts (402 333) - - 1 (402 333)
---------- ---------- ----------- ----------
5 431 209 429 518 - 5 860 727
Inventories 2 510 868 151 418 - 2 662 286
Prepaid expenses and other current assets 451 551 70 193 - 521 744
---------- ---------- ----------- ----------
Total current assets 13 075 663 933 743 (2 766 196) 11 243 210
Property, plant and equipment 9 000 334 2 665 807 (1 144 250) 3 10 521 891
Less : Accumulated depreciation (2 119 912) (1 144 250) 1 144 250 3 (2 119 912)
---------- ---------- ----------- ----------
6 880 422 1 521 557 - 8 401 979
Goodwill 408 541 5 191 - 413 732
Investments and other intangibles 3 166 818 - 2 988 144 6 154 962
Loans to stockholders - 116 027 - 116 027
Deferred income taxes 73 550 - - 1 73 550
---------- ---------- ----------- ----------
23 604 994 2 576 518 221 948 26 403 460
========== ========== =========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Bank overdraft payable 745 724 435 822 - 1 181 546
Current portion of long term debt 2 101 799 - - 2 101 799
Trade accounts payable 2 162 257 543 449 - 2 705 706
Other provisions and accruals 1 923 371 546 054 - 2 469 425
Income taxes payable 1 518 095 48 751 - 1 566 846
---------- --------- ------- ----------
Total current liabilities 8 451 246 1 574 076 - 10 025 322
Long term debt 2 361 372 294 155 - 2 655 527
----------
Total liabilities 10 812 618 1 868 231 - 12 680 849
Stockholders' investment
Capital stock 41 701 128 58 1 41 887
Capital in excess of par 18 518 986 - 930 049 1 19 449 035
Retained earnings (3 887 407) 881 502 (881 502) 1 (3 887 407)
Foreign currency translation adjustments (1 888 211) (173 343) 173 343 1 (1 888 211)
Income restricted as to distribution 7 307 - - 7 307
---------- --------- ------- ----------
23 604 994 2 576 518 221 948 26 403 460
========== ========= ======= ==========
F-15
FIRST SOUTH AFRICA CORP., LTD
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(unaudited)
- --------------------------------------------------------------------------------
Combined Astoria
Bakery CC and
Consolidated Astoria Bakery
Company Lesotho (Pty) Ltd
Year ended Year ended Pro Forma Pro Forma
June 30, 1996 June 30, 1996 Adjustments Consolidated
$ $ $ $
Revenues 14 911 097 6 944 595 - 21 855 692
---------- --------- -------- ----------
Operating expenses
Cost of sales 8 385 511 3 542 258 - 11 927 769
Selling, general and administrative costs 5 134 431 3 257 253 119 526 8 511 210
Non cash compensation charge 6 314 000 - - 2 6 314 000
---------- --------- -------- ----------
19 833 942 6 799 511 119 526 26 752 979
---------- --------- -------- ----------
Operating (loss)/income (4 922 845) 145 084 (119 526) (4 897 287)
Other income 539 636 69 207 - 608 843
Interest expense (865 733) (37 440) - (903 173)
---------- ------- -------- ----------
(Loss)/income before income taxes (5 248 942) 176 851 (119 526) (5 191 617)
Provision for taxes on income (488 618) (29 435) 41 834 2 (476 219)
---------- ------- -------- ----------
Net (loss)/income (5 737 560) 147 416 (77 692) (5 667 836)
========== ======= ======== ==========
Weighted average number of shares
outstanding at June 30, 1996 (note 4) 2 079 510
Net loss per share (2.73)
F-16
ASTORIA BAKERY CC AND
ASTORIA BAKERY LESOTHO (PROPRIETARY) LIMITED
NOTES TO PRO FORMA BALANCE SHEET AND STATEMENT OF INCOME
(unaudited)
- --------------------------------------------------------------------------------
1. Reflects the acquisition of Astoria Bakery CC and Astoria Bakery Lesotho (Proprietary)
Limited.
The purchase price and adjustments arising as a result of the acquisition are as follows: $
186,047 shares of FSAH class B stock issued to Astoria Bakery CC and Astoria Bakery
Lesotho (Proprietary) Limited shareholders at $5,00 each, the fair market value of the
shares at the date of the agreement 930 235
Cash portion of purchase consideration 2 766 196
---------
Total purchase price 3 696 431
Common stockholders' equity at June 30, 1996
Capital stock (128)
Retained earnings (881 502)
Foreign currency translation adjustments 173 343
---------
Intellectual property rights acquired 2 988 144
=========
Additional second, third and fourth instalments are payable, of which the third and
fourth instalments are contingent on pre-tax profits of the business combination as
follows:
Second instalment
The US dollar equivalent of R8 million
Third instalment
4 times pre tax profit for the year ending June 30, 1998
multiplied by 25 percent less the US dollar equivalent of R3
million
Fourth instalment
4 times pre tax profit for the year ending June 30, 1999
multiplied by 25 percent less the third instalment
The third and fourth instalments will be paid as follows:
40 percent of the purchase price determined by the formula
above will be settled in FSAH class B stock 60 percent of
the purchase price determined by the above formula will be
settled by a cash consideration
Included in the purchase consideration above is an amount of $1
386 161 which will be offset against the instalments above before
any additional amounts are paid, this is due to a minimum purchase
price payable in terms of the agreement.
2. Amortisation of other intangibles which represent rights to intangible knowledge
acquired from the selling stockholders. Amortised over a twenty five year period.
Other intangibles 2 988 144
Amortisation charge for the year ended June 30, 1996 119 526
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Taxation effect of amortisation at 35%, the South African statutory tax rate for the year
ended June 30, 1996 41 834
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3. Revaluation of property, plant and equipment to estimated fair values. Based on
preliminary assessments, property, plant and equipment values are not significantly in
excess of net book value
4. Calculation of weighted average number of shares outstanding at
June 30, 1996 The weighted average number of shares outstanding at
June 30, 1996 has been adjusted to take into account the shares
issued as part of the purchase consideration of Astoria Bakery CC
and Astoria Bakery Lesotho (Proprietary) Limited
Weighted average number of shares per the 10K, June 30, 1996 1 893 463
FSAH class B stock issued as part of the consideration for Astoria Bakery CC and
Astoria Bakery Lesotho (Proprietary) Limited 186 047
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2 079 510
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F-17