Brikor discloses ‘reportable irregularities’ in results
THE AUDITORS of Brikor, the AltX-listed clay brick and aggregates manufacturer, have reported “reportable irregularities” by the company to the Independent Regulatory Board of Auditors (IRBA).
Brikor disclosed in its financial results statement for the year to February last year, released yesterday, that the “reportable irregularities” related to non-compliance with the Income Tax Act and the Mineral and Petroleum Resources Royalties Act and were reported to the IRBA last November.
The company said they related to the non-submission of annual tax returns and late payments of provisional tax as required by the Income Tax Act and the non-registration for Royalty Tax and/or submission of returns and/or payment of Royalty Tax due to the SA Revenue Service as required by the Petroleum Resources Royalties Act.
It said these “reportable irregularities” resulted in penalties and interest being charged to the group but did not disclose the quantum of the penalty and interest charged.
Attempts to get comment from Brikor chief executive Garnett Parkin and financial director Andre Hanekom were unsuccessful.
Brikor in its financial statements attributed the noncompliance instances to the provisional liquidation of the company and cash flow constraints on the group.
The company went into provisional liquidation in August 2013 when it experienced financial distress. This followed the conclusion of two acquisitions in 2008, the year of the global financial crisis-induced market collapse, which resulted in a protracted strike at the company.
It came out of provisional liquidation in October 2015, saving more than 1 000 jobs and creating about a further 250 jobs.
The group said yesterday its overall financial indicators improved substantially in a competitive trading environment in the year to February last year through effective cost management initiatives and a concerted effort to maintain and improve sustainable working capital levels.
It said control of input costs in production, through the wholly-owned mining subsidiary Ilangabi Investments 12 and the additional revenue generated through the sale of the additional coal derived through the mining process, provided the natural synergy that continued to grow external revenues and reduce production input costs.
Brikor yesterday reported a 107.4 percent growth in headline earnings a share from continuing operations to 5.6 cents from 2.7c in the previous year.
Revenue fell marginally to R317.0 million from R318.2m.
Operating profit before interest and taxation improved by 91.8 percent to R48.6m.
Efforts to keep expenses to a minimum resulted in operating expenses falling by 8 percent to R43.7m. The group’s total debt fell by 37.8 percent to R184m.
The group said its directors had prepared their budgets and cash flow forecasts for the year ahead based on reasonable and supportable assumptions, with the cash flow forecast and current management reports indicating the group would operate as a going concern “for the foreseeable future”.
Trading in Brikor’s shares on AltX is still suspended.