Commentary
General
The board of R&E is pleased to announce the audited results for the year ended 31 December 2013.
Mr Van Zyl Botha CA(SA), financial director, is responsible for the annual financial statements and these summarised annual results and has supervised the preparation thereof in conjunction with Mrs Mandrie Steyn.
Income
The majority of the income recognised is mainly as a result of settlements and recoveries
of R22 million, the profit on sale of prospecting rights of R1 million and interest earned of R11.4 million on cash investements.
Financial position
R&E is liquid with no interest-bearing debt. R&E’s total assets consist primarily of cash and cash equivalents. R&E had a net asset value per share of R2.61 at 31 December 2013.
Cash flow
R&E started the year under review with a cash and cash equivalent balance of R214 million. Operating activities utilised net cash of R15 million, primarily as a result of interest received of R11 million offsetting cash utilised in operations of R26 million.
Investing activities yielded cash inflows of R2.3 million received, primarily from the proceeds on disposal of prospecting rights of R1.5 million and the net disposal of investments in equity securities of R0.7 million. R&E remains in a healthy cash position with R201 million in cash and cash equivalents at 31 December 2013.
Outlook
The outlook for 2014 is similar to that for the previous year. Expenditure on litigation is expected to be at a similar level, which is likely to prevail until the claims in which
the company is engaged have been finalised. Management will continue to focus on reducing the costs of its operations where possible.
DC Kovarsky
Chairman
Marais Steyn
Chief executive officer
Johannesburg
20 March 2014
Summarised consolidated statement of comprehensive income for the year ended 31 December 2013
|
|
Audited
2013
R’000 |
Audited
2012
R’000 |
|
Notes |
|
|
| Revenue |
|
75 |
29 |
| Profit on disposal of investments |
|
135 |
43 |
| Recoveries |
7 |
22 136 |
15 981 |
| Other income |
|
3 382 |
8 589 |
| Personnel expenses |
|
(6 429) |
(10 015) |
| Profit on disposal of prospecting rights |
6 |
1 076 |
5 037 |
| Change in fair value of held-for-trading investments |
|
(127) |
30 |
| Other operating expenses |
|
(24 706) |
(21 690) |
|
|
|
|
| Loss from operating activities |
|
(4 458) |
(1 996) |
| Finance income |
|
11 419 |
11 155 |
| Profit before taxation |
|
6 961 |
9 159 |
| Taxation |
|
– |
– |
| Profit for the year |
|
6 961 |
9 159 |
| Other comprehensive income, net of tax |
|
|
|
| Actuarial gains/(losses) |
|
4 073 |
(2 307) |
| Total comprehensive income for the year |
|
11 034 |
6 852 |
| Profit attributable to: |
|
|
|
| Owners of the company |
|
6 961 |
9 159 |
| Profit for the year |
|
6 961 |
9 159 |
|
|
|
|
| Total comprehensive income attributable to: |
|
|
|
| Owners of the company |
|
11 034 |
6 852 |
| Total comprehensive income for the year |
|
11 034 |
6 852 |
| Basic and diluted earnings per share (cents) |
8 |
10 |
13 |
Summarised consolidated statement of financial position as at 31 December 2013
|
|
Audited
2013
R’000 |
Audited
2012
R’000 |
|
Notes |
|
|
| Assets |
|
|
|
| Non-current assets |
|
124 |
661 |
| Plant and equipment |
|
75 |
187 |
| Intangible assets |
|
49 |
474 |
| Current assets |
|
204 360 |
217 311 |
| Investment in equity securities |
|
1 170 |
1 892 |
| Trade and other receivables |
|
2 030 |
1 502 |
Cash and cash equivalents
Total assets |
|
201 160 |
213 917 |
|
|
204 484 |
217 972 |
| Equity and liabilities |
|
|
|
| Shareholders’ equity |
|
186 912 |
175 878 |
| Issued capital |
|
746 |
746 |
| Retained earnings |
|
186 166 |
175 132 |
|
|
|
|
| Liabilities |
|
|
|
| Non-current liabilities |
|
|
|
| Post-retirement medical benefit obligation |
|
15 547 |
40 768 |
|
|
|
|
| Current liabilities |
|
|
|
| Trade and other payables |
|
2 025 |
1 326 |
| Total equity and liabilities |
|
204 484 |
217 972 |
|
|
|
|
Summarised consolidated statement of changes in equity for the year ended 31 December 2013
|
|
Audited
31 December 2013
R’000 |
Audited
31 December 2012
R’000 |
|
Notes |
|
|
| Attributable to equity holders of the company |
|
|
|
| Share capital |
|
746 |
746 |
|
|
|
|
| Retained earnings |
|
186 166 |
175 132 |
| Balance at the beginning of the period |
|
175 132 |
168 280 |
| Profit and total comprehensive income for the period |
|
11 034 |
6 852 |
Summarised consolidated statement of cash flows for the year ended 31 December 2013
|
|
Audited
31 December 2013
R’000 |
Audited
31 December 2012
R’000 |
|
Notes |
|
|
| Profit before taxation |
|
6 961 |
9 159 |
|
|
|
|
| Adjusted for: |
|
|
|
| Profit on disposal of investments |
|
(135) |
(43) |
| Profit on disposal of prospecting rights |
|
(1 076) |
(5 037) |
| Change in fair value of held-for-trading investments |
|
127 |
(30) |
| Loss on impairment of other assets |
|
65 |
– |
| Depreciation |
|
50 |
73 |
| Change in post-retirement medical benefit liability |
|
(25 221) |
1 626 |
| Finance income |
|
(11 419) |
(11 155) |
| Actuarial gains/(losses) |
|
4 073 |
(2 307) |
| Dividends received |
|
(75) |
(29) |
| Working capital changes |
|
(13) |
(4 212) |
| Cash utilised in operations |
|
(26 663) |
(11 955) |
| Interest received |
|
11 419 |
11 155 |
| Taxation received |
|
184 |
– |
| Cash flows from operating activities |
|
(15 060) |
(800) |
| Cash flows from investing activities |
|
2 303 |
3 247 |
| Dividends received |
|
75 |
29 |
| Proceeds on disposal of prospecting rights |
|
1 500 |
5 037 |
| Acquisition of investment in equity securities |
|
(464) |
(2 712) |
| Proceeds on disposal of investments in equity securities |
|
1 192 |
893 |
| Cash flow from financing activities |
|
– |
– |
| (Decrease)/increase in cash and cash equivalents |
|
(12 757) |
2 447 |
| Cash and cash equivalents at the beginning of the period |
|
213 917 |
211 470 |
| Cash and cash equivalents at the end of the period |
|
201 160 |
213 917 |
Notes to the summarised consolidated financial statements for the year ended 31 December 2013
1. Reporting entity
R&E is a company domiciled and incorporated in the Republic of South Africa. The condensed consolidated annual financial statements of the company for the year ended 31 December 2013 include the company and its subsidiaries (together referred to as “the group”).
2. Basis of preparation
The summarised consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements for abridged reports, and the requirements of the Companies Act applicable to summarised financial statements. The Listings Requirements require abridged 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.
3. Significant accounting policies
The accounting policies applied in the preparation of the consolidated financial statements, from which the summarised consolidated financial statements were derived, are in terms of International Financial Reporting Standards and are consistent with the accounting policies applied in the preparation of the previous consolidated annual financial statements, except
for the revised IAS 19 Employee Benefits that was adopted on 1 January 2013. The impact of IAS 19 on the financial statements is presented in note 10. The accounting policies have been applied consistently by all group entities.
4. Independent audit by the auditor
These summarised consolidated financial statements for the year ended 31 December 2013 have been extracted from the complete set of annual financial statements on which the auditors, KPMG Inc,
have expressed an unqualified audit opinion, dated 20 March 2014. The auditor’s report and annual financial statements, which have been summarised in this report, are available for inspection at the registered office of the company. This abridged report is extracted from audited information, but is not itself audited. The Directors take full responsibility for the preparation of this report and that the financial information has been correctly extracted from the underlying annual financial statements.
5. Segment reporting
The group operates in a single operating segment as an investment holding company with assets in the mining industry.
6. Profit on disposal of prospecting rights
R&E disposed of certain of its prospecting rights which had a R0.4 million carrying value for R1.5 million. R&E has entered into various agreements for the sale of certain of its prospecting rights, with nil carrying values, to third parties. In terms of the agreements, however, there are still a number of conditions precedent outstanding at year-end and as a result the disposals
have not been recognised as yet. The proceeds (and profit) which are expected to be realised from these transactions are R5.9 million.
7. Recoveries
R&E concluded a settlement agreement with Mr Paul Main on 23 March 2012, in terms of which USD4 million was payable by Mr Main to R&E. The settlement relates to the group’s claim against him for damages in respect of 2 million Randgold Resources Limited shares. Shareholders are referred to the announcements made by the company on 30 May 2013, relating to this settlement. R&E recognised the final payment of R22 million received in cash during June 2013.
8. Earnings per share
|
|
2013
Per share
(in cents) |
2012
Per share
(in cents) |
Earnings per share
Basic earnings and diluted earnings per ordinary share |
|
10 |
13 |
The calculation of basic and diluted earnings per ordinary share is based on earnings
of R6.9 million (2012: earnings of R9.1 million) attributable to ordinary shareholders of the
company and a weighted average of 71 585 172
(2012: 71 585 172) shares in issue. |
|
|
|
|
|
|
|
| Headline earnings and diluted headline earnings per share |
|
8 |
6 |
The calculation of the headline earnings and diluted headline earnings per share is based on headline
earnings of R5.8 million (2012: headline earnings of R4.1 million) attributalbe to equity holders
of the company and a weighted average of 71 585 172 (2012: 71 585 172)
ordinary shares in issue during the year. |
|
|
|
|
|
|
|
| Reconciliation between basic earnings for the year and headline earnings |
|
|
|
|
|
|
|
| Profit for the year attributable to equity holders of the company |
|
6 961 |
9 159 |
| Adjusted for: |
|
|
|
| Profit on disposal of prospecting rights |
|
(1 076) |
(5 037) |
Headline earnings for the year attributable to equity
holders of the company |
|
5 885 |
4 122 |
9. Net asset and tangible net asset value per share
The net asset value per share is calculated using the following variables:
|
|
31 December
2013 |
31 December
2012 |
|
Notes |
|
|
| Net asset value (R’000) |
|
186 912 |
175 878 |
| Ordinary shares outstanding |
|
71 585 172 |
71 585 172 |
| Net asset value per share (cents) |
|
261 |
246 |
| Net tangible asset value per share (cents) |
|
261 |
245 |
The number of shares outstanding at 31 December 2013 and 31 December 2012 has been adjusted for the 2 999 893 treasury shares held.
10. Material changes
Post-retirement medical benefit obligation
During 2013, R&E concluded settlements with a number of pensioners. The main drivers of the movement in the post-retirement medical obligation are due to the settlements of R19.9 million and actuarial gains of R4 million.
IAS 19 change in accounting policy
|
|
2013
R’000 |
2012
R’000 |
All actuarial gains and losses are recognised through other
comprehensive income.During the prior year the policy was to
recognise gains and losses through profit and loss. As this
change in accounting police does not affect the balance sheet,
a third balance sheet is not required. |
|
|
|
| Income statement |
|
|
|
| Personnel costs |
|
(2 356) |
(12 322) |
| Transfer to Other comprehensive income |
|
(4 073) |
2 307 |
| Restated Personnel costs |
|
(6 429) |
(10 015) |
| Profit before reclassification |
|
11 034 |
6 852 |
| Transfer to Other comprehensive income |
|
(4 073) |
2 307 |
| Restated profit for the year |
|
6 961 |
9 159 |
|
|
|
|
| Other Comprehensive Income |
|
|
|
| Actuarial gains/(losses) |
|
4 073 |
(2 307) |
| Other comprehensive income for the year |
|
4 073 |
(2 307) |
|
|
|
|
| Basic earnings and diluted earnings per ordinary share |
|
|
|
| Before change in accounting policy |
|
15 |
10 |
| After change in accounting policy |
|
10 |
13 |
11. Related party transactions
There were no related party transactions during the period under review other than in the normal course of business. Key management remuneration for the current year was R4.064
million (2012: R4.792 million).
12. Events after reporting date
There were no significant events between the reporting date and the approval date of these results.
13. Notice of annual general meeting
Shareholders are advised that the annual general meeting of R&E will be held at MW Business Centre, Michelangelo Hotel, Mandela Square, Sandton, at 11:00 on Thursday, 8 May 2014.
A copy of the notice of the annual general meeting incorporating the summarised financial
statements will be distributed to shareholders on 24 March 2014.
The date on which shareholders must be recorded in the Share Register maintained by the
transfer secretaries, for purposes of being entitled to attend and vote at the annual general meeting is Friday, 2 May 2014, with last day to trade being Wednesday, 23 April 2014.
Directors
DC Kovarsky (Chairman)**, M Steyn (CEO)*, V Botha*, P Burton#, JH Scholes** (*Executive, **Independent non-executive, #Appointed 23 May 2013 independent non-executive)
Company secretary
V Botha CA(SA)
Transfer secretaries
Computershare Investor Services (Pty) Ltd
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001
Sponsor
PSG Capital
First Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
24 March 2014
