Wrap Text
Abridged Condensed Consolidated Audited Results for the year ended 30 SEPTEMBER 2012
RACEC GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/006153/06)
Share code: RAC ISIN: ZAE000105409
(“RACEC” or “the Company” or “the Group”)
ABRIDGED CONDENSED CONSOLIDATED AUDITED RESULTS FOR THE YEAR ENDED 30
SEPTEMBER 2012
COMMENTARY
INTRODUCTION
Having disposed of its non-core loss-making subsidiaries in 2011, RACEC Group Ltd (“RACEC Group” or
“RACEC”) has spent the last year focusing exclusively on railway construction and maintenance. While
2011 had been a year of change that saw major re-structuring; 2012 was a year of profitable
consolidation. These results confirm the success of this significant turnaround.
The restructured RACEC Group now focuses exclusively on its core business: rail construction, rail
electrification and maintenance contracting. Specifically, the Group offers engineering excellence in:
- Constructing, maintaining and upgrading railway track systems;
- Providing mechanised on-track plant and machinery;
- Constructing gantry, stacker reclaimer and ship loader track work;
- Providing crane tracks for building and maintenance sectors;
- Designing and constructing railway sidings;
- Providing track-related civil and ancillary works;
- Managing industrial rail networks;
- Providing clients with turn-key project solutions; and
- Constructing and maintaining electrical overhead track equipment (OHTE).
FINANCIAL PERFORMANCE
During the year revenue increased by 57% from R226.0 million to R355.2 million and the Group?s total
profit after tax was R29.8 million (2011: profit after tax from continuing operations R15.1 million).
Approximately 52% of the revenue relates to operations within South Africa and 48% relates to operations
within the rest of Africa.
During the course of the 2012 financial year we had the opportunity to review our accounting treatment
with respect to the consolidation of Solethu Civils Holdings (Pty) Ltd (“Solethu Civils”). Originally Solethu
Civils was considered to be a special-purpose entity. Given the risk profile of the transaction, it was
interpreted that the consolidation of this entity into the Group?s results was a requirement in terms of SIC
12. However, a different interpretation of the situation determined that Solethu Civils should not be
consolidated into the Group?s results as RACEC has no shareholding in Solethu Civils, no voting power
and no influence over the board of Solethu Civils. The effects of this restatement are disclosed in note 6
below.
The de-consolidation of Solethu Civils has resulted in an increase in the 2011 net equity of R21.1 million
(2010: R20.0 million). It has also resulted in the loss per share for 2011 reducing by 12.7 cents (2010:
earnings per share reduced by 4.8 cents).
The positive generation of cash reserves remains a key area of focus for the Group. The losses and
write-off in the 2011 financial year relating to the disposed loss-making non-core operations took its
toll on our working capital and certainly left us with a challenge for the 2012 financial year. Profitable
trading saw R19.8 million of cash generated from operations, which included the investment of R26.8
million in working capital as the Group experienced some 57% growth in revenue.
We are looking at various funding methods for large capital intensive projects in order to minimise the
amount of working capital caught up in up-front capital and start-up costs.
OPERATIONAL PERFORMANCE AND PROSPECTS
RACEC?s operations performed very profitably in 2012 and the Group's future outlook looks very
promising. Given the positive sentiment and opportunities in the rail sector, 2013 will more vigorously
address the rebuilding of shareholder value. Management will continue to concentrate on improved
certainty in earnings, improved stakeholder communication and investor awareness, as well as actively
trying to improve share market liquidity.
RACEC will continue to concentrate on reinforcing the business fundamentals to provide a solid
foundation from which to grow, as well as actively addressing the cyclical nature of the order book. Work
in excess of R210 million has already been secured and there are further identified potential projects in
excess of R8 billion, over the next three to five years. Encouragingly, the gross margin percentage is
increasing while the underlying overhead percentage is reducing.
Tight controls and improved scalability over fixed costs will continue so as to provide a solid base from
which the numerous available opportunities can be targeted. The Group's biggest challenge is to build
sufficient capacity to deliver the rail opportunities in the medium to long term without unnecessarily
increasing fixed overhead costs. Management will continue to reorganise the overhead structure to
accommodate essential functions, while forming various outsourced and coalition relationships with both
service providers and clients. It is believed that by streamlining the overhead structure and achieving a
balanced mix of projects, the effect of the cyclical nature of the construction industry can be minimised.
The strategy to diversify operations across the rail sector by targeting and balancing order book splits
between construction versus annuity contracts; South Africa versus rest of Africa contracts, will continue.
A geographical analysis of revenue streams shows a 33% increase in revenue from the South African
operations from R139.3 million to R185.9 million, while revenue from the rest of Africa increased by 95%
from R86.6 million to R169.3 million. This equates to a geographical revenue split of 52/48 in 2012 (2011:
62/38), which is in line with the Group's strategic targets.
Construction remains a key driver of RACEC?s success. Highlights include the successful construction of
the Postmasberg, the Sishen West Expansion Project (SWEP) and Tshipi Borwa projects in the Northern
Cape as well as the additional 51 kilometers of track upgrade in Sierra Leone.
The split on construction versus annuity contracts for 2012 was 86/14 (2011: 90/10). This initial slow
progress towards the targeted strategic split is due to the relatively high growth in construction work that
leads the maintenance annuity strategy. Knowledge of the site and contract conditions will allow cost-
effective solutions advantageous to both RACEC and clients, to be provided. Currently, short-term
maintenance works are being undertaken in Sierra Leone, Mozambique as well as South Africa and there
is confidence that these will convert into long-term contracts over time.
Expansion into Africa will continue as RACEC focuses on the mining sector and other large infrastructure
contractors exploring this market. The Group's position as a niche player in an opportunity-rich rail market
will allow strict risk mitigation measures to be applied before taking on work. Gross margin improvement
is a result of being able to deploy resources effectively and efficiently. Following on the Group's
successes in Sierra Leone, Mozambique and Kenya, a further R70-million West African contract,
scheduled to commence in February 2013 was recently awarded. The Group is also anticipating further
imminent awards in East Africa.
Despite the positive sentiment around South Africa?s targeted infrastructure expansion, the local
operations still experienced frustrations during the year. Protracted procurement cycles, delays in
awarding contracts and the lumpy nature of the infrastructure program proved very challenging. However,
confidence remains, that as an experienced local level 3 broad-based black economic empowerment
(BBBEE) niche rail contractor, RACEC will be well positioned to participate in the anticipated
infrastructure rollout, and the Group eagerly awaits the outcome of recent bid submissions.
RACEC?s corporate governance and ethical culture is balanced with an entrepreneurial and flexible
attitude and managements capability to act swiftly and decisively continues to attract clients. The biggest
challenge will be building sufficient capacity to deliver on rail opportunities in the medium to long term.
Although much work has been done, this will be accelerated during the upcoming year through
continuous recruitment, increased internal skills development, developmental training and bursary
programmes. The Group's ethical culture and equal opportunity for all approach will continue to ensure
that RACEC is a business that retains and attracts competent, high-calibre employees representative of
the cultural mix and diversity of the societies in which the company operates.
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited
year Restated Restated
ended audited audited
30 year ended year ended
September 30 September 30 September
2012 2011 2010
R’000 R'000 R'000
Revenue 355 192 225 982 157 447
Cost of sales (252 497) (162 930) (110 686)
Gross profit 102 695 63 052 46 761
Other income 2 539 123 (5 378)
Other expenses (61 484) (35 666) (30 196)
Net profit before investment revenue, finance costs and
taxation 43 750 27 509 11 187
Investment revenue 1 963 1 185 1 704
Finance costs (6 020) (5 869) (8 509)
Profit before taxation 39 693 22 825 4 382
Taxation (9 942) (7 703) (8 530)
Profit for the period 29 751 15 122 (4 148)
Discontinued operations
(Loss)/Profit for the year from discontinued operations - (35 055) 12 420
Loss from disposal of discontinued operations - (37 936) -
Profit/(Loss) for the period 29 751 (57 869) 8 272
Attributable to:
Equity holders of the parent 29 751 (57 062) 8 401
Non-controlling interest – discontinued operations - (807) (129)
29 751 (57 869) 8 272
Other comprehensive income/(loss):
- Deferred tax on revaluation through disposal - - 251
- Revaluation of property, plant and equipment 13 995 - 336
- Deferred tax on revaluation of property, plant and equipment (3 919) - (94)
- Foreign currency translation differences (8) 49 6
Total comprehensive income/(loss) for the period 39 819 (57 820) 8 771
Attributable to:
Equity holders of the parent 39 819 (57 013) 8 900
Non-controlling interest – discontinued operations - (807) (129)
39 819 (57 820) 8 771
EARNINGS/(LOSS) PER SHARE (CENTS)
Basic 22.7 (43.6) 7.6
Diluted basic 16.3 (31.9) 5.6
Headline 24.3 (10.1) 8.4
Diluted headline 17.4 (7.4) 6.3
Restated Restated
Audited audited audited
year ended year ended year ended
30 30 30
September September September
2012 2011 2010
R’000 R'000 R'000
From continued operations
Basic 22.7 11.5 (3.7)
Diluted basic 16.3 8.4 (2.8)
Headline 24.3 11.8 (2.9)
Diluted headline 17.4 8.6 (2.2)
From discontinued operations
Basic - (55.1) 11.3
Diluted basic - (40.3) 8.4
Headline - (21.9) 11.3
Diluted headline - (16.0) 8.4
Weighted average number of ordinary shares in issue („000)* 130 969 130 969 111 180
Fully diluted weighted average number of ordinary shares in
issue („000)** 182 778 178 993 149 642
*Excludes treasury shares
** Treasury shares considered to have dilutive potential
SEGMENTAL REPORT
Administrative
investment and Rail Consolidating
plant hire construction Entries Total
Analysis per reportable segment R'000 R'000 R’000 R'000
Audited – year ended 30 Septmber 2012
Revenue – external 507 354 685 - 355 192
Revenue – intersegment 25 204 - - 25 204
(Loss)/Profit before tax 9 126 30 567 - 39 693
Total assets 61 587 148 046 - 209 633
Audited - year ended 30 September 2011
Revenue – external - 225 982 - 225 982
Revenue – intersegment 17 518 14 - 17 532
Profit/(loss) before tax 9 047 23 494 (9 716) 22 825
Total assets – continued operations 66 789 110 722 - 177 511
Audited - year ended 30 September 2010
Revenue – external 270 157 177 - 157 447
Revenue – intersegment 16 253 - - 16 253
Profit/(loss) before tax (4 842) 22 970 (13 746) 4 382
Total assets – continued operations 49 205 77 713 - 126 918
Outside Consolidating
South Africa South Africa entries Total
Geographical analysis R'000 R'000 R'000 R'000
Audited – year ended 30 Septmber 2012
Revenue - external 185 873 169 319 - 355 192
Revenue – intersegment 6 249 - - 6 249
Profit before tax 12 316 27 377 - 39 693
Total assets 125 908 83 725 - 209 633
Audited - year ended 30 September 2011
Revenue - external 139 345 86 637 - 225 982
Profit/(Loss) before tax 25 969 6 571 (9 715) 22 825
Total assets – continued operations 104 736 72 775 - 177 511
Audited - year ended 30 September 2010
Revenue - external 101 836 55 611 - 157 447
(Loss)/profit before tax (20 461) 24 843 - 4 382
Total assets – continued operations 95 666 31 251 - 126 917
An operating segment is a component of the Group that engages in business activities which may earn
revenues and incur expenses and whose operating results are regularly reviewed by the Group?s chief
operating decision makers, being the Group?s Board of Directors, in order to allocate resources and
assess performance, and for which discrete financial information is available.
Operating segments, which display similar economic characteristics and have similar products, services,
customers, methods of distribution and regulatory environments are aggregated for reporting purposes.
Segments were identified and grouped together using a combination of the products and services offered
by the segments and the geographical areas in which they operate.
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited Audited
as at as at as at
30 30 30
September September September
2012 2011 2010
R’000 R'000 R'000
ASSETS
Non-current assets 77 591 66 555 70 679
- Property, plant and equipment 65 920 54 978 55 631
- Investment property 351 351 351
- Intangible assets 891 1 125 10 314
- Loans to shareholders 1 806 1 200 -
- Loans and receivables - 8 839 -
- Loans to related parties 8 438 62 -
- Deferred tax assets 185 - 4 383
Current assets 132 042 107 503 147 462
- Inventories 52 012 41 692 31 020
- Trade and other receivables 61 847 43 755 97 237
- Loans and receivables - 4 385 -
- Derivative financial instruments - - 28
- Tax receivable - 103 97
- Cash and cash equivalents 18 183 17 568 19 080
Assets classified as held for sale - 3 453 -
Total assets 209 633 177 511 218 141
EQUITY AND LIABILITIES
Capital and reserves 60 182 20 199 81 185
- Equity attributable to equity holders of the parent 60 182 20 199 81 314
- Non-controlling interest - - (129)
Non-current liabilities 32 336 31 091 33 026
- Loans from shareholders - - 4 163
- Other financial liabilities 23 268 24 042 20 092
- Share based payments 813 2 085 2 911
- Deferred tax liabilities 8 255 4 964 5 860
Current liabilities 117 115 125 176 103 930
- Loans from shareholders - 6 739 8 350
- Other financial liabilities 3 072 6 258 12 828
- Current tax payable 11 380 7 638 6 894
- Trade and other payables 78 582 73 606 54 494
- Bank overdraft 24 081 30 935 21 364
- Liabilities directly associated with assets classified as
held for sale - 1 045 -
Total equity and liabilities 209 633 177 511 218 141
Net asset value per share (cents) 46.0 15.4 62.1
Net tangible asset value per share (cents) 45.3 14.6 54.2
Total number of ordinary shares in issue ('000)* 130 969 130 969 130 969
*Excludes treasury shares
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited Audited
year ended year ended year ended
30 September 30 September 30 September
2012 2011 2010
R’000 R'000 R'000
Cash flows from operating activities 19 877 31 984 9 788
- Cash generated from operations 30 798 40 840 11 136
- Interest income 446 875 2 093
- Finance costs (4 459) (4 949) (4 165)
- Taxation paid (6 908) (4 782) 724
Cash flows from investing activities (3 251) (21 788) (5 258)
- Purchase of property, plant and equipment (9 405) (24 936) (13 186)
- Proceeds from disposal of property, plant and equipment 6 322 3 963 8 771
- Purchase of intangible assets (168) (782) (843)
- Proceeds from disposal of discontinued operations - (33) -
Cash flows from financing activities (9 144) (21 311) 1 672
- Repayment of other financial liabilities (3 747) (15 928) (14 003)
- Advance of other financial liabilities 1 352 11 938 11 144
- Advance/(repayment) of loans by related parties - 420 (372)
- Repayment of loans from shareholders (6 743) (6 411) (4 550)
- Advance of loans and other receivables - (7 079) -
- (Costs incurred)/net proceeds from shares issued (6) - 9 453
- Dividends paid - (4 251) -
Total cash movement for the period 7 482 (11 115) 6 202
Cash at the beginning of the period (13 367) (2 284) (8 499)
Exchange rate movements on cash and cash equivalents (13) 32 13
Total cash at the end of the period (5 898) (13 367) (2 284)
ABRIDGED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
capital Non-
and share Treasury Other Retained controlling Total
premium shares reserves earnings interest equity
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 30 September 2009 as
previously reported 76 298 (45 000) 6 878 10 129 69 48 374
Restatement adjustment (35 000) 35 000 - 14 681 - 14 681
Restated balance at 30 September
2009 41 298 (10 000) 6 878 24 810 69 63 055
Total comprehensive income/(loss) - - (832) 9 732 (129) 8 771
- Profit for the year - - - 8 401 (129) 8 272
- Realised revaluation through
depreciation - - (499) 499 - -
- Deferred tax on revaluation
through depreciation - - 140 (140) - -
- Realised revaluation through
disposal - - (1 002) 1 002 - -
- Deferred tax on revaluation - 281 (30) - 251
through disposal -
- Revaluation of property, plant and
equipment - - 336 - - 336
- Deferred tax on revaluation of
property, plant and equipment - - (94) - - (94)
- Foreign currency translation
differences - - 6 - - 6
Share capital issued by the
company 15 726 - - - - 15 726
Share issue expenses (548) - - - - (548)
Shares issued to subsidiaries * - (5 319) - - - (5 319)
Share premium reduction (4 690) 4 690 - - - -
Non-controlling interest acquired - - - - (68) (68)
Acquisition of remaining equity
interest in subsidiary - - (431) - - (431)
Non-controlling interest in shares
issued by subsidiary - - - - (1) (1)
Balance at 30 September 2010 as
previously stated 70 369 (39 158) 5 615 24 535 (129) 61 232
Restatement adjustment (18 583) 28 529 - 10 007 - 19 953
Restated balance at 30 September
2010 51 786 (10 629) 5 615 34 542 (129) 81 185
Total comprehensive loss - - (532) (56 481) (807) (57 820)
- Loss for the year - - - (57 062) (807) (57 869)
- Realised revaluation through
depreciation - - (531) 531 - -
- Deferred tax on revaluation
through depreciation - - 148 (148) - -
- Realised revaluation through
disposal - - (275) 275 - -
- Deferred tax on revaluation
through disposal - - 77 (77) - -
- Foreign currency translation
differences - - 49 - - 49
Share option expenses - - 150 - - 150
Disposal of controlling interest in
subsidiaries - - 889 (889) 936 936
Dividends - - - (4 252) - (4 252)
Balance at 30 September 2011 as
previously stated 70 369 (39 158) 6 122 (38 249) - (916)
Restatement adjustment (18 583) 28 529 - 11 169 - 21 115
Restated balance at 30 September
2011 51 786 (10 629) 6 122 (27 080) - 20 199
Total comprehensive loss - - 9 593 30 226 - 39 819
- Profit for the period - - - 29 751 - 29 751
- Realised revaluation through
depreciation - - (336) 336 - -
- Deferred tax on revaluation
through depreciation - - 94 (94) - -
- Realised revaluation through
disposal - - (324) 324 - -
- Deferred tax on revaluation
through disposal - - 91 (91) - -
- Revaluation of property, plant and
equipment - - 13 995 - - 13 995
- Deferred tax on revaluation of - - (3 919) - - (3 919)
property, plant and equipment
- Foreign currency translation
differences - - (8) - - (8)
- Share capital issued 602 - - - - 602
- Shares issued on loan account - (602) - - - (602)
- Share issue expenses (7) - - - - (7)
- Share option expenses - - 171 - - 171
Balance at 30 September 2012 52 381 (11 231) 15 886 3 146 - 60 182
* The shares were issued to the RACEC Employee Share Trust (“the Trust”) and RACEC Employee
Share Purchase Scheme (“the Scheme”), being special purpose entities, which are consolidated as part
of the Group.
NOTES TO THE ABRIDGED CONDENSED CONSOLIDATED FINANCIAL RESULTS
1. Statement of compliance
The accounting policies applied in the preparation of these abridged condensed consolidated results,
which are based on reasonable judgments and estimates, are in accordance with International
Financial Reporting Standards, its interpretations adopted by the International Accounting Standards
Board, AC500 as issued by the Accounting Practices Board and are consistent with those applied in
the annual financial statements for the year ended 30 September 2011. These condensed
consolidated financial statements as set out in this report have been prepared in terms of IAS 34 –
Interim Financial Reporting, the South African Companies Act (Act 71 of 2008), as amended, and the
Listings Requirements of JSE Limited (“Listings Requirements”).
These condensed consolidated financial statements have been prepared under the supervision of Mr
Sean Wilkins CA(SA), the Chief Financial Officer of the Group.
2. Audit opinion
The annual financial statements have been audited by Grant Thornton. Both the financial statements
and the unqualified audit opinion are available for inspection at the registered office of RACEC Group.
The auditor?s report does not necessarily cover all of the information contained in this abridged report.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditor?s work they should obtain a copy of that report together with the accompanying financial
information from the registered office of the Company.
3. Basis of measurement
These unaudited condensed financial statements have been prepared on the historical cost basis,
modified for certain items measured at fair value.
4. Discontinued operations
During the 2011 financial year, RACEC disposed of all its Electrical services segment subsidiaries.
RACEC Electrification Proprietary Limited, RACEC Power Proprietary Limited and Northern Electric
(Cape) Proprietary Limited were disposed of on 1 August 2011 and Greenbro Proprietary Limited and
Greenglo Geysers Proprietary Limited on 30 September 2011.
Audited
year ended
30 September
2011
R'000
The results of the discontinued operations for the period were as
follows:
Revenue 108 504
Cost of sales (104 974)
Gross profit 3 530
Other income 130
Other expenses (37 232)
Net loss before investment revenue, finance costs and
taxation (33 572)
Investment revenue 939
Finance costs (919)
Loss before taxation (33 552)
Taxation (1 503)
Trading loss after taxation (35 055)
Loss from disposal of discontinued operations (37 936)
- Gross (37 936)
- Taxation -
Net loss for the period (72 991)
Loss attributable to:
Equity holders of the parent (72 184)
Non-controlling interest (807)
(72 991)
Audited
year ended
30 September
2011
R'000
Assets
Property, plant and equipment 3 453
Assets classified as held for sale 3 453
Liabilities
Instalment sale agreement liabilities 1 045
Liabilities directly associated with assets classified as held for sale 1 045
4. Proceeds from the disposal of discontinued operations
Audited
year ended
30
September
2011
R'000
Property, plant and equipment 7 963
Intangible assets 3 478
Inventories 9 448
Trade and other receivables 47 272
Tax receivable 22
Cash and cash equivalents 190
Non-controlling interest 936
Loans from related parties (149)
Deferred tax liabilities (23)
Other financial liabilities (885)
Current tax payable (179)
Trade and other payables (25 116)
Bank overdraft (158)
42 799
Less: Net bank overdraft disposed of (32)
Loss on disposal of subsidiaries (37 936)
Proceeds on disposal 4 831
- Loan account with RACEC Electrification Proprietary Limited 4 371
- Loan account with Greenbro Proprietary Limited /Greenglo Purchases Proprietary
Limited 493
- Cash flow (33)
5. Reconciliation of earnings/(loss) to headline earnings/(loss)
Continued operations
Audited Audited Audited
year ended year ended year ended
3o September 30 September 30 September
2012 2011 2010
R’000 R'000 R'000
Reconciliation between earnings and headline earnings:
- Profit/(Loss) after tax 29 751 15 122 (4 148)
- Impairment losses on property, plant and equipment 526 289 694
- Impairment losses on intangible assets - - 25
- Impairment loss on related party loans 1 423 - -
- Loss on disposal of property, plant and equipment 463 161 621
- Profit on disposal of property, plant and equipment - - (62)
- Tax effect of adjustments (277) (126) (360)
Headline earnings 31 886 15 446 (3 230)
Discontinued operations
- (Loss)/Profit after tax - (72 184) 12 549
- Impairment losses on property, plant and equipment - 123 42
- Impairment loss on Intangible assets - 5 557 32
- Loss on disposal of property, plant and equipment - 14 10
- Profit on disposal of property, plant and equipment - (11) (18)
- Loss on disposal of subsidiaries - 37 936 -
- Tax effect of adjustments - (158) (9)
Headline loss - (28 723) 12 606
Total
- Profit/(Loss) after tax attributable to equity holders of the
parent 29 751 (57 062) 8 401
- Impairment losses on property, plant and equipment 526 412 736
- Impairment loss on related party loans 1 423 - -
- Impairment loss on Intangible assets - 5 557 57
- Loss on disposal of property, plant and equipment 463 175 631
- Profit on disposal of property, plant and equipment - (11) (80)
- Loss on disposal of subsidiaries - 37 936 -
- Tax effect of adjustments (277) (284) (369)
Headline earnings/(loss) 31 886 (13 277) 9 376
6. Retrospective restatement adjustment
Solethu Civils Holdings (Pty) Ltd was treated as a special purpose entity in the Group?s financial
statements for the 6 month period ending 31 March 2012 and years ending 30 September 2011 and
2010. This treatment was based on SIC 12 - Consolidation - Special purpose entities. It has come to
light that SIC 12 should only be considered as a guideline where there is control under IFRS 3 -
Business combinations. It was concluded that there is no control over Solethu Civils Holdings (Pty)
Ltd and therefore the guidelines per SIC 12 do not need to be considered. The Group has therefore
retrospectively adjusted the financial statements and has deconsolidated Solethu Civils Holdings
(Pty) Ltd.
Below are the impacts of the restatements:
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Adjustment Adjustment
year ended year ended
30 September 30 September
2011 2010
R'000 R'000
ASSETS
Non-current assets
Increase in Loans to shareholders 1 200 -
(Decrease) in Loans to related parties (12 520) (4 694)
(11 320) (4 694)
Current assets
(Decrease) in Loans and receivables (1 498) -
(Decrease) in Cash and cash equivalents (1) (152)
(1 499) (152)
(Decrease) in Total assets (12 819) (4 846)
EQUITY AND LIABILITIES
Equity
(Decrease) in Share premium (18 583) (18 583)
Decrease in Treasury shares 28 529 28 529
Decrease in (Accumulated deficit) / Increase in Retained income 11 169 10 007
Increase in Total equity 21 115 19 953
Non-current liabilities
Increase in Loan from shareholders - 4 162
(Decrease) in Loans from related parties (28 744) (50 161)
Increase in Other financial liabilities 14 126 12 850
(14 618) (33 149)
Current liabilities
Increase in loans from shareholders 6 739 8 350
Decrease in loans from related parties (25 996) -
Decrease in current tax payable (59) -
(19 316) 8 350
Total liabilities (33 934) (24 799)
Total equity and liabilities (12 819) (4 846)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Adjustment Adjustment
year ended year ended
30 30
September September
2011 2010
R'000 R'000
(Decrease) in Other income - (5 983)
Decrease in Other expenses 8 -
Increase / (decrease) in Net profit before
investment revenue, finance costs and taxation 8 (5 983)
Increase in Investment revenue 562 1 271
Decrease in Finance costs 2 017 87
Increase / (decrease) in Profit before taxation 2 587 (4 625)
Decrease / (increase) in Taxation 59 (50)
Increase / (decrease) in Profit / (loss) from
continued operations 2 646 (4 675)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Adjustment Adjustment
year ended year ended
30 September 30 September
2011 2010
R'000 R'000
Cash flows from operating activities
Increase in Cash generated from operations 9 -
(Decrease) in Interest income - (296)
(Increase) in Finance costs (1288) -
(Decrease) in Net cash utilised by operating activities (1 279) (296)
Cash flows from financing activities
Decrease in Repayments of loans to related parties 9 324 (5 252)
(Increase) in Repayment of loans from shareholders (6 411) (4 550)
Proceeds on share capital issued - 9 946
Dividends paid (1 482) -
Increase in Net cash from financing activities 1 431 144
(Decrease) / Increase / in Total cash movement for the period 152 (152)
(Decrease) in Cash at the beginning of the period (152) -
(Decrease) in Total cash at end of the period - (152)
EARNINGS PER SHARE (CENTS)
Previous
Adjustment audited
Restated unaudited year ended year ended
year ended 30 30
30 September September September
Loss per ordinary share (cents) 2011 2011 2011
Loss per share (cents)
- Basic loss per share (43.6) 12.7 (56.3)
- Headline loss per share (10.1) 4.9 (15.0)
Diluted loss per share (cents)
- Diluted basic loss per share (31.9) 1.5 (33.4)
- Diluted headline loss per share (7.4) 1.5 (8.9)
Restated unaudited Previous
Earnings per ordinary share (cents) year ended Adjustment audited
30 September year ended year ended
2010 30 30 September
September 2010
2010
Earnings per share (cents)
- Basic earnings per share 7.6 (4.8) 12.4
- Headline earnings per share 8.4 (4.9) 13.3
Diluted Earnings per share (cents)
- Diluted basic earnings per share 5.6 (3.1) 8.7
- Diluted headline earnings per share 6.3 (3.1) 9.4
7. Events after the reporting period
There are no events after the reporting period that require disclosure.
DIVIDENDS
It is the policy of the Group to declare dividends up to a maximum of one-third of annual profits after tax,
subject to working capital requirements and acquisition activities.
In addition, it is the intention of the Group to periodically consider this dividend policy, taking into account
the prevailing market conditions, the particular circumstances of the Group and future cash requirements
in determining if it is appropriate to pay dividends.
No dividends have been declared for the period ending 30 September 2012.
DIRECTORATE
During the period under review, as from 28 February 2012, Mr Stephen Smithyman is no longer
representing Mr Q Zulu as an alternative on RACEC?s board of directors.
By order of the Board
M Uys G Harrod
Non-Executive Chairman Chief Executive Officer
14 December 2012
Directors:
M Uys* (Chairman), G Harrod (Chief Executive Transfer secretaries:
Officer), C Harrod*, C Gooden*, S Wilkins (Chief Computershare Investor Services (Proprietary)
Financial Officer), B Petersen*, Q Zulu*, Limited (PO Box 61763, Marshalltown, 2107)
* Non-executive
Designated Adviser:
Company secretary: Merchantec Capital (PO Box 41480, Craighall,
C van Rensburg 2024)
Registered office: Auditors:
8 Hawkins Avenue, Epping 1, 7460 (PO Box 61, Grant Thornton. (Docex 169 Randburg )
Eppindust, 7475)
These results may be viewed on the Internet on http://www.racec.co.za.
Date: 14/12/2012 02:17:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
