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NAI - New Africa Investments Limited - Unaudited interim results of the
Group for the six months ended 31 December 2011
NEW AFRICA INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
(Share codes: NAI and NAN)
(ISIN: ZAE000033338 and ZAE000033346)
("NAIL" or the "Group" or the "Company")
UNAUDITED INTERIM RESULTS OF THE GROUP FOR THE SIX MONTHS ENDED 31 DECEMEBER
2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months Year ended
31 Dec 2011 31 Dec 2010 30 June
2011
Note R`000 R`000 R`000
Administration expenses (1,366) (1,391) (2,824)
Additional disposal
consideration for KFM 3,625 5,721 10,994
Radio (Proprietary)
Limited ("KFM Agterskot")
Other income - - 1,026
Finance (charges) / income (31) 164 355
Share of profit of
associate 5,374 3,149 5,975
Profit before income 7,602 7,643
taxation 15,526
Income tax expense 1 (78) - (317)
Profit and total
comprehensive income for 7,524 7,643 15,209
the period
Attributable to:
Owners of the Company 7,524 7,643 15,209
Non-controlling interest - - -
7,524 7,643 15,209
Basic earnings per share
(cents) 5.9 6.0 12.0
Diluted earnings per share 5.9 6.0 12.0
(cents)
Number of shares taken
into account in 126,623 126,623 126,623
calculating earnings per
share (`000s)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited *Restated Audited
unaudited
31 Dec 2011 31 Dec 2010 30 June
2011
R`000 R`000 R`000
ASSETS
Non-current assets
Investment in associate 14,753 14,823 13,118
Current assets 16,140 39,913 26,685
Income tax receivable 10,395 10,395 10,395
Other receivables 25 28 -
Other receivable - KFM 4 21,095
Agterskot - 7,586
Cash and cash equivalents 5,720 8,395 8,704
TOTAL ASSETS 30,893 54,736 39,803
Equity attributable to
owners of the Company 28,921 52,160 37,440
Ordinary share capital and 4,712
share premium 4,712 4,712
Reserves 24,209 47,448 32,728
Non-controlling interest 123 123 123
TOTAL EQUITY 29,044 52,283 37,563
Current liabilities 1,849 2,453 2,240
Trade and other payables 1,261 1,750 1,409
Loan from related party 588 - 831
Provisions - 703 -
Borrowings - - -
TOTAL EQUITY AND 30,893 54,736 39,803
LIABILITIES
Net asset value per share 41.2 29.6
attributable to owners of 22.8
the Company (cents)
Number of shares in issue 126,623
used in calculating net 126,623
asset value per share
(`000s) 126,623
New Africa Investments Limited Share Incentive Trust
* In terms of SIC-12: Consolidation - Special Purpose Entities, entities
which are created to achieve a narrow and well-defined purpose and are
created with legal arrangements that impose strict and sometimes permanent
limits on the decision-making powers of their governing board, trustees or
management over the operations of the SPE are required to be consolidated by
the creator. The New Africa Investments Limited Share Incentive Trust was
created by New Africa Investments Limited to facilitate the exercise and
distribution of proceeds relating to share options which were exercised by
employees as part of the TISO Consortium acquisition of NAIL in 2003. This
trust was not previously consolidated. All options were settled, however, a
slight delay in the payment of the settlements arose and interest accrued
during this period resulting in excess funds in the trust. The excess funds
have been consolidated and a corresponding provision has been raised. Based
on the aforementioned, the comparative figures have been restated to reflect
the consolidated cash and related provision of R0.703 million at 31 December
2010. There is a nil impact on retained earnings and no changes to the
consolidated statements of comprehensive income nor to the statement of
changes in equity. There is a nil impact on basic and diluted earnings and
headline earnings per share.
Borrowings and non-controlling interest
* The borrowing from the Industrial Development Corporation was provided to
Wild Coast Films (Proprietary) Ltd to fund the production of a film and was
repayable only out of proceeds arising from that film. In terms of IAS 39,
Financial Instruments: Recognition and Measurement, such a financial
liability, which is carried at amortised cost, is reassessed and adjusted
for changes in expected cash flows over the life of the liability. This film
was written down to a net realisable value of nil prior to the year ended 31
December 2008, however, the borrowing was not reassessed. The expected cash
flows payable in settlement of the borrowing were therefore also nil and
consequently, this liability (although not extinguished), should have been
remeasured to nil. As a result, the comparative figures have been restated
to reflect the liability at nil and a resultant increase in retained
earnings of R9.172 million. In terms of IAS 27 - Consolidated and Separate
Financial Statements (as revised 2003), a debit non-controlling/minority
interest is recognisable only when the minority has a binding obligation and
is able to make an additional investment to cover the losses. No such
binding obligation existed and, consequently, the comparative figures have
been restated to reverse the debit minority interest of R9.172 million which
had been recognised. The revised provisions of the current IAS 27 are not
applied retrospectively and therefore do not impact the restatement. There
is an overall net nil impact on retained earnings and no change to the
consolidated statements of comprehensive income. There is an overall nil
impact on basic and diluted earnings and headline earnings per share.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the
Company
Ordinary Non- Total
share controlli Equity
capital ng
and share interest
premium
Reserves Total
R`000 R`000 R`000 R`000 R`000
Balance at 01 July
2010 as previously 4,712 39,805 44,517 (9,049) 35,468
stated
Reversal of debit
non-controlling
interest - (9,172) (9,172) 9,172 -
Remeasurement of - -
borrowings 9,172 9,172 9,172
Balance at 01 July 39,805 44,517 123
2010 as restated 4,712 44,640
Total comprehensive
income for the year - 15,209 15,209 - 15,209
Transactions with
owners - Dividends - (22,286) (22,286) - (22,286)
paid
Balance at 30 June
2011 4,712 32,728 37,440 123 37,563
Total comprehensive
income for the
period - 7,524 7,524 - 7,524
Transactions with
owners - Dividends - (16,043) (16,043) - (16,043)
paid
Balance at 31
December 2011 4,712 24,209 28,921 123 29,044
CONSOLIDATED STATEMENT OF CASH FLOWS
*Restated
Unaudited unaudited Audited
6 months 6 months Year ended
31 Dec 2011 31 Dec 2010 30 June
2011
R`000 R`000 R`000
Cash utilised in operations (1,538) (450) (2,561)
Taxation paid (78) - (317)
Net cash utilised in operating (2,878)
activities (1,616) (450)
Cash flows from investing activities
- Dividends received from Associate 5,902
3,738 1,371
- Interest (paid)/ received (31) 164 355
- Agterskot refund received 11,211 - 18,782
Net cash generated from investing 25,039
activities 14,918 1,535
Cash flows from financing activities
- Dividends paid to shareholders (22,286)
(16,043) -
- Loan (paid to)/ received from 831
related party (243) -
Net cash utilised in financing (21,455)
activities (16,286) -
Net (decrease)/ increase in cash and
cash equivalents (2,984) 1,085 706
Cash and cash equivalents at
beginning of the period 8,704 7,310 7,998
Cash and cash equivalents at end of
period 5,720 8,395 8,704
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP
Unaudited Unaudited Audited
6 months 6 months Year ended
31 Dec 2011 31 Dec 2010 30 June
2011
R`000 R`000 R`000
1. INCOME TAX EXPENSE
South African normal tax:
- Current taxation - - -
- Secondary taxation on companies
(78) - (317)
2. HEADLINE EARNINGS
Profit attributable to owners of the
Company 7,524 7,643 15,209
Additional consideration for KFM (10,994)
Radio (Proprietary) Ltd ("KFM (3,625) (5,721)
Agterskot")
Headline earnings
3,899 1,922 4,215
Basic and diluted headline earnings
per share (cents) 3.1 1.5 3.3
3. RELATED PARTIES
Major shareholders:
Primedia (Proprietary) Limited ("Primedia") which owns 76.1% of
the ordinary shares and 95.8% of the "N" ordinary shares; and
Capricorn Capital Partners Investments (Proprietary) Limited
("Capricorn"), which owns 21.6% of the ordinary shares and 3.9%
of the "N" ordinary shares.
The Company, prior to the acquisition by Primedia and Capricorn
in February 2009, was controlled by the TISO Consortium, which
owned 90.3% of the ordinary shares and 99.3% of the "N" Ordinary
Shares. The TISO Consortium includes Investec, Tiso Group,
Capricorn Capital Partners, Mineworkers Investment Company and
Safika Investments.
Transactions with related R`000 R`000 R`000
parties are as follows:
Primedia - accounting and
secretarial fees 342 300 684
Loan from Primedia 588 - 831
Non-executive directors` 106 102 176
remuneration
Receivable from Primedia - refer to detail in note 4
4. OTHER RECEIVABLE
The KFM Agterskot receivable, due from Primedia, is in terms of the
disposal agreement for KFM Radio (Proprietary) Limited, which was sold by
NAIL in 2004 and is due as a result of KFM`s successful challenge of SARS`
decision to disallow its R50 million trademark deduction in terms of
Section 11(gA) of the Income Tax Act. During February 2011, KFM agreed to
a write off period of 18 years for the deduction, in settlement of the
dispute with SARS. During the six months to 31 December 2011, the
receivable was fully settled.
COMMENTARY
BASIS OF PRESENTATION
This condensed consolidated interim financial information for the six months
ended 31 December 2011 has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting Standards
("IFRS") and the disclosure requirements as outlined in IAS 34 - Interim
Financial Reporting, and in compliance with the Listing Requirements of the
JSE Limited and the South African Companies Act (2008), on a basis
consistent with that of the prior period.
ACCOUNTING POLICIES
The accounting policies applied are consistent with those of the annual
financial statements for the period ended 30 June 2011, as described
therein.
REVIEW OF RESULTS
The performance for the period reflects the results of the Group`s single
operating segment, its 24.9% interest in Kaya FM (Proprietary) Limited and
administrative expenses incurred, primarily in relation to the Company`s
listing on the JSE.
RETURN OF CASH TO SHAREHOLDERS
Advance Agterskot payment
In terms of the offer made in 2009 by Primedia and Capricorn, NAIL
shareholders had the option of accepting the Once-off Offer Consideration of
68 cents per NAIL share or the Agterskot Offer Consideration which comprised
the Initial Cash portion of 26 cents per NAIL share plus the Agterskot
Amount (which includes the receipt by NAIL of additional KFM disposal
proceeds). Following the settlement of a tax dispute relating to KFM`s
trademark deduction, NAIL received a second additional purchase
consideration from Primedia which amounted to R11.041 million (2011: R18.782
million). Consequently, former NAIL shareholders who accepted the Agterskot
Offer Consideration and sold their shares in terms of the 2009 Offer were
entitled to an Advance Agterskot payment of 12.67 cents (2011: 11.44 cents)
per NAIL share, which was paid, via a dividend, to current shareholders on
28 October 2011 who in turn settled the amounts owing to the former NAIL
shareholders. The total amount of the Advance Agterskot payment (including
interest of R0.45 million thereon) was R16.043 million (2011: R14.486
million).
Dividend
A dividend of 12.67 cents per share was declared to shareholders registered
on 21 October 2011. The total amount of the dividend (excluding STC thereon)
was R 16.043 million (2011: R22.286 million).
GOING CONCERN
The going concern basis has been adopted in preparing the financial
information. The directors have no reason to believe that the Group will not
be a going concern in the year ahead, based on forecasts and available cash
resources.
SUBSEQUENT EVENTS
Unclaimed dividends
On 28 February 2012, the directors passed a resolution, in terms of the NAIL
memorandum of incorporation to prescribe unclaimed dividends of R25 671
relating to dividend number 5, which was declared on 13 February 2009 (2011:
R 166 164).
Change in directorate
Mr R Kevan, a non-executive director, resigned from the board with effect
from 27 February 2012.
For and on behalf of the Board
SR BRUYNS CJ PATRICIOS
SANDTON
29 February 2012
Directors: SR Bruyns (Chairman), G Chadwick, CJ Patricios, T Volkwyn
Company Secretary: E Sather
Date: 29/02/2012 16:51:01 Supplied by www.sharenet.co.za
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