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NAI - New Africa Investments Limited - Audited condensed consolidated

Release Date: 09/09/2011 17:45
Code(s): NAI NAN
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NAI - New Africa Investments Limited - Audited condensed consolidated financial information of the group for the year ended 30 June 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") AUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP FOR THE YEAR ENDED 30 JUNE 2011 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Audited *Restated
year ended 18 months 30 June 2011 30 June 2010 Notes R`000 R`000 Administration expenses (2,824) (7,048) Additional disposal consideration for KFM Radio 10,994 15,374 (Pty) Limited ("KFM Agterskot") Other income 1,026 1,766 Finance income 355 909 Share of profit of associate 5,975 6,275 Profit before taxation 15,526 17,276 Income tax expense 1 (317) (1,328) Profit and total comprehensive income for the period 15,209 15,948 Attributable to: Owners of the Company 15,209 15,948 Non-controlling interest - -
Profit and total comprehensive 15,209 15,948 income for the period Basic earnings per share (cents) 12.0 12.6 Diluted earnings per share 12.0 12.6 (cents) Number of shares taken into account in calculating 126,623 126,653 earnings per share (`000s) * In terms of IAS 39, Financial Instruments: Recognition and Measurement, shareholders for dividends represent financial liabilities. Upon prescription and extinguishment of these financial liabilities, any difference arising between the carrying amount of the financial liability extinguished and the consideration paid (if any) is recognised in profit or loss. In the comparative period, unclaimed dividends, which had prescribed, were recognised directly in retained earnings as opposed to in profit or loss. Consequently, the comparative figures have now been restated to reflect the additional gain of R1.766 million in the consolidated statement of comprehensive income. There is a nil net tax impact due to the existence of carry-forward losses. There is a nil net impact on retained earnings, no changes to the consolidated statement of financial position and no impact on cash flows. This restatement only affects the period ended 30 June 2010 as this is the first period in which the prescription was effected by the directors. The impact on basic and diluted earnings and headline earnings per share is a 1.4 cents increase. CONSOLIDATED STATEMENT OF FINANCIAL POSITION Audited *Restated *Restated 30 June 2011 30 June 2010 31 Dec 2008
R`000 R`000 R`000 ASSETS Non-current assets Investment in associate 11,505 13,118 13,045 Current assets 26,685 33,853 40,151 Income tax receivable 10,395 10,395 10,395 Other receivables - 86 - Other receivable - KFM 4 Agterskot 7,586 15,374 - Cash and cash equivalents 8,704 7,998 29,756 TOTAL ASSETS 39,803 46,898 51,656 Equity attributable to owners of the Company 37,440 44,517 47,676 Ordinary share capital and share premium 4,712 4,712 4,814 Reserves 32,728 39,805 42,862
Non-Controlling interest 123 123 123 TOTAL EQUITY 47,799 37,563 44,640
Current liabilities 3,857 2,240 2,258 Trade and other payables 1,409 1,570 3,218
Loan from related party 831 - - Provisions - 688 639 Borrowings - - - TOTAL EQUITY AND LIABILITIES 51,656 39,803 46,898 Net asset value per share 37.6 attributable to owners of the 29.6 35.2 Company (cents) Number of shares in issue used in calculating net asset value 126,623 126,623 126,760 per share `000 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 R0.639 million at 31 December 2008 and R0.688 million at 30 June 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 (Pty) 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 January 2009 as 4,814 42,862 47,676 (9,049) 38,627 previously stated Reversal of - (9,172) (9,172) 9,172 - debit non- controlling interest Remeasurement of - 9,172 9,172 - 9,172 borrowings Balance at 01 4,814 42,862 47,676 123 47,799 January 2009 as restated Total comprehensive - 14,182 14,182 - 14,182 income for the period as previously stated Reclassification of prescribed - 1,766 1,766 - 1,766 dividends Total comprehensive - 15,948 15,948 - 15,948 income for the period as restated Transactions with owners as (102) (17,239) (17,341) - (17,341) previously stated Reclassification of prescribed - (1,766) (1,766) - (1,766) dividends Transactions with owners as (102) (19,005) (19,107) - (19,107) restated - Share capital repurchased (102) 9 (93) - (93) - Dividends paid - (19,014) (19,014) - (19,014) Balance at 30 44,640 June 2010 4,712 39,805 44,517 123 Total comprehensive - 15,209 15,209 - 15,209 income for the year Transactions with owners - (22,286) (22,286) - (22,286) - Dividends paid - (22,286) (22,286) - (22,286) Balance at 30 June 2011 4,712 32,728 37,440 123 37,563 CONSOLIDATED STATEMENT OF CASH FLOWS Audited *Restated year ended 18 months 30 June 2011 30 June 2010 R`000 R`000
Cash utilised in operations (2,561) (7,060) Taxation paid (317) (1,328)
Net cash utilised in operating activities (2,878) (8,388) Cash flows from investing activities - Dividends received from Associate 5,902 4,735 - Interest received 355 909 - Agterskot refund received 18,782 - Net cash generated from investing activities 25,039 5,644 Cash flows from financing activities - Dividend paid to shareholders (22,286) (19,014)
- Loan received from related party 831 - Net cash utilised in financing activities (21,455) (19,014) Net increase/ (decrease) in cash and cash equivalents 706 (21,758) Cash and cash equivalents at beginning of the period 7,998 29,756 Cash and cash equivalents at end of period 8,704 7,998 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP
1. INCOME TAX EXPENSE South African normal tax - - Secondary taxation on companies (317) (1,328) 2. HEADLINE EARNINGS Profit attributable to owners of the Company 15,209 15,948 Additional consideration for KFM Radio (Pty) Ltd ("KFM Agterskot") (10,994) (15,374) Headline earnings 4,215 574 . Basic and diluted headline earnings per share (cents) 3.3 0.5 3. RELATED PARTIES The Company is jointly controlled by: Primedia (Proprietary) Limited ("Primedia") which owns 47.4% of the ordinary shares and 73.6% of the "N" ordinary shares; and Capricorn Capital Partners Investments (Proprietary) Limited ("Capricorn"), which owns 50.2% of the ordinary shares and 26.1% 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 parties are as follows: Investec in the prior year provided sponsor and financial advice to NAIL, on the same basis as would be available to third parties. R`000 R`000 Purchase of goods and services Sponsor fee paid 143 Investment banking fee 285 428 Key Management Compensation Salaries and other short term employee benefits - 225 Bonuses paid - 250 - 475
Primedia - accounting and secretarial fees 684 - Loan from Primedia 831 - Non-executive directors` 176 222 remuneration Dividend paid to the TISO - 18,830 Consortium 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 write off period of 18 years for the deduction, in settlement of the dispute with SARS. COMMENTARY BASIS OF PRESENTATION This condensed consolidated financial information for the year ended 30 June 2011 is based on the audited financial statements of the Group and 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. These annual financial statements have been prepared under the supervision of CJ Patricios CA(SA). ACCOUNTING POLICIES Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the period ended 30 June 2010, 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 of 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 an initial additional purchase consideration from Primedia which amounted to 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 11.44 cents per NAIL share, which was paid, via a dividend, to current shareholders on 3 May 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 R14.486 million. Dividend A dividend of 17.60 cents per share was declared to shareholders registered on 29 April 2011. The total amount of the dividend (excluding STC thereon) was R22.286 million. CHANGE IN DIRECTORS The following changes in the directorate have taken place, during the year ended 30 June 2011: * Ms O Ighodaro, non-executive director, resigned from the board with effect from 31 May 2011. * Mr CJ Patricios, previously an alternate director, was appointed as non-executive director of the Company with effect from 1 June 2011. 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. UNCLAIMED DIVIDENDS During the year, the directors passed a resolution, in terms of the NAIL memorandum of incorporation to prescribe unclaimed dividends of R166 164 relating to the 2006 and 2007 financial years (2010: R1 766 214). SUBSEQUENT EVENTS On 14 July 2011, Primedia acquired 1 185 896 (One million one hundred and eighty five thousand eight hundred and ninety six) ordinary and 27 193 881 (twenty seven million one hundred and ninety three thousand eight hundred and eighty one) "N" ordinary shares from Capricorn. The total beneficial interest held by Primedia in the shares of the Company is now 76.1% and 95.8% of the ordinary and "N" ordinary shares respectively. NAIL ordinary shares NAIL "N" shares Number of % Holding Number of % Holding shares shares Capricorn 21.6 % 3.9 % 894,623 4,798,920 Primedia 76.1 % 95.8 % 3,150,080 117,353,859 AUDITED OPINION The above results have been audited by PricewaterhouseCoopers Inc, a copy of their unqualified audit opinion is available for inspection at the Company`s registered office, 5 Gwen Lane, Sandown, 2196. For and on behalf of the Board SR BRUYNS CJ PATRICIOS SANDTON 8 September 2011 Directors: SR Bruyns (Chairman), G Chadwick, R Kevan, CJ Patricios, T Volkwyn Company Secretary: E Sather Date: 09/09/2011 17:45:01 Supplied by www.sharenet.co.za 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. 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