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Restated condensed consolidated unaudited results for the six months ended 31 march 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”)
RESTATED CONDENSED CONSOLIDATED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED
31 MARCH 2012
RESTATEMENT OF RESULTS
In the Group?s results from 2009 to current, the Group consolidated the results of Solethu Civils Holdings
(Pty) Ltd (“Solethu Civils”) based on the interpretation of SIC 12. A further interpretation of SIC 12
concludes that the Group should not consolidate the results of Solethu Civils. The most recent
interpretation concludes that control does not exist and therefore no consolidation should take place. The
results for the Group have therefore been restated retrospectively.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Restated
unaudited Restated Restated
6 months unaudited unaudited
ended year ended year ended
31 March 30 September 30 September
2012 2011 2010
R’000 R'000 R'000
Revenue 127 763 225 982 157 447
Cost of sales (92 485) (162 930) (110 686)
Gross profit 35 278 63 052 46 761
Other income 1 979 123 (5 378)
Other expenses (22 522) (35 666) (30 196)
Net profit before investment revenue, finance costs and
taxation 14 735 27 509 11 187
Investment revenue 953 1 185 1 704
Finance costs (3 189) (5 869) (8 509)
Profit before taxation 12 499 22 825 4 382
Taxation (3 517) (7 703) (8 530)
Profit for the period 8 982 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 8 982 (57 869) 8 272
Attributable to:
Equity holders of the parent 8 982 (57 062) 8 401
Non-controlling interest – discontinued operations - (807) (129)
8 982 (57 869) 8 272
Other comprehensive income/(loss):
- Deferred tax on revaluation through disposal - - 251
- Revaluation of property, plant and equipment - - 336
- Deferred tax on revaluation of property, plant and equipment - - (94)
- Foreign currency translation differences (117) 49 6
Total comprehensive income/(loss) for the period 8 865 (57 820) 8 771
Attributable to:
Equity holders of the parent 8 865 (57 013) 8 900
Non-controlling interest – discontinued operations - (807) (129)
8 865 (57 820) 8 771
EARNINGS/(LOSS) PER SHARE (CENTS)
Basic 6.9 (43.6) 7.6
Diluted basic 4.9 (31.9) 5.6
Headline 6.8 (10.1) 8.4
Diluted headline 4.9 (7.4) 6.3
Restated
unaudited Restated Restated
6 months unaudited unaudited
ended year ended year ended
31 March 30 September 30 September
2012 2011 2010
R’000 R'000 R'000
From continued operations
Basic 6.9 11.6 (3.7)
Diluted basic 4.9 8.4 (2.8)
Headline 6.8 11.8 (2.9)
Diluted headline 4.9 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)** 182 187 178 993 149 642
*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
Restated unaudited – 6 months ended 31
March 2012
Revenue – external 438 127 325 - 127 763
Revenue – intersegment 8 293 - - 8 293
(Loss)/Profit before tax (1 260) 13 759 - 12 499
Total assets 57 397 105 536 - 162 933
Restated unaudited - 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
Restated unaudited - 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 41 232 77 713 - 118 945
Outside Consolidating
South Africa South Africa entries Total
Geographical analysis R'000 R'000 R'000 R'000
Restated unaudited – 6 months ended 31
March 2012
Revenue - external 84 706 43 057 - 127 763
Revenue – intersegment 1 933 - - 1 933
(Loss)/Profit before tax (3 241) 15 740 - 12 499
Total assets 110 487 52 446 - 162 933
Restated unaudited - year ended 30
September 2011
Revenue - external 139 345 86 637 - 225 982
Revenue – intersegment 6 325 - - 6 325
Profit/(Loss) before tax 25 969 6 571 (9 715) 22 825
Total assets – continued operations 104 736 72 775 - 177 511
Restated unaudited - 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 87 694 31 251 - 118 945
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.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated Restated
Restated unaudited unaudited
unaudited as at as at
as at 30 30
31 March September September
2012 2011 2010
R’000 R'000 R'000
ASSETS
Non-current assets 62 540 66 555 70 679
- Property, plant and equipment 50 502 54 978 55 631
- Investment property 351 351 351
- Intangible assets 926 1 125 10 314
- Loans to shareholders 1 499 1 200 -
- Loans and receivables 9 252 8 839 -
- Loans to related parties - 62 -
- Deferred tax assets 10 - 4 383
Current assets 100 393 110 956 147 462
- Inventories 49 013 41 692 31 020
- Trade and other receivables 43 096 43 755 97 237
- Loans and receivables 194 4 385 -
- Derivative financial instruments 28
- Tax receivable - 103 97
- Cash and cash equivalents 8 090 17 568 19 080
- Assets classified as held for sale - 3 453 -
Total assets 162 933 177 511 218 141
EQUITY AND LIABILITIES
Capital and reserves 29 139 20 199 81 185
- Equity attributable to equity holders of the parent 29 139 20 199 81 314
- Non-controlling interest - - (129)
Non-current liabilities 27 259 31 091 33 026
- Loans from shareholders - - 4 163
- Other financial liabilities 21 459 24 042 20 092
- Share based payments 971 2 085 2 911
- Deferred tax liabilities 4 829 4 964 5 860
Current liabilities 106 536 126 221 103 930
- Loans from shareholders 3 770 6 739 8 350
- Other financial liabilities 4 859 6 258 12 828
- Current tax payable 4 610 7 638 6 894
- Trade and other payables 63 236 73 606 54 494
- Bank overdraft 30 060 30 935 21 364
- Liabilities directly associated with assets classified as
held for sale - 1 045 -
Total equity and liabilities 162 933 177 511 218 141
Net asset value per share (cents) 22.2 15.4 62.1
Net tangible asset value per share (cents) 21.5 14.6 54.2
Total number of ordinary shares in issue („000)* 130 969 130 969 130 969
*Excludes treasury shares
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Restated
unaudited Restated Restated
6 months unaudited unaudited
ended year ended year ended
31 March 30 September 30 September
2012 2011 2010
R’000 R'000 R'000
Cash flows from operating activities (6 276) 31 984 9 788
- Cash generated from operations 4 674 40 840 11 136
- Interest income 654 875 2 093
- Finance costs (5 019) (4 949) (4 165)
- Taxation paid (6 585) (4 782) 724
Cash flows from investing activities 3 725 (21 788) (5 258)
- Purchase of property, plant and equipment (1 643) (24 936) (13 186)
- Proceeds from disposal of property, plant and equipment 5 368 3 963 8 771
- Purchase of intangible assets - (782) (843)
- Proceeds from disposal of discontinued operations - (33) -
Cash flows from financing activities (5 950) (21 311) 1 672
- Repayment of other financial liabilities (6 994) (15 928) (14 003)
- Advance of other financial liabilities - 11 938 11 144
- Advance/(repayment) of loans by related parties 31 420 (372)
- Repayment of loans from shareholders (2 969) (6 411) (4 550)
- Advance of loans and other receivables 3 982 (7 079) -
- Net proceeds from share issue - -
- Net proceeds from shares issued - - 9 453
- Dividends paid - (4 251) -
Total cash movement for the period (8 501) (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 (102) 32 13
Total cash at the end of the period (21 970) (13 367) (2 284)
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
through disposal - - 281 (30) - 251
- 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 - - 889 (889) 936 936
subsidiaries
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 - - (471) 9 336 - 8 865
- Profit for the period - - - 8 982 - 8 982
- Realised revaluation through
depreciation - - (164) 164 - -
- Deferred tax on revaluation
through depreciation - - 46 (46) - -
- Realised revaluation through
disposal - - (328) 328 - -
- Deferred tax on revaluation
through disposal - - 92 (92) - -
- Foreign currency translation
differences - - (117) - - (117)
- Share capital issued 602 (602) - - - -
- Share option expenses - - 75 - - 75
Balance at 31 March 2012 as stated
previously 70 971 (39 760) 5 726 (30 779) - 6 158
Restatement adjustment (18 583) 28 529 - 13 035 - 22 981
Restated balance at 31 March 2012 52 388 (11 231) 5 726 (17 744) - 29 139
* 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 CONDENSED CONSOLIDATED FINANCIAL RESULTS
1. Statement of compliance
The accounting policies applied in the preparation of these 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.
The interim and restated results have not been audited or reviewed by the Group?s auditors.
2. Basis of measurement
These unaudited condensed financial statements have been prepared on the historical cost basis,
modified for certain items measured at fair value.
3. 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
Restated Restated Restated
unaudited unaudited unaudited
6 months ended year ended year ended
31 March 30 September 30 September
2012 2011 2010
R’000 R?000 R?000
Reconciliation between earnings and headline earnings:
- Profit/(Loss) after tax 8 982 15 122 (4 148)
- Impairment losses on property, plant and equipment - 289 694
- Impairment losses on intangible assets - - 25
- Loss on disposal of property, plant and equipment 455 161 621
- Profit on disposal of property, plant and equipment (458) - (62)
- Tax effect of adjustments (63) (126) (360)
(3
Headline earnings 8 916 15 446 230)
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 8 982 (57 062) 8 401
- Impairment losses on property, plant and equipment - 412 736
- Impairment loss on Intangible assets - 5 557 57
- Loss on disposal of property, plant and equipment 455 175 631
- Profit on disposal of property, plant and equipment (458) (11) (80)
- Loss on disposal of subsidiaries - 37 936 -
- Tax effect of adjustments (63) (284) (369)
Headline earnings/(loss) 8 916 (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 Adjustment
6 months year ended year ended
ended 30 30
31 March September September
2012 2011 2010
R’000 R?000 R?000
ASSETS
Non-current assets
Increase in Loans to shareholders 1 499 1 200
(Decrease) in Loans to related parties (15 666) (12 520) (4 694)
(14 167) (11 320) (4 694)
Current assets
(Decrease) in Trade and other receivables (1) - -
(Decrease) in Loans and receivables (1 498) (1 498) -
(Decrease) in Cash and cash equivalents (1) (1) (152)
(1 500) (1 499) (152)
(Decrease) in Total assets (15 667) (12 819) (4 846)
EQUITY AND LIABILITIES
Equity
(Decrease) in Share premium (18 583) (18 583) (18 583)
Decrease in Treasury shares 28 529 28 529 28 529
Decrease in (Accumulated deficit) / Increase in
Retained income 13 035 11 169 10 007
Increase in Total equity 22 981 21 115 19 953
Non-current liabilities
Increase in Loan from shareholders - - 4 162
(Decrease) in Loans from related parties (30 066) (28 744) (50 161)
Increase in Other financial liabilities 14 899 14 126 12 850
(15 167) (14 618) (33 149)
Current liabilities
Increase in loans from shareholders 3 770 6 739 8 350
Decrease in loans from related parties (27 192) (25 996) -
Decrease in current tax payable (59) (59) -
(23 481) (19 316) 8 350
Total liabilities (38 648) (33 934) (24 799)
Total equity and liabilities (15 667) (12 819) (4 846)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Adjustment Adjustment
Adjustment year ended year ended
6 months ended 30 30
31 March September September
2012 2011 2010
R’000 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 299 562 1 271
Decrease in Finance costs 1 567 2 017 87
Increase / (decrease) in Profit before taxation 1 866 2 587 (4 625)
Decrease / (increase) in Taxation - 59 (50)
Increase / (decrease) in Profit / (loss) from
continued operations 1 866 2 646 (4 675)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Adjustment Adjustment Adjustment
6 months year ended year ended
ended 30 30
31 March September September
2012 2011 2010
R’000 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 (264) (1288) -
(Decrease) in Net cash utilised by operating
activities (264) (1 279) (296)
Cash flows from financing activities
Decrease in Repayments of loans to related parties 3 232 9 324 4 694
(Increase) in Repayment of loans from shareholders (2 969) (6 411) (4 550)
Dividends paid - (1 482) -
Increase in Net cash from financing activities 263 1 431 144
(Decrease) / Increase / in Total cash movement for
the period (1) 152 (152)
(Decrease) in Cash at the beginning of the period (1) (152) -
(Decrease) in Total cash at end of the period (2) - (152)
EARNINGS PER SHARE (CENTS)
Previous
Adjustment unaudited
Restated unaudited 6 months 6 months
6 months ended ended ended
31 March 31 March 31 March
Earnings / (loss) per ordinary share (cents) 2012 2012 2012
Earnings per share (cents)
Basic earnings per share 6.9 0.2 6.7
Headline earnings per share 6.8 0.2 6.6
Diluted Earnings per share (cents)
Diluted earnings per share 4.9 1.0 3.9
Diluted headline earnings per share 4.9 1.0 3.9
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 loss per share (31.9) 1.5 (33.4)
Diluted 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 / (loss) per share (cents)
Diluted earnings per share 5.6 (3.1) 8.7
Diluted headline earnings per share 6.3 (3.1) 9.4
By order of the Board
M Uys G Harrod
Non-Executive Chairman Chief Executive Officer
21 November 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: 21/11/2012 04:30:00 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.
