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VUNANI LIMITED - Reviewed results for the year ended 31 December 2012

Release Date: 25/03/2013 07:05
Code(s): VUN     PDF:  
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Reviewed results for the year ended 31 December 2012

VUNANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/020641/06)
JSE code: VUN
ISIN: ZAE000163382
("Vunani” or “the Company" or “the Group”)


Reviewed preliminary condensed consolidated results

for the year ended 31 December 2012

Salient features

Profit from operations of R61.9 million compared to R34.3 million in 2011

Net finance costs decreased by 24.8%

Profit from continuing operations of R11.8 million compared to loss of
R24.9 million in 2011

Net asset value per share increased to 191.2c

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
31 DECEMBER 2012

Figures in R'000s                                       Note          Reviewed       Audited
                                                                              31 Dec 2012   31 Dec 2011


CONTINUING OPERATIONS
Revenue                                                           1          107 892       106 755
Other income                                                                   8 620           9 360
Investment revenue                                                          2 355           4 737
Interest received from investments (note I)                     22 557          24 316


Net profit/(loss) on disposal of assets                               5 854         (6 099)


Fair value adjustments and impairments           2            43 786          48 448


Operating expenses                                                    (129 129)     (153 207)
Results from operating activities                                    61 935          34 310


Finance income                                                                 1 007             754
Finance costs                                                                (48 845)        (64 407)
Net finance cost                                                            (47 838)        (63 653)
Results from operating activities after net                       14 097        (29 343)
finance costs


Equity accounted earnings (net of income tax)                 17 218           5 715
Profit/(loss) before income tax                                         31 315        (23 628)


Income tax expense                                          3            (19 560)         (1 263)
Profit/(loss)from continuing operations                            11 755        (24 891)



DISCONTINUED OPERATIONS
Loss from discontinued operations (net of                                 -        (33 944)
income tax)
Profit/(loss) for the year                                                   11 755        (58 835)

Total comprehensive income for the year                         11 755        (58 835)


Profit/(loss) from continuing operations for the year attributable to :



Equity holders of Vunani Limited                                        (216)        (21 760)


Non-controlling interest                                                  11 971          (3 131)
                                                                                       11 755        (24 891)

Profit/(loss) and total comprehensive income for the year attributable to :




Equity holders of Vunani Limited                                       (216)        (47 603)


Non-controlling interest                                                 11 971        (11 232)
                                                                                      11 755        (58 835)

Loss per share (cents)
Basic and diluted basic loss per share (note                      (0.2)             (48.7)
II)
Headline and diluted headline loss per              6            (11.2)             (28.0)
share (note II)



Note I – Interest received on investments has been included in results from
operating activities which better represents the nature of the income.

Note II - December 2011 loss per share has been adjusted to show the effect
of the 50:1 share consolidation as described in note 4.




CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2012
Figures in R'000s                                             Note      Reviewed       Audited
                                                                                 31 Dec 2012   31 Dec 2011


ASSETS
Plant and equipment                                                       2 611         4 191
Goodwill                                                                       34 123        34 123
Intangible assets                                                                489         1 466
Investment property                                                        4 000         4 000
Investment in and loans to associates                           80 073        98 093


Other investments                                           4           73 728       237 981
Deferred tax asset                                                         40 917        93 886
Other non-current assets                                              15 984          4 709
Total non-current assets                                             251 925      478 449


Inventory                                                                                -         3 287
Other investments                                           4            78 513     181 687
Other current assets                                                         3 994              -
Taxation prepaid                                                                 254           154
Trade and other receivables                                          25 768        21 289


Accounts receivable from trading activities                 199 629        95 638


Trading securities                                                            1 564         1 030
Cash and cash equivalents                                             29 378       17 169
Total current assets                                                     339 100     320 254
Total assets                                                                 591 025     798 703


EQUITY
Stated capital                                                                  610 088             -
Share capital and share premium                                               -   610 088
   

Share based payment reserve                                           5 906         2 524


Treasury shares                                                            (14 899)      (14 276)
Accumulated loss                                                        (399 578)     (399 480)
Equity attributable to equity holders of                         201 517       198 856
Vunani Limited


Non-controlling interest                                                 12 794        13 842
Total equity                                                                   214 311     212 698
 

LIABILITIES
Other financial liabilities                                 4              60 080       103 140


Deferred tax liabilities                                                      8 610         46 784
Total non-current liabilities                                            68 690       149 924


Other financial liabilities                                 4              68 646       298 585


Current tax payable                                                         10 310             445
Trade and other payables                                                25 861        47 225
Accounts payable from trading activities                        200 373       89 407


Trading securities                                                                     -             259
Bank overdraft                                                                   2 834             160
Current liabilities                                                           308 024      436 081


Total liabilities                                                               376 714      586 005


Total equity and liabilities                                              591 025      798 703



Shares in issue (000s) (comparative                                105 415      105 415
adjusted to reflect effect of share
consolidation)


Net asset value per share (cents) (note                              191.2           188.6
III)
Net tangible asset value per share                                     158.3           154.9
(cents)(note III)




Shares in issue ('000s)
Shares in issue at the end of the year                        5 270 732       5 270 732


Weighted average number of shares in issue             4 896 040       4 896 040


Note III - December 2011 net asset value and tangible net asset value per
share have been adjusted to show the effect of the 50:1 share consolidation
as described in note 4.




CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31
DECEMBER 2012
Figures in R'000s                               Total                  Non-               Total
                                                          attributable       controlling       equity
                                                          to equity             interest
                                                          holders of
                                                          Vunani


Balance as at 31 December 2010 -      250 131            174 088        424 219
Audited

Transactions with owners, recorded directly in equity


Issue of shares                                       8 080                        -            8 080
Treasury shares                                   (14 276)                       -         (14 276)
Share based payment reserve                2 524                         -            2 524
Disposal of subsidiaries                                -             (149 014)      (149 014)
Total transactions with owners            (3 672)             (149 014)      (152 686)


Total comprehensive income
Loss and total comprehensive income (47 603)              (11 232)       (58 835)
for the year
Balance as at 31 December 2011 -      198 856                13 842      212 698
Audited

Transactions with owners, recorded directly in equity


Acquisition of non-controlling                    118                  (118)                 -
interest  
Treasury shares acquired                           (623)                       -             (623)
Dividend paid                                                  -             (12 901)       (12 901)
Share based payment reserve                    3 382                      -            3 382
Total transactions with owners                  2 877            (13 019)       (10 142)


Total comprehensive income
Profit/(loss) and total                                  (216)              11 971         11 755
comprehensive income for the year


Balance as at 31 December 2012 -         201 517              12 794        214 311
Reviewed




CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31
DECEMBER 2012
Figures in R'000s                                              Reviewed         Audited
                                                                    31 Dec 2012     31 Dec 2011

Cash flows from operating activities
Net cash generated from operating activities       (21 628)              8 717

Investment revenue                                               2 355                4 737
Interest received                                                  22 084              25 322
Interest paid                                                       (61 304)           (19 196)
Income taxes paid                                                (1 914)             (3 195)
Net cash (utilised)/generated by operating         (60 407)             16 385
activities

Cash flows from investing activities
Acquisition of property, plant and equipment          (486)            (3 528)

Proceeds on   disposal of property, plant and            128            21 117
equipment
Proceeds on   disposal of discontinued                          -          203 601
operations
Proceeds on   disposal of businesses                       3 300          15 600
Acquisition   of businesses                                             -              (150)
Proceeds on   disposal of investment property                -          85 040

Acquisition of investment property                                 -          (5 888)
Decrease/(increase) in investments and loans          8 296          (8 573)
to associates
Proceeds on disposal   of non-current assets                  -          9 000
held for sale
Proceeds on disposal   of associates                         2 732                 -
Acquisition of other   investments                                   -       (129 771)
Proceeds on disposal   of other investments         190 101          84 954

Acquisition of other non-current asset                   (3 950)              (802)
Net cash inflow from investing activities               200 121         270 600


Cash flows from financing activities
Increase in other financial liabilities                          9 516           3 133

Repayments of other financial liabilities              (139 695)       (280 819)

Net cash outflow from financing activities           (130 179)       (277 686)



Net increase in cash and cash equivalents                 9 535           9 299

Cash and cash equivalents at the beginning of        17 009           7 710
the year
Total cash and cash equivalents at end of                26 544          17 009
year
SEGMENTAL REPORTING

FOR THE YEAR ENDED 31 DECEMBER 2012

Figures in R'000s                        Revenue       Reportable      Total
                                                      segment     assets
                                                      profit/
                                                       (loss)
                                                    after tax

Reviewed 31 December 2012

                                                       31 Dec       31 Dec       31 Dec
                                                          2012         2012          2012
Continuing operations
Asset management                          25 039        1 248        49 440
Advisory services (note IV)                9 283         (6 277)        2 045

Investment holdings                                 -          3 282    221 071
Securities broking                             48 068       (1 513)   220 449
Property developments & investments 7 864       20 951     89 213
(note V)
Property asset management                 7 014        2 402           690

Group (note VI)                                   10 624       (8 338)       8 117
                                                         107 892       11 755    591 025

Audited 31 December 2011

                                                       31 Dec       31 Dec     31 Dec
                                                         2011         2011       2011
Continuing operations
Asset management                          22 663        5 916       34 895
Advisory services (note IV)               22 174        5 298         9 418
 
Investment holdings                                 -      (10 464)    540 545
Securities broking                            50 693           (791)   129 273
Property developments & investments  249          9 265     84 174
(note V)
Property asset management               6 267           (671)         398

Group (note VI)                                   4 709      (33 444)            -
                                                       106 755      (24 891)   798 703
Discontinued operations

Asset management                             2 157              411           -
Properties                                         77 799         (34 355)         -
                                                         79 956        (33 944)         -




Note IV – The advisory services segment was previously named “Investment
banking and advisory”. The name was amended in the current year. This
segment now includes the information that only relates to the advisory
component of the group’s operations. The comparative information for this
segment has been adjusted to reflect this change.

Note V – The properties development and investments segment was previously
reported as two separate segments. In the current year, these segments have
been combined and reported as one segment.

Note VI – The group segment was previously named “Group overhead”. The
segment name was changed in the current year.

NOTES TO THE CONDENSED CONSOLIDATED PRELIMINARY RESULTS

(all figures in R’000)

BASIS OF PREPARATION

The condensed consolidated preliminary results for the year ended 31
December 2012 have been prepared in accordance with the framework concepts
and recognition and measurement principles of International Financial
Reporting Standards and presented in accordance with the minimum content,
including disclosures, prescribed by IAS 34 Interim Financial Reporting
applied to year end reporting, the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and the requirements of the
Companies Act of South Africa.

The accounting policies as set out in the audited financial statements for
the year ended 31 December 2011 have been consistently applied. The
reviewed condensed consolidated preliminary results have been presented on
the historical cost basis, except for other investments, investment
property and other financial liabilities, which are fair valued. These
condensed consolidated preliminary results are presented in Rands, rounded
to the nearest thousand, which is the functional currency of Vunani and the
group presentation currency.

These reviewed condensed consolidated preliminary results incorporate the
financial statements of the company, its subsidiaries and special purpose
entities that, in substance, are controlled by the group and the group's
interest in associates. Results of subsidiaries and associates are included
from the effective date of acquisition up to the effective date of
disposal.  All   significant  transactions   and  balances   between  group
enterprises are eliminated on consolidation.



NOTES



1.      Revenue

Revenue includes fees earned from advisory services, brokerage, asset
management fees, client service fees and proprietary trading revenues.



2.      Fair value adjustments and impairments
                                                                             Reviewed               Audited
                                                                        31 Dec 2012       31 Dec 2011
                                                                                   R'000                 R'000
Financial assets and liabilities designated as           42 176                 47 786
fair value through profit and loss
Fair value adjustment on investment property                  -                      810
Impairment of non-current assets held for sale                -                    (201)
Impairment of investment in associates                       (933)                       -
Reversal of impairment of loans to associates             2 543                      53
                                                                                43 786                48 448


3.   Income tax expense

                                                                             Reviewed                Audited
                                                                                 31 Dec                 31 Dec
                                                                                    2012                    2011
                                                                                   R'000                    R'000
Current tax expense                                                    5 010                    (337)
Deferred tax expense                                                14 550                    (926)
Total income tax expense recognised in profit and    19 560                 (1 263)
loss



Condensed reconciliation of effective tax rate

Income tax rate                                                          28.0%                    28.0%
Items increasing effective tax rate                            113.8%                  114.4%
Items decreasing effective tax rate                            (79.3%)                (147.7%)
Effective tax rate                                                        62.5%                     (5.3%)




Items increasing the effective tax rate include disallowed expenditure,
disallowed interest, unrecognised estimated tax losses carried forward not
recognised in deferred tax, the increase to the capital gains tax inclusion
rate during the year and the reversal of deferred tax assets previously
recognised.

Items decreasing the effective tax rate include exempt income, equity
accounted earnings, fair value gains and losses that would be taxed at
capital gains tax rate as opposed to corporate tax rates, profit on
disposal of assets where the profit was not subject to tax and the reversal
of secondary tax on companies raised in prior periods on accrued preference
share interest no longer required due to the introduction of withholding
tax on dividends in 2012.



4.   Other investments and other financial liabilities

Unlisted investments are fair valued annually by the directors. Listed
investment prices are determined with reference to the share price at
period end. Both listed and unlisted investments are designated as fair
value through profit and loss. Financial liabilities are either accounted
for at amortised cost or designated as fair value through profit and loss.
The group designates certain financial liabilities at fair value through
profit or loss upon initial recognition. Ring fenced special purpose
entities have historically been used to house the group’s geared equity
investments and any financial liabilities that relate to such investments.
Financial assets and liabilities that arise in terms of these ring fenced
structures are both fair valued through profit or loss in terms of IAS 39
Financial instruments: Recognition and measurement.

The reason for the above designation was to reduce the measurement
inconsistency on ring-fenced liabilities relative to the assets that they
funded. Because the liability to lenders is limited to the value of the
assets, if the assets were fair valued through profit or loss and the
liabilities carried at amortised cost, inconsistency would arise that would
not reflect the true liability of the group. In order to eliminate this
inconsistency on ring-fenced structures, these specific liabilities are
designated as fair value through profit or loss on initial recognition.

Financial liabilities related to specific investments are measured at fair
value as determined by an independent valuer. Financial liabilities at fair
value include capitalised interest and attributable profit participation.

5.    Authorised and issued share capital

The authorised share capital at 31 December 2012 was 200 million ordinary
shares of no par value (2011: 10 billion ordinary shares with a par value
of R0.001 per share). At the beginning of the year, 5 270 732 462 shares
were in issue. On 12 March 2012, the share capital was consolidated on a
50:1 basis and the shares were converted to shares of no par value. After
the consolidation, 105 414 649 shares of no par value were in issue.



Weighted average number of ordinary            Reviewed    Post share            As
shares (000s)                                            31 Dec 2012   consolidati    previously
                                                                                                    on    presented
                                                                                     31 Dec 2011   31 Dec 2011
Issued ordinary shares at the beginning       5 270 732        95 270     4 763 502
of the year
Effect of share consolidation                        (5 165 317)                 -                   -
Effect of cancelled shares                                             -            (658)        (32 900)
Effect of own shares held                                     (4 793)        (2 425)      (121 260)
Effect of issued shares                                                 -           5 552        277 612
Weighted average number of shares                  100 622        97 739     4 886 954

Number of shares in issue at the end of            105 415       105 415     5 270 732
the year (000s)


 The shares issued as part of the employee share incentive scheme could
 potentially dilute basic earnings in the future. In the current year,
 the employee shares have no dilutive effect.


6.   Headline loss
                                                                                  Reviewed      Audited
                                                                                     31 Dec       31 Dec
                                                                                         2012         2011
  


Total comprehensive income attributable to equity           (216)      (47 603)
holders of Vunani
Adjusted for
Revaluation of investment property
Subsidiaries
Gross revaluation                                                                   -            (604)
Deferred taxation on revaluation                                            -               85
Deferred taxation rate change                                              38                -
Non-controlling interest                                                       (8)            114
Associates
Gross revaluation                                                         (10 866)       (3 476)
Deferred taxation on revaluation                                     2 026           231
Deferred taxation rate change                                            984               -
Non-controlling interest                                                 1 728            714
Disposal of investment property
Profit on disposal                                                                   -        23 206
Capital gains tax                                                                    -             (77)
Non-controlling interest                                                        -         (5 088)
Disposal of plant and equipment
Loss/ (profit) on disposal                                                      53          (703)
Capital gains tax                                                                   (10)           99
Disposal of subsidiaries
(Profit)/ loss on disposal                                                 (5 907)      14 971
Taxation                                                                               -          (2 096)
Profit on disposal of non-current assets held for sale

Profit on disposal                                                                 -          (7 969)
Taxation                                                                              -           1 116
Associates
Impairment of cost of investment                                      933                -
Business acquisitions
Bargain purchase                                                                  -            (346)
Taxation                                                                                -              48
                                                                                   (11 245)      (27 378)

Headline loss per share (cents)                                          (11.2)       (28.0)
Basic and diluted headline loss per share from                  (11.2)       (20.0)
continuing operations
Basic and diluted headline loss per share from                         -         (8.0)
discontinued operations

Shares in issue ('000s)
Shares in issue at the end of the year                          105 415        92 983
Weighted average number of shares in issue               100 622        94 310


OVERVIEW AND PROSPECTS
Vunani has overcome a number of historic challenges and is pleased to
present a profit from continuing operations of R11.8 million. Of this, the
amount attributable to shareholders of the group fell just shy of a break
even position.

Revenue from continuing operations increased by 1% for the year ended 31
December 2012 compared to 31 December 2011. Growth in revenue in the second
half of year tapered off as compared to the first six months of the year.
Other income comprises the amortisation of deferred revenue, directors’
fees earned where the group’s executive directors serve on investee company
boards, the purchase price adjustment on the disposal of the group’s
investment in Vunani Property Investment Fund Limited (“VPIF”) in 2011 and
the reversal of the rental guarantee provided to VPIF on properties that
were not fully let out at the date of disposal.

Investment revenue decreased by 50% from R4.7 million in December 2011 to
R2.4 million in December 2012 owing to the realisation of a number of
dividend yielding investments during 2011 and 2012 to reduce interest
bearing debt. In the current period, profit on disposal of assets amounted
to R5.9 million (2011: loss of R6.1 million) from the disposal of
investments in the group’s investment in Civils 2000 Holdings Proprietary
Limited (“Civils 2000”) and the Hurlingham property development. Positive
fair value adjustments of R42.1 million (2011:R47.8 million) related to
assets and liabilities designated as fair value through profit and loss.

Operating expenses reduced by 16% to R129.1 million (2011: R153.2 million)
reflecting an intensive group-wide cost reducing initiative. Results from
operating activities reflected a positive R61.9 million compared to R34.3
million in 2011.

Interest received from investments of R22.6 million (2011: R24.3 million)
includes the distributions from VPIF and Redefine Properties Limited.
Finance costs have reduced by 24% from R64.4 million to R48.8 million as a
result of the reduction in other financial liabilities.

Equity accounted earnings amount to R17.2 million compared to R5.7 million
in 2011. The increase is attributable to the completion of a number of
property developments where the group has an associate shareholding.

Taxation is reflected as a charge of R19.6 million (2011: credit of R1.3
million). The charge is attributable mainly to the investment holdings
segment and arises as a result of the disposal of a number of the group’s
investments and redemption of the related debt. In addition to accounting
for the tax effect of the disposal and redemption transactions, deferred
tax assets relating to capital losses realised in special purpose entities
were not raised as uncertainty exists regarding the utilisation of these
losses going forward.

Non-current assets decreased by R478.4 million in December 2011 to R251.9
million in December 2012. Investments and loans to associates was reduced
primarily as a result of dividends of R30 million (2011: R5.5m) received
from   associate  companies.   Other   investments  (non-current)   reduced
significantly from R238.0 million in December 2011 to R73.7 million as a
result of the disposal of a number of investments to facilitate the
redemption of debt. Consequently, other liabilities (non-current) decreased
by 42% from R103.1 million in December 2011 to R60.1 million in December
2012.

Both deferred tax assets and liabilities reduced as a result of the
disposal of investments and settlement of loans. Recoverability of deferred
tax assets was assessed and to the extent that uncertainty exists regarding
recoverability, these assets were not recognised.

Current assets increased from R320.3 million in December 2011 to R339.1
million in December 2012 and current liabilities decreased from R436.1
million in December 2011 to R308.0 million in December 2012. Trade
receivables and payables from trading activities relate to the securities
broking segment and represent trades conducted on behalf of clients that
are in the process of settlement through the JSE.



Asset management

The asset management segment reported a profit of R1.2 million for the year
ended December 2012 compared to a profit of R5.9 million in December 2011.
The results to December 2011 included profits attributable to Edge Holding
Company Proprietary Limited, Vunani Portfolio Solutions Proprietary Limited
and IMI. With the exception of IMI, which was an associate at year end,
these companies were disposed of during the 2011 financial year. Despite
the disposals of these investments, the asset management segment, which is
underpinned by Vunani Fund Managers Proprietary Limited (“VFM”) has been
successful in winning new business. VFM’s assets under management increased
by R2.8 billion to R11.4 billion during the year. Fees are earned as a
percentage of assets under management and vary across Vunani Fund Managers’
client base.

Advisory services

The corporate finance business had a tough year on the back of significant
uncertainty in the market delaying transactions. A decision was taken to
terminate the designated advisor services business that services JSE AltX
companies as its viability became questionable.  This decision was
implemented in July 2012. While some bad debt write-offs were incurred,
business activity improved in the second half of the year. Total revenue
for the segment reduced from R22.2 million for the year ended 31 December
2011 to R9.3 million for year to 31 December 2012. A large advisory mandate
that had been secured by Vunani Technology Ventures Proprietary Limited
(“VTV”) in 2011 was completed in the first quarter of 2012, which lead to
the team being downsized. Smaller advisory mandates secured cashflows for
the VTV side of the advisory operation until December 2012, when a decision
was taken to close the VTV business.



Investment holdings

Investment holdings reflected a segment profit of R3.3 million to December
2012 (2011: loss of R10.5 million). Positive fair value adjustments and
reduced interest costs reflect the considerable effort that has been
devoted to restructuring the investment holding portfolio to resolve the
legacy debt issues. Included in this segment are all listed and unlisted
equity investments, together with any related liabilities. During the year,
investments in Brikor Limited, PSV Limited, Basil Read Limited, Civils
2000, Wesizwe Platinum Limited, Consolidated Infrastructure Group Limited
and VPIF were disposed of. The corresponding liabilities to ABSA Bank
Limited, Standard Bank Group Limited and Investec Bank Limited were
redeemed. Included in the redemption of other financial liabilities was the
settlement of a guarantee provided to Investec amounting to R60 million.
The payment was facilitated through the disposals of the abovementioned
assets. A portion of the loan from the Development Bank of South Africa was
also repaid and the terms of the loan were renegotiated.

Securities broking

Revenue decreased by 5% from R50.7 million in 2011 to R48.1 million in
2012. Profitability deteriorated slightly with the segment reporting a loss
in 2011 of R0.8 million and a loss of R1.5 million in 2012. Key challenges
faced by institutional securities brokers include volatile markets, which
has resulted in lower trade volumes and reduced margins resulting from
charging clients competitive market rates, but while still being subjected
to increased trading costs charged by the JSE.

Property developments & investments

During 2012 the group’s shareholding in VPIF was disposed of to settle
debt. This segment was previously reported as two separate segments. In the
current financial year, the segmental reporting was combined. The
completion of a number of developments within the group resulted in the
segment reflecting revenue of R7.9 million to December 2012, compared to
R0.3 million in December 2011. The segment reflects a profit of R21.0
million (2011:R9.3 million) after taking into account equity accounted
earnings of R18.8 million (2011: R6.4 million).

Property asset management

The property asset management segment is underpinned by the operations of
Vunani Property Asset Management Proprietary Limited (“VPAM”), which
manages VPIF. The segment reflected revenue of R7.0 million (2011: R6.3
million) and profit of R2.4 million (2011: loss of R0.7 million).

Group

Revenue in this segment is generated from services provided by directors to
clients and opportunistic transactions, which may involve arbitrage
opportunities and/or result in facilitation fees being earned. During the
year, an extensive cost cutting exercise was embarked on. This segment
reflects the majority of the benefit of that process, with overall segment
losses being reduced from R33.4 million in 2011 to R8.4 million in 2012.

Prospects

Going forward, the board and management will focus on growing our operating
businesses, in particular fund management, advisory, securities trading and
private clients. The interlinked nature of these platforms allows a variety
of opportunities to add complimentary businesses, both in South Africa and
eventually across the sub-continent.
The prudent and successful management of these businesses remains at the
core of our strategy to create value for clients while ultimately unlocking
value for shareholders. But does this mean Vunani will stop investing? The
short answer to this is no. Having learned from the past, we will only
select investments where we can add value, even if these investments fall
outside of the financial services sector. As the group is ultimately
controlled by its senior management, shareholders’ interests are closely
aligned with those of management.      The senior management team remains
committed to actively looking for opportunities to grow its business
operations and unlock shareholder value.

SUBSEQUENT EVENTS

On 21 February 2013, the financial liabilities relating to the group’s
investment in the Redefine Properties Limited (“Redefine”) became due and
payable. The repayment of the debt was done in terms of the original
agreements with the lenders, which resulted in a portion of Redefine shares
being sold on 21 February 2013.     The proceeds were used to settle the
outstanding debt of R64.2 million relating to this investment. The balance
of the shares are required to be held by the group for a two year period.
Any distributions from the shares will flow to the group.

On 28 February 2013, the group disposed of its 48% investment in one of its
associates, Integrated Managed Investments Proprietary Limited for R10.2
million. The 48% was disposed of to management.

DIVIDENDS

No dividends were declared or paid to shareholders during the period under
review (2011: R nil).

GOING CONCERN

The directors have made an assessment of the ability of the company and its
subsidiaries to continue as going concerns and have no reason to believe
the businesses will not continue as going concerns for the foreseeable
future.

REVIEW OPINION

The condensed consolidated preliminary results of Vunani Limited for the
year ended 31 December 2012 have been reviewed by the company’s auditor,
KPMG Inc. In their review report dated 25 March 2013, which is available
for inspection at the Company’s Registered Office, KPMG Inc. state that
their review was conducted in accordance with the International Standard on
Review Engagements 2410, Review of Interim Information Performed by the
Independent Auditor of the Entity, which applies to a review of condensed
consolidated preliminary financial information, and have expressed an
unmodified conclusion on the condensed consolidated preliminary results.



CORPORATE INFORMATION

Executive directors                           Independent non-executive directors
EG Dube (Chief Executive Officer)     WC Ross (Chairman)
BM Khoza (Managing Director)         Dr.BA Khumalo (resigned effective 31
                                                        December 2012)
A Judin (Chief Financial Officer)        NS Mazwi
CE Chimombe-Munyoro                  G Nzalo
NM Anderson                                  JR Macey


Company secretary                          A Judin

Physical and registered address      Postal address
Vunani House                                 PO Box 652419
Athol Ridge Office Park                  151 Katherine Street
Benmore                                         2010
Sandown
Sandton
2196

Telephone number +27 11 263 9500
Facsimile number +27 11 784 3095


Transfer secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg
2001

Designated Adviser
Grindrod Bank Limited




EG Dube                             A Judin
25 March 2013                  25 March 2013

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