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MPACT LIMITED - Audited Summarised Group Results for the year ended 31 December 2013 and Cash Dividend Declaration

Release Date: 05/03/2014 09:00
Code(s): MPT     PDF:  
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Audited Summarised Group Results for the year ended 31 December 2013 and Cash Dividend Declaration

Mpact Limited
(Incorporated in the Republic of South Africa)
(Company registration number 2004/025229/06)
Income tax number: 9003862175
JSE Share Code: MPT JSE ISIN: ZAE 000156501
("Mpact" or "the Group" or "the Company")

AUDITED SUMMARISED GROUP RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013 AND CASH DIVIDEND DECLARATION

HIGHLIGHTS

-    Revenue of R7.7 billion up 12.9%
-    Underlying operating profit up 12.0% to R654.8 million
-    Basic underlying earnings per share up 22.2% to 233.5 cents (December 2012: 191.1 cents)
-    Return on Capital Employed (ROCE) up to 17.3% (December 2012: 16.0%)
-    Gearing decreased to 28.1% (December 2012: 28.6%)
-    Final gross cash dividend up 16% to 58 cents per share(December 2012: 50 cents per share)

COMPANY PROFILE

Mpact is one of the largest paper and plastics packaging businesses in southern Africa, listed on the JSE's Main Board in
the Industrial – Paper and Packaging sector. Mpact has the leading market position in southern Africa in recovered paper
collection, corrugated packaging, recycled–based cartonboard and containerboard, polyethylene–terephthalate (PET)
preforms, styrene trays and plastic jumbo bins. These leading market positions allow Mpact to meet the increasing
requirements of its customers, achieve economies of scale and cost effectiveness at the various operations.
Mpact has 32 operating sites of which 22 are manufacturing operations in South Africa, Namibia, Mozambique and
Zimbabwe. Approximately 91% of Mpact's sales were to South African–based customers for the current financial year
while the balance is exported predominantly to customers in the rest of Africa.

As at 31 December 2013, Mpact employed 3,998 people.

COMMENTARY

The directors of Mpact are pleased to present a set of results for the financial year ended 31 December 2013 which
reflect a solid operating performance and sound business strategy. Strong growth in the fruit sector translated to
growth in packaging and bulk bins which was partially offset by subdued growth in the broader economy. The weaker
rand improved our export competitiveness as well as the relative competitive position of the Group's manufactured
products compared to imported substitutes, especially in the Paper business. The benefits derived from the weaker rand
in the Paper business were partially offset in the Plastics business, where polymer price increases reflected the levels of
currency depreciation. While there was some price recovery in the last quarter of the financial year in both the Paper and
Plastics businesses, polymer price increases in the Plastics business remain materially under–recovered.

In September 2013 the Group acquired a 51% interest in Detpak South Africa, a niche manufacturer of paper and board
packaging for the Quick Service Restaurant sector. This acquisition provides Mpact the opportunity to expand its paper
converting business servicing both domestic and export markets.

GROUP PERFORMANCE

Revenue of R 7.7 billion was 12.9% higher than the comparable prior year period, attributable mainly to volume growth in
the Plastics business and higher average selling prices. External sales volume growth of 4.0% was achieved during the year.

Underlying operating profit increased by 12.0% to R654.8 million. The under recovery of raw material price increases led to
the operating profit margin decreasing to 8.5% from 8.6% in the comparable prior year period. ROCE for the year improved
to 17.3% (December 2012: 16.0%).

Underlying earnings per share improved by 22.2%, compared to the prior year, to 233.5 cents per share as a result of the
increase in operating profit, lower finance costs and a lower effective tax rate.

Paper business
Revenue for the year was up 10.5% to R5,574.0 million with external sales volume growth of 3.2%. Higher average selling
prices are attributable to increases implemented during the last quarter of 2012 to cover input cost escalation, as well as
good sales volume growth in higher value products such as white top liner and fruit boxes, yielding a favourable product
mix variance.

Underlying operating profit increased by 13.0% to R635.3 million while the operating profit margin increased to 11.4%
(2012: 11.2%) primarily as a result of stringent cost control and a favourable product mix.

Plastics business
Revenue increased by 19.4% to R2,123.8 million mainly due to volume growth of 10.7%. The preform and closure
business benefited from good growth in the beverage sector while growth in the agricultural sector benefited the
styrene and bulk bin businesses. Average selling price increases achieved during the year were insufficient to fully offset
polymer price increases of more than 20%. Consequently, underlying operating profit declined by 9.3% to R105.8 million
(2012: R116.7 million) and the underlying operating profit margin decreased to 5.0% (2012: 6.6%).

Special items
For the year ended 31 December 2013, special items amounted to R2.4 million in respect of impairment of assets.
(December 2012: R5.4 million related to a settlement charge in respect of the defined benefit pension plan.)

Net finance costs
Net finance costs of R114.2 million were lower than the comparable prior year by 10.6% due to lower average net debt and
lower average interest rates during the year.

Tax
The effective tax rate of 27.4% is lower than the prior year of 30.0% due to the repayment in 2012 of a loan on which the
interest was not tax deductible. Tax payments of R122 million were made during the year (December 2012: R38 million)
primarily due to the Company's assessed loss being fully utilised during the course of the current year.

Earnings per share
Basic and headline earnings per ordinary share for the year were 232.5 cents (December 2012: 188.5 cents) and 233.3 cents
(December 2012: 187.5 cents) respectively. Underlying earnings per share increased 22.2% versus the comparable prior year
period from 191.1 cents to 233.5 cents.

Net debt
Net debt at 31 December 2013 was R1,116 million, an increase of R60 million from the prior year after capital expenditure of
R387 million and acquisitions of R84 million. Average net debt was 3.3% lower than the comparable prior year.

Cash Dividend
The Board has declared a final gross cash dividend of 58 cents per ordinary share payable on Monday, 12 May 2014. In terms
of the Income Tax Act, the dividend has been declared from income reserves; the Dividend Withholding Tax rate is 15%.

Mpact has no STC credits. The net dividend amount is 49.30 cents per share for shareholders liable to pay Dividends Tax and
58 cents per share for shareholders exempt from paying Dividends Tax. The number of issued shares at the date of
declaration is 163,575,656.

The salient dates for the dividend are as follows:

Last day to trade to receive a dividend                                      Wednesday, 30 April 2014
Shares commence trading "ex" dividend                                        Friday, 2 May 2014
Record date                                                                  Friday, 9 May 2014
Payment date                                                                 Monday, 12 May 2014

Share certificates may not be dematerialised or rematerialised between Friday, 2 May 2014 and Friday, 9 May 2014, both
days inclusive.

OUTLOOK

Subdued demand growth in South Africa is expected to be a challenge during 2014 which could be compounded by
further raw material cost inflation driven by the current exchange rate.

Despite this we are confident in our strategy and will look to implement projects in the paper and plastic packaging
sectors across the region that will ensure sustainable growth and profitability for Mpact.

As part of the implementation of the Group's strategy, the Board has approved a capital investment of R765 million in
Mpact's Felixton paper mill, situated near Empangeni in KwaZulu–Natal, to enhance our product offering and cost
competitiveness in line with global trends and to increase capacity. Improvements in energy efficiency and the mill's
environmental footprint will also be realised. Board approval follows positive and active engagement with the
Department of Trade and Industry who have been very supportive of the project. R155 million will be invested in the first
phase which is expected to be completed during the first half of 2015 while the last phase will be completed in 2017.

Change in directorate
There has been no change to the Board of directors for the year ended 31 December 2013.

AJ Phillips                                                                            BW Strong
Chairman                                                                               Chief Executive Officer

5 March 2014

Directors:
Independent Non–Executive:
AJ Phillips (Chairman), NP Dongwana, NB Langa–Royds, TDA Ross, AM Thompson

Executive:
BW Strong (Chief Executive Officer), BDV Clark (Chief Financial Officer)

Company secretary:
MN Sepuru

Registered office:
4th Floor, No.3 Melrose Boulevard, Melrose Arch, 2196
(Postnet Suite #179, Private Bag X1, Melrose Arch, 2076)

Transfer secretaries:
Link Market Services South Africa (Proprietary) Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000, South Africa)

Sponsors:
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196
(P O Box 786273, Sandton, 2146)
 

SUMMARISED STATEMENT OF COMPREHENSIVE INCOME  
for the year ended 31 December 2013 
                                             Notes              2013                    2012 
                                                                 R'm                     R'm 
Revenue                                                      7,697.8                 6,820.8  
Cost of sales                                              (4,746.7)               (4,079.7) 
                                                  
Gross margin                                                 2,951.1                 2,741.1  
Administration and other operating expenses                (1,940.9)               (1,835.0) 
Depreciation, amortisation and impairments                   (357.8)                 (327.4) 
                                                  
Operating profit                               3/4             652.4                   578.7  
Share of profit from equity accounted 
investees                                                        9.8                     8.6  
                                               
Total profit from operations and equity 
accounted investees                                            662.2                   587.3  
                                                                                                
Net finance costs                                            (114.2)                 (127.8) 
 
Investment income                                                6.9                     9.9  
Finance costs                                                (121.1)                 (137.7) 
                                                     
Profit before taxation                                         548.0                   459.5  
Tax charge                                                   (150.4)                 (138.0) 
 
Profit for the year                                            397.6                   321.5  
 
Other comprehensive income: 
Effects of cash flow hedges                                     10.4                   (4.7) 
Tax effect                                                     (2.9)                     1.3  
Actuarial gains (losses) on post–retirement 
benefit scheme                                                  12.0                   (1.1) 
Tax effect                                                     (3.4)                     0.3  
Exchange differences on translation of foreign 
operations                                                       6.4                   (0.1) 
                                                     
Other comprehensive income (loss) for the 
financial year net of tax                                       22.5                   (4.3)  
                                                     
Total comprehensive income for the year                        420.1                   317.2  
                                                      
Attributable to: 
Non–controlling interests in subsidiaries                       17.7                    12.7  
Equity holders of Mpact                                        402.4                   304.5  
 
                                                               420.1                   317.2
SUMMARISED STATEMENT OF COMPREHENSIVE INCOME (continued)
for the year ended 31 December 2013                                                           
                                                Notes           2013                    2012 
                                                                 R'm                     R'm 
 
Profit from operations                                          397.6                   321.5  
                                                         
Attributable to: 
Non–controlling interests in subsidiaries                        17.5                    12.7  
Equity holders of Mpact                                         380.1                   308.8  
 
Earnings per share (EPS) for profit attributable to 
equity holders of Mpact 
 
Basic EPS (cents)                                   5          232.5                   188.5  
Diluted EPS (cents)                                 5          230.5                   187.9  
                                                         

SUMMARISED STATEMENT OF FINANCIAL POSITION 
for the year ended 31 December 2013 
                                                                                                
                                            Notes               2013                    2012 
                                                                 R'm                     R'm 
                                                
Goodwill and other intangible assets                         1,083.8                 1,057.1  
Property, plant and equipment                                2,076.0                 1,999.2  
Investments in equity accounted investees                       80.0                    70.2  
Financial asset investments                                     24.9                    10.6  
Deferred tax assets                                             11.1                     6.0  
Derivative financial instruments                                 4.6                       – 
                                               
Non–current assets                                           3,280.4                 3,143.1 
                                                
Inventories                                                    944.1                   826.7  
Trade and other receivables                                  1,571.6                 1,462.9  
Cash and cash equivalents                                      402.3                   399.5  
Derivative financial instruments                                 3.6                     2.7  
Current tax receivable                                           4.5                     1.6  
                                                   
Current assets                                               2,926.1                 2,693.4  
                                                    
Total assets                                                 6,206.5                 5,836.5  
                                                     
Short–term borrowings                                          397.3                   332.8  
Trade and other payables                                     1,464.8                 1,478.6  
Current tax liabilities                                          7.6                     1.5  
Provisions                                                       1.3                     1.8  
Other current liabilities                                        2.7                    25.6  
Derivative financial instruments                                 0.8                     0.8  
Deferred income                                                  1.9                       –  
                                                    
Current liabilities                                          1,876.4                 1,841.1  
                                                    
Non–current borrowings                                       1,120.8                 1,122.3  
Retirement benefits obligation                                  54.0                    63.1  
Deferred tax liabilities                                       202.5                   161.4  
Other non–current liabilities                                   54.7                       –  
Derivative financial instruments                                   –                     6.2  
Deferred income                                                 14.5                       – 
                                                    
Non–current liabilities                                      1,446.5                 1,353.0  
                                                    
Total liabilities                                            3,322.9                 3,194.1  
                                                    
Stated capital                                6              2,326.0                 2,326.0  
Retained earnings                                              478.8                   215.6  
Other reserves                                                (19.3)                    11.2  
                                                    
Total attributable to equity holders of 
Mpact                                                        2,785.5                 2,552.8  
Non–controlling interests in subsidiaries                       98.1                    89.6  
                                                    
Total equity                                                 2,883.6                 2,642.4  
                                                    
Total equity and liabilities                                 6,206.5                 5,836.5      

SUMMARISED STATEMENT OF CASH FLOWS 
for the year ended 31 December 2013 
                                           Notes                2013                    2012 
                                                                 R'm                     R'm 
Operating cash flows before movements in 
working capital                                              1,027.9                   913.7  
Net increase in working capital                              (220.6)                  (48.4) 

Cash generated from operations                                 807.3                   865.3  
Dividends from equity accounted investees                        3.1                     7.5  
Taxation paid                                                (121.8)                  (38.3) 

Net cash inflows from operating activities                     688.6                   834.5  

Cash flows from investing activities 
Acquisition of subsidiaries, net of cash        7              (51.7)                   (7.1) 
Replacement of property, plant and 
equipment                                                    (387.4)                 (362.5) 
Government grant received                                       18.9                       – 
Proceeds from the disposal of property, 
plant and equipment                                              2.6                     4.6  
Additions to intangible assets                                     –                   (8.9) 
Loan repayments from related parties                               –                     1.6  
Loan advances to external parties                             (14.3)                   (1.6) 
Interest received                                                6.9                     9.9  
Acquisition of non–controlling interest in a 
subsidiary                                                     (4.3)                   (1.8) 

Net cash outflows from investing activities                  (429.3)                 (365.8) 

Cash flows from financing activities 
Borrowings raised (repaid)                                      47.4                 (261.5) 
Finance costs paid                                           (112.6)                 (102.0) 
Dividends paid to non–controlling interests                    (7.1)                   (4.3) 
Dividends paid to equity holders of Mpact 
Limited                                                      (117.7)                  (98.3) 
Purchase of treasury shares                                   (30.3)                       –  
Repurchase of shares                                               –                   (8.1) 
Repayment of other non–current liabilities                    (27.7)                  (20.3) 
 
Net cash outflows from financing activities                  (248.0)                 (494.5) 

Net increase (decrease) in cash and cash 
equivalents                                                     11.3                  (25.8) 
Cash and cash equivalents at beginning of 
year(1)                                                        381.1                   406.9  

Cash and cash equivalents at end of year1                      392.4                   381.1  
 
(1) Cash and cash equivalents net of overdrafts.

SUMMARISED STATEMENT OF CHANGES IN EQUITY 
for the year ended 31 December 2013  
                                                                                                                                                  Total 
                                                                    Share–       Cash       Post–                              Retained   attributable 
                                                                     based       flow  retirement                             earnings/      to equity         Non– 
                                                       Stated     payment      hedge     benefit         Other  Treasury   (accumul–     holders of  controlling     Total
                                                      capital    reserves   reserves    reserves   reserves(1)    shares  ated loss)      Mpact Ltd    interests    equity 
                                                          R'm         R'm        R'm         R'm           R'm       R'm         R'm            R'm          R'm       R'm 
Balance at 31 December 2011                            2,334.1         1.8          –        17.1        (41.4)         –      (10.5)        2,301.1        110.9   2,412.0  
Total comprehensive income for the year                      –           –      (3.4)       (0.8)         (0.1)         –       308.8          304.5         12.7     317.2  
Dividends paid                                               –           –          –           –             –         –      (98.3)         (98.3)            –    (98.3) 
Share buy back(2)                                       (8.1)           –          –           –             –         –           –          (8.1)            –     (8.1) 
Share plan charges for the year                              –         8.5          –           –             –         –           –            8.5            –       8.5  
Dividends paid to non–controlling interests                  –           –          –           –             –         –           –              –        (4.3)     (4.3) 
Reclassification of pension fund reserve                     –           –          –      (16.6)             –         –        16.6              –            –         –  
Decrease in non–controlling interest and put option     
exercised(3)                                                –           –          –           –          46.1         –       (1.0)           45.1       (29.7)      15.4  

Balance at 31 December 2012                            2,326.0        10.3      (3.4)       (0.3)           4.6         –       215.6        2,552.8         89.6   2,642.4  
Total comprehensive income for the year                      –           –        7.5         8.6           6.2         –       380.1          402.4         17.7     420.1 
Dividends paid                                               –           –          –           –             –         –     (117.7)        (117.7)            –   (117.7) 
Purchase of treasury shares(4)                               –           –          –           –             –    (30.3)           –         (30.3)            –    (30.3) 
Share plan charges for the year                              –        21.1          –           –             –         –           –           21.1            –      21.1 
Dividends paid to non–controlling interests                  –           –          –           –             –         –           –              –        (7.1)     (7.1) 
Reclassification                                             –           –          –           –         (0.7)         –         0.1          (0.6)          0.6         – 
Decrease in non–controlling interest and put option 
exercised(3)                                                 –           –          –           –          13.2         –       (0.6)           12.6        (11.7)      0.9 
Issue of shares under employee share scheme                  –       (1.3)          –           –             –         –         1.3              –             –        – 
Put option held by non–controlling shareholder of 
subsidiary(5)                                                –           –          –           –        (54.8)         –           –         (54.8)          12.1   (42.7) 
Increase in shareholding in a subsidiary(6)                  –           –          –           –             –         –           –              –         (3.1)    (3.1) 

Balance at 31 December 2013                            2,326.0        30.1        4.1         8.3        (31.5)    (30.3)       478.8        2,785.5          98.1  2,883.6 

(1)  Other reserves consist of the option to equity holder reserve and currency translation adjustment reserve.  
(2)  On 13 July 2012 the Company repurchased 470 820 shares as a result of an odd–lot and specific offer. 
(3)  Minority shareholders of a group subsidiary exercised their put option which resulted in a decrease in their shareholding. 
(4)  Treasury shares purchased represent the cost of shares in Mpact Ltd purchased in the market and held by the Mpact Incentive Share Trust to satisfy share awards under the Group's share 
     schemes. As at 31 December 2013, there are 1 010 000 treasury shares on hand. 
(5)  During the current year the Mpact Group acquired a subsidiary. The minority shareholders of the subsidiary have a put option to sell the remainder of their interest to the Mpact Group at a future 
     date.  
(6)  The group increased its shareholding in a subsidiary by 3% for a consideration of R4.3 million.  

NOTES TO THE SUMMARISED ANNUAL FINANCIAL STATEMENTS 
for the year ended 31 December 2013 

1.    Basis of preparation 

       These summarised, consolidated financial statements are prepared in accordance with the requirements of the JSE 
       Listing Requirements for preliminary reports, and the requirements of the Companies Act applicable to summary 
       financial statements. The Listing Requirements requires preliminary reports to be prepared in accordance with 
       framework concepts and the measurement and recognition requirements of International Financial Reporting 
       Standards (IFRS) as issued by the International Accounting Standards Board (IASB) (in particular IAS 34: Interim Financial 
       Reporting), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial 
       Reporting Pronouncements as issued by Financial Reporting Standards Council.  
        
       The preparation of these summarised consolidated annual financial statements was supervised by the chief financial 
       officer, BDV Clark CA(SA). 
        
  2    Accounting policies 
        
       The accounting policies and methods of computation used are consistent with those applied in the preparation of the 
       Group annual financial statements.  
       The Group has adopted the following Standards, amendments to published Standards and Interpretations during the 
       current year, all of which had no significant impact on the Group's results: 

-   IFRS 7    –    Financial Instruments: Disclosures 
-   IFRS 10   –    Consolidated Financial Statements 
-   IFRS 11   –    Joint Arrangements 
-   IFRS 12   –    Disclosure of Interests in Other  Entities 
-   IFRS 13   –    Fair Value Measurement 
-   IAS 19    –    Employee Benefits 
-   IAS 27    –    Consolidated and Separate Financial Statements  
-   IAS 28    –    Investments in Associates and Joint Ventures 
 
These summarised consolidated financial statements for the year ended 31 December 2013 have been audited by 
Deloitte & Touche, who expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion 
on the annual financial statements from which these summarised consolidated financial statements were derived. A 
copy of the auditor's report on the summarised consolidated financial statements and of the auditor's report on the 
annual consolidated financial statements are available for inspection at the company's registered office, together with 
the financial statements identified in the respective auditor's reports. The auditor's report does not necessarily report 
on all of the information contained in this announcement. Shareholders are therefore advised that in order to obtain a 
full understanding of the nature of the auditor's engagement, they should obtain a copy of that report together with 
the accompanying financial information from the registered office of the company. Any reference to future financial 
performance included in this announcement has not been reviewed or reported on the Company's auditors.
                
3.   OPERATING SEGMENTS  
       
      Operating segment revenue 
                                                           2013                                     2012   

                                        Segment        Internal     External      Segment     Internal     External 
                                        revenue      revenue(1)      revenue      revenue   revenue(1)      revenue 
                                            R'm             R'm          R'm          R'm          R'm          R'm 
       
      Paper                             5,593.8          (19.8)      5,574.0      5,058.6        (16.2)     5,042.4  
      Plastics                          2,123.8               –      2,123.8      1,778.6         (0.2)     1,778.4 
       
      Segments total                    7,717.6          (19.8)      7,697.8      6,837.2        (16.4)     6,820.8  
      Inter–segment elimination          (19.8)            19.8            –       (16.4)          16.4           –

      Total                             7,697.8               –       7,697.8     6,820.8             –     6,820.8  

 (1) Inter–segment transactions are conducted on an arm's length basis. 

                                                                    2013                    2012 
                                                                     R'm                     R'm 
Operating segment underlying operating profit/(loss)  
Paper                                                              635.3                   562.4  
Plastics                                                           105.8                   116.7  
Corporate                                                         (86.3)                  (94.4) 

Segments total                                                     654.8                   584.7  
Special items(1)                                                    (2.4)                    (6.0) 
Share of equity accounted investees' profit                          9.8                     8.6  
Net finance costs                                                (114.2)                 (127.8) 

Profit before tax                                                  548.0                   459.5  

Significant components of operating profit  
Depreciation, amortisation and impairment 
Paper                                                              199.3                   183.6  
Plastics                                                           134.1                   110.1  
Corporate                                                           24.4                    33.7  

Segments total                                                     357.8                   327.4   

Operating segment assets 
                 
Segment assets(2)  
Paper                                                            3,112.5                 2,837.4  
Plastics                                                         1,360.5                 1,296.0  
Corporate                                                        1,101.2                 1,093.4  
Inter–segment elimination                                          (2.8)                   (2.6) 

Segment total                                                    5,571.4                 5,224.2  
Unallocated: 
Investments in equity accounted investee                             80.0                    70.2  
Deferred tax assets                                                 11.1                     6.0  
Other non–operating assets(3)                                       116.8                   126.0  

Trading assets                                                   5,779.3                 5,426.4  
Financial asset investments                                         24.9                    10.6  
Cash and cash equivalents                                          402.3                   399.5  

Total assets                                                     6,206.5                 5,836.5  

(1)    Special item includes an impairment charged on property, plant and equipment of R2.4 million. (2012: Impairment 
       charged on property, plant and equipment of R0.6 million and a defined benefit pension plan settlement charge of 
       R5.4 million.) 
(2)    Segment assets are operating assets and as at 31 December 2013 consist of property, plant and equipment of 
       R2,076.0 million (2012: R1,999.2 million), goodwill and other intangible assets of R1,083.8 million 
       (2012: R1,057.1 million), inventories of R944.1 million (2012: R826.7 million) and operating receivables of 
       R1,467.5 million (2012: R1,341.2 million). 
(3)    Other non–operating assets consist of derivative assets of R8.2 million (2012: R2.7 million), other non–operating 
       receivables of R104.1 million (2012: R121.7 million) and current tax receivable of R4.5 million (2012: R1.6 million). 

                                                                            2013                2012
                                                                             R'm                 R'm
4.   OPERATING PROFIT 
      Operating profit for the year has been arrived at 
      after charging: 
      Impairment charge of property, plant and 
      equipment                                                               2.4                 0.6   
      Depreciation of property, plant and equipment                         346.8               310.2    
      Amortisation of intangibles                                             8.6                16.6   
 
5.   EARNINGS PER SHARE 
                                                                                       Cents per share        
                                                                              2013                2012 
      Earnings per share (EPS) 
      Basic EPS                                                               232.5               188.5  
      Diluted EPS                                                             230.5               187.9  
                                                                                                            
      Headline earnings per share for the financial year1 
      Basic headline EPS                                                      233.3               187.5  
      Diluted headline EPS                                                    231.3               186.9 
                                                           
      Underlying earnings per share for the financial year(2)                           
      Basic underlying EPS(3)                                                  233.5               191.1
      Diluted underlying EPS(3)                                                231.5               190.5
                                                                                                           
 
(1) The presentation of Headline EPS is mandated under the JSE Listings Requirements. Headline earnings has been 
    calculated in accordance with Circular 2/2013, ‘Headline Earnings', as issued by the South African Institute of 
    Chartered Accountants. 
(2) Underlying EPS excludes the impact of special items. 
(3) Underlying earnings is arrived at by adjusting the profit attributable to equity holders of Mpact for special items, net 
    of tax. (see note 2, segment underlying operating profit) 
 
The calculation of basic and diluted EPS, and basic and diluted headline EPS is based on the following data: 

 
                                                                                        Earnings             
                                                                               2013                2012 
                                                                                R'm                 R'm 
Profit for the financial year attributable to equity holders of Mpact         380.1               308.8  
                                                                                                       
Impairment of tangible assets                                                   2.4                 0.6  
Profit on disposal of tangible assets                                         (0.7)               (2.9) 
Related tax                                                                   (0.4)                 0.6  
 
Headline earnings for the financial year                                      381.4               307.1  

                                                                                 Weighted number of shares
                                                                               2013                2012 
 
Weighted average number of ordinary shares outstanding                  163,510,495         163,825,216
Effect of dilutive potential ordinary shares(1)                           1,404,161             533,954
                                                                                                       
 
Diluted number of ordinary shares outstanding                           164,914,656         164,359,170 
                                                                                                        
(1)    Diluted EPS is calculated by adjusting the weighted average number of ordinary shares in issue, on the assumption 
        of conversion of all potentially dilutive ordinary shares.                       
                                                                                2013                 2012 
                                                                             R'm                 R'm 
6.    STATED CAPITAL 
                                       
       Authorised share capital
       217,500,000 shares of no par value                                       –                   –   
                                                                                               
       Issued share capital 
       Issue of 163,575,656 shares of no par value                        2,326.0             2,334.1
       Repurchase of shares                                                     –               (8.1)
                                                                          2326.0             2,326.0 
                                                                                                     
On 13 July 2012 the listing of 470,820 ordinary shares of no par value was withdrawn in terms of the Company's specific 
repurchase of shares, in terms of odd lot and specific offer. 
           
7.   BUSINESS COMBINATIONS 
           
(a) On 6 February 2013 the Group acquired a PET business at fair value for R15 million. Profit for the period arising on this 
    acquisition was not material to the Group. Assets acquired relates to Property, plant and equipment. 
                
(b) On 25 September 2013, the Group acquired a 51% interest in Detpak South Africa (Pty) Ltd, for a purchase 
    consideration of R37.1 million. Profit for the year arising on this acquisition was not material for the Group.  
                
Details of the fair value of Detpak net assets acquired are as follows:  

                                                        2013 
                                                         R'm 
     
        Total non–current assets                        64.2  
        Total current assets                            64.8  
        Total current liabilities                     (43.6) 
        Total non–current liabilities                 (60.8) 

        Net assets acquired                             24.6  
        Non–controlling interest                      (12.1) 
                                                                  
        Mpact share of net assets acquired               12.5  
        Cash acquired, net of overdrafts                 1.4  
        Shareholder loans                               24.6  
        Deferred consideration                         (1.8) 
                                                                  
        Net cash paid                                   36.7  

(c) In the prior year, the Group acquired a PET tray business as a going concern. Profit for the year arising on this 
    acquisition was not material to the Group.  

   Details of the fair value of net assets acquired are as follows:  

                                                        2012 
                                                         R'm 
        Total non–current assets                        10.7  
        Total current assets                            12.5  
        Total current liabilities                     (11.7) 
        Total non–current liabilities                  (3.5) 
                            
        Net assets acquired                              8.0
                                                       
        Overdrafts                                     (0.9) 
                                  
        Net cash paid                                    7.1  
                                                          
                                                            2013                   2012
                                                             R'm                    R'm 
    8.   CAPITAL COMMITMENTS 
           
          Contracted for,                                   111.1                   62.5   
          Approved, not yet contracted for                   66.9                   43.2   
                                                                                                
                                                            178.0                  105.7   
                                                                                                
The capital commitments will be financed from existing cash resources and borrowing facilities. 

    9.   CONTINGENT LIABILITIES AND CONTINGENT ASSETS 
          a.    Contingent liabilities for the Group comprise aggregate amounts at 31 December 2013 of R7.4 million 
                (2012: R7.7 million) in respect of loans and guarantees given to banks and other third parties. 
          b.    A Group mill is the subject of a land claim, which should not have a material impact on the financial position of the 
                Group. 
          c.    In the prior year a settlement was reached in respect of a dispute relating to the valuation of put options in a group 
                subsidiary.  The settlement agreement provides for a deferred payment contingent upon the achievement of 
                certain EBITDA and ROCE levels for the years 2014 to 2018, subject to a maximum amount of R15.7 
                million.(December 2012: R18.4 million) 
          d.    There were no significant contingent assets for the Group at 31 December 2013 and 31 December 2012.  
 
    10. RELATED PARTY TRANSACTIONS 
     
        The Group has a related party relationship with its associates and directors.   
         
        The Group and its subsidiaries, in the ordinary course of business, enter into various sales, purchase and services 
        transactions with joint ventures and associates and others in which the Group has a material interest. These transactions 
        are under terms that are no less favourable than those arranged with third parties.  These transactions in total are not 
        significant. 
         
11.    POST–BALANCE SHEET EVENTS 
         
        The Board has approved a capital investment of R765 million in Mpact's Felixton paper mill. R155 million will be invested
        in the first phase which is expected to be completed during the first half of 2015 while the last phase will be completed in
        2017. 


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