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RANDGOLD & EXPLORATION COMPANY LTD - Abridged consolidated financial statements for the year ended 31 December 2013 and notice of annual general meeting

Release Date: 24/03/2014 11:20
Code(s): RNG     PDF:  
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Abridged consolidated financial statements for the year ended 31 December 2013 and notice of annual general meeting

Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number:  1992/005642/06)
Share code:  RNG
ISIN:  ZAE000008819
("R&E" or "the company")


ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2013
AND NOTICE OF ANNUAL GENERAL MEETING


Commentary

General

The board of R&E is pleased to announce the audited results for the year ended
31 December 2013.

Mr Van Zyl Botha CA(SA), financial director, is responsible for the annual financial
statements and these summarised annual results and has supervised the preparation
thereof in conjunction with Mrs Mandrie Steyn.

Income

The majority of the income recognised is mainly as a result of settlements and recoveries
of R22 million, the profit on sale of prospecting rights of R1 million and interest earned
of R11.4 million on cash investements.

Financial position

R&E is liquid with no interest-bearing debt. R&E’s total assets consist primarily of cash
and cash equivalents. R&E had a net asset value per share of R2.61 at 31 December 2013.

Cash flow

R&E started the year under review with a cash and cash equivalent balance of R214 million.

Operating activities utilised net cash of R15 million, primarily as a result of interest
received of R11 million offsetting cash utilised in operations of R26 million.

Investing activities yielded cash inflows of R2.3 million received, primarily from the
proceeds on disposal of prospecting rights of R1.5 million and the net disposal of
investments in equity securities of R0.7 million.

R&E remains in a healthy cash position with R201 million in cash and cash equivalents
at 31 December 2013.

Outlook

The outlook for 2014 is similar to that for the previous year. Expenditure on litigation
is expected to be at a similar level, which is likely to prevail until the claims in which
the company is engaged have been finalised. Management will continue to focus on reducing 
the costs of its operations where possible. 

DC Kovarsky                Marais Steyn
Chairman                   Chief executive officer

Johannesburg
20 March 2014


Summarised consolidated statement of comprehensive income
for the year ended 31 December 2013

                                                                          Audited          Audited
                                                                             2013             2012
                                                           Notes            R’000            R’000
Revenue                                                                        75               29
Profit on disposal of investments                                             135               43
Recoveries                                                     7           22 136           15 981
Other income                                                                3 382            8 589
Personnel expenses                                                         (6 429)         (10 015)
Profit on disposal of prospecting rights                       6            1 076            5 037
Change in fair value of held-for-trading investments                         (127)              30
Other operating expenses                                                  (24 706)         (21 690)

Loss from operating activities                                             (4 458)          (1 996)
Finance income                                                             11 419           11 155
Profit before taxation                                                      6 961            9 159
Taxation                                                                        –                –
Profit for the year                                                         6 961            9 159
Other comprehensive income, net of tax
Actuarial gains/(losses)                                                    4 073           (2 307)
Total comprehensive income for the year                                    11 034            6 852

Profit attributable to:
Owners of the company                                                       6 961            9 159
Profit for the year                                                         6 961            9 159

Total comprehensive income attributable to:
Owners of the company                                                      11 034            6 852
Total comprehensive income for the year                                    11 034            6 852

Basic and diluted earnings per share (cents)                   8               10               13



Summarised consolidated statement of financial position
as at 31 December 2013

                                                                          Audited          Audited
                                                                             2013             2012
                                                                            R’000            R’000
Assets
Non-current assets                                                            124              661
Plant and equipment                                                            75              187
Intangible assets                                                              49              474
Current assets                                                            204 360          217 311
Investment in equity securities                                             1 170            1 892
Trade and other receivables                                                 2 030            1 502
Cash and cash equivalents                                                 201 160          213 917
Total assets                                                              204 484          217 972

Equity and liabilities
Shareholders’ equity                                                      186 912          175 878
Issued capital                                                                746              746
Retained earnings                                                         186 166          175 132

Liabilities
Non-current liabilities
Post-retirement medical benefit obligation                                 15 547           40 768

Current liabilities
Trade and other payables                                                    2 025            1 326
Total equity and liabilities                                              204 484          217 972



Summarised consolidated statement of changes in equity
for the year ended 31 December 2013

                                                                          Audited          Audited
                                                                       31 December      31 December
                                                                             2013             2012
                                                                            R’000            R’000
Attributable to equity holders of the company
Share capital                                                                 746              746

Retained earnings                                                         186 166          175 132
Balance at the beginning of the period                                    175 132          168 280
Profit and total comprehensive income for the period                       11 034            6 852



Summarised consolidated statement of cash flows
for the year ended 31 December 2013

                                                                          Audited          Audited
                                                                      31 December      31 December
                                                                             2013             2012
                                                                            R'000            R'000

Profit before taxation                                                      6 961            9 159

Adjusted for:
Profit on disposal of investments                                            (135)             (43)
Profit on disposal of prospecting rights                                   (1 076)          (5 037)
Change in fair value of held-for-trading investments                          127              (30)
Loss on impairment of other assets                                             65                –
Depreciation                                                                   50               73
Change in post-retirement medical benefit liability                       (25 221)           1 626
Finance income                                                            (11 419)         (11 155)
Actuarial gains/(losses)                                                    4 073           (2 307)
Dividends received                                                            (75)             (29)
Working capital changes                                                       (13)          (4 212)
Cash utilised in operations                                               (26 663)         (11 955)
Interest received                                                          11 419           11 155
Taxation received                                                             184                –
Cash flows from operating activities                                      (15 060)            (800)
Cash flows from investing activities                                        2 303            3 247
Dividends received                                                             75               29
Proceeds on disposal of prospecting rights                                  1 500            5 037
Acquisition of investment in equity securities                               (464)          (2 712)
Proceeds on disposal of investments in equity securities                    1 192              893
Cash flow from financing activities                                             –                –
(Decrease)/increase in cash and cash equivalents                          (12 757)           2 447
Cash and cash equivalents at the beginning of the period                  213 917          211 470
Cash and cash equivalents at the end of the period                        201 160          213 917



Notes to the summarised consolidated financial statements for the year ended 31 December 2013


1. Reporting entity

R&E is a company domiciled and incorporated in the Republic of South Africa. The condensed
consolidated annual financial statements of the company for the year ended 31 December 2013
include the company and its subsidiaries (together referred to as “the group”).


2. Basis of preparation

The summarised consolidated financial statements are prepared in accordance with the requirements
of the JSE Limited Listings Requirements for abridged reports, and the requirements of the
Companies Act applicable to summarised financial statements. The Listings Requirements require
abridged reports to be prepared in accordance with the framework concepts and the measurement
and recognition requirements of International Financial Reporting Standards (IFRS) and the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum,
contain the information required by IAS 34 Interim Financial Reporting.


3. Significant accounting policies

The accounting policies applied in the preparation of the consolidated financial statements,
from which the summarised consolidated financial statements were derived, are in terms of
International Financial Reporting Standards and are consistent with the accounting policies
applied in the preparation of the previous consolidated annual financial statements, except
for the revised IAS 19 Employee Benefits that was adopted on 1 January 2013. The impact of
IAS 19 on the financial statements is presented in note 10.

The accounting policies have been applied consistently by all group entities.


4. Independent audit by the auditor

These summarised consolidated financial statements for the year ended 31 December 2013 have been
extracted from the complete set of annual financial statements on which the auditors, KPMG Inc,
have expressed an unqualified audit opinion, dated 20 March 2014. The auditor’s report and annual
financial statements, which have been summarised in this report, are available for inspection
at the registered office of the company. This abridged report is extracted from audited
information, but is not itself audited.

The Directors take full responsibility for the preparation of this report and that the financial
information has been correctly extracted from the underlying annual financial statements.

5. Segment reporting

The group operates in a single operating segment as an investment holding company with assets
in the mining industry.


6. Profit on disposal of prospecting rights

R&E disposed of certain of its prospecting rights which had a R0.4 million carrying value for
R1.5 million. R&E has entered into various agreements for the sale of certain of its prospecting
rights, with nil carrying values, to third parties. In terms of the agreements, however, there
are still a number of conditions precedent outstanding at year-end and as a result the disposals
have not been recognised as yet. The proceeds (and profit) which are expected to be realised from
these transactions are R5.9 million.


7. Recoveries

R&E concluded a settlement agreement with Mr Paul Main on 23 March 2012, in terms of which USD4
million was payable by Mr Main to R&E. The settlement relates to the group’s claim against him
for damages in respect of 2 million Randgold Resources Limited shares. Shareholders are referred
to the announcements made by the company on 30 May 2013, relating to this settlement.
R&E recognised the final payment of R22 million received in cash during June 2013.


8. Earnings per share

                                                                       2013           2012
                                                                  Per share      Per share
                                                                  (in cents)     (in cents)
Earnings per share
Basic earnings and diluted earnings per ordinary share                   10             13

The calculation of basic and diluted earnings
  per ordinary share is based on earnings
  of R6.9 million (2012: earnings of R9.1 million)
  attributable to ordinary shareholders of the
  company and a weighted average of 71 585 172
  (2012: 71 585 172) shares in issue.

Headline earnings and diluted headline earnings per share                 8              6

The calculation of the headline earnings and diluted 
  headline earnings per share is based on headline earnings 
  of R5.8 million (2012: headline earnings of R4.1 million) 
  attributalbe to equity holders of the company and a 
  weighted average of 71 585 172 (2012: 71 585 172)
  ordinary shares in issue during the year.

Reconciliation between basic earnings for the year and
  headline earnings

Profit for the year attributable to equity holders of 
  the company                                                         6 961          9 159
Adjusted for:
Profit on disposal of prospecting rights                             (1 076)        (5 037)
Headline earnings for the year attributable to equity
  holders of the company                                              5 885          4 122


9. Net asset and tangible net asset value per share

The net asset value per share is calculated using the following variables:

                                                               31 December    31 December
                                                                      2013           2012

Net asset value (R’000)                                            186 912        175 878
Ordinary shares outstanding                                     71 585 172     71 585 172
Net asset value per share (cents)                                      261            246
Net tangible asset value per share (cents)                             261            245

The number of shares outstanding at 31 December 2013 and 31 December 2012 has been adjusted
for the 2 999 893 treasury shares held.


10. Material changes

Post-retirement medical benefit obligation

During 2013, R&E concluded settlements with a number of pensioners. The main drivers of the
movement in the post-retirement medical obligation are due to the settlements of R19.9 
million and actuarial gains of R4 million.

IAS 19 change in accounting policy

                                                                      2013           2012
                                                                     R'000          R'000

All actuarial gains and losses are recognised through other
comprehensive income.During the prior year the policy was to
recognise gains and losses through profit and loss. As this
change in accounting police does not affect the balance sheet,
a third balance sheet is not required.

Income statement
Personnel costs                                                     (2 356)       (12 322)
Transfer to Other comprehensive income                              (4 073)         2 307
Restated Personnel costs                                            (6 429)       (10 015)
Profit before reclassification                                      11 034          6 852
Transfer to Other comprehensive income                              (4 073)         2 307
Restated profit for the year                                         6 961          9 159
 
Other Comprehensive Income
Actuarial gains/(losses)                                             4 073         (2 307)
Other comprehensive income for the year                              4 073         (2 307)

Basic earnings and diluted earnings per ordinary share
Before change in accounting policy                                      15             10
After change in accounting policy                                       10             13


11. Related party transactions

There were no related party transactions during the period under review other than in the
normal course of business. Key management remuneration for the current year was R4.064
million (2012: R4.792 million).


12. Events after reporting date

There were no significant events between the reporting date and the approval date of these
results.


13. Notice of annual general meeting

Shareholders are advised that the annual general meeting of R&E will be held at MW Business
Centre, Michelangelo Hotel, Mandela Square, Sandton, at 11:00 on Thursday, 8 May 2014.
A copy of the notice of the annual general meeting incorporating the summarised financial
statements will be distributed to shareholders on 24 March 2014.


The date on which shareholders must be recorded in the Share Register maintained by the
transfer secretaries, for purposes of being entitled to attend and vote at the annual
general meeting is Friday, 2 May 2014, with last day to trade being Wednesday, 23 April 2014.



Directors
DC Kovarsky (Chairman)**, M Steyn (CEO)*, V Botha*, P Burton#, JH Scholes**

(*Executive, **Independent non-executive, #Appointed 23 May 2013 independent non-executive)


Company secretary
V Botha CA(SA)


Transfer secretaries
Computershare Investor Services (Pty) Ltd
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001


Sponsor
PSG Capital
First Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600


24 March 2014





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