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Audited group results of Mediclinic International Limited and its subsidiaries for the year ended 31 March 2014
Mediclinic International Limited
Incorporated in the Republic of South Africa
Reg. no. 1983/010725/06
Income tax no: 9950122714
Share code: MDC
ISIN code: ZAE000074142
("Mediclinic" or "the Company")
AUDITED GROUP RESULTS OF MEDICLINIC INTERNATIONAL LIMITED AND ITS SUBSIDIARIES FOR THE YEAR ENDED 31 MARCH 2014 AND DECLARATION OF CASH DIVIDEND
SALIENT FEATURES
- Strong growth in patient numbers
- Positive effect of Group refinancing for first full year
- Positive effect of acquiring minority interests in Mediclinic Middle East
- Positive impact of currency movements
- Basic normalised headline earnings per share increased by 45% to 377.1 cents
- Final dividend per ordinary share increased to 68.0 cents (2013: 60.5 cents)
Danie Meintjes, CEO of Mediclinic International commented:
"All our platforms performed strongly, benefiting from a marked increase in the number of patients treated. We continue to invest for growth
across our businesses. The diversity of our geographic reach has resulted in more than 60% of our revenue and earnings now being generated
in Switzerland and the United Arab Emirates."
TRADING RESULTS
We are pleased to report that the Group has maintained its consistent growth pattern.
Group normalised revenue increased by 24% to R30 495m (2013: R24 587m) for the period under review. Normalised operating profit before interest,
tax, depreciation and amortisation ("normalised EBITDA") was 23% higher at R6 467m (2013: R5 237m). The leveraging effect of the Group's capital
structure, together with the positive effects of the Group refinancing and acquisition of the minority interests in Mediclinic Middle East
completed in October 2012, augmented the Group's financial performance and resulted in basic normalised headline earnings per share growth of 45%
to 377.1 cents (2013: 259.3 cents).
The Group's normalised EBITDA margin decreased from 21.3% to 21.2% for the period under review.
The current Group results included a number of one-off items which were excluded in determining normalised headline earnings. The one-off items are:
- a past-service cost credit of R241m (R192m after tax) arising in the main Hirslanden pension fund; and
- Swiss prior year tax and deferred tax adjustments amounting to R111m.
The comparative results included one-off charges of R3 215m (R2 946m after tax) relating to the refinancing of the Group's debt, a pre-acquisition
Swiss tariff provision charge of R151m (R115m after tax) and a past-service cost credit of R35m (R27m after tax) arising in one of the Group's
pension funds.
Including these one-off items, headline earnings increased by 402% to R3 355m (2013: loss of R1 110m) and basic headline earnings per ordinary
share increased by 377% to 414.6 cents (2013: loss of 149.5 cents).
This year, significant movements in the exchange rates had a material effect on the reported results. The average ZAR/Swiss franc (CHF) exchange
rate was R11.05 compared to R9.05 for the comparative period and the average ZAR/UAE dirham (AED) exchange rate was R2.76 compared to R2.32 for
the comparative period.
Finance cost
Finance cost includes amortisation of capitalised financing expenses of R133m (2013: R89m).
The capitalised financing expenses are amortised over the terms of the relevant loans in line with future cash payments as prescribed in IAS 39
Financial Instruments.
Cash flow
The Group's cash flow continued to be strong. The Group converted 98% (2013: 106%) of normalised EBITDA into cash generated from operations.
Cash and cash equivalents increased from R2 705m at 31 March 2013 to R3 521m at 31 March 2014.
Interest-bearing borrowings
Interest-bearing borrowings increased from R26 362m at 31 March 2013 to R30 370m at 31 March 2014, mainly as a result of the change in the
closing ZAR/CHF and ZAR/AED exchange rates. The closing ZAR/CHF exchange rate moved from R9.69 at 31 March 2013 to R11.96 at 31 March 2014 and
the closing ZAR/AED exchange rate moved from R2.51 at 31 March 2013 to R2.88 at 31 March 2014. It is important to note that the
foreign debt of the Group's Swiss and Middle Eastern operations, amounting to R24 528m, is matched with foreign assets in the same currencies.
The foreign debt has no recourse to the Southern African operations' assets.
Assets
Property, equipment and vehicles increased from R40 137m at 31 March 2013 to R49 597m at 31 March 2014, and intangible assets increased from
R7 279m at 31 March 2013 to R9 210m at 31 March 2014. These increases are mainly as a result of the change in the closing ZAR/CHF and the
ZAR/AED exchange rates, as mentioned above.
Restatement of comparative numbers
The impacts of the application of the revised IAS 19 standard and the new IFRS 11 standard are as follows:
- The revised IAS 19 standard deals with the accounting for defined benefit obligations and plan assets. Previously the net interest income on
Hirslanden's plan assets was recognised in profit or loss based on the expected return on plan assets. The net interest rate on plan assets
is no longer calculated based on expected return but rather equal to the discount rate used for determining retirement benefit obligations.
- The new IFRS 11 standard deals with the accounting of joint ventures. Previously Wits University Donald Gordon Medical Centre (Pty) Ltd was
proportionately consolidated whereas, under IFRS 11, the company is now equity accounted.
Refer to the 'Changes to accounting policy' note for details of the restated comparative numbers.
Normalised non-IFRS financial measures
The Group uses normalised revenue, normalised EBITDA, normalised headline earnings and normalised basic headline earnings per share as non-IFRS
measures in evaluating performance and as a method to provide shareholders with clear and consistent reporting. These non-IFRS measures are
defined as reportable EBITDA, headline earnings and basic headline earnings per share in terms of accounting standards, excluding one-off items,
as detailed above.
OPERATIONS IN SOUTHERN AFRICA
MEDICLINIC SOUTHERN AFRICA
Financial performance
Mediclinic Southern Africa's normalised revenue increased by 11% to R11 205m (2013: R10 059m) for the period under review. Normalised EBITDA was
12% higher at R2 418m (2013: R2 158m).
The Southern African operations contributed R984m (2013: R901m) to the normalised attributable income of the Group after:
- depreciation charges of R302m (2013: R277m);
- net finance charges of R403m (2013: R368m);
- income from joint venture of Rnil (2013: R3m);
- taxation of R528m (2013: R445m); and
- minority interest amounting to R201m (2013: R170m).
Business performance
The 11% revenue growth was driven by a 5.9% increase in bed-days sold and a 5.4% increase in the average income per bed-day. The number of
patients admitted increased by 3.6%, while the average length of stay increased by 2.3%.
The normalised EBITDA margin of the Southern African operations increased from 21.5% to 21.6%.
Mediclinic Southern Africa's cash flow continued to be strong as it converted 105% (2013: 112%) of normalised EBITDA into cash generated from
operations.
Cash and cash equivalents increased from R1 305m at 31 March 2013 to R1 359m at 31 March 2014.
Interest-bearing borrowings increased from R5 809m at 31 March 2013 to R5 842m at 31 March 2014.
Projects and capital expenditure
During the year, the Southern African operations spent R577m (2013: R445m) on capital projects and new equipment to enhance its business and R308m
(2013: R249m) on the replacement of existing equipment. In addition, R289m (2013: R276m) was spent on the repair and maintenance of property and
equipment, charged through the income statement. For the next financial year, R937m is budgeted for capital projects and new equipment to enhance
its business, R302m for the replacement of existing equipment and R303m for repairs and maintenance. Incremental EBITDA resulting from capital
projects in progress or approved is budgeted to amount to R52m and R58m in 2015 and 2016 respectively.
The number of beds increased from 7 436 to 7 614 during the period under review.
During the past year a number of building projects were completed at various hospitals, that created 178 additional beds as well as new consulting
rooms, and included the relocation of a hospital in Lephalale and a number of facility upgrades.
Building projects in progress, which should be completed during the next financial year, will add 279 additional beds. The establishment of the
new Mediclinic Midstream (previously referred to as Mediclinic Centurion) (176 beds) is the most significant development.
The number of beds is expected to increase from 7 614 to 7 893 during the next 12 months.
Several building projects in progress should be completed during the 2016 financial year, which will create 43 additional beds.
Regulatory environment
Within the broader health sector context, the government maintains its commitment to achieve universal coverage through a National Health Insurance
(NHI) system. Mediclinic Southern Africa continues to support the underlying principle of universal coverage. A White Paper on the NHI is expected
to be published during the year ahead and Mediclinic Southern Africa will continue to engage with both government and other relevant stakeholders
on the most appropriate design and mechanisms to pursue universal coverage within the South African context.
The Competition Commission is set to commence an inquiry into the private healthcare sector within the year. The Commission has published the
Terms of Reference for the inquiry and is finalising the administrative processes concerning the conduct of the inquiry.
OPERATIONS IN SWITZERLAND
HIRSLANDEN
Financial performance
Hirslanden's normalised revenue increased by 32% to R15 874m (2013: R12 043m) for the period under review. Normalised EBITDA was 28% higher at
R3 297m (2013: R2 584m). In Swiss francs, normalised revenue increased by 8% to CHF 1 436m (2013: CHF1 330m) and normalised EBITDA increased by 5%
to CHF299m (2013: CHF286m).
Hirslanden contributed R1 350m (2013: R706m) to the attributable income of the Group after:
- depreciation charges of R801m (2013: R604m);
- net finance charges of R846m (2013: R1 006m);
- normalised tax of R303m (2013: R270m); and
- income from associate of R3m (2013: R2m).
In Swiss francs, Hirslanden contributed CHF122m (2013: CHF78m) to the attributable income of the Group after:
- depreciation charges of CHF73m (2013: CHF67m);
- net finance charges of CHF77m (2013: CHF111m);
- normalised tax of CHF27m (2013: CHF30m); and
- income from associate of CHFO.3m (2013: CHFO.2m).
Business performance
The 8% normalised revenue growth was driven by inpatient admissions increasing by 5.5%, at a constant average length of stay and the average
revenue per case increased by 2.8%, mainly due to higher acuity levels.
The normalised EBITDA margin of Hirslanden decreased from 21.5% to 20.8% in line with expectations.
Hirslanden converted 92% (2013: 97%) of normalised EBITDA into cash generated from operations.
Cash and cash equivalents increased from R536m (CHF55m) at 31 March 2013 to R1 138m (CHF95m) at 31 March 2014.
Interest-bearing borrowings reported in ZAR increased from R18 997m (CHF1 960m) at 31 March 2013 to R23 040m (CHF1 926m) at 31 March 2014, mainly
due to the increase in the closing ZAR/CHF exchange rate.
Projects and capital expenditure
During the year Hirslanden invested R769m (CHF70m) (2013: R741m (CHF82m)) in capital projects and new equipment to enhance its
business and R558m (CHF51m) (2013: R498m (CHF55m)) on the replacement of existing equipment. In addition, R397m (CHF36m) (2013: R317m (CHF35m))
was spent on the repair and maintenance of property and equipment, charged through the income statement. For the next financial year CHF65m is
budgeted for capital projects and new equipment, CHF75m for the replacement of existing equipment and CHF37m for repairs and maintenance.
Incremental EBITDA resulting from capital projects in progress or approved is budgeted to amount to CHF6m and CHF14m in 2015 and 2016 respectively.
The number of inpatient beds increased from 1 487 to 1 567 during the period under review, mainly as a result of the opening of the new wing at
Klinik Hirslanden.
Building projects completed during the period under review were:
- The new wing at Klinik Hirslanden in Zurich formally opened during May 2013 and after a phased build-up is now fully operational.
- In August 2013 Klinik Stephanshorn completed the expansion of the intensive care unit and Klinik Beau-Site opened its health centre at the train
station in the capital city, Berne.
- An additional cardiac catheterisation laboratory opened in November 2014 at Klinik Beau Site.
- The Hirslanden Klinik radiotherapy department within Männedorf public hospital was commissioned recently.
The major ongoing expansion projects are as follows:
- Basel: Klinik Birshof is expanding its facilities to accommodate the group of orthopaedic doctors who joined the hospital. The project will
include the fitting of five new patient rooms, expansion of the Accident and Emergency Department and equipping the Radiology Department with a
3 Tesla MRI and a new CT scanner.
- Aarau: Klinik Aarau is expanding its patient accommodation the private patient Privé Department is being enlarged with seven rooms and
two suites. The cardiology department is also being expanded to satisfy the requirements of the new cooperation with the Berne University Hospital.
- Schaffhausen: Klinik Belair is to open an outpatient health centre with a general practitioner and walk-in practice similar to the group's centre
recently opened in Berne.
The number of inpatient beds is expected to increase from 1 567 to 1 594 during the next financial year.
Regulatory environment
There has been extensive resistance to the planned concentration of highly specialised medicine, mostly due to the arbitrary fashion in which the
responsible planning body is pursuing the initiative. A number of Swiss hospitals, including Hirslanden, have challenged allocation decisions in
the courts. To date all appeals lodged by Hirslanden were ruled in Hirslanden's favour.
The vote on the initiative for a public statutory health insurer is provisionally planned for the end of 2014. The intention is to replace the
current system of competition between many different health insurers with one unified public health insurance fund. Swiss private hospitals,
including Hirslanden, are campaigning against this initiative which, if adopted, would be a further step towards nationalising the system.
OPERATIONS IN UNITED ARAB EMIRATES
MEDICLINIC MIDDLE EAST
Financial performance
Mediclinic Middle East's normalised revenue increased by 37% to R3 416m (2013: R2 485m) for the period under review. Normalised EBITDA increased by
52% to R752m (2013: R495m). In UAE dirhams, normalised revenue increased by 15% to AED1 238m (2013: AED1 072m) and normalised EBITDA increased by 27%
to AED272m (2013: AED214m).
Mediclinic Middle East contributed R523m (2013: R232m) to the attributable income of the Group after:
- depreciation charges of R136m (2013: R113m);
- net finance charges of R93m (2013: R63m); and
- minority interest of Rnil (2013: R87m).
In UAE dirhams, Mediclinic Middle East contributed AED189m (2013: AED100m) to the attributable income of the Group after:
- depreciation charges of AED49m (2013: AED49m);
- net finance charges of AED34m (2013: AED27m); and
- minority interest of AEDnil (2013: AED38m).
Business performance
The 15% revenue growth was driven by inpatient hospital admissions increasing by 4%, while hospital outpatient consultations and visits to the
emergency units increased by 4%. Clinic outpatient consultations increased by 8%.
The normalised EBITDA margin of Mediclinic Middle East increased from 19.9% to 22.0%.
Mediclinic Middle East converted 102% (2013: 125%) of normalised EBITDA into cash generated from operations.
Cash and cash equivalents increased from R629m (AED250m) at 31 March 2013 to R724m (AED251m) at 31 March 2014. Interest-bearing borrowings
decreased from R1 556m (AED619m) at 31 March 2013 to R1 488m (AED517m) at 31 March 2014, mainly because of loan repayments.
Projects and capital expenditure
During the year, Mediclinic Middle East invested R71m (AED26m) (2013: R62m (AED27m)) in capital projects and new equipment to enhance
its business, apart from R59m (AED22m) (2013: R45m (AED19m)) on the replacement of existing equipment. In addition, R52m (AED19m) (2013: R43m
(AED19m)) was spent on the repair and maintenance of property and equipment, as accounted for in the income statement. In addition, Mediclinic
Middle East acquired the pathology laboratories at Mediclinic Welcare Hospital and Mediclinic Al Sufouh for a purchase consideration of AED95m
with effect from 1 October 2013. Incremental annualised EBITDA resulting from this investment is estimated to amount to AED19m.
For the next financial year, AED177m is budgeted for capital projects and new equipment to enhance the business in the longer term, AED15m for
the replacement of existing equipment and AED20m for repairs and maintenance. EBITDA resulting from capital projects in progress or approved is
budgeted to amount to AED4m and AED5m in 2015 and 2016 respectively.
The number of beds remained at 382, which includes 27 day beds available at the clinics.
During the period under review, Mediclinic City Hospital broke ground on its new North Wing extension, due to open in mid-2015 at a total
estimated cost of AED265m.
PROSPECTS
We continue to invest for growth across our platforms in preparation for the continuing increase in demand we anticipate for cost-effective
quality healthcare.
CHANGES TO THE BOARD OF DIRECTORS
During the period under review, Mr Pieter Uys, an Investment Manager at Remgro, was appointed as a non-executive director of the Company with
effect from 1 April 2013, as previously reported.
REPORTS OF THE INDEPENDENT AUDITOR
The annual financial statements have been audited by PricewaterhouseCoopers Inc. and their unqualified audit reports on the comprehensive annual
financial statements and the abridged annual financial statements are available for inspection at the registered office of the Company.
The auditor's report does not necessarily cover 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 work, they should obtain a copy of that report together with the accompanying
financial information from the registered office of the Company after the reports have been released on or before 25 June 2014.
BASIS OF PREPARATION
The accounting policies applied in the preparation of these summarised Group annual financial statements, which are based on reasonable judgements
and estimates, are in accordance with International Financial Reporting Standards (IFRS) and are consistent with those applied in the prior year,
except for the adoption of the new and revised standards. The adoption of the IFRS 11 Joint Arrangements and the revised IAS 19 Employee Benefits
required a restatement of the comparative figures. Refer to the section 'Restatement of comparative numbers' and the 'Changes in accounting policy'
note for further detail. The summarised Group annual financial statements have been prepared in accordance with the Financial Reporting Guides
issued by the Accounting Practices Committee of the South African Institute of Chartered Accountants and in terms of IAS 34 Interim Financial
Reporting as well as in compliance with the Companies Act 71 of 2008, as amended, and the Listings Requirements of the JSE Limited. The preparation
of the summarised Group annual financial statements was supervised by the Chief Financial Officer, Mr CI Tingle (CA(SA)).
CASH DIVIDEND TO SHAREHOLDERS
Notice is hereby given that the directors have declared a final gross cash dividend in respect of the year under review of 68.0 cents
(2013: 60.5 cents) (57.8000 cents (2013: 51.4250 cents) net of dividend withholding tax) per ordinary share. The dividend declared increased by
12.4% compared to the comparative period.
Together with the interim dividend declared during November 2013, the total gross dividend relating to the year under review increased by 11.9% to
96.0 cents (2013: 85.8 cents).
The dividend has been declared from income reserves and no secondary tax on companies credits have been utilised. A dividend withholding tax of 15%
will be applicable to all shareholders who are not exempt therefrom. The Company's issued share capital at the declaration date is 826 957 325
ordinary shares.
The salient dates for the dividend will be as follows:
Last date to trade cum dividend Thursday,12 June 2014
First date of trading ex dividend Friday, 13 June 2014
Record date Friday, 20 June 2014
Payment date Monday, 23 June 2014
Share certificates may not be dematerialised or rematerialised from Friday, 13 June 2014 to Friday, 20 June 2014, both days inclusive.
CONSOLIDATED ABRIDGED INCOME STATEMENT
For the year ended 31 March Notes 2014 change 2013
R'm % R'm
(restated)
Revenue 1 30 495 25% 24 436
Cost of sales (17 189) (13 881)
Administration and other operating expenses (6 562) (5 428)
Operating profit before depreciation (EBITDA) 2 6 744 32% 5 127
Depreciation and amortisation (1 239) (994)
Operating profit 5 505 4 133
Other gains and losses 3 2 531
Income from associates 3 2
Income from joint venture - 3
Finance income 73 69
Finance cost 4 (1 221) (5 166)
Profit/(loss) before tax 4 362 (428)
Income tax expense (776) (418)
Profit/(loss) for the period 3 586 (846)
Attributable to:
Equity holders of the Company 3 385 (1 105)
Non-controlling interests 201 259
3 586 (846)
Number Number
PER SHARE PERFORMANCE ('000) ('000)
Weighted average number of shares
Before rights offer n/a 714 856
Adjustment for rights offer (IAS33 para 26) n/a 27 002
Weighted average number of ordinary shares in issue 809 319 741 858
Diluted weighted average number of shares
Before rights offer n/a 735 860
Adjustment for rights offer (IAS33 para 26) n/a 27 002
Diluted weighted average number of ordinary shares in issue 826 956 762 862
Earnings per ordinary share cents cents
- Basic earnings/(loss) basis 418.3 381% (148.9)
- Diluted earnings/(loss) basis 409.3 (144.8)
- Basic headline earnings/(loss) basis 414.6 377% (149.5)
- Diluted headline earnings/(loss) basis 405.7 (145.4)
- Basic normalised headline earnings basis 377.1 45% 259.3
- Normalised diluted headline earnings basis 369.1 252.2
Dividends per ordinary share
- interim 28.0 25.3
- final 68.0 60.5
96.0 85.8
EARNINGS RECONCILIATION R'm R'm
Profit/(loss) attributable to shareholders 3 385 (1 105)
Re-measurements for headline earnings (38) (6)
Profit on sale of property, equipment and vehicles (4) (6)
Impairment of property and equipment 8 -
Insurance proceeds (40) -
Gain from a bargain purchase (2)
Income tax effects 8 1
Headline earnings/(loss) 3 355 402% (1 110)
Re-measurements for normalised headline earnings (352) 3 331
Group one-off refinancing charges - 3 215
Pre-acquisition tariff provision - 151
Swiss tax charges relating to prior years (111) -
Past service cost (241) (35)
Income tax effects 49 (297)
Normalised headline earnings 3 052 59% 1 924
NOTES TO THE ABRIDGED FINANCIAL STATEMENTS
2014 change 2013
R'm % R'm
(restated)
1 REVENUE RECONCILIATION
Revenue 30 495 24 436
Adjusted for:
Pre-acquisition tariff provision - 151
Normalised revenue 30 495 24% 24 587
2 EBITDA RECONCILIATION
Operating profit before depreciation (EBITDA) 6 744 5 127
Adjusted for: .
Past service cost (241) (35)
Pre-acquisition tariff provision - 151
Impairment of equipment 8 -
Insurance proceeds (40) -
Profit on sale of property, equipment and vehicles (4) (6)
Normalised EBITDA 6 467 23% 5 237
3 OTHER GAINS AND LOSSES
Realised gains on forward contracts - 574
Gain on a bargain purchase 2 -
Stamp duty - (41)
Other - (2)
2 531
4 FINANCE COST
Interest 990 (24%) 1 301
Amortisation of capitalised financing fees 133 89
Loan breakage charges - 54
Preference share dividend 125 59
Accelerated recognition of capitalised financing fees - 163
Derecognition of Swiss interest rate swap - 3 531
Less: amounts included in the cost of qualifying assets (27) (31)
1 221 5 166
5 COMMITMENTS
Capital commitments 3 233 3 307
Southern Africa 1 717 2 011
Middle East 683 607
Switzerland 833 689
6 EXCHANGE RATES
R R
Average Swiss franc (ZAR/CHF) 11.05 9.05
Closing Swiss franc (ZAR/CHF) 11.96 9.69
Average UAE dirham (ZAR/AED) 2.76 2.32
Closing UAE dirham (ZAR/AED) 2.88 2.51
7 NUMBER OF SHARES ISSUED No. ('000) No. ('000)
Ordinary shares in issue 826 957 826 957
Ordinary shares held in treasury (16 832) (19 078)
Ordinary shares in issue net of treasury shares 810 125 807 879
CONSOLIDATED ABRIDGED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2014 change 2013
R'm % R'm
(restated)
Profit/(loss) for the period 3 586 524% (846)
Other comprehensive income
Items that may be reclassified to the income statement
Currency translation differences 4 371 1 699
Fair value adjustment to cash flow hedges (net of tax) 29 3 203
Items that may not be reclassified to the income statement
Actuarial gains and losses (net of tax) 138 54
Other comprehensive income, net of tax 4 538 4 956
Total comprehensive income for the period 8 124 4 110
Attributable to:
Equity holders of the Company 7 922 3 808
Non-controlling interests 202 302
8 124 4 110
CONSOLIDATED ABRIDGED STATEMENT OF FINANCIAL POSITION
As at 31 March 2014 2013
R'm R'm
(restated)
ASSETS
Non-current assets 59 308 47 885
Property, equipment and vehicles 49 597 40 137
Intangible assets 9 210 7 279
Investments in associates 4 2
Investments in joint venture 67 65
Other investments and loans 68 63
Derivative financial instruments 60 100
Deferred income tax assets 302 239
Current assets 11 226 8 857
Inventories 904 681
Trade and other receivables 6 768 5 427
Current income tax assets 33 44
Cash and cash equivalents 3 521 2 705
Total assets 70 534 56 742
EQUITY AND LIABILITIES
Total equity 25 391 18 002
Share capital and reserves 24 468 17 206
Non-controlling interests 923 796
LIABILITIES
Non-current liabilities 36 899 32 692
Borrowings 28 704 25 351
Deferred income tax liabilities 7 251 6 182
Retirement benefit obligations 414 709
Provisions 492 365
Derivative financial instruments 38 85
Current liabilities 8 244 6 048
Trade and other payables 5 048 4 121
Borrowings 1 666 1 011
Provisions 376 322
Derivative financial instruments - 65
Current income tax liabilities 1 154 529
Total liabilities 45 143 38 740
Total equity and liabilities 70 534 56 742
Net asset value per ordinary share - cents 3 020.3 2 129.8
CONSOLIDATED ABRIDGED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2014 2013
R'm R'm
(restated)
Opening balance 18 002 11 487
Shares issued - 5 000
Share issue costs - (104)
Movement in shares held in treasury 7 13
Movement in share-based payment reserve 19 5
Non-controlling interests acquired by the Group 24 (588)
Total comprehensive income for the period 8 124 4 110
Transactions with non-controlling shareholders 2 (1 268)
Gain on sale of nil-paid letters of allocation - 41
Distributed to shareholders (688) (488)
Distributed to non-controlling interests (99) (206)
Closing balance 25 391 18 002
Comprising
Share capital 11 027 11 027
Treasury shares (249) (256)
Share-based payment reserve 159 140
Foreign currency translation reserve 9 197 4 827
Hedge reserve 9 (20)
Retained earnings 4 325 1 488
Shareholders' equity 24 468 17 206
Non-controlling interests 923 796
Total equity 25 391 18 002
CONSOLIDATED ABRIDGED STATEMENT OF CASH FLOWS
For the year ended 31 March 2014 2013
R'm R'm
(restated)
Cash flow from operating activities 4 615 3 549
Cash generated from operations 6 340 5 571
Net finance cost (982) (1 508)
Taxation paid (743) (514)
Cash flow from investment activities (2 539) (527)
Investment to maintain operations (926) (792)
Investment to expand operations (1 684) (1 230)
Proceeds on disposal of property, equipment and vehicles 32 52
Insurance proceeds 40 -
Proceeds from derivative financial instruments - 25
Proceeds from other investments and loans 1 4
Investment in joint venture (2) (8)
Amounts advanced to joint venture - (1)
Proceeds from FVTPL financial assets - 868
Proceeds from money market funds - 1 200
Purchases of money market funds - (657)
Interest received - 12
Cash flow from financing activities (1 605) (2 837)
Proceeds from shares issued - 5 000
Share issue costs - (104)
Distributions to shareholders (688) (488)
Distributions to non-controlling interests (99) (206)
Proceeds from borrowings 223 21 996
Repayment of borrowings (1 074) (24 939)
Settlement of interest rate swap - (1 633)
Proceeds from disposal of treasury shares 7 27
Treasury shares purchased - (16)
Acquisition of non-controlling interests - (1 971)
Refinancing transaction costs - (615)
Proceeds on disposal of of nil-paid letters of allocation - 41
Proceeds on disposal of non-controlling interest 26 71
Net movement in cash, cash equivalents and bank overdrafts 471 185
Opening balance of cash, cash equivalents and bank overdrafts 2 705 1 979
Exchange rate fluctuations on foreign cash 309 541
Closing balance of cash, cash equivalents and bank overdrafts 3 485 2 705
Cash and cash equivalents 3 521 2 705
Bank overdrafts (36) -
3 485 2 705
ABRIDGED SEGMENTAL REPORT
For the year ended 31 March 2014 2013
R'm R'm
(restated)
Revenue
Southern Africa 11 205 10 059
Middle East 3 416 2 485
Switzerland 15 874 11 892
30 495 24 436
EBITDA
Southern Africa 2 453 2 163
Middle East 752 495
Switzerland 3 539 2 469
6 744 5 127
Operating profit
Southern Africa 2 151 1 886
Middle East 616 382
Switzerland 2 738 1 865
5 505 4 133
CHANGES IN ACCOUNTING POLICY
For the
year ended For the
31 March 2013 year ended
Impact on profit (loss) of the application of new and revised as previously IFRS 11 IAS 19 31 March 2013
standards reported adjustments adjustments (restated)
Rm Rm Rm Rm
Revenue 24 562 (126) - 24 436
Cost of sales (13 845) 59 (95) (13 881)
Administration and other operating expenses (5 454) 61 (35) (5 428)
Depreciation and amortisation (999) 5 - (994)
Income from joint venture - 3 - 3
Fnance income 68 1 - 69
Income tax expense (442) (3) 27 (418)
Loss for the year (743) - (103) (846)
Increase in loss for the year attributable to:
Equity holders of the Company (1 002) - (103) (1 105)
Impact on other comprehensive income of the application of the
new and revised standards
Actuarial gains and losses 201 - (147) 54
Currency translation differences 1 705 - (6) 1 699
Other comprehensive income for the year, net of tax 5 109 - (153) 4 956
Decrease in total comprehensive income for the year attributable to:
Equity holders of the Company 4 064 - (256) 3 808
As at
31/03/2013 as IFRS 11 IAS 19 As at
Impact on assets, liabilities and equity of the application of the new previously adjust- adjust- 31/03/2013
and revised standards reported ments ments (restated)
Rm Rm Rm Rm
Property, equipment and vehicles 40 233 (96) - 40 137
Intangible assets 7 279 - - 7 279
Investment in joint venture - 65 - 65
Other investments and loans 17 46 - 63
Deferred income tax assets 244 (5) - 239
Inventories 684 (3) - 681
Trade and other receivables 5 466 (39) - 5 427
Borrowings (non current) (25 359) 8 - (25 351)
Deferred income tax liabilities (6 227) 45 (6 182)
Retirement benefit obligations (501) 10 (218) (709)
Trade and other payables (4 135) 14 - (4 121)
Total effect on net assets 17 701 - (173) 17 528
Retained earnings (1 655) (1 655)
Opening balance adjustments (83) (83)
Adjustments for the period 250 250
(1 488)
Other reserves (Foreign currency translation reserve) (4 833) 6 (4 827)
Total effect on equity (6 488) - 173 (6 315)
Signed on behalf of the board of directors:
E DE LA H HERTZOG DP MEINTJES
Chairman Chief Executive Officer
Stellenbosch, 20 May 2014
DIRECTORS
Dr E de la H Hertzog (Chairman), DP Meintjes (Chief Executive Officer), CI Tingle (Chief Financial Officer), JJ Durand, JA Grieve (Scottish),
Prof Dr RE Leu (Swiss), Dr MK Makaba, N Mandela, TD Petersen, KHS Pretorius, AA Raath, DK Smith, PJ Uys, Dr CA van der Merwe,
Dr TO Wiesinger (German)
SECRETARY
GC Hattingh
REGISTERED ADDRESS
Mediclinic Offices, Strand Road, Stellenbosch 7600, South Africa
PO Box 456, Stellenbosch 7599, South Africa
Tel +27 21 809 6500
Fax +27 21 886 4037
Ethics line: 0800 005 316
WEBSITE
www.mediclinic.com
TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg 2001, South Africa
PO Box 61051, Marshalltown 2107, South Africa
Tel +27 11 370 5000
Fax +27 11 688 7716
SPONSOR
Rand Merchant Bank (A division of FirstRand Bank Limited)
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