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VUNANI LIMITED - Audited Results for the Year Ended 31 December 2014, Notice Of Annual General Meeting and Change in Company Secretar

Release Date: 22/06/2015 15:14
Code(s): VUN     PDF:  
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Audited Results for the Year Ended 31 December 2014, Notice Of Annual General Meeting and Change in Company Secretar

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


AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014, NOTICE OF ANNUAL
GENERAL MEETING AND CHANGE IN COMPANY SECRETARY



Audited Results
Shareholders are advised that the audited annual financial statements for the year ended 31 December
2014, which are included in the company's integrated annual report for that year, have been dispatched
to shareholders today, 22 June 2015. The audited annual financial statements are unchanged from the
reviewed results published on SENS on 30 March 2015, apart from the following changes that were
made:

All values are expressed in R’000

Consolidated statement of financial position
at 31 December 2014

                                                                                       Annual
                                  Reviewed                                             Financial
                                  Results                    Adjustment                Statements

Other financial liabilities
(non-current)                     36 144                     (15 846)                  20 298

Other financial liabilities
(current)                         9 436                      15 846                    25 282

The adjustment was required as a result of reclassification of certain liabilities from non-current to
current due to the lack of defined repayment terms.

Furthermore, note 9 “Financial instruments carried at fair value’ as published in the reviewed provisional
condensed results, was presented as follows:

  9.    Financial instruments carried at fair value

        The fair value of a financial instrument is the price that would be received for the sale of an
        asset or paid for the transfer of a liability in an orderly transaction between market participants
        at the measurement date. Underlying the definition of fair value is a presumption that an entity
        is a going concern without any intention or need to liquidate, to curtail materially the scale of
        its operations or to undertake a transaction on adverse terms. Fair value is not, therefore, the
        amount that an entity would receive or pay in a forced transaction, involuntary liquidation or
        distressed sale.

        The existence of published price quotations in an active market is the best evidence of fair
        value and, where they exist, they are used to measure the financial asset or financial liability.
        A market is considered to be active if transactions occur with sufficient volume and frequency
        to provide pricing information on an ongoing basis. Financial instruments fair valued using
        quoted prices would generally be classified as level 1 in terms of the fair value hierarchy.
  
  Where a quoted price does not represent fair value at the measurement date or where the
  market for a financial instrument is not active, the group establishes fair value by using a
  valuation technique. These valuation techniques include reference to the value of the assets
  of underlying business, earnings multiples (e.g. unlisted investments), discounted cash flow
  analysis (e.g. unlisted investments, loans and advances) and various option pricing models.


  Valuation techniques applied by the group would result in financial instruments being
  classified as level 2 or level 3 in terms of the fair value hierarchy. The determination of whether
  a financial instrument is classified as level 2 or level 3 is dependent on the significance of
  observable inputs versus unobservable inputs in relation to the fair value of the financial
  instrument.

  Inputs typically used in valuation techniques include discount rates, expected future cash
  flows, dividend yields, earnings multiples, volatility, equity prices and commodity prices.


  Valuation methodologies and techniques applied for level 3 financial instruments include a
  combination of discounted cash flow analysis, application of earnings multiples on sustainable
  after tax earnings, current and projected net asset values to determine overall reasonability.
  The valuation technique applied to specific financial instruments depend on the nature of the
  financial instrument and the most appropriate valuation technique is determined on that basis.


  After the valuations of the unlisted financial assets and liabilities are performed, these are
  presented to the group’s investment committee for independent review. All significant
  valuations are approved by the investment committee.

  The valuation methodologies, techniques and inputs applied to the fair value measurement
  of the financial instruments have been applied in a manner consistent with that of the previous
  financial year.




                                                      Reviewed                           Audited
                                                   31 December                       31 December
                                                          2014                              2013
Fair values                                            Carrying                         Carrying
Figures in R’000s                                        amount    Fair value             amount      Fair value
Financial assets measured at fair value

Designated at fair value through profit or              134 783       134 783            144 885         144 885
loss on initial recognition
Financial assets not measured at fair
value
Loans and receivables                                   179 445       179 445            164 519         164 519
Non-current assets held for sale                              –             –                 34              34
Trading securities                                          251           251               320              320
                                                        314 479       314 479            309 758         309 758
Financial liabilities measured at fair value
Designated at fair value through profit or
                                                         (2 554)       (2 554)            (6 971)         (6 971)
loss on initial recognition
Financial liabilities not measured at fair
value
Amortised cost                                         (193 106)     (193 106)          (198 720)        (198 720)
Non-current liabilities held for sale                         –             –             (2 479)          (2 479)
                                                       (195 660)     (195 660)          (208 170)        (208 170)

At 31 December 2014 the fair values of all the financial instruments are substantially identical to the carrying
amount reflected in the statement of financial position.
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities.
These fair value measurements are categorised into different levels in the fair value hierarchy based on
inputs to the valuation techniques used.


The different levels are defined as
follows:
– Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
– Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
   either directly (i.e. as prices) or indirectly (i.e. derived from prices).
– Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).



Reviewed 31 December 2014
Figures in R’000s                                         Level 1         Level 2          Level 3          Total
Financial assets designated at fair value
                                                           96 339               –           38 444        134 783
through profit or loss
Financial liabilities designated at fair
                                                               –                –           (2 554)        (2 554)
value through profit or loss
                                                           96 339               –           35 890        132 229



Audited 31 December 2013                                  Level 1         Level 2          Level 3          Total
Financial assets designated at fair value
                                                           80 240               –           64 645        144 885
through profit or loss
Financial liabilities designated at fair
                                                               –                –           (6 971)        (6 971)
value through profit or loss
                                                           80 240               –           57 674        137 914




                                                                                      Reviewed            Audited
                                                                                    31 December       31 December
Figures in R’000s                                                                          2014              2013
Level 3 comprises:
Balance at beginning of year                                                             57 674           (38 635)
Total gains or losses in profit or loss                                                 (24 927)           19 573
Proceeds from loan, interest and repayments                                                   –            70 697
Purchases, transfers, sales, issues and
                                                                                          3 143             6 039
settlements
Balance at end of the year                                                               35 890            57 674
    
     A change of 10% in the unobservable inputs of the investment and liability at the reporting date would
     have increased/(decreased) equity and profit or loss by the amount shown below. This analysis assumes
     that all other variables remain constant.


                                                                                     Reviewed                 Audited
                                                                                  31 December            31 December
     Figures in R’000s                                                                   2014                   2013
     Effect on statement of comprehensive income
     (profit/(loss)) and equity before taxation                                          2014                   2013
     10% increase                                                                       5 867                  5 767
     10% decrease                                                                      (1 725)                (5 767)


As a result of the finalisation of the audit of the annual financial statements, the disclosure in the above
note changed substantially in the way it is presented in the audited annual financial statements
compared to the way it was previously presented in the above note 9. The change resulted from the
following:

-   The composition of the financial assets (both measured at fair value and not measured at fair
    value) disclosed in this note was revised.
-   The most significant revision related to the disclosure around loans and receivables, which are not
    measured at fair value. The carrying value of all other loans and receivables approximates fair
    value, with the exception of loans to associates and loans in other non-current assets, which are
    carried at amortised cost.

The notes corresponding to note 9 in the integrated annual report are notes 43.4 and 43.5, which are
presented in the audited annual financial statements as follows:


43.4 Fair values

The fair value of a financial instrument is the price that would be received for the sale of an asset or
paid for the transfer of a liability in an orderly transaction between market participants at the
measurement date. Underlying the definition of fair value is a presumption that an entity is a going
concern without any intention or need to liquidate, to curtail materially the scale of its operations or to
undertake a transaction on adverse terms. Fair value is not, therefore, the amount that an entity would
receive or pay in a forced transaction, involuntary liquidation or distressed sale.

The existence of published price quotations in an active market is the best evidence of fair value and,
where they exist, they are used to measure the financial asset or financial liability. A market is
considered to be active if transactions occur with sufficient volume and frequency to provide pricing
information on an ongoing basis. Financial instruments fair valued using quoted prices would generally
be classified as level 1 in terms of the fair-value hierarchy.

Where a quoted price does not represent fair value at the measurement date or where the market for a
financial instrument is not active, the group establishes fair value by using a valuation technique. These
valuation techniques include reference to the value of the assets of underlying business, earnings
multiples (e.g. unlisted investments), discounted cash flow analysis (e.g. unlisted investments, loans
and advances) and various option pricing models.

Valuation techniques applied by the group would result in financial instruments being classified as level
2 or level 3 in terms of the fair-value hierarchy. The determination of whether a financial instrument is
classified as level 2 or level 3 is dependent on the significance of observable inputs versus
unobservable inputs in relation to the fair value of the financial instrument.

Inputs typically used in valuation techniques include discount rates, expected future cash flows,
dividend yields, earnings multiples, volatility, equity prices and commodity prices.
Valuation methodologies and techniques applied for level 3 financial instruments include a combination
of discounted cash flow analysis, application of earnings multiples on sustainable after tax earnings and
or current and projected net asset values to determine overall reasonability. The valuation technique
applied to specific financial instruments depend on the nature of the financial instrument and the most
appropriate valuation technique is determined on that basis.

After the valuations of the unlisted financial assets and liabilities are performed, these are presented to
the group's investment committee for independent review. All significant valuations are approved by the
investment committee.

The valuation methodologies, techniques and inputs applied to the fair value measurement of the
financial instruments have been applied in a manner consistent with that of the previous financial year.

                                                                       
 Fair values                                                     31 December          31 December       31 December
 All values presented in R'000           31 December 2014               2014                 2013              2013
 Financial assets measured
 at fair value                            Carrying amount         Fair value      Carrying amount        Fair value
 Designated as fair value
 through profit or loss on initial                                                                                
 recognition                                      134 874            134 874              144 885           144 885

 Trading securities                                   251                251                  320               320

 Financial assets not
 measured at fair value

 Other non-current assets                           4 788              5 786                4 388             5 489
                                                                                               
 Loans to associates                               14 325             11 537               16 323            13 674
 Non-current assets held for
 sale                                                   -                  -                   34                34

                                                  154 238            152 448              165 950           164 368




 Financial liabilities
 measured at fair value
 Designated as fair value
 through profit or loss on initial
 recognition                                       (2 554)           (2 554)              (6 971)            (6 971)

 Financial assets not
 measured at fair value
 Other financial liabilities                      (45 580)          (42 760)             (46 504)            (40 152)
 Non-current assets held for
 sale                                                                                     (2 479)             (2 479)
                                                  (48 134)          (45 314)             (55 954)            (49 602)

The carrying amounts of cash and cash equivalents, accounts receivable from trading activities, trade and other
receivables, bank overdraft, accounts payable from trading activities and trade, non-current assets and liabilities
held for sale and other payables reasonably approximate their fair values.

43.5 Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair
value measurements are categorised into different levels in the fair value hierarchy based on inputs to valuation
techniques used.

The different levels are defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 All values in R’000
 31 December 2014                                              Level 1               Level 2         Level 3
 Financial assets designated at fair value through
 profit or loss                                                  96 430                    –          38 443
 Financial assets measured at fair value                            251                    –               –
 Financial assets measured at amortised cost                          –                    –          17 323
 Financial liabilities designated at fair value
 through profit or loss                                               –                    –          (2 554)
 Financial liabilities measured at amortised                          –                    –         (42 760)
                                                                 96 681                    –          10 452
 31 December 2013
 Financial assets designated at fair value through
 profit or loss                                                  80 240                    –          64 645

 Financial assets measured at fair value                            320                    –
 Financial assets measured at amortised cost                          –                               19 163
 Financial liabilities designated at fair value
 through profit or loss                                               –                    –          (6 971)
 Financial liabilities measured at amortised                          –                              (40 152)
                                                                 80 560                    –          36 685

                                                            31 December          31 December
 All values in R’000                                               2014                 2013
 Level 3 comprises:
 Balance at beginning of year                                    57 674              (38 635)
 Total gains or losses in profit or loss                        (24 927)              19 573
 Proceeds from loan, interest, repayment                              –               70 697
 Purchases, sales, issues and settlements                         3 143                6 039
 Balance at end of year                                          35 890               57 674

 A change of 10% in the unobservable inputs of the investment and liability at the reporting date would
 have increased/(decreased) equity and profit or loss by the amount shown below. This analysis
 assumes that all other variables remain constant.

 Effect on statement of comprehensive income (profit/(loss)) and equity before taxation

 All values in R’000                                             31 December 2014          31 December 2013
 Net asset value
 10% increase                                                               1 309                     5 767
 10% decrease                                                              (1 192)                   (5 767)
 Free cash flow
 10% increase                                                                 777                     9 762
 10% decrease                                                                 821                    (4 806)


No other modifications or reclassifications have been made to the audited annual financial statements.
The integrated annual report will also be made available on the company’s website hosted at
www.vunanilimited.co.za, as well as at the company’s registered offices at 151 Katherine Street, Vunani
Office Park, Vunani House, Sandton.

Notice of Annual General Meeting
Notice is hereby given that the annual general meeting of shareholders of the company will be held on
Tuesday, 21 July 2015 at 10h00 in the boardroom, 151 Katherine Street, Vunani Office Park, Vunani
House, Sandton to transact the business as stated in the notice of annual general meeting forming
part of the company's integrated annual report.

Change in Company Secretary
Shareholders are advised that CIS Company Secretaries Proprietary Limited has been appointed as
Company Secretary with effect from 22 June 2015.

Aphrodite Judin, the group chief financial officer who has been fulfilling the role of company secretary
for the group, will retain her role as full time group chief financial officer.



22 June 2015
Sandton

Designated Adviser
Grindrod Bank Limited

Date: 22/06/2015 03:14:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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