RH BOPHELO LIMITED - Provisional audited summarised consolidated financial statements for the year ended 28 February 2018

Release Date: 25/05/2018 16:39
Code(s): RHB
 
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Provisional audited summarised consolidated financial statements for the year ended 28 February 2018

RH BOPHELO LIMITED
(Previously Newshelf 1388 Proprietary Limited)
Incorporated in the Republic of South Africa
(Registration number: 2016/533398/06)
JSE share code: RHB, ISIN: ZAE000244737
("RHB" or "the Company")

PROVISIONAL AUDITED SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 28 FEBRUARY 2018

INTRODUCTION

The board of directors ("the Board") of the Company is pleased to present the results for the year ended 28 February 2018.

RHB was incorporated on 13 December 2016 and successfully listed as a Special Purpose Acquisition Company ("SPAC")
on the Johannesburg Stock Exchange ("JSE") on 12 July 2017, raising R500 000 000 through the issue of 49 999 999 "A"
ordinary shares at R10 a share, and 1 "B" share at R1.

The purpose of RHB whilst it is a SPAC is to pursue the acquisition of viable healthcare assets. Shareholders will be notified
once the JSE/FTSE has completed the reclassification process to an investment entity after the acquisition of assets on the 
26 April 2018.

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 28 FEBRUARY 2018

                                                                                                               Feb-18   Feb-17   
                                                                                                                    R        R   
Administrative and other operating expenditure                                                           (12 522 732)        -   
Finance income                                                                                             20 827 263        -   
Profit before taxation                                                                                      8 304 531        -   
Taxation                                                                                                    (468 619)        -   
Profit for the year                                                                                         7 835 912        -   
Other comprehensive income                                                                                          -        -   
Total comprehensive income for the year                                                                     7 835 912        -   
Earnings per share (cents)                                                                                                       
Basic earnings per share (cents)                                                                                 24,7        -   
Note: There are no dilutive instruments in issue                                                                                 

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 2018

                                                                                                               Feb-18   Feb-17   
                                                                                                                    R        R   
ASSETS                                                                                                                           
Current assets                                                                                                                   
Cash and cash equivalents                                                                                 499 177 878        1   
Total assets                                                                                              499 177 878        1   
EQUITY AND LIABILITIES                                                                                                           
Share capital                                                                                             487 826 373        1   
Retained income                                                                                             7 835 912        -   
Total equity                                                                                              495 662 285        1   
Current liabilities                                                                                                              
Other payables                                                                                              3 515 593        -   
Total equity and liabilities                                                                              499 177 878        1   


SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28
FEBRUARY 2018

                                                                                      Share capital    Retained          Total
                                                                                                         income         equity
                                                                                                  R           R              R

Issue of share capital                                                                            1           -              1   
                                                                                                                             -   
Balance as at 28 February 2017                                                                    1           -              1   
Shares issued                                                                           500 000 000           -    500 000 000   
Transactional costs                                                                    (12 173 628)               (12 173 628)   
Total comprehensive income for the year                                                           -   7 835 912      7 835 912   
Balance at 28 February 2018                                                             487 826 373   7 835 912    495 662 285   


SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 28 FEBRUARY
2018

                                                                                                              Feb-18   Feb-17   
                                                                                                                   R        R   
Cash generated from operating activities                                                                                        
Profit before tax                                                                                          8 304 531        -   
Income tax                                                                                                 (468 619)            
Changes in working capital                                                                                                      
Increase in payables                                                                                       3 515 593        -   
Net cash inflow from operating activities                                                                 11 351 505        -   
Cash flow from financing activities                                                                                             
Proceeds on share issue*                                                                                 487 826 372        1   
Net cash inflow from financing activities                                                                487 826 372        1   
Net movement in cash and cash equivalents                                                                499 177 877        1   
Cash and cash equivalents at beginning of the year                                                                 1        -   
Cash and cash equivalents at the end of the year                                                         499 177 878        1   


*The proceeds on share issue have been shown net of transaction costs of R12 173 628.

NOTES TO THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING POLICIES
The accounting policies applied in the preparation of these annual results for the year ended 28 February 2018 are in terms of
IFRS and are consistent with those applied in the preparation of the audited annual financial statements. These are consistent
with prior year.

BASIS OF PREPARATION
The summarised consolidated financial statements have been prepared in accordance with the framework concepts and the
recognition and measurement principles 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 presented in accordance with the minimum content, including disclosures, prescribed by IAS
34: Interim Financial Reporting applied to year-end reporting, the Companies Act of South Africa, and the JSE Limited's
Listings Requirements ("Listings Requirements").

These summarised financial results have been extracted from the annual financial statements of RHB which have been
prepared under the supervision of the Financial Director, Dion Mhlaba CA(SA). These summarised annual financial results
have been audited by the auditors. The Board takes full responsibility for the preparation of this report and ensuring that the
financial information has been correctly prepared.

SEGMENTAL REPORTING
The Board has considered the implications of IFRS 8: Operating segments and are of the opinion that the current operations
of the Group constitute one operating segment.

RELATED PARTIES

Management fees

Management fees have been paid by the Company to RH Bophelo Management Company Proprietary Limited for providing
operational management services. Management fees are 0,7% per quarter of the total capital raised, while the Company is
classified as a Special Purpose Acquisition Company ("SPAC"). Management fees paid to RH Bophelo Management
Company Proprietary Limited in the current year amounted to R2 458 055 (nil in the prior year). An amount of R776 616 (nil
in the prior year) was included in other payables at year end.

Subsidiary

Fees of R2 900 000 (nil in the prior year) were paid by the Company to RH Bophelo Operating Company Proprietary Limited,
a wholly owned subsidiary of the Company, for the costs related to the operations of the business. An amount of R26 403 (nil
in the prior year) was included in other payables at year end.

Professional fees

Professional fees of R11 508 300 were paid by the Company to Thirdway Investments Proprietary Limited. These payments
were made for capital raising and corporate advisory services. Thirdway Investments Proprietary Limited owns 30% of RH
Bophelo Management Company Proprietary Limited and a non executive director of the Company is a partner in Thirdway
Investments Proprietary Limited.

ISSUE OF STATED CAPITAL
During the year, the Company raised R499 999 999 through the issue of 49 999 999 "A" ordinary shares at R10 a share. In the
prior year, the Company had 1"A" ordinary share in issue.

The Company also issued 1 "B" share for R1 to RH Bophelo Management Company Proprietary Limited. In the prior year,
the Company had no "B" shares in issue.

The net asset value per share at year end is R9,91 (prior year: R1).

FINANCIAL OVERVIEW
The key financial results reflected in these inaugural financial results are:

- RHB recorded an operating group profit of R7 835 912 for its first period of operation, comprised almost entirely of
  costs associated with the listing of the Company on the JSE, due diligence expenses and interests earned from the funds
  raised.

- Basic earnings per share and headline earnings per share amounted 24,7 cents. The reported net income should be
  viewed in the context of the following:

      -    RHB listed on the JSE on 12 July 2017, and did not engage in any commercial trade prior to listing;
      -    Apart from the 50 000 000 shares issued in preparation of the listing, no other shares were issued;
      -    The subscription amount of R500 million less all permissible expenses is kept in the escrow account with RMB
           until the Company is reclassified from a SPAC to the investment entity sector of the JSE;
      -    Total interest earned as at 28 February 2018 was R20 827 263;
      -    The expenses reported for this period is therefore comprised of permissible expenses incurred to advance and
           achieve RHB's JSE listing, and operational expenses of R12 522 732; and
      -    RHB acquired assets only on 26 April 2018 and therefore any income earned is not indicative of the Company's
           future prospects.

At the time of listing, the Board made it known to the market that the Company was seeking the acquisition of a viable asset
in the Healthcare industry. Since the listing, management has been diligently reviewing various potential acquisition
opportunities and is continuously engaging with potential vendors on propositions that could satisfy the Company's vision
and values. The Company has sufficient resources to make a significant investment, using cash, equity and debt, or any
combination thereof as deemed appropriate by management and the Board.

BASIC AND HEADLINE EARNINGS PER SHARE
Basic earnings per share was based on profit after tax of R7 835 912 and weighted average number of ordinary shares of
31 780 822 issued and subscribed on 12 July 2017.

At reporting date RHB had not concluded a viable asset acquisition, therefore the income earned in the current year is not
indicative of the Company's prospects.

                                                                                                           Feb-18   Feb-17   
Headline earnings per share (cents)                                                                          24,7        -   
Diluted headline earnings per share (cents)                                                                  24,7        -   
Reconciliation between earnings and headline earnings                                                                        
Earnings and headline earnings                                                                          7 835 912        -   


SUBSEQUENT EVENTS

The directors are not aware of any other material items that arose subsequent to 28 February 2018 that affect the financial
statements as at the same date that should either be adjusted or disclosed other than the below acquisitions.

The Company acquired Vryburg Private Hospital ("VPH") and African Healthcare ("AHC") on 26 April 2018, which
were classified as a Category 1 acquisitions in terms of the JSE Listings Requirements per JSE Limited ruling. The
Acquisitions resulted in the Company applying for a classification as an investment entity in terms of the JSE Listings
Requirements. The Company is waiting for the JSE/FTSE approval process to conclude.

The acquisitions were successfully concluded as at 26 April 2018.

Details of the Vryburg Hospital acquisition:

The Company has, through RH Bophelo Operating Company Proprietary Limited, acquired 76% of the equity in the newly
formed VPH Holding Company ("Vryburg Hospital") for a total consideration of R24 320 000 which will be paid from
existing cash resources raised on Listing.

Details of the African Healthcare acquisition:

The Company has acquired 60% of the equity in AHC for a total initial purchase consideration of
R62 500 000, where R50 000 000 in cash was paid for a fresh subscription of shares in AHC); and R12 500 000 will be paid
to the shareholders of AHC through the issue of 1 250 000 A Ordinary Shares issued at the Company's 30 day VWAP of
R10 per share. The 1 250 000 A Ordinary shares have been listed by JSE.

Details of the Rondebosch Medical Centre acquisition

On 14 May 2018, the Company entered into transaction agreements to acquire 30% of the equity in Rondebosch Medical
Centre Proprietary Limited ("RMC") by way of a subscription of new RMC shares and the provision of a shareholder
loan, and acquire a call option which entitles the Company to acquire an additional 21% of the issued shares in RMC on
the 4th anniversary of the Company's initial investment. This acquisition is still subject to certain conditions precedent.

GOING CONCERN
The Board has undertaken a detailed review of the going concern capability of the Company with reference to certain
assumptions and plans underlying various internal cash flow forecasts.

The Board has not identified any events or conditions that individually or collectively cast significant doubt on the ability
of the Company to continue as a going concern.

DIVIDENDS
No dividend has been declared during the period under review.

DIRECTORS

The following director appointments took place during the year ended 28 February 2018:

Katekani Dion Mhlaba, Executive (appointed - 23 June 2017)
Vuyokazi Phatheka Nomvalo, Executive (appointed - 23 June 2017)
Maunatlala Peter Mehlape, Executive (appointed - 23 June 2017)
John Rabagadi Oliphant, Non-executive (appointed - 23 June 2017)
Phetole David Sekete, Non-executive (appointed - 23 June 2017)
Solomon Gabriel Motuba, Lead Independent (appointed - 23 June 2017)
Kgaogelo Rachel Ntshwana, Independent (appointed - 23 June 2017)
Londeka Shezi, Independent (appointed - 21 December 2017)

AUDIT REPORT

The external auditors, Deloitte & Touche, have issued their opinion on the Group's consolidated financial statements for
the year ended 28 February 2018. The audit was conducted in accordance with International Standards on Auditing. The
auditor responsible for the audit is P Ndlovu. They have issued an unmodified audit opinion on the consolidated financial
statements and provisional summarised consolidated financial statements. These provisional summarised consolidated
financial statements have been derived and are consistent in all material respects with the Group's consolidated financial
statements. A copy of their audit reports on the consolidated financial statements, together with the Group consolidated
financial statements, are available for inspection at the Company's registered office. Any reference to future financial
performance included in this announcement has not been audited and reported on by the Group's external auditors. 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 issuer's registered office.

On behalf of the Board
Quinton Zunga
CEO

Johannesburg
25 May 2018

Registered Office                                         Transfer Secretaries
3rd floor, 18 Melrose Boulevard                           Computershare Investor Services Proprietary Limited
Melrose Arch, Melrose North                               (Registration number 2004/003647/07)
Johannesburg, 2076                                        Rosebank Towers,
South Africa                                              15 Biermann Ave, Rosebank,
                                                          Johannesburg, 2196
Directors                                                 South Africa
Q Zunga (Chief executive officer)
KD Mhlaba (Chief financial officer)
VP Nomvalo (Executive director)
MP Mehlape (Chief operating officer)
Dr. SG Motuba (Lead independent non-executive Director)   Sponsor
Dr. KR Ntshwana (Independent non-executive Director)      Deloitte & Touche Sponsor Services Proprietary Limited
JR Oliphant (Non-executive chairman)                      (Registration number 1996/000034/07)
Dr. PD Sekete (Non-executive Director)                    The Woodlands, Woodlands Drive
L Shezi (Independent non-executive Director)              Woodmead, Sandton
                                                          Johannesburg, 2196
Company Secretary                                         South Africa
Corporate Vision Consulting Proprietary Limited
(Registration number 2015/006536/07)
3 Decotah, Canart Street, Kyalami Hills
Johannesburg, 1684
South Africa

Auditors
Deloitte & Touche
The Woodlands, Woodlands Drive
Woodmead, Sandton
Johannesburg, 2196
South Africa



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