RANDGOLD & EXPLORATION COMPANY LIMITED - Summarised Group Financial Statements for the Year Ended 31 December 2018

Release Date: 25/03/2019 14:15
Code(s): RNG
 
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Summarised Group Financial Statements for the Year Ended 31 December 2018

Randgold & Exploration company ltd
(Incorporated in the Republic of South Africa)
(Registration number: 1992/005642/06)
Sharecode: RNG
ISIN: ZAE00000819
(R&E or the company)


SUMMARISED GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018

COMMENTARY TO THE SUMMARISED GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018  

GENERAL
The board of R&E is pleased to announce the audited results for the year ended 31 December 2018.

Mr Marais Steyn 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 Mr Rayner van Wyk CA(SA) representing Outsourced
CFO (Pty) Ltd (Group Financial Manager).

INCOME
The 2018 group results reflected a total comprehensive income for the year of R3.8 million (2017 loss: R7.0 million). This
was mainly as a result of an increase in third party recoveries. During the year income was derived primarily from third
party recoveries of R21.7 million (2017: R1.1 million) and interest of R12.0 million (2017: R13.0 million) earned on cash
investments. The company spent R6.9 million (2017: R6.7 million) on personnel costs, R23.0 million (2017: R22.4 million)
on legal and forensic fees, and other operational costs totalled R3.0 million (2017: R2.1 million).

FINANCIAL POSITION
R&E is liquid with no interest-bearing debt. The major assets of the R&E group as at 31 December 2018 consisted of funds
held in unit trusts of R167.9 million. The board has adopted a low risk approach to protect the group's investments in
listed securities, which are monitored daily in conjunction with a specialist treasury firm to maintain optimal returns
with minimal associated risks.

R&E had a net asset value per share of R2.19 at 31 December 2018. (2017: R2.13)

CASH FLOW
The group's cash outflow of R1.4 million was the net result of interest earned on cash, dividends and recoveries received,
less cash utilised to fund its operations during the year.

OUTLOOK
The outlook for 2019 is largely dependent on the progress and outcome of current legal matters. Expenditure on litigation
is expected to be at a similar level as 2018. Until the claims in which the company are engaged have been finalised, this
pattern of expenditure is likely to prevail.

David Kovarsky        Marais Steyn
Chairman              Joint Chief Executive Officer and Financial Director
Johannesburg
22 March 2019

SUMMARISED GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
                                                                                     2018         2017
                                                                                    R'000        R'000
                                                                          Notes             (Restated*)
Dividends received - Investments in listed securities                                 317          294
(Loss)/profit on disposal of listed securities                                       (360)          33
Recoveries                                                                    6    21 750        1 158
Other income                                                                          602          150
Personnel expenses                                                                 (6 908)      (6 711)
Profit on disposal of prospecting rights                                                -        9 120
Change in fair value of investments in listed securities                            1 937          462*
Other operating expenses                                                          (25 957)     (24 528)
Loss from operating activities                                                     (8 619)     (20 022)
Finance income                                                                     12 072       13 005
Finance expense                                                                         -            -
Profit/(loss) before taxation                                                       3 453       (7 017)
Taxation                                                                                -            -
Profit/(loss) for the year                                                          3 453       (7 017)
Other comprehensive income/(loss)
Items of other comprehensive income/(loss) that will not be subsequently
reclassified to profit or loss
Actuarial gains/(losses)                                                              366          (42)
Total comprehensive income/(loss) for the year                                      3 819       (7 059)

Basic and diluted earnings/(loss) per share (cents)                           7         5          (10)

* These amounts have been reclassified to better reflect their nature, please refer to note 9 for detail. 
This reclassification does not change the loss  for the year.



SUMMARISED GROUP STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2018

                                                                                  Audited      Audited
                                                                                     2018         2017
                                                                                    R'000        R'000
                                                                                            (Restated*)

ASSETS
Non-current assets                                                                    12            17
Equipment                                                                             12            17
Intangible assets                                                                      -             -

Current assets                                                                   169 284       166 661
Investments in listed securities                                                 167 881       164 901*
Other receivables                                                                  1 085            85
Cash and cash equivalents                                                            318         1 675*

Total assets                                                                     169 296       166 678

EQUITY AND LIABILITIES
Shareholders' equity                                                             156 536       152 717
Ordinary share capital                                                               716           716
Retained earnings                                                                155 820       152 001

LIABILITIES
Non-current liabilities
Post-retirement medical benefit obligation                                        10 496        11 404

Current liabilities
Other payables                                                                     2 264         2 557
Total equity and liabilities                                                     169 296       166 678

*These amounts have been reclassified to better reflect their nature, please refer to note 9 for detail. 
This reclassification does not change total or current assets and does not affect retained earnings. 
Management have therefore deemed it not necessary to disclose a 3rd statement of financial position.


SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                 Audited       Audited
                                                                             31 December   31 December
                                                                                    2018          2017
                                                                                   R'000         R'000
Attributable to equity holders of the company
Ordinary share capital                                                               716           716

Retained earnings                                                                155 820       152 001
Balance at the beginning of the period                                           152 001       159 060
Total comprehensive income for the year                                            3 819        (7 059)



SUMMARISED GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                 Audited       Audited
                                                                             31 December   31 December
                                                                                    2018          2017
                                                                                   R'000         R'000
                                                                                            (Restated*)
Profit/(loss) before taxation                                                      3 453        (7 017)
Adjusted for:
Profit on disposal of investments in listed securities                               360           (33)
Profit on sale of prospecting rights                                                   -        (9 120)
Change in fair value of investments in listed securities                          (1 937)         (462)*
Depreciation                                                                           6             6
Post-retirement medical benefit obligation - interest cost                           884           975
Interest received                                                                (12 072)      (13 005)
Dividends received                                                                  (317)         (294)
Working capital changes                                                           (1 293)       (2 651)
Cash utilised in operating activities                                            (10 916)      (31 601)
Interest received                                                                 12 072        13 005
Post-retirement medical benefit liability - benefits paid                         (1 426)       (1 462)
Cash flow from operating activities                                                 (270)      (20 058)
Cash flow from investing activities                                               (1 087)       16 824
Dividends received from listed equity securities                                     317           294
Proceeds on disposal of prospecting rights                                             -         9 120
Acquisition of Investments in listed securities                                   (3 580)       (2 269)
Proceeds from disposal of Investments in listed securities                         2 176         9 679*
Cash flow from financing activities                                                    -            -

Increase/(decrease) in cash and cash equivalents                                  (1 357)      (3 234)*
*Cash and cash equivalents at the beginning of the year                            1 675         4 909*
Cash and cash equivalents at the end of the year                                     318         1 675*

*These amounts have been reclassified to better reflect their nature, please refer to note 9 for detail.


NOTES TO THE SUMMARISED GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018

1.REPORTING ENTITY
R&E is a company domiciled and incorporated in the Republic of South Africa. The summarised group annual financial
statements of the company for the year ended 31 December 2018 includes the company and its subsidiaries (together 
referred to as "the group").

2.BASIS OF PREPARATION
The summarised group 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 summary 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 Reporting Pronouncements as issued by the
Financial Reporting Accountants 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 group financial statements, from which the summarised group
financial statements were derived, are in terms of IFRS and are consistent with the accounting policies applied in the
preparation of the previous group annual financial statements.

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

4.INDEPENDENT AUDIT BY THE AUDITOR
These summarised group financial statements for the year ended 31 December 2018 have been extracted from the complete set
of annual financial statements on which the auditors, KPMG Inc., have expressed an unqualified audit opinion, dated 22 March 
2019. 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.

6.RECOVERIES
During 2017 R&E received a settlement payment from Charles Orbach and Company, a former auditor of R&E, of R21.7 million.

7.EARNINGS PER SHARE
                                                                2018          2017
                                                           Per share     Per share
EARNINGS PER SHARE                                         (in cents)    (in cents)
Basic earnings and diluted earnings per ordinary share             5           (10)
 
The calculation of basic and diluted earnings per share is based on profits of R3.5 million (2017 losses: R7.0 million)
attributable to ordinary shareholders of the company and a weighted average of 71 585 172 (2017: 71 585 172) ordinary
shares in issue during the period.

Headline earnings and diluted headline earnings per share          5          (23)

The calculation of headline and diluted headline earnings per share is based on headline profits of R3.5 million (2017
losses: R16.1 million) attributable to ordinary shareholders of the company and a weighted average of 71 585 172 
(2017: 71 585 172) ordinary shares in issue during the period.

Reconciliation between basic earnings for the year and headline earnings
Profit/(loss) for the year attributable to 
equity holders of the company                                   3 453       (7 017)
Adjusted for:
Profit on disposal of prospecting rights                            -       (9 120)
Headline profit earnings for the year attributable to 
equity holders of the company                                   3 453      (16 137)


8.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
                                                                  2018         2017
Net asset value (R'000)                                        156 536      152 717
Ordinary shares outstanding                                 71 585 172   71 585 172
Net asset value per share (cents)                                  219          213
Net tangible asset value per share (cents)                         219          213


The number of shares outstanding at 31 December 2018 and 31 December 2017 has been adjusted for the 2 999 893 treasury
shares held.

9.CORRECTION OF PRIOR PERIOD ERRORS
Funds held in unit trusts were disclosed as part of cash and cash equivalents in the December 2017 financial statements.
To better reflect the nature of these amounts, they have been reclassified to investments in listed securities in the
summarised group statement of financial position as well as the summarised group statement of comprehensive income. This
has also resulted in the restatement of the summarised group cash flow statement. This reclassification does not change
total or current assets and does not affect retained earnings. Management have therefore deemed it not necessary to
disclose a 3rd statement of financial position. Investments in listed securities are held in the Investec High Income Fund
and Nedgroup Investments Core Income Fund. These funds are mostly term deposits and hold a spread of high-grade fixed
income instruments, predominantly of a floating rate nature.

                                                                              1 January 2017
                                                                1 January 2017  Restatement  Restated
Balance sheet restatements:                                              R'000        R'000     R'000
Assets
Investments in listed securities                                         6 683      165 132   171 815
Cash and cash equivalents                                              170 041     (165 132)    4 909

                                                                             31 December 2017
                                                              31 December 2017   Restatement  Restated
                                                                         R'000         R'000     R'000
Assets
Investments in listed securities                                         6 472       158 429   164 901
Cash and cash equivalents                                              160 104      (158 429)    1 675

                                                                             31 December 2017
                                                             31 December 2017    Restatement  Restated
Statement of comprehensive income restatements:                         R'000          R'000     R'000
Change in fair value of investments in listed securities                 (389)           851       462
Change in fair value of cash investments                                  851           (851)        -

                                                                              31 December 2017
                                                              31 December 2017    Restatement  Restated
Statement of cash flows restatements:                                    R'000          R'000     R'000
Change in fair value of investments in listed securities                   389           (851)     (462)
Proceeds from disposal of Investments in listed securities               2 125          7 554     9 679



10.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 R5.1 million (2017: R4.8 million). JH Scholes, a director of R&E, is also
a director of Malan Scholes Attorneys, which provides legal prospecting right consulting services to R&E on an ad hoc
basis. The cost of these services amounted to R1 224 during 2018 (2017: R45 790).

11.EVENTS AFTER REPORTING DATE
There were no significant events between the reporting date and the approval date of these results.

12. NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS OF R&E
Notice is hereby given that the annual general meeting (“the meeting” or “the annual general meeting”) of shareholders of R&E 
will be held at The Westin Cape Town, Convention Square, Lower Long Street, Cape Town, at 11:00 on Friday 17 May 2019, for the 
purpose of considering and, if deemed fit, passing, with or without modification, the following ordinary and special resolutions 
in the manner required by the memorandum of incorporation of the Company, the Companies Act, 71 of 2008, as amended (“the Companies 
Act”) and to the Listings Requirements of the JSE Limited (“JSE”). A copy of the notice of the annual general meeting, incorporating 
the summarised group financial statements will be distributed to shareholders on 25 March 2019. The date on which shareholders must 
be recorded in the share register, maintained by the transfer secretaries, for purpose of being entitled to attend and vote at the 
meeting is Friday, 10 May 2019, with the last day to trade being, Tuesday, 7 May 2019.

Directors
DC Kovarsky (Chairman)**, M Steyn  (Joint Chief Executive Officer and Financial Director)*^, V Botha***^^, P Burton**, JH Scholes**
(*Executive, **Independent Non-executive, ***Non-excecutive)
(^Appointed to the dual role of chief executive officer and financial director on 27 February 2019.)
(^^Resigned as financial director on 27 February 2019, and assumed the position of non-executive director on the board of R&E 
with immediate effect.)

Company secretary         
Statucor (Pty) Ltd*
*(Appointed 19 March 2019)

Sponsor: PSG Capital Proprietary Limited, First Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
Transfer Secretaries:Computershare Investor Services Proprietary Limited Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196.

Corporate information: Randgold & Exploration Company Limited (R&E),Postal address PO Box 202, Stellenbosch, 7600.
Telephone: +27 71 580 3739, Facsimile: +27 86 235 9863, Website: www.randgoldexp.co.za.

Announcement date:
25 March 2019



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