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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
Date: 25/03/2019 02:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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