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Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Share Code: RNG & ISIN: ZAE000008819

(“R&E” or “the company”)

 

ANNUAL AUDITED RESULTS FOR R&E FOR THE YEAR ENDED 31 DECEMBER 2012 – 26 MARCH 2013

COMMENTARY

TO THE SUMMARSIED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2012

 

General

The board of R&E is pleased to announce the audited results for the year ended 31 December 2012.

Income

The majority of the income recognised is mainly as a result of settlements and recoveries of R16 million, the disposal of prospecting rights to the value of R5 million and interest earned of R11.1 million on cash investments.

 

Financial position

R&E is liquid with no interest-bearing debt. R&E’s total assets consist primarily of cash and cash equivalents. R&E had a net asset value per share of R2.46 at 31 December 2012.

Cash flow

R&E started the year under review with a cash and cash equivalent balance of R211 million.

Operating activities utilised cash of R0.8 million, primarily as a result of interest received of R11.1 million offsetting operating expenses of R11.9 million.

Investing activities yielded cash inflows of R3.2 million received, primarily from the disposal of prospecting rights of R5 million offsetting the net acquisition of investments in equity securities of R1.8 million.

R&E remains in a healthy cash position with R214 million in cash and cash equivalents at 31 December 2012.

Outlook

The outlook for 2013 is similar to that for the previous year. Expenditure on litigation is expected to be at a similar level, which is likely to prevail until the claims in which the company is engaged have been finalised. Management will continue to focus on reducing the costs of its operations where possible.

 

DC Kovarsky                                                                             Marais Steyn

Chairman                                                                                   Chief Executive Officer

Johannesburg
18 March 2013

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

Notes

2012
R’000

2011
R’000

 

 

Audited

Audited

Revenue

 

29

1 826

Profit on disposal/distribution of investments

 

43

52 474

Recoveries        

7

15 981

Other income

 

8 589

2 688

Personnel expenses

 

(12 322)

(16 137)

Profit on disposal of prospecting rights

6

5 037

9 963

Change in fair value of held-for-trading investments

 

30

Other operating expenses

 

(21 690)

(12 944)

Results from operating activities

 

(4 303)

37 870

Finance income

 

11 155

8 832

Profit before taxation

 

6 852

46 702

Taxation

 

949

Profit for the year

 

6 852

47 651

Other comprehensive income, net of tax

 

 

 

Change in fair value of available-for-sale investments

 

(9 537)

Realised gain reclassified to profit or loss

 

(52 474)

Total comprehensive income / (loss) for the year, net of tax

 

6 852

(14 360)

 

 

 

 

Profit attributable to:

 

 

 

Owners of the company

 

6 852

47 651

Profit for the year

 

6 852

47 651

 

 

 

 

Total comprehensive income attributable to:

 

 

 

Owners of the company

 

6 852

(14 360)

Total comprehensive income / (loss) for the year

 

6 852

(14 360)

 

 

 

 

Basic and diluted earnings per share (cents)

8

10

66

 

 

 

 

 

 

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

2012
R’000

2011
R’000

 

 

Audited

Audited

ASSETS

 

 

 

Non-current assets

 

661

734

Plant and equipment

 

187

260

Intangible assets

 

474

474

 

 

 

 

Current assets

 

217 311

213 258

Investment in equity securities

 

1 892

Trade and other receivables

 

1 502

1 788

Cash and cash equivalents

 

213 917

211 470

 

 

 

 

Total assets

 

217 972

213 992

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

Shareholders’ equity

 

175 878

169 026

Issued capital

 

746

746

Retained earnings

 

175 132

168 280

 

 

 

 

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Post-retirement medical benefit obligation

 

40 768

39 142

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

1 326

5 824

 

 

 

 

Total equity and liabilities

 

217 972

213 992

 

SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

31 December 2012

31 December 2011

 

Audited

Audited

 

R’000

R’000

Attributable to equity holders of the company

 

 

Share capital

746

746

Balance at the beginning of the period

746

748

Shares repurchased during the year

(2)

 

 

 

Investment fair value reserve

Balance at the beginning of the period

62 011

Change in fair value of available-for-sale investments

(9 537)

Realised gain reclassified to profit or loss

(52 474)

 

 

 

Retained earnings

175 132

168 280

Balance at the beginning of the period

168 280

111 696

Profit for the period

6 852

47 651

Shares repurchased

(604)

Remeasurement of shareholders for dividend

9 537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS

 

31 December 2012

31 December 2011

 

Audited

Audited

 

R’000

R’000

Profit before taxation

6 852

 46 702

Adjusted for:

 

 

Profit on disposal of investments

(43)

(52 474)

Profit on disposal of prospecting rights

(5 037)

(9 963)

Change in fair value of investments in equity securities

(30)

Depreciation

73

76

Change in post-retirement medical benefit liability

1 626

2 713

Finance income

(11 155)

 (8 832)

Dividends received

(29)

 (1 826)

Working capital changes

(4 212)

 (1 775)

Cash utilised in operations

(11 955)

 (25 379)

Interest received

11 155

 8 832

Taxation paid

 (10 455)

Cash flows from operating activities

(800)

 (27 002)

Cash flows from investing activities

3 247

 11 762

Dividends received

29

 1 826

Proceeds on disposal of prospecting rights

5 037

9 963

Acquisition of investment in equity securities

(2 712)

Proceeds on disposal of investments in equity securities

893

Acquisition of plant and equipment

(38)

Proceeds from disposal of plant and equipment

11

Cash flow from financing activities

(65 087)

Dividends paid

(64 481)

Shares repurchased

(606)

Increase/(decrease) in cash and cash equivalents

2 447

 (80 327)

Cash and cash equivalents at the beginning of the period

211 470

 291 797

Cash and cash equivalents at the end of the period

213 917

 211 470

 

NOTES
TO THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2012

1.  Reporting entity
R&E is a company domiciled and incorporated in the Republic of South Africa. The summarised consolidated financial statements of the company for the year ended 31 December 2012 include the company and its subsidiaries (together referred to as “the group”).

2.  Statement of compliance
The summarised consolidated financial statements for the year ended 31 December 2012 have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRSs), the presentation and disclosure requirements of IAS34 Interim Financial Reporting applied to year end reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, as well as the requirements of the South African Companies Act.
Mr Van Zyl Botha CA (SA), financial director, is responsible for these summarised consolidated financial statements and has supervised the preparation thereof in conjunction with Ms Marleen Schalkwijk.

3.  Significant accounting policies
The accounting policies set out below are the same as those applied by the company in its separate financial statements and the group in its consolidated financial statements as at and for the year ended 31 December 2011, except for IAS 12 Deferred Tax – Recovery of underlying assets that was adopted on 1 January 2012. There was no significant impact on these financial statements as a result of adopting this standard.

4. Independent audit by the auditor

These summarised consolidated financial statements for the year ended 31 December 2012 have been extracted from the complete set of annual financial statements on which the auditors, KPMG Inc, have expressed an unqualified audit opinion, dated 18 March 2013. The auditor’s reports and annual financial statements, which have been summarised in this report, are available for inspection at the registered office of the company.

5.  Segment reporting
The group operates in a single operating segment as an investment holding company with assets in the mining industry.

6.  Profit on disposal of prospecting rights
R&E disposed of certain of its prospecting rights which had a Rnil carrying value for R5 million. R&E has entered into various agreements for the sale of certain of its prospecting rights, with nil carrying values, to third parties. In terms of the agreements, however, there are still a number of conditions precedent outstanding at year-end and as a result the disposals have not been recognised as yet. The proceeds (and profit) which are expected to be realised from these transactions is R 7 million.

7.  Recoveries 
On 23 March 2012 Paul Main agreed to pay R&E USD 4 million, of which USD 2 million has been paid to date. The payment of the remaining amount has been postponed as announced and shareholders will be kept up to date of any further developments via SENS.

8.  Earnings per share

 

2012

2011

Earnings per share

Per share
(in cents)

Per share
(in cents)

Basic earnings and diluted earnings per ordinary share

10

66

 

 

 

The calculation of basic and diluted earnings per ordinary share is based on earnings of R6,9 million (2011: earnings of R47,7 million) attributable to ordinary shareholders of the company and a weighted average of 71 585 172 (2011: 71 756 219) shares in issue.

 

 

 

 

 

Headline earnings/(loss) and diluted headline earnings/(loss) per share

2

(21)

 

 

 

The calculation of the headline earnings and diluted headline earnings per share is based on a headline earnings of R1,8 million (2011: headline loss of R14,8 million) attributable to equity holders of the company and a weighted average of 71 585 172 (2011: 71 756 219) ordinary shares in issue during the year.

 

 

 

 

 

 

2012
R’000

2011
R’000

Reconciliation between basic profit for the year and headline earnings/(loss)

 

 

Profit for the year attributable to equity holders of the company

6 852

47 651

Adjusted for:

 

 

Profit on disposal/distribution of investments

(43)

(52 474)

Profit on disposal of prospecting rights

(5 037)

(9 963)

Headline earnings/(loss) for the year attributable to equity holders of the company

1 772

(14 786)

 

9.  Net asset and tangible net asset value per share
The net asset value per share is calculated using the following variables:

 

31 December 2012

31 December 2011

Net asset value (R’000)

175 878

169 026

Ordinary shares outstanding

71 585 172

71 585 172

Net asset value per share (cents)

246

236

Net tangible asset value per share (cents)

245

235

The number of shares outstanding at 31 December 2012 and 31 December 2011 has been adjusted for the 2,999,893 treasury shares held.

10. Material changes
Settlement with Paul Main
R&E and ASI (African Strategic Investment (Holdings) Limited) concluded a settlement agreement with Paul Main on 23 March 2012.  In terms of the settlement agreement, Main agreed to pay R&E USD4 million, of which USD2 million (R 15.3 million) has been paid to date and recognised as “Recoveries” in profit.  The remaining USD2 million will be recognized on receipt or when the company is virtually certain of receipt.  As a consequence of various extensions granted to Main to make payment of the second instalment, Main has paid extension payments to the company amounting to R 7.4 million, which have been recognised in profit and included in “Other income” in the Statement of Comprehensive Income.

Disclosure of Contingent Liabilities
In December 2012, an application by current and former mineworkers (who claim to have contracted silicosis on certain gold mines in South-Africa) was issued against R&E and twenty nine other Respondents.  A notice of intention to oppose the application was filed by R&E in February 2013, and in due course an answering affidavit will be served. At this stage, no damages have been quantified by the Applicants against R&E and R&E is not able to determine its potential liability if any, arising from the application.

11. Related party transactions
There were no related party transactions during the period under review other than in the normal course of business,
i.e. key management remuneration.

12. Events after reporting date
There were no significant events between the reporting date and the approval date of these results.

Directors
DC Kovarsky (Chairman)**, M Steyn (CEO)*, V Botha*, MB Madumise#, JH Scholes**
(*Executive, **Independent non-executive, #Resigned 23 March 2012 independent non-executive)

Company Secretary
V Botha CA (SA)

Transfer secretaries
Computershare Investor Services (Pty) Ltd
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001

Sponsor
PSG Capital
First Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600