| Thu 13 Dec 2007, 17:54 | | JCD - JCI - Group Net Asset Value Statement |
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JCD KRHT
JCD
JCD - JCI - Group Net Asset Value Statement
JCI LIMITED
("JCI" or "the Company")
(Incorporated in the Republic of South Africa)
(Registration number 1894/000854/06)
Share code: JCD (Suspended)
ISIN: ZAE0000039681
GROUP NET ASSET VALUE STATEMENT
Limited Assurance Report of the independent auditor and renewal of cautionary
announcement
DIRECTORS` RESPONSIBILITY STATEMENT
The JCI directors are responsible for the preparation and presentation of the
Group Net Asset Value Statement of JCI Limited at 31 March 2007 and accompanying
Notes.
The Group Net Asset Value Statement has been prepared in accordance with the
basis of preparation set out in the accompanying Notes for the purpose of
providing the shareholders with a financial update relevant to the proposed
merger between JCI and R&E, as was announced on SENS on 15 March 2007, and has
not been prepared in accordance with IFRS or other generally accepted accounting
principles.
The JCI directors` responsibility includes determining that the basis of
preparation is an acceptable basis for preparing and presenting the Group Net
Asset Value Statement and accompanying Notes and making accounting estimates
which, in the opinion of the JCI directors, are reasonable in the circumstances.
KPMG, the independent auditor, is responsible for reporting on whether, based on
the auditor`s procedures arising from a limited assurance engagement, the Group
Net Asset Value Statement at 31 March 2007 has been prepared, in all material
respects, in accordance with the basis of preparation set out in the
accompanying Notes to the Group Net Asset Value Statement.
Approval of the Group Net Asset Value Statement
The Group Net Asset Value Statement at 31 March 2007 and accompanying Notes were
approved by the JCI board on 13 December 2007 and are signed on its behalf by:
Peter Henry Gray Leslie Arthur Maxwell
Chief Executive Officer Financial Director
LIMITED ASSURANCE REPORT OF THE INDEPENDENT AUDITOR TO THE SHAREHOLDERS OF JCI
LIMITED
We have performed our limited assurance engagement on the Group Net Asset Value
Statement of JCI Limited at 31 March 2007 and accompanying Notes.
Directors` responsibility for the Group Net Asset Value Statement
The JCI Limited directors are responsible for the preparation and presentation
of the Group Net Asset Value Statement in accordance with the basis of
preparation, set out in the Notes to the Group Net Asset Value Statement for the
purpose of providing the shareholders with financial information relevant to the
proposed merger with Randgold & Exploration Company Limited, as referred to in
the Notes. This responsibility includes determining that the basis of
preparation is an acceptable basis for preparing and presenting the Group Net
Asset Value Statement and making accounting estimates which, in the opinion of
the JCI directors, are reasonable in the circumstances.
Auditor`s responsibility
Our responsibility is to conclude on whether the Group Net Asset Value Statement
at 31 March 2007 has been prepared on the basis of preparation set out in the
accompanying Notes, based on the procedures performed by us in a limited
assurance engagement. There are no International Standards on Auditing
(Engagement Standards) applicable to an engagement of this nature. In these
circumstances we applied our professional judgement in planning and performing
our procedures to obtain limited assurance on the Group Net Asset Value
Statement in accordance with the basis of preparation set out in the
accompanying Notes. Our evidence gathering procedures are more limited than for
a reasonable assurance engagement and therefore less assurance is obtained than
in a reasonable assurance engagement. We believe that the evidence we have
obtained is sufficient and appropriate to provide a basis for our conclusion.
Summary of work performed
Our work included making enquiries with management and performing procedures to
obtain evidence in respect of the amounts and disclosures in the Group Net Asset
Value Statement in accordance with the basis of preparation set out in the
accompanying Notes. We have evaluated the appropriateness of the basis of
preparation in the circumstances and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the Group
Net Asset Value Statement.
Conclusion
Based on the procedures performed by us, nothing has come to our attention that
causes us to believe that the Group Net Asset Value Statement at 31 March 2007
has not been prepared, in all material respects, on the basis of preparation set
out in the accompanying Notes.
Restriction on use of this report
The Group Net Asset Value Statement has been prepared, in all material respects,
in accordance with the basis of preparation, set out in the accompanying Notes,
for the purpose of providing the shareholders with financial information
relevant to the proposed merger, as referred to in the Notes.
The Group Net Asset Value Statement and our limited assurance report may not be
suitable for any other purpose.
KPMG Inc
Registered Auditor
13 December 2007
Johannesburg, South Africa
GROUP NET ASSET VALUE STATEMENT
Notes Unaudited
At 31 March 2007
R `000
ASSETS
Listed investments 3 1 979 915
Gold Fields 1 720 817
R&E 178 094
Other listed investments 81 004
Unlisted investments 477 198
Boschendal 4 127 043
Jaganda 5 283 755
Businesses held for sale 6 66 400
Prospecting rights 246 421
Prospecting rights - GFO transaction 7 182 315
Other prospecting rights 8 64 106
Other assets 56 547
Investment properties 9 6 100
Cash and cash equivalents 10 50 447
TOTAL ASSETS 2 760 081
LIABILITIES
Investec raising fee 11 (373 335)
Income tax payable 12 (76 093)
Deferred taxation 13 (46 287)
Trade and other payables 14 (175 979)
TOTAL LIABILITIES (671 694)
NET ASSETS 2 088 387
Number of shares
ISSUED SHARES 15
Number of shares in issue 2 224 798 993
Treasury shares (202 024 776)
Shares identified for possible cancellation -
Net shares in issue 2 022 774 217
NAV per share - Rand 1.0324
NOTES TO THE GROUP NET ASSET VALUE STATEMENT AT 31 MARCH 2007
1 PURPOSE OF THE GROUP NET ASSET VALUE STATEMENT
On 7 April 2006, JCI published restated unaudited and unreviewed provisional
financial results for the six months ended 30 September 2005, and for each of
the years ended 31 March 2004 and 31 March 2005 ("provisional results").
In the accompanying commentary to these provisional results the JCI directors
indicated, inter alia, that due to the extent of the misappropriations, for
which details were disclosed in the commentary, there may be other material
events and circumstances of which the JCI directors are not aware of and which
may have a material effect on JCI. These may affect the completeness and
accuracy of the information reflected in the provisional results and/or may have
the effect that the provisional results do not reflect a true and complete
account of the financial and other affairs of JCI. In these circumstances the
JCI directors disclaimed any liability in respect of the accuracy, correctness
and/or completeness of the information reflected in the provisional results.
This is still the position.
KPMG Inc. was appointed as the independent auditor of JCI during October 2005.
In view of the uncertainties relating to the provisional results, and the
disclaimer by the JCI directors, they were unable to, and did not, express an
audit or review opinion on the provisional results. This is still the position.
On 15 March 2007, JCI and R&E published an update to shareholders on the
settlement and/or merger negotiations between JCI and R&E which included a Net
Asset Value Statement. Subsequently on 23 April 2007, JCI and R&E announced
their intention to merge. Because the JCI directors are still unable to prepare
a complete set of financial statements for the years ended 31 March 2005, 2006
and, now, 2007, in accordance with IFRS, the JCI directors have prepared a Group
Net Asset Value Statement on the basis set out in note 2. The JCI directors
consider the Group Net Asset Value Statement, including the accompanying Notes,
suitable in the circumstances for the purpose of providing its shareholders with
financial information relevant to the proposed merger.
2 BASIS OF PREPARATION
The Group Net Asset Value Statement has been prepared from information available
to the JCI directors and may not be complete for the reasons given in note 1
above. In particular, the Group Net Asset Value Statement excludes major claims
and counter claims between JCI and R&E.
Other than these claims, the Group Net Asset Value Statement includes all known
significant assets and liabilities of the JCI Group and associate companies. The
Group Net Asset Value Statement includes JCI`s proportionate share of FSD`s (an
44.89% associate interest of JCI) assets and liabilities on a line by line
basis.
The Group Net Asset Value Statement has been prepared in Rands. All financial
information is presented in Rands and has been rounded to the nearest thousand.
The Group Net Asset Value Statement required the JCI directors to make
judgements, estimates and assumptions that affect the basis of preparation and
the reported amounts of assets and liabilities. Actual results may differ from
these estimates.
The assets and liabilities of subsidiaries are included in the Group Net Asset
Value Statement, except in instances where the subsidiaries are considered as
businesses held for sale, or if the subsidiaries are considered to be insolvent.
However, insolvent subsidiaries` liabilities have been included to the extent
where JCI or any of its other subsidiaries have guaranteed the liabilities.
The Group Net Asset Value Statement has been prepared on a fair value basis as
disclosed under each heading below:
2.1 Listed investments
The JCI Group`s listed investments, except for the investment in R&E, are based
on the VWAP for March 2007 comprising 21 trading days.
The value of the R&E investment is based on the Net Asset Value per share of R&E
at 31 March 2007 which is based on the amount disclosed in the R&E Group Net
Asset Value Statement, published on the same date as this statement. The R&E
value is adjusted to reflect a proposed merger ratio of 95 to 1, as announced on
23 April 2007.
2.2 Unlisted investments
Unlisted investments include the investments in Boschendal and Jaganda, as well
as businesses held for sale.
2.2.1 Businesses held for sale
The fair values of these businesses are based on purchase offers received from
third parties. The JCI directors have used the latest offer received as an
indication of the businesses` minimum values.
2.3 Prospecting rights
Where an agreement has been signed to sell the prospecting rights, the value is
based on the consideration in the relative agreement.
Where no such agreements are in place, the JCI directors have determined a value
which they believe is reasonable based on calculations from independent mineral
project evaluation experts. For such calculations, independent mineral project
evaluation experts were used to conduct and conclude on the mineralisation which
was valued using comparable transactions.
2.4 Other assets
Other assets include investment properties and cash and cash equivalents.
2.4.1 Investment properties
Where an agreement is signed to sell the properties, the value is based on the
consideration in the signed agreement.
Where there are no such agreements in place, the value is based on the latest
offer to purchase received from a third party.
2.4.2 Cash and cash equivalents
Cash and cash equivalents comprises cash and cash deposits with banking
institutions. The carrying amount of cash and cash deposits with banking
institutions approximates fair value.
2.5 Taxation
2.5.1 Income tax payable
Income tax payable comprises taxation payable, calculated on the basis of the
expected taxable income, using the tax rates enacted or substantively enacted at
the reporting date, and any adjustment of income tax payable for previous years.
Income tax payable has been calculated based on the best information currently
available to management regarding taxable income (including prior year
assessments and management`s interpretation of current tax law) given the
circumstances detailed in note 1 above.
2.5.2 Deferred taxation
Deferred taxation is provided based on temporary differences. Temporary
differences are differences between the carrying amounts of assets and
liabilities reported in the Group Net Asset Value Statement and their tax base.
The amount of deferred taxation provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities using
tax rates enacted or substantively enacted at the reporting date.
A deferred taxation asset is recognised only to the extent that it is probable
that future taxable profits will be available against which the associated
unused tax losses, unredeemed capital expenditure and deductible temporary
differences can be utilised. Deferred taxation assets are reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
2.6 Trade and other payables
Trade and other payables include accruals and other amounts payable, based on
management`s best estimate at the reporting date.
2.7 Contingent assets
Contingent assets are disclosed when it is probable that they will be realised
and are best estimates expected to be recovered. No contingent assets have been
included in the Group Net Asset Value Statement as the recoverability cannot be
reasonably assured.
3 Listed investments
Number of Value per Value R`000
shares share R
Gold Fields 13 434 438 128.0900 1 720 817
R&E 6 196 868 28.7393 178 094
Other listed investments 81 004
- Matodzi 211 590 495 0.2404 50 866
- Sekunjalo 23 885 556 0.7850 18 750
- Simmers 1 833 592 6.2108 11 388
1 979 915
The value of the listed investments, except for the investment in
R&E, is based on the VWAP for March 2007 comprising 21 trading
days.
The value of the R&E investment is based on the Net Asset Value
per share of R&E at 31 March 2007 which is disclosed in the R&E
Group Net Asset Value Statement, published on the same date as
this statement.
The R&E value is adjusted for the merger ratio as announced on
23 April 2007.
The JCI Group has not included 2 943 087 R&E shares, which have
been pledged as security for a liability owing by the JCI Group.
These shares have not been included in the Group Net Asset Value
Statement of R&E as these are shares included for possible
cancellation.
4 Boschendal
35% investment through Moregate and Kovacs 40 250
Debentures in Kovacs including interest 85 888
Loan to Kovacs 905
127 043
The investment in Boschendal is held through an investment in
Moregate and a debenture agreement with Kovacs. These two
investments equate to an indirect shareholding of 35% in
Boschendal.
An offer to purchase 20% of the investment in Boschendal was
received from a third party. The directors of JCI used this offer
to purchase to calculate the value of the 35% investment in
Boschendal.
The value of the debentures in Kovacs is based on the original
purchase price plus accumulated interest.
The loan receivable from Kovacs is the amount receivable at 31 March
2007. The loan has no fixed terms of repayment.
The JCI board is of the opinion that the valuation of R127 million
is fair and reasonable, however, the JCI board has indicated that
the long term value of the investment could be in excess of this
amount. Due to various uncertainties, the JCI board is not able to
further speculate on the valuation of the investment.
Jaganda R`000
Investment at 283 755
valuation
The investment in Jaganda comprises 357 374 000 preference shares.
The preference shares mature in June 2010.
During April 2006, JCI instituted an action against Jaganda for the
delivery of 357 374 000 preference shares held by JCI in that
company, which holds ordinary shares in Simmers. Jaganda has
disputed the validity of the preference shares, pleadings have
closed and the matter has been allocated a trial date of 11 June
2008.
The preference shares carry interest at bank prime overdraft rate in
South Africa, only in the event and to the extent that Simmers pays
dividends to its shareholders. In addition, on redemption, 20% of
the 30-day VWAP of the Simmers quoted share price on the JSE, that
exceeds 25 cents per share, becomes payable to JCI in cash. At a
Simmers share price of R6.2108, the total value of the Jaganda
preference shares is R515.4 million.
Jaganda disputes the validity of the preference shares based on
certain technical issues. Jaganda acknowledges that it is indebted
to JCI for R89.3 million, the original value of the preference
shares, but denies further obligations.
The JCI board is not able to place a value on the investment in
Jaganda due to uncertainty regarding its holding, but, with the
agreement of the R&E board, has placed a value of R284 million to
the investment in Jaganda, this being between the face value of the
preference share and market value at 31 March 2007.
Businesses held
for sale
AMT 33 000
AML, MSI, Cueincident and 21 500
Loan account - CMMS
Bioclones 5 000
Skygistics 6 000
Tavlands 900
66 400
All the above businesses held for sale are valued by the JCI
directors based upon offers received for the investments.
The JCI Group has other investments which have not been included as
the JCI directors have not received any offers and are of opinion
that it would not be prudent to attribute any value to these
businesses at the current time. The JCI directors are of the opinion
that they may, however, be able to generate value from these
investments in the future. These include businesses such as Lyons
and Palfinger.
Prospecting rights - GFO
transaction
JCI`s share of the 177 315
prospecting rights in respect
of the GFO transaction
Prospecting rights held 5 000
within the JCI Group
182 315
JCI and R&E, and certain of their subsidiaries had reached
agreement, in terms of which the JCI and R&E groups relinquished
their rights in favour of GFO for a purchase consideration of R400
million (excluding VAT), concluded on 31 October 2007. Upon
conclusion, JCI, through its 44.89% shareholding in FSD, is entitled
to an amount of R177 million.
Other
prospecting
rights
New order prospecting rights 64 106
held by FSD
These prospecting rights have been converted to new order
prospecting rights, and have been valued based on old prospecting
data. For further details, refer to note 16.1.
Investment
properties
Houghton 3 500
property
Stonehurst 2 600
properties
6 100
These properties are held through subsidiary companies. The Houghton
property value is based on a recent offer to purchase received,
while the Stonehurst properties are valued based on the actual sales
value realised subsequent to 31 March 2007.
Cash and cash
equivalents
Cash and cash 50 447
deposits
Investec raising
fee
Investec raising fee based on (373 335)
the Investec loan agreement
The Investec loan agreement provides for a raising fee to be paid to
Investec on certain selected assets of JCI. The raising fee has been
calculated based on the JCI directors` interpretation of the
Investec loan agreement. The Investec raising fee liability would be
R453.4 million should the profit share calculation be based on the
asset values as disclosed in the Group Net Asset Value Statement, as
different values were used in calculating the Investec raising fee
than those disclosed in the Group Net Asset Value Statement.
JCI and Investec are in the process of finalising the calculation of
this raising fee arrangement. Currently there are differences
between JCI`s and Investec`s interpretation of the loan agreement.
These differences relate to Investec`s disagreement with JCI
regarding the calculation of the value of the JCI shares, and the
value of the investments in R&E, Boschendal and Jaganda used in
JCI`s calculation.
The Investec raising fee liability would be R575.6 million should
the raising fee calculation be based on Investec`s interpretation of
the Investec loan agreement.
The JCI directors are strongly of the view that the amount disclosed
will be the amount agreed upon, subject to the court actions
instituted by third parties regarding the Investec raising fee
agreement.
Investec hold the following assets as security for the outstanding
fee:
Number of Share Value
shares price R`000
R
Gold Fields 11 657 240 128.0900 1 493 176
Matodzi 200 000 000 0.2404 48 080
R&E 3 250 000 28.7393 93 403
Boschendal 127 043
Jaganda 283 755
Stonehurst properties 2 600
2 048 057
Income tax payable
CGT (49 197)
Income tax (22 868)
Proportionate share of FSD`s (4 028)
tax liability
(76 093)
The amounts include all penalties and interest that may be due. A
large portion of these amounts relate to years prior to
reconstitution of the JCI board. Management have resolved these tax
issues with SARS.
Deferred taxation
Unrealised
Deferred (2 655)
taxation
Deferred taxation on other (18 584)
prospecting rights
Realised
Deferred taxation arising (25 048)
from the GFO transaction
(46 287)
The deferred taxation balance comprises temporary differences on
listed investments, unlisted investments and prospecting rights,
except where the deferred tax liability has been offset against
deferred tax assets in the respective JCI Group companies.
No deferred taxation assets were raised on the assessed losses of
the JCI Group as it is not probable that future taxable profits will
be available when the related deductible temporary differences
reverse.
Trade and other
payables
Trade and other (109 658)
payables
VAT (17 659)
payable
PAYE (2 288)
payable
FSD loan (46 374)
(175 979)
Trade and other payables include provisions for unsettled legal
claims and matters that JCI is engaged in. JCI has also raised
provisions for amounts on which security has been signed and amounts
which JCI believes will not be received from the principal debtor.
These amounts also include a loan payable to FSD, a subsidiary
of R&E, net of JCI`s share of this loan, as disclosed in note
16. The loan payable to FSD bears interest at the bank prime
lending rate and no formal terms of repayment have been
established.
JCI have pledged 2 943 087 R&E shares as security for a debt
of US$4.8 million which is included in trade and other
payables. These shares have not been included in the assets as
the ownership of the shares are under dispute and R&E have
indicated that they will possibly cancel these shares. Refer
to note 3.
PAYE payable:
JCI engaged independent tax advisors who completed a PAYE
audit. Their report was submitted to SARS. JCI have reached
agreement with SARS regarding the amount payable.
VAT payable:
JCI engaged independent tax advisors who completed a VAT audit
and determined the amount payable. SARS has considered JCI`s
submission and issued assessments for the amounts payable. JCI
and SARS have reached agreement regarding the settlement of
amounts outstanding.
15 Issued shares
15.1 Treasury shares 202 024 776
Treasury shares are JCI shares held by
subsidiary companies excluding those held by
Matodzi.
15.2 Total shares identified for possible 194 874 834
cancellation
JCI shares in the possession of R&E (104 000 000)
Shares involved in potential legal proceedings (90 874 834)
Shares identified for possible cancellation -
The above shares have been identified as fraudulent issues,
issued by the previous board. For the purpose of calculating
the net shares in issue, the number of shares in issue has not
been reduced by the above identified shares as; firstly the
104 million JCI shares are in the possession of R&E and
secondly the 90 874 834 shares have been excluded as
proceedings for their cancellation are still in progress.
16 FSD`s Net Asset Value
Notes JCI`s share 100% Unaudited
Unaudited At At 31 March
31 March 2007
2007 R`000
R`000
ASSETS
Prospecting rights 241 421 537 806
Prospecting rights - 177 315 395 000
GFO transaction
Other prospecting 16.1 64 106 142 806
rights
Other asset
Loan receivable 16.2 37 774 84 148
TOTAL ASSETS 279 195 621 954
LIABILITIES
Income tax payable (4 028) (8 972)
Deferred taxation (43 632) (97 197)
TOTAL LIABILITIES (47 660) (106 169)
NET ASSETS 231 535 515 785
JCI`s proportionate share, equating to 44.89%, of FSD`s Net
Asset Value was included in the applicable line items of the
Group Net Asset Value Statement. FSD`s net asset value has
been prepared on a basis consistent with that of JCI.
16.1 Other prospecting rights
JCI is the beneficial owner of various prospecting rights held
through its 44.89% shareholding in the issued share capital of
FSD. Various prospecting rights, mainly flowing from the
historical old order mineral rights portfolio of FSD and its
subsidiaries, have either been applied for or awarded by the
DME. The Du Preez Leger Project, which has been granted and
executed, has not yet been registered in the name of FSD.
The prospecting rights adjacent to St Helena, namely Du Preez
Leger 423/Jonkersrus 72, have a gold resource of 22 million
tonnes at 6.7 g/t at a pay limit of 5.6 g/t. The prospecting
right adjacent to the Harmony, namely on Vermeulenskraal 223,
has a gold resource on the Basal reef of 6.3 million tonnes at
10.07 g/t. at a pay limit of 5.6 g/t. This information is
quoted from historic evaluations done in the 1980s and the
definitions of resources and reserves would not be exactly the
same as those currently accepted by SAMREC, JORC and the NI 43-
101 codes.
Considering various transactions that have been quoted
publicly, and noting differences between the nature of the Du
Preez Leger project and Vermeulenskraal`s gold deposits and
the transactions quoted, a value of US$4 per ounce was applied
for the purposes of valuing the project. This value was
derived after applying a 35% discount factor on the average
US$ per ounce rate of similar transactions. The discount
factor was applied due to the fact that a detailed assessment
of the Du Preez Leger project and Vermeulenskraal has not been
conducted, other than the historic valuations concluded in the
1980`s, as well as the fact that the projects may not be
viable as stand-alone projects at this point in time.
16.1 Other prospecting rights
On this basis, the Du Preez Leger Project can be valued as
follows:
Tonnes g/t moz US$/oz US$ R`m at After (1)
(m`s) `000 R7.36 BEE
dilution
R`m
Du Preez Leger 22.00 6.70 4.5785 4.00 18 314 134.792 99.747
423/Jonkersrus
72
Vermeulens- 6.30 10.07 1.9765 4.00 7 906 58.188 43.059
kraal 223
Total - Du 6.5550 26 220 192.980 142.806
Preez Leger
Project
(1) The value of other prospecting rights has been calculated on the
basis that 26% thereof will be attributable in terms of the BEE Act.
16.2 Loan receivable
The loan is receivable from JCI Gold and bears interest
at the bank prime lending rate. No formal terms of
repayment have been established. The loan receivable is
eliminated in the preparation of the Group Net Asset
Value Statement of JCI and is therefore not included in
the assets of JCI.
17 Contingent assets
The JCI Group has several assets not included in the
Group Net Asset Value Statement as their value,
recoverability and ownership cannot be determined with
any reliability at this time.
17.1 Claims against third parties (excluding R&E)
JCI has identified various claims against third parties.
It is not prudent at this stage to disclose a claim
value or a break-down thereof, or to identify a name or
to disclose any other relating details as it might
influence the recoverability of these claims.
18 Guarantees
The JCI Group provided the following guarantees:
Boschenda 364 000
l
AML 10 000
374 000
The JCI directors are confident that the JCI Group is not
exposed to any other significant liabilities.
19 Subsequent events
The JCI Group has entered into a back to back transaction
with the sale of 1.7 million Gold Fields shares and a
single stock future for 1.7 million Gold Fields shares
subsequent to 31 March 2007.
JCI has reached a settlement with SARS regarding the
matters of its subsidiaries, and has signed an agreement of
the matters. The settlement has been accounted in the Net
Asset Value Statement.
No other material events occurred subsequent to 31 March
2007 other than those disclosed elsewhere in the Group Net
Asset Value Statement.
20 Encumbrances
No significant assets have been encumbered or pledged other
than those disclosed elsewhere.
FURTHER RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue to exercise caution
when trading in their shares over-the-counter until further
announcements are made.
GLOSSARY OF TERMS
"AMT" Kovacs 620 (Proprietary) Limited
(Registration number 2003/019844/07) trading
as Advanced Medical Technologies, a private
company incorporated in South Africa, and a
wholly-owned subsidiary of the JCI Group;
"AML" African Maritime Logistics (Proprietary)
Limited (Registration number
2000/011486/07), a private company
incorporated in South Africa, and a
subsidiary of the JCI Group;
"BEE" Black Economic Empowerment Act 53 of 2003;
"CGT" Capital Gains Tax is defined within the
Eighth Schedule of the Income Tax Act No.58
of 1962 (As Amended) and applies to the
taxation of the disposal of certain capital
items (assets) which generate either capital
gains or losses;
"Bioclones" Bioclones (Proprietary) Limited
(Registration number 1982/005469/07), a
private company incorporated in South
Africa;
"Boschendal" Boschendal Limited (Registration number
2002/023534/06), a public company
incorporated in South Africa;
"contiguous rights" collectively, and severally the
Kalbasfontein rights, the WA4 rights, the
Cardoville rights and the Wildebeestkuil
rights as detailed in the JCI circular to
shareholders issued on 15 October 2007;
"CGT" capital gains tax levied in terms of the
Income Tax Act;
"CMMS" Consolidated Mining Management Services
Limited (Registration number
1925/008135/06), a public company
incorporated in South Africa and a
subsidiary of the JCI Group;
"Cueincident" Cueincident (Proprietary) Limited,
(Registration number 2000/000708/07), a
private company incorporated in South
Africa;
"DME" the Department of Minerals and Energy;
"Du Preez Leger Project" the Du Preez Leger Project is a project
encompassing the farms Du Preez Leger 324,
Jonkersrus 72, Milo 639, Rebelkop 456,
Tweepan 678 and Vermeulenskraal 223 located
in the district of Virginia in the Free
State Province;
"FSD" Free State Development and Investment
Corporation Limited (Registration number
1944/016931/06), a public company
incorporated in South Africa, jointly held
by JCI and R&E;
"GFO" Gold Fields Operations Limited (formerly
Western Areas Limited) (Registration number
1959/003209/06), a public company
incorporated in South Africa, and a wholly-
owned subsidiary of Gold Fields;
"GFO transaction" the relinquishment by JCI and certain of its
subsidiaries, and R&E and its subsidiary
Goldridge, of rights contiguous to the South
Deep gold mine, to GFO, details of which are
included in the circular issued to JCI
shareholders on 15 October 2007;
"Gold Fields" Gold Fields Limited (Registration number
1968/004880/06), a public company
incorporated in South Africa, the shares of
which are listed on the JSE, and the New
York Stock Exchange;
"Goldridge" Goldridge Gold Mining Company (Proprietary)
Limited (Registration number 1974/003333/07)
a private company incorporated in South
Africa;
"g/t" grams of gold per tonne;
"Harmony" Harmony Gold Mining Company Limited
(Registration number 1950/038232/06), a
public company incorporated in South Africa,
the shares of which are listed on the JSE,
the New York Stock Exchange and the NASDAQ
stock market;
"IFRS" International Financial Reporting Standards
as adopted by the International Accounting
Standards Board;
"Income Tax" income Tax levied in terms of the Income Tax
Act;
"Income Tax Act" the Income Tax Act 1962 (Act 58 of 1962), as
amended;
"Investec" Investec Bank Limited (Registration number
1969/004763/06), a public company
incorporated in South Africa, the shares of
which are listed on the JSE;
"Investec loan agreement" the agreement between JCI and Investec as
amended, in terms of which Investec
undertook to arrange a loan facility of up
to R460 million to JCIIF, the terms of which
are summarised in the circular to
shareholders issued on 15 October 2005. For
avoidance of doubt, the latest agreement,
incorporating all the respective amendments
was signed on 16 January 2006;
"Investec loan facility" the loan facility made available to JCIIF in
terms of the Investec loan agreement;
"Investec raising fee" details of which are contained in the
circular issued to shareholders on 15
October 2007;
"Jaganda" Jaganda (Proprietary) Limited (Registration
number 2004/005559/07), a private company
incorporated in South Africa, and a wholly-
owned subsidiary of the JCI Group;
"JCI" JCI Limited (Registration number
1894/000854/06), a public company
incorporated in South Africa, the shares of
which is listed on the JSE but which are
suspended;
"JCI board" or "JCI the current board of directors of JCI, being
directors" the reconstituted directors appointed on 24
August 2005 and subsequent changes thereto;
"JCIIF" JCI Investment Finance (Proprietary) Limited
(Registration number 2005/021440/07), a
private company incorporated in South Africa
and a wholly-owned subsidiary of JCI;
"JCI Gold" JCI Gold Limited (Registration number
1998/005215/06), a public company
incorporated in South Africa, being a wholly-
owned subsidiary of JCI and a shareholder in
FSD;
"JCI Group" JCI and its subsidiary companies;
"JCI shares" ordinary shares of 1 cent each in the issued
share capital of JCI;
"JORC" the Australasian Joint Ore Reserves
Committee, based in Australia have developed
an internationally accepted code for
defining ore "resources" and "reserves";
"JSE" JSE Limited (Registration number
2005/022939/06) a public company
incorporated in South Africa, which is
licensed as an exchange under the Securities
Services Act;
"Kovacs" Kovacs Investments 608 (Proprietary) Limited
(Registration number 2003/015125/07), a
private company incorporated in South
Africa;
"KPMG" KPMG Inc (Registration number
1999/021543/21), a public company
incorporated in South Africa;
"Letseng" Letseng Diamonds (Proprietary) Limited
(Registration number 95/259), a private
company incorporated in Lesotho;
"Letseng Holdings" Letseng Investment Holdings South Africa
(Proprietary) Limited (Registration number
1998/023466/07), a private company
incorporated in South Africa;
"Lyons" Lyons Property Solutions (Proprietary)
Limited (Registration number
2006/026142/07), a private company
incorporated in South Africa;
"Matodzi" Matodzi Resources Limited (Registration
number 1933/004523/06), a public company
incorporated in South Africa, the shares of
which are listed on the JSE, a subsidiary of
JCI;
"mediators" Advocate SF Burger SC, Professor H Wainer,
CA(SA) and Mr C Nupen, appointed in terms of
the mediation agreement;
"MSI" Mvelaphanda Security Investments
(Proprietary) Limited, (Registration number
2002/008808/07), a private company
incorporated in South Africa, and a wholly-
owned subsidiary of the JCI Group;
"Moregate" Moregate Investments Limited (Registration
number 358251), now known as African
Strategic (Holdings) Limited, a public
company incorporated in the British Virgin
Islands;
"Moz" million ounces;
"mt" million tonnes or tons;
"N1 43-101" the standard for the reporting of minerals
by competent persons established in Canada;
"oz" ounces (troy);
"Palfinger" Palfinger Southern Africa (Proprietary)
Limited (Registration number
1990/003385/07), a private company
incorporated in South Africa;
"proposed merger" the announcement published jointly by R&E
and JCI on SENS dated 23 April 2007,
incorporating details of the proposed merger
of both companies;
"Rand" or "R" the South African Rand, the unit of currency
in South Africa;
"R&E" Randgold & Exploration Company Limited
(Registration number 1992/005642/06), a
public company incorporated in South Africa,
the shares of which are listed on the JSE
but which are suspended;
"R&E claims" the alleged claims by R&E against JCI;
"R&E Group Net Asset Value the R&E Group Net Asset Value Statement
Statement" published on the same date as the JCI Group
Net Asset Value Statement;
"SAMREC Code" South African code for reporting of mineral
resources and mineral reserves;
"SARS" the South African Revenue Services is a
division of the government that collects
revenue and regulates all forms of tax
payable by South African tax payers. SARS
refers to the Income Tax Act No.58 of 1962
(as amended) for these collections and
regulations;
"Securities Services Act" the Securities Services Act, 2004, (Act 36
of 2004) as amended;
"Sekunjalo" Sekunjalo Investments Limited (Registration
number 1996/006093/06), a public company
incorporated in South Africa, the shares of
which are listed on the JSE;
"shareholders" holders of JCI shares;
"Skygistics" Skygistics (Proprietary) Limited
(Registration number 2000/018328/07), a
private company incorporated in South
Africa;
"Simmers" Simmer and Jack Mines Limited (Registration
number 1924/007778/06), a public company
incorporated in South Africa, the shares of
which are listed on the JSE;
"South Africa" the Republic of South Africa;
"South Deep" South Deep (a gold mine), situated in the
Magesterial District of Westonia and
Vanderbijlpark (Gauteng Province), owned by
Gold Fields;
"St Helena" St Helena Gold Mines Limited is a company
registered in South Africa (Registration
Number 1905/020743/06) and located within
the Free State Province of South Africa.
Its main business is the mining of gold
within the Free State province;
"Stonehurst properties" properties in the Stonehurst Mountain Estate
situated on the slopes of the Steenberg
mountain, in Cape Town;
"Tavlands" Tavlands (Proprietary) Limited (Registration
number 1971/007783/07), a private company
incorporated in South Africa;
"US$" United States Dollars;
"VWAP" volume weighted average price on the JSE;
"VAT" value added tax levied in terms of the VAT
Act;
"VAT Act" the Value-Added Tax Act, 1991 (Act 89 of
1991), as amended;
Legal adviser and secretary Sponsor
and registered office
Ms BE Morton (BA, LLB, LLM, Sasfin Capital
Attorney) a division of Sasfin Bank Limited
13th Floor (Registration number
28 Harrison Street 1951/002280/06)
Johannesburg, 2001 Sasfin Place
(PO Box 11165, Johannesburg, North Block
2000) 13 - 15 Scott Street
Telephone: +27 11 688 5100 Waverley, 2090
Facsimile: +27 11 492 1070 (PO Box 95104, Grant Park 2051)
Website: www.jci.co.za Telephone: +27 11 809 7500
Facsimile: +27 11 809 7726
Registered auditor South African transfer secretaries
KPMG Inc. Computershare Investor Services
(Registration number 2004 (Proprietary) Limited
1999/021543/21) (Registration number
KPMG Crescent 2004/003647/07)
85 Empire Road Ground Floor
Parktown, 2193 70 Marshall Street
(Private Bag 9, Parkview, Johannesburg, 2001
2122) (PO Box 61051, Marshalltown 2107)
Telephone: +27 11 647 7111 Telephone: +27 861 100 634
Facsimile: +27 11 647 8000 or +27 11 370 5000
United Kingdom secretaries Communications
St James`s Corporate Brian Gibson Issue Management
Services Limited Brian Gibson
6 St James`s Place 23 Sutherland Avenue
London SW1A 1NP Craighall Park, 2196
United Kingdom (PO Box 406, Parklands, 2121)
Telephone: +44 (20) 7499 Telephone: +27 11 880 1510
3916 Facsimile: +27 11 880 1392
Facsimile: +44 (20) 7491
1989
United Kingdom registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Telephone: 0870 162 3100
(from inside the United
Kingdom)
Telephone: +44 (20) 8639
3399 (from outside the
United Kingdom)
Facsimile: +44 (20) 8639
2342
FORWARD-LOOKING STATEMENT AND DISCLAIMER FOR JCI
Certain statements in this announcement, as well as oral statements that may be
made by the officers, directors or employees of JCI acting on its behalf
relating to such information, contain "forward-looking statements". All
statements, other than statements of historical facts, are "forward-looking
statements". These include, without limitation, the ability of JCI and R&E to
successfully consummate a merger that is approved by the shareholders and is
acceptable to the necessary governmental authorities, the fraud and
misappropriation that are alleged to have occurred and the time periods affected
thereby; the ability of JCI to recover any misappropriated assets and
investments; the outcome of any proceedings on behalf of, or against JCI; the
ability of JCI to complete its forensic investigation and prepare audited
financial statements; the time period for completing the forensic investigation
and audited financial statements; the amount of any claims JCI is or is not able
to recover against others, and the success of its mediation with R&E; the
likelihood and economic parameters of any merger arrangement between JCI and
R&E; and the ultimate impact on the previously released financial statements and
results, assets and investments, including with respect to business, operations,
economic performance, financial condition, outlook and trading markets of JCI.
Although JCI believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations will
prove to be correct, particularly in light of the extent of the alleged frauds
and misappropriations uncovered to date. Actual results could differ materially
from those implied by or set out in the forward-looking statements.
Among other factors, the existence of any possible unknown liabilities, the
willingness of any governmental authority to sanction any merger; the extent,
magnitude and scope of any fraud and misappropriation that may be ultimately
determined to have occurred and the time periods and facts related thereto
following the completion of the forensic investigation and any other
investigations that may be commenced and the ultimate outcome of such forensic
investigation; the ability of JCI to successfully assert any claims it may have
against other parties for fraud or misappropriation of JCI assets or otherwise
and the solvency of any such parties; the determinations of the mediators and
acceptance of any such determinations by the shareholders of JCI; the ability of
JCI to defend successfully any counterclaims or proceedings against it; the
ability of JCI and the forensic investigators to obtain the necessary
information with respect to the transactions, assets, investments, subsidiaries
and associated entities of JCI to complete the forensic investigation and
prepare audited financial statements; the willingness and ability of the
forensic investigators and auditors to issue any final opinions with respect
thereto; the ability of JCI to implement improved systems and to correct its
late reporting; the JSE`s willingness to lift its suspension of the trading of
JCI`s securities on that exchange; changes in economic and market conditions;
fluctuations in commodity prices and exchange rates; the success of any business
and operating initiatives, including any mining rights; and changes in the
regulatory environment and other government actions; business and operational
risk management; other matters not yet known to JCI or not currently considered
material by JCI.
All forward-looking statements attributable to JCI, or persons acting on its
behalf, are qualified in their entirety by these cautionary statements. JCI
expressly disclaims any obligation to release publicly any update or revisions
to any forward-looking statements to reflect any changes in expectations, or any
change in events or circumstances on which those statements are based, unless
otherwise required by law.
13 December 2007
Johannesburg
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 13/12/2007 17:54:02 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.
