| Mon 24 Nov 2008, 13:56 | | JCD - JCI Limited - Group Net Asset Value Statement |
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JCD KRHT
JCD
JCD - JCI Limited - 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 NAV Statement of JCI at 31 March 2008 and accompanying Notes as set out on
pages 3 to 20.
The Group NAV 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 financial information relevant to the proposed merger between
JCI and R&E, 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 NAV
Statement and accompanying Notes, and making accounting estimates, which, in the
opinion of the JCI directors, are reasonable in the circumstances.
KPMG Inc, the independent auditor is responsible for reporting on whether, based
on the auditor`s procedures arising from a limited assurance engagement, the
Group NAV Statement at 31 March 2008 has been prepared, in all material
respects, in accordance with the basis of preparation set out in the
accompanying Notes.
Approval of the Group NAV Statement
The Group NAV Statement at 31 March 2008 and accompanying Notes were approved by
the JCI board on 21 November 2008 and signed on its behalf by:
Peter Henry Gray
Chief Executive Officer
Leslie Arthur Maxwell
Financial Director
Johannesburg
24 November 2008
Sponsor
Sasfin Capital (A division of Sasfin Bank Limited)
The Directors
JCI Limited
10 Benmore Road
Sandton
2146
21 November 2008
Dear Sirs
INDEPENDENT AUDITOR`S LIMITED ASSURANCE REPORT IN RESPECT OF THE GROUP NAV
STATEMENT OF JCI LIMITED AT 31 MARCH 2008
We have performed our limited assurance engagement on the Group NAV Statement of
JCI Limited at 31 March 2008 and accompanying notes thereto ("Notes"), as set
out on pages 3 to 20 of the Group Net Asset Value Statement (Group NAV
Statement).
Directors` responsibility for the Group NAV Statement
The JCI Limited directors are responsible for the preparation and presentation
of the Group NAV Statement in accordance with the basis of preparation, set out
in the accompanying Notes to the Group NAV Statement, for the purpose of
providing the shareholders of JCI Limited with financial information relevant to
the proposed merger with Randgold & Exploration Company Limited, as referred to
in the accompanying Notes. This responsibility includes determining that the
basis of preparation is an acceptable basis for preparing and presenting the
Group NAV Statement and making accounting estimates, which, in the opinion of
the JCI Limited directors, are reasonable in the circumstances.
Auditor`s responsibility
Our responsibility is to conclude on whether the Group NAV Statement at 31 March
2008 as reflected on pages 3 to 20 of the Group NAV Statement to which this
report forms a part 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 NAV 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 of management and performing procedures to
obtain evidence in respect of the amounts and disclosures in the Group NAV
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
NAV Statement.
Conclusion
Based on the procedures performed by us, nothing has come to our attention that
caused us to believe that the Group NAV Statement at 31 March 2008 has not been
prepared, in all material respects, on the basis of preparation set out in the
Notes.
Emphasis of matter
As indicated, the Group NAV Statement is prepared, in accordance with the basis
of preparation, set out in the Notes, for the purpose of providing the
shareholders of JCI Limited with financial information relevant to the proposed
merger, as referred to in the Notes. The Group NAV Statement and our limited
assurance report may not be suitable for any other purpose.
KPMG Inc.
Registered Auditor
Per: J Erasmus
Chartered Accountants (SA)
Director
21 November 2008
KPMG Crescent
85 Empire Road
Parktown, 2193
Johannesburg, South Africa
GROUP NET ASSET VALUE STATEMENT
At 31 March At 31 March
2007
2008 2007
Notes R `000 R `000
ASSETS
Listed investments 3 1 705 101 1 979 915
Goldfields 1 449 293 1 720 817
R&E 189 596 178 094
Other listed investments 64 205 81 004
Derivative instruments 2 007 -
Unlisted investments 530 113 477 198
Boschendal 4 160 988 127 043
Jaganda 5 284 302 283 755
Businesses held for sale 6 68 823 66 400
Loans 7 16 000 -
Prospecting rights 62 528 246 421
Prospecting rights - GFO 8 - 182 315
transaction
Other prospecting rights 9 62 528 64 106
Other assets 254 045 56 547
Investment properties 10 30 498 6 100
Share of cash in associate 11 159 860 -
Cash and cash equivalents 12 63 687 50 447
TOTAL ASSETS 2 551 787 2 760 081
LIABILITIES
Investec raising fee 13 (373 335) (373 335)
Income tax payable 14 (12 371) (76 093)
Deferred taxation 15 (20 066) (46 287)
Trade and other payables 16 (147 068) (175 979)
TOTAL LIABILITIES (552 840) 671 694)
NET ASSETS 1 998 947 2 088 387
No of shares No of shares
ISSUED SHARES 17
Number of shares in issue 2 224 798 2 224 798
993 993
Treasury shares (202 115 202 024
127) 776)
Net shares in issue 2 022 683 2 022 774
866 217 21766
Group NAV per share - Rand 0.9883 1.0324
NOTES TO THE GROUP NAV STATEMENT AT 31 MARCH 2008
1 PURPOSE OF THE GROUP NAV STATEMENT
On 7 April 2006, JCI published unreviewed, unaudited and restated 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 and 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, 2007 and 2008, in accordance with IFRS, the
JCI directors have prepared a Group NAV Statement on the basis set out in note
2. The JCI directors consider the Group NAV Statement, including the
accompanying Notes, suitable in the circumstances for the purpose of providing
shareholders with financial information relevant to the proposed merger with
R&E.
1 BASIS OF PREPARATION
The Group NAV 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 NAV Statement excludes major claims and counter claims
between JCI and R&E.
Other than for these claims, the Group NAV Statement includes all known
significant assets and liabilities of the JCI Group and associate companies. The
Group NAV Statement includes JCI`s proportionate share of FSD`s (a 44.9%
associate of JCI) assets and liabilities on a line by line basis.
The Group NAV Statement has been prepared in Rands. All financial information is
presented in Rands and has been rounded to the nearest thousand. Foreign
currency monetary and non-monetary items are reported using the closing rate at
31 March 2008.
The Group NAV 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 NAV
Statement, except in instances where the subsidiaries are considered as
businesses held for sale, or if the subsidiaries are considered to be insolvent,
or dormant, or if the ownership of the assets and liabilities could not be
proven. However, insolvent subsidiaries` liabilities have been included to the
extent where JCI or any of its other subsidiaries have guaranteed the
liabilities.
Intra-group balances are eliminated in the preparation of the Group NAV
Statement.
The Group NAV Statement has not been prepared in terms of IFRS, but on the basis
discussed 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 2008 comprising 19 trading days (2007: VWAP for March 2007
comprising 21 trading days).
The value of the R&E investment is based on the NAV per share of R&E at 31 March
2008 (2007: 31 March 2007) which is disclosed in the R&E Group NAV Statement
after adjusting for the proposed merger ratio of 95 to 1, as was announced on 23
April 2007.
SAFEX futures are derivative instruments and are measured at the fair value of
the instrument at 31 March 2008. The fair value of the futures is based on the
amount of cash that would be received if the future contracts were closed out on
31 March 2008 which includes the profit/loss on the instruments.
2.2 Businesses held for sale
The fair values of these businesses are based on the latest offer received as an
indication of the businesses` minimum values. The actual sales value was used,
where the business has been sold.
2.3 Prospecting rights
Where an agreement is signed to sell the prospecting rights, the value is based
on the consideration amount as quoted in the signed agreement. Where no such
agreements are in place, but sufficient data and value exists, the JCI directors
have determined a value which they believe is reasonable based on valuations
performed by independent experts using comparable transactions.
2.4 Other assets
Other assets include investment properties and cash and cash equivalents.
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.
Third party property acquisitions during the last year are stated at cost as the
directors consider that to approximate fair value.
2.4.2 Loans
Loans are only brought into account when they are either certain of recovery or
are secured by assets which value can be determined.
2.4.3 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 the directors given the circumstances detailed in note 1 above
(including prior year assessments and management`s interpretation of current tax
law).
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 NAV 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.
The amounts disclosed are the best estimate of amounts expected to be recovered.
Due to the complex nature of the legal and forensic proceedings underway the
actual amounts to be recovered from the misappropriation of the JCI Group`s
assets could vary significantly. These amounts have not been included in the
Group NAV Statement as the recoverability cannot be reasonably assured.
2.8 Contingent liabilities
Contingent liabilities are disclosed when it is probable that they will be
realised. The amounts disclosed are the best estimate of amounts expected to be
paid.
All guarantees are disclosed even if the directors are of the opinion that they
will not be called up or JCI is to be released from such guarantees on the sale
of the underlying assets or businesses.
No of Value per At 31 At 31
shares share / March March
/futures future
2008 2007
R R `000 R `000
3. Listed
investments
Goldfields 11 123.5069 1 449 293 1 720
734 508 817
R&E 6 27.9064 189 596 178 094
794 007
Other listed 64 205 81 004
investments
Matodzi 211 0.2540 53 744 50 866
590 595
Sekunjalo - 0.6841 - 18 750
Simmers 1 5.7053 10 461 11 388
833 592
Derivative 2 007 -
instruments
Goldfields SAFEX 17 038 117.83 2 007 -
futures
1 705 101 1 979
915
3.1 Listed investments
The value of the listed investments, except for the investment
in R&E, is based on the VWAP for March 2008 comprising 19
trading days.
3.2 Derivative instruments
Goldfields SAFEX
futures
Goldfields SAFEX 17 038 117.83 2 007 -
futures
Deposit - variance margin (disclosed under 28 197 -
cash refer note 12)
Deposit - initial margin (disclosed under 26 622 -
cash refer note 12)
56 826 -
The value of the Goldfields SAFEX futures is based on the
closing rate per future at 31 March 2008. The value represents
the mark to market price of the futures at 31 March 2008 less
the mark to market prices at the inception of the contract.
Each Goldfields SAFEX futures contract is convertible into 100
ordinary Goldfields Shares on expiry of the future contracts.
Thus the 17 038 Goldfields futures are convertible into
1 703 800 Goldfields shares on expiry date of the future
contracts, these contracts expire every 3 months at the
discretion of JCI.
The variance margin is the surplus cash in the JCI futures
trading account that is used to settle the daily mark to market
price movements.
The initial margin on the contract is the cash deposited with
SAFEX held as security by SAFEX over the futures.
3.3 Merger Ratio
The value of the R&E investment is based on the adjusted NAV
per share of R&E at 31 March 2008.
2008 2007
R R
Net Asset Value per share - R&E Group NAV 8.3607 8.1960
Statement
Net Asset Value per share - adjusted to 27.9452 28.7393
reflect the proposed merger ratio of 1 R&E
share for 95 JCI Shares
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
to Letseng Guernsey Limited. These shares have not been
included in the Group NAV Statement of R&E as these shares are
indentified for possible cancellation.
At 31 At 31
March March
2008 2007
R `000 R `000
4. Boschendal
20.002% investment through 45 006 40 250
Moregate
Debentures in Kovacs including 115 077 85 888
interest and profit share
Loan to Kovacs 905 905
Total investment in 160 988 127 043
Boschendal
The investment in Boschendal is held through a direct
investment via Moregate and an indirect investment through a
debenture agreement with Kovacs.
An offer to purchase the direct portion of the investment in
Boschendal was received from a third party, fellow shareholder
of Boschendal. This offer was at R2.250 million per percent.
The directors of JCI used this offer to purchase to calculate
the value of the investment in Boschendal.
The value of the debentures in Kovacs (the indirect holding in
Boschendal) is based on the original investment amount plus
accumulated interest and profit share supported by a financing
agreement in place and secured by a loan from Kovacs to
Boschendal. The directors are confident that the loan is
recoverable. The loan has no fixed terms of repayment.
The JCI board is of the opinion that the valuation as detailed
above of R161 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. An independent valuer
calculated a value that was not significantly different from
the value that the JCI directors have placed on the investment.
Subsequent to 31 March 2008, there has been a further offer to
purchase of R2.5 million per percent interest in Boschendal.
Kovacs has followed their pre-emptive rights in terms of this
offer and purchased an additional 5.5% interest in and R10 000
000 of loans to Boschendal. This has been financed by JCI on a
similar basis to the Debentures.
5. Jaganda
Investment at 284 302 283 755
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. Jaganda
acknowledges that it is indebted to JCI for R89.3 million,
which is the original value of the preference shares, but
denies further obligations. Pleadings in respect of the
disputes have closed and the matter has been postponed due to
the application for liquidation of Jaganda. The liquidation
application is contested by JCI. The directors of JCI have
assessed the impact of the liquidation application of Jaganda
and are confident it does not effect their valuation.
The preference shares carry interest at prime bank overdraft
rate (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 R5.7053,
which is the VWAP for March 2008, the total upside of the
Jaganda preference shares agreement is R479.3 million.
The JCI directors have placed a value of R284 million to the
investment in Jaganda, this being the midpoint of the original
face value of the preference shares (i.e. R89.3 million) and
the total value of the 20% upside as detailed above. This may
not be the fair value if concluded in an arms length
transaction with a third party.
At 31 At 31
March March
2008 2007
R `000 R `000
6. Businesses held for sale
AMT (Sales agreement signed 31 March 2008) 36 200 33 000
AML, MSI, Cueincident including CMMS Loan 16 423 21 500
account (Sales agreements in draft and not
yet signed but purchase price has been
received in full)
Bioclones (Sales agreement signed 18 4 200 5 000
February 2008)
Skygistics (Sales agreement signed 30 12 000 6 000
November 2007)
Tavlands (Sales agreement signed 22 - 900
September 2006)
68 823 66 400
All the above businesses held for sale are valued by the JCI
directors based upon signed sales agreements received for the
investments. The above amounts have been received subsequent to
31 March 2008.
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 Palfinger and Lyons, with the
exception of the loans recoverable from the Lyons group.
7. Loans
Loans to Lyons secured by immovable 16 000 -
properties
16 000 -
The loans to Lyons have been valued, based on the value of the concluded sale
agreements of the properties held as security for the repayment of the loans.
There is an encumbrance of R7.5 million with a financial institution which will
be offset against the proceeds receivable on the sale of the Sandton Emperor
penthouse Unit 1004 property.
However, management has entered into an agreement with a third party where the
third party has undertaken to have the encumbrance waived.
8. Prospecting rights - GFO transaction
JCI`s share of the prospecting rights in - 177 315
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 have 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 44.9%
shareholding in FSD, is entitled to an amount of R177 million
in cash.
9. Other prospecting
rights
New order prospecting rights held by FSD 62 528 64 106
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 18.1.
At 31 At 31
March March
2008 2007
R `000 R `000
10. Investment
properties
Valued at offer
price
Houghton property (Offer accepted 30 May 3 500 3 500
2007)
St James Place - London (Date of offer 10 19 498 -
April 2008)
Stonehurst properties (Sold) - 2 600
Valued at cost
50% share in Investment House (Conclusion 7 500 -
of share purchase 2 November 2008)
30 498 6 100
These properties are held through subsidiary companies. The
value of the Houghton and St James Place properties are based
on offers to purchase received, the St James Place offer is
still being negotiated further by the directors. Investment
House is valued at the purchase price which according to the
JCI directors approximates fair value. The Stonehurst
properties were disposed during the current year.
11. Share of cash in associate
Cash and cash deposits 159 860 -
12. Cash and cash equivalents
Cash and cash deposits 8 868 50 447
Deposits - Variance margin on Goldfields 28 197
future contracts (restricted cash) -
Deposits - Initial margin on Goldfields 26 622 -
future contracts (restricted cash) -
63 687 50 447
13. Investec raising fee
Investec raising fee based on the Investec (373 (373 335)
loan agreement 335)
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. Different values
were used in calculating the Investec raising fee than those
disclosed in the Group NAV 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 maximum 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 Value per At 31 At 31
shares share March March
2008 2007
R R `000 R `000
Goldfie 11 657 240 123.5069 1 439 1 493 176
lds 750
Matodzi 187 954 095 0.2540 47 740 48 080
R&E 3 250 000 27.9064 90 696 93 403
Boschen 160 988 127 043
dal
Jaganda 284 302 283 755
Stonehurst - 2 600
properties
2 023 2 048 057
476
Subsequent to 31 March 2008 there was a significant movement in
the number of shares held as security.
The shares held as security subsequent to year end were as
follows:
Goldfields 8 657 240
shares
Matodzi -
shares
R&E shares 4 789 318
14. Income tax payable
CGT
- (49 197)
Income
tax - (22 868)
Proportionate share of (12 371) (4 028)
FSD`s tax liability
(12 371) (76 093)
The company has settled with SARS in relation to CGT
and Income Tax.
15. Deferred
taxation
Unrealised
Deferred (2 564) (2 655)
taxation
Deferred taxation on other prospecting (17 (18
rights 502) 584)
Real
ised
Deferred taxation arising from the GFO - (25 048)
transaction
(20 066) (46 287)
The deferred taxation balance is as a result of temporary
differences on listed investments, unlisted investments,
investment properties 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.
At 31 At 31
March March
2008 2007
R `000 R `000
16. Trade and other payables
Trade and (73 (109 658)
other payables 100)
VAT - (17 659)
payable
PAYE - (2 288)
payable
FSD group (73 968) (46
loans 374)
(147 (175
068) 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. Subsequent to 31 March 2008, JCI has reached
a settlement in the RAWAS matter with DRD GOLD. The value of
the settlement was R25 million of which JCI`s share was R21
million and the balance by the other parties involved in the
settlement. These amounts have been settled.
JCI have pledged 2 943 087 R&E shares as security for a debt of
US$4.8 million from Letseng Guernsey Limited 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 and the relevant amounts have been settled.
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 and the relevant amounts have
been settled.
FSD group loans:
The total FSD group loan is an amount of R 134 million (see
note 18 below). As JCI has a shareholding of 44.9% in FSD the
intercompany portion of the loan needs to be removed.
17. Issued Shares
17.1 Treasury
shares
Treasury shares are JCI shares held by 202 115 202 024 776
subsidiary companies excluding those 127
held by Matodzi.
17.2 Shares identified for
Cancellation
Shares identified for possible 194 874 194 874 834
cancellation 834
Shares in the possession of (104 000 (104 000
R&E 000) 000)
Total shares identified for possible 90 90 874 834
cancellation excluding the shares held 874 834
by R&E
The above shares have been identified as fraudulent issues 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
shares identified for possible cancellation for the following
reasons; firstly the 104 million JCI shares are in the possession
of R&E and secondly the JCI board have decided to exclude the
balance of 90 874 834 shares as legal proceedings have not yet
been finalised.
JCI`s 100%
proportionate
share
Unaudited
At 31 March At 31 March
2008 2008
Notes R `000 R `000
18. FSD`s Net Asset Value
ASSETS
Prospecting rights 62 528 139 293
Prospecting rights - - -
GFO transaction
Other prospecting 18.1 62 528 139 293
rights
Other asset
Cash at Bank 159 860 356 114
Loan receivable 18.2 60 251 134 219
TOTAL ASSETS 282 639 629 626
LIABILITIES
Income tax payable (12 371) (27 558)
Deferred taxation (17 502) (38 988)
TOTAL LIABILITIES (29 873) (66 546)
NET ASSETS 252 766 563 080
JCI`s proportionate share, equating to 44.89%, of FSD`s NAV was
included in the applicable line items of the Group NAV Statement.
2008 2007
18.1 Other prospecting rights
Valued at 7 62 528 64 106
November 2008
JCI is the beneficial owner of various prospecting rights held
through its 44.89% shareholding in the issued share capital of FSD.
The prospecting rights comprise primarily of the Du Preez Leger
project. The Du Preez Leger Project comprises four exploration areas
in the Free State Province; namely the Du Preez Leger/Jonkersrust 72
area, the Vermeulenskraal area, the Rebelkop area and the Tweepan
area. The project area is located in the Free State goldfield of the
Witwatersrand Basin. The areas of interest are located on
exploration rights which are held by FSD.
During November 2008, management commissioned an independent third
party valuation expert to compile an Independent Techno-Economic
Valuation report, in the form of a Competent Persons Report ("CPR")
on the mineral assets of the Du Preez Leger project.
The inferred resource was valued based on the following information :
Resource In Gold Area Valu Value million Value
Area Situ Conten e per
Grad t per hectare
e ounc
e
g/t Moz Hectar US US Rand Rand Rand
e Doll Dollar / US
ar Doll
ar
Du Preez 5.17 4.99 1.131 2.10 10.470 8.20 85.858 75.909
Leger /
Jonkersru
st
Vermeulen 4.99 4.30 914 2.10 9.028 8.20 74.030 81.040
skraal
Millo / 3.86 0.85 355 2.10 1.775 8.20 14.555 40.999
Tweepan
Total / 4.95 10.13 2.400 2.10 21.273 8.20 174.443 66.104
Average
The Rebelkop area does not have any estimated mineral resources, and was valued
using a value per hectare of R20.000 as determined relative to other areas as
detailed below:
Resource Area Value Value
Area per million
hectare
Hectare Rand Rand
Rebelkop 690 20.000 13.791
Using a comparable transactions approach, the prospecting rights were valued at
R188 million at 31 March 2008.
R`000
Du Preez Leger/Jonkersrust 72 85 858
Vermeulenskraal 74 030
Tweepan 14 555
Rebelkop 13 791
Valuation per CPR 188 234
Adjusted for BBBEE dilution 48 941
After BBBEE dilution 139 293 (1)
JCI`s 44.89% proportionate share at 31 62 528
March 2008
For the March 2007 value, management commissioned an independent third party
mineral project evaluation expert to evaluate the mineralisation of the Du Preez
Leger project and place a value thereon. A value of R193 million was placed on
the project based on this exercise.
A CPR was not obtained to support this value and the valuation at March 2007 was
based on reserves and not on inferred resources. Management believed that this
valuation was the best estimate of fair value for the Du Preez Leger project
based on comparable transactions. The valuation also placed no value on the
Rebelkop and the Tweepan areas.
R`000
Du Preez Leger/Jonkersrust 72 134 792
Vermeulenskraal 58 188
Adjusted for BBBEE dilution 192 980
After BBBEE dilution 50 174 (1)
JCI`s 44.89% proportionate share at 31 142 806
March 2007
64 106
(1) Management has adjusted the value of these prospecting rights on the basis
that 26% thereof will be attributable in terms of the BBBEE requirements of the
Minerals and Petroleum Resources Development Act.
18.2 Loan receivable
The loans are receivable from JCI group companies and bear
interest at the prime bank lending rate. No formal terms of
repayment have been established. These loans are secured by the
pledge of 79 million JCI shares and 1.666 million Goldfield
shares. The Goldfields pledge came into effect on 20 May 2008.
The loan receivable is eliminated in the preparation of the
Group NAV Statement of JCI and is therefore not included in the
assets of JCI.
19. Contingent assets
The JCI Group has several assets not included in the Group NAV
Statement as their value, recoverability and ownership cannot be
determined with any reliability at this time.
19.1 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.
20. Contingent liabilities R`000
The JCI Group provided the following
guarantees:
Nedbank Bank on behalf of Boschendal 109 503
Absa Bank on behalf of AML (to be 10 000
released as part of the sale of AML
to Mvelaphanda)
DME, SARS and financial institutions 4 062
No provision has been raised for these guarantees
The directors have assessed all claims and have raised
provisions for those claims which they consider to be probable
and at values estimated to be the settlement values.
21. Subsequent events
The JCI group has entered into a back to back transaction with
the sale of 1 000 000 Goldfields shares and a purchase of single
stock future for 1 000 000 Goldfields shares subsequent to 31
March 2008. This has been done on the same basis as the SAFEX
futures disclosed in the group NAV statement.
JCI has disposed of the investment in Matodzi on a share swop
deal, JCI has swopped the 211 590 595 Matodzi shares for 1 679
289 R&E shares.
JCI has also entered a share swop agreement where 155 000
Goldfields shares were swopped for 1 000 000 R&E shares.
On 29 October 2008, JCI concluded a transaction to acquire the
remaining 30% stake in the Lyons group of companies excluding
the property management company for the settlement of their loan
accounts.
It should also be noted that the listed investments and the
valuation of Jaganda have been affected by the recent turmoil in
the financial markets both locally and abroad.
No other material events occurred subsequent to 31 March 2008
other than those disclosed elsewhere in the Group NAV Statement.
22. Encumbrances
Except as noted above in the notes, no significant assets have
been encumbered or pledged other than those disclosed elsewhere
in the Group NAV Statement.
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;
"AML" African Maritime Logistics (Proprietary) Limited
(Registration number 2000/011486/07), a private
company incorporated in South Africa;
"BEE" Black Economic Empowerment Act 53 of 2003;
"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 Collectively, and severally the Kalbasfontein
rights" 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;
"Du Preez Leger The Du Preez Leger Project is a project encompassing
Project" the the farms Du Preez Leger 324, Jokersrus 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 the relinquishment by JCI and certain of its
transaction" 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;
"Goldfields" Gold Fields Limited (Registration number
1968/004880/06), a public company incorporated in
South Africa, the shares of which are listed on the
JSE;
"Goldridge" Goldridge Gold Mining Company (Proprietary) Limited
(Registration number 1974/003333/07) a private
company incorporated in South Africa;
"g/t" grams per ton of gold;
"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;
"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 the agreement between JCI and Investec as amended,
agreement" 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 2006. For
avoidance of doubt, the latest agreement,
incorporating all the respective amendments was
signed on 16 January 2006;
"Investec loan the loan facility made available to JCIIF in terms
facility" of the Investec loan agreement;
"Investec the raising fee as per the Investec loan agreement;
raising fee"
"Jaganda" Xelexwa Investment Holdings (Proprietary) Limited,
formally known as Jaganda (Proprietary) Limited
(Registration number 2004/005559/07), a private
company incorporated in South Africa;
"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 the board of directors of JCI;
"JCI directors"
"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;
"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 Letseng Investment Holdings South Africa
Holdings" (Proprietary) Limited (Registration number
1998/023466/07), a private company incorporated in
South Africa;
"Liberty Moon Liberty Moon Investments 23 (Proprietary) Limited
Investments" (Registration number 2001/021181/07), 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;
"MSI" Mvelaphanda Security Investments (Proprietary)
Limited, (Registration number 2002/008808/07), a
private company incorporated in South Africa;
"Moregate" Moregate Investments Limited (Registration number
358251), a public company incorporated in the
British Virgin Islands;
"Moz" million ounces;
"mt" million tonnes or tons;
"oz" ounces (troy);
"Palfinger" Palfinger Southern Africa (Proprietary) Limited
(Registration number 1990/003385/07), a private
company incorporated in South Africa;
"previous board" The board of JCI prior to its reconstitution on 24
August 2005, comprised of Roger Ainsley Ralph
Kebble, Roger Brett Kebble, Hendrik Christoffel
Buitendag, Charles Henry Delacour Cornwall and John
Stratton;
"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 NAV the R&E net asset value statement published on the
Statement" same date as the JCI group NAV statement;
"reconstituted the JCI board and the R&E board, as the context
board(s)" requires, reconstituted on 24 August 2005;
"SAMREC Code" South African code for reporting of mineral
resources and mineral reserves;
"SARS" South African Revenue Services;
"Securities the Securities Services Act, 2004, (Act 36 of 2004)
Services Act" 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;
"shares" or "JCI ordinary shares of R0.01 each in the issued share
shares" capital of JCI;
"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;
"Stonehurst Properties in the Stonehurst Mountain Estate
properties" 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.
24 November 2008
Date: 24/11/2008 13:56:01 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.
