| Mon 30 Mar 2009, 16:47 | | AND - Andulela Investment Holdings Limited - Reviewed Abridged Results For The |
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AND - Andulela Investment Holdings Limited - Reviewed Abridged Results For The
Six Months Ended 31 December 2008
ANDULELA INVESTMENT HOLDINGS LIMITED
(Previously DNR Capital Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1950/037061/06)
Share code: AND & ISIN: ZAE000125894
Reviewed abridged results for the six months ended 31 December 2008
Income Statement
Reviewed Audited Reviewed
6 Months 12 Months 6 Months
31 December 30 June 31 December
2008 2008 2007
(R`000) (R`000) (R`000)
Gross revenue - - -
Loss from operations (3,890) (5,958) (1,863)
Investment income 274 3,078 -
Finance costs (1,646) - -
Share of loss from
associates (3,912) - -
Impairment of investments (286,843) - -
Loss before taxation (296,017) (2,880) (1,863)
Taxation - - -
Net loss for the
period/year (296,017) (2,880) (1,863)
Shares in issue (millions) 419 134 34
Weighted average no.
of shares in issue
(millions) 256 82 34
Loss per share (cents) (1) (115.6) (3.5) (5.5)
Headline loss per share
(cents) (1) (115.6) (3.5) (5.5)
Dividends per share
(cents) - - -
(1) The loss and headline loss per share is calculated by dividing loss
and headline loss by the weighted average number of shares in issue
during the period.
Abridged cash flow statement
Cash flows from:
Operating activities (1,160) (2,600) (1,286)
Investing activities (365,000) (85,033) (7)
Financing activities 356,870 97,722 1,260
Change in cash and
equivalents (9,290) 10,089 (33)
Opening cash and
equivalents 10,193 104 104
Closing cash and
equivalents 903 10,193 71
Abridged statement of changes in equity
Opening balances 94,587 (1,313) (1,313)
Net loss for the
period/year (296,017) (2,880) (1,863)
Shares issued net
of expenses 354,593 98,780 -
Closing balances 153,163 94,587 (3,176)
Balance Sheet
Note
31 December 30 June 31 December
2008 2008 2007
(R`000) (R`000) (R`000)
Assets
Non-current assets 159,245 85,000 8
Property, plant
and equipment - - 8
Other financial assets 159,245 85,000 -
- Deposit -
acquisition of
investment - 85,000 -
- Investment in
Associates 1 159,245 - -
Current assets 903 10,193 265
Trade and other
Receivables - - 194
Cash and cash equivalents 903 10,193 71
Total assets 160,148 95,193 273
Equity and liabilities
Capital and reserves 153,163 94,587 (3,175)
Share capital 4,940 1,340 340
Share premium 448,774 97,781 1
Accumulated loss (300,551) (4,534) (3,516)
Non-current liabilities 2,276 - 2,318
Long term loans 2 2,276 - -
Loans from directors - - 2,318
Current liabilities 4,709 605 1,130
Trade and other payables 4,690 586 1,111
Taxation payable 19 19 19
Total equity and liabilities 160,148 95,192 273
Net asset value per share
(cents) 36.6 70.6 (9.3)
Net tangible asset value
per share (cents) 36.6 70.6 (9.3)
Accounting policies
The company has complied with International Financial Reporting Standards (IFRS)
for the six months ended 31 December 2008. The accounting policies have been
consistently applied for all periods and are consistent with those used in the
preparation of the latest audited financial statements.
These financial results have been prepared in accordance with the requirements
of the JSE Listings Requirements with regard to provisional and abridged results
reports, including those relating to IAS 34: Interim Financial Reporting.
Notes to the abridged
financial statements 31 Dec 30 Jun 31 Dec
2008 2008 2007
(R`000) (R`000) (R`000)
1. Investment in associates 159,245 - -
At cost 450,000 - -
Share of loss
from associates (3,912) - -
Impairment of
Investments (286,843) - -
2. Long term loans
The loan from Jonah Capital (Pty) Ltd is unsecured, bears interest at prime
overdraft rate and interest is payable quarterly in arrears. The loan shall
become repayable by no later than 24 December 2009.
Review Opinion
These results have been reviewed by the company`s auditors, PKF (Jhb) Inc.,
whose report is available for inspection at the company`s registered office.
Nature of the business
The company is presently an investment holding company.
Going concern
The financial statements have been prepared on the going concern basis and the
company completed the reverse listing and acquisition of investment transaction
as detailed in the circular to shareholders dated 1 September 2008. The details
of the transaction are discussed in the directors` commentary below.
Directorate
The following appointments have been made:
J Stalker Chief Executive Officer 23 September 2008
P C de Jager Chief Financial Officer 23 September 2008
S E Jonah Non-Executive Chairman 23 September 2008
R K Jonah Non-Executive 23 September 2008
J P Barton-Bridges Non-Executive 23 September 2008
N L Herbert Non-Executive 23 September 2008
The following resignations have been approved:
J H Goldberg Resigned as director of the company 22 August 2008
G M Geva Resigned as chief financial officer 23 September 2008
S Medalie Resigned as director of the company 23 September 2008
N L Herbert Resigned as director of the company 23 December 2008
J Stalker Resigned as chief executive officer 23 March 2009
Commentary
Introduction
During the 6 months ended 31 December 2008 Andulela finalised the reverse
listing and acquisition of an effective 41.8% interest in Kilken Platinum
(Proprietary) Limited ("Kilken"), a platinum group metals tailings retreatment
operation, for a total purchase consideration of R450 million.
The investment is held via a 50% shareholding in each of two associate
companies: Abalengani Mining Investments (Proprietary) Limited ("AMI") and JB
Platinum Holdings (Proprietary) Limited ("JBPH"). The remaining 50%
shareholding in each of AMI and JBPH is held by Abalengani Platinum
(Proprietary) Limited ("Abalengani Platinum"). AMI and JBPH effectively own a
combined 83.6% stake in Kilken, giving the company an effective 41.8% stake in
Kilken.
All suspensive conditions for the transaction were fulfilled on or before 29
September 2008 and the effective date of the acquisition was 1 October 2008.
On 13 October 2008 the company recommenced trading in the "equity investment
instruments" sector of the JSE under the new name of "Andulela Investment
Holdings Limited".
Kilken
In November 2004 Kilken, in joint venture with BEE partner Imbani Minerals,
concluded a Sale of Tailings and Concentrate ("STC") agreement with Rustenburg
Platinum Mines ("RustPlat"). The Kilken joint venture purchases tailings from
RustPlat`s Amandelbult mine, processes the tailings and sells the resultant
concentrate and platinum group metals back to RustPlat. The STC agreement will
continue for so long as RustPlat produces tailings from the Amandelbult site
which is estimated to be at least 50 years.
Financial Review
The company acquired the investment in associates "cum" dividend from 1 January
2008. The transaction excluded a special distribution of R12,8 million payable
to the previous shareholders relating to the period ending 31 December 2007.
Profits and losses from associates for the period 1 January 2008 to 30 September
2008 have been accounted for in the carrying value of the investment. The share
of loss from associates for the period 1 October 2008 to 31 December 2008 is
reflected in the income statement.
At the reporting date no dividends had been received from the associate
companies primarily due to the special distribution referred to above and
capital expenditure of approximately R20 million incurred in the Kilken joint
venture.
Preference dividends due to Jonah Mining (Proprietary) Limited ("Jonah Mining")
in the amount of R1,6 million have not been paid but have been accrued in the
financial result for the period.
At the date hereof, the audited financial statements of the associates for the
2008 financial year had not yet been received. Expenses incurred and accounting
policies adopted in the associates, as reported in the management accounts, are
still under examination. The directors have adopted a conservative approach and
have accounted for all expenditure as recorded in the accounts of the
associates.
Carrying value of Kilken
The recent decline in the world commodity markets has had an adverse effect on
the projected sales revenue of Kilken and dividend distributions from the
investment.
In accordance with IAS and IFRS, management recognized an impairment of R287
million to the carrying value of the investment in Kilken in the income
statement to reflect fair value based on a valuation presented in a competent
person`s report dated 17 February 2009, which assumed a conservative forecast
average platinum price of US$995 per ounce for 2009.
Management remains positive about the future dividend cash inflows from and
overall profitability of the investment in Kilken.
AMI and JBPH options
Andulela has been granted a call option and Abalengani a put option over the
remaining 50% of the shares in, and all of Abalengani Platinum`s claims on loan
account against each of, AMI ("the AMI option") and JBPH ("the JBPH option"), as
detailed in the circular to shareholders issued by Andulela on 1 September 2008.
If the AMI option and the JBPH option are exercised and the company acquires the
remaining 50% of the shares in, and all of Abalengani Platinum`s claims on loan
account against each of, AMI ("the AMI option equity") and JBPH, ("the JBPH
option equity") it will increase the company`s effective holding in Kilken to
83.6%.
If the AMI option and the JBPH option are exercised, the purchase consideration
for the AMI option equity of R267 million at current values and the purchase
consideration of the JBPH option equity of R183 million at current values, may
be discharged by the company by the issue of new ordinary shares in the capital
of Andulela at an issue price equal to the volume weighted average traded price
at which the company`s ordinary shares traded on the JSE over the 30 trading
days prior to the date on which the AMI option and the JBPH option are
exercised. This may necessitate an increase in the company`s authorised share
capital.
If current market conditions prevail, Abalengani Platinum is expected to have a
significant majority of the shares in issue in Andulela following the exercise
of the AMI and JBPH options.
Events subsequent to the interim period
Jonah Capital (Proprietary) Limited has committed working capital of up to R5
million, through an unsecured loan, bearing interest at prime and which is
repayable by no later than 24 December 2009.
The exercise of the AMI and JBPH options is conditional on the securing of an
appropriate consent from RustPlat. The original deadline for fulfilment of all
suspensive conditions to the AMI and JBPH options was 31 January 2009 and has
been extended by mutual written agreement between the parties to 30 April 2009.
This suspensive condition to the AMI and JBPH options had not been fulfilled as
of the publication date.
The original AMI and JBPH option periods have been amended by mutual written
agreement amongst the parties to commence on 1 May 2009 and not 1 April 2009.
The AMI and JBPH option periods still expire on the original expiry date of 31
October 2009.
Following the resignation of the CEO, Ian Stalker, on 23 March 2009, the board
appointed John Barton-Bridges as interim CEO.
Strategic Review and Outlook
Kilken is a low-cost producer of platinum group metals.
Andulela acquired the Kilken asset to participate in the positive growth outlook
for platinum in the long term. Market expectations are that platinum prices
will strengthen in the medium to long term.
No further material capital expenditure is contemplated for the second half of
the financial year and it is anticipated that Andulela will receive regular
dividend payments from the investment.
For and on behalf of the board
S E Jonah J P Barton-Bridges
Non-Executive Chairman Interim Chief Executive Officer
30 March 2009
Directors
S E Jonah (Chairman)*, P Vallet (Deputy Chairman)*, P C de Jager, J P Barton-
Bridges, R K Jonah*, D N Rosen*, V D Rubin^
*Non-executive ^Independent non-executive
Registered Office
2nd Floor, 28 Fricker Road, Illovo Boulevard, Sandton, 2196
Company Secretary
J R Jones (Mrs)
Transfer Secretaries
Link Market Services (Proprietary) Ltd
5th Floor, 11 Diagonal Street, Johannesburg
PO Box 4844, Johannesburg, 2000
Sponsor
Java Capital (Proprietary) Limited
Date: 30/03/2009 16:47:01 Produced by the JSE SENS Department.
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