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ERM
ERM
ERM - Enterprise Risk Management Limited - Consolidated reviewed interim results
for the twelve months ended 28 February 2009
Enterprise Risk Management Limited
Incorporated in the Republic of South Africa
(Registration number: 1995/001603/06)
Share code: ERM & ISIN: ZAE000037701
("ERM" or "the Company")
Consolidated reviewed interim results for the twelve months ended 28 February
2009
Reviewed Audited
Unaudited
twelve six twelve
months to months to months to
28 31 August 29
February 2008 February
2009 2008
R 000`s R 000`s R 000`s
Income statement
Turnover - - -
Operating loss -5,740 -1,958 -3,754
Impairment of investment -16,779 -18,192 -
in joint venture
Finance costs -68 - -2,189
Finance income 6,480 3,001 7,512
Equity (loss) income -17,277 -18,079 8,399
from joint venture
(Loss)profit before tax -33,384 -35,228 9,968
Taxation 373 483 -532
(Loss)profit for the -33,011 -34,745 9,436
period
Basic and diluted 53,419 54,612 54,611
weighted average number
of shares (000`s)
Earnings per share -61.8 -63.6 17.3
(cents)
Diluted earnings per -61.8 -63.6 17.3
share (cents)
Reconciliation of
headline earnings:
Earnings attributable to -33,011 -34,745 9,436
shareholders
Fair value movement of 19,160 20,558 -8,606
investment properties -
joint venture
Impairment of investment 16,779 18,192 -
in joint venture
Headline earnings 2,928 4,005* 830
Headline earnings per 5.5 7.33* 1.5
share (cents)
Diluted headline 5.5 7.33* 1.5
earnings per share
(cents)
* Restated.In error the
impairment of investment
in joint venture had not
been added back when
these results were
originally published
Reviewed Audited
Unaudited
>>Balance sheet 28 31 August 29
February 2008 February
2009 2008
R 000`s R 000`s R 000`s
Assets
Non-current assets 37,944 39,076 75,938
Available-for-sale 12,046 18,914 19,724
financial assets
Investment in joint 22,158 19,942 56,214
venture
Investment in associates 2,622 - -
Deferred tax 1,118 220 -
Current assets 38,968 45,271 43,879
Accounts receivable 479 256 420
Financial assets at fair - 43,198 41,183
value through profit and
loss
Taxation receivable 488 488 488
Loans to joint venture 33,914 - -
Loans to associates 1,704 - -
Cash & cash equivalents 2,383 1,329 1,788
Total assets 76,912 84,347 119,817
Equity & liabilities
Equity attributable to 73,520 83,624 118,736
equity holders
Stated capital 53,722 59,536 59,340
Retained earnings 22,553 20,819 55,564
Fair value and other -2,755 3,269 3,832
reserves
Non-current liabilities
- - 376
Deferred tax
- - 376
Current liabilities 3,392 723 705
Accounts payable 1,455 183 164
Taxation payable 382 384 385
Loans from associates 1,399 - -
Shareholders for 156 156 156
dividends
Total equity & 76,912 84,347 119,817
liabilities
Number of shares in 50,111 54,770 54,568
issue (`000)
Net asset value per 146.7 152.7 217.6
share (cents)
Reviewed Audited
Unaudited
twelve six twelve
months to months to months to
28 31 August 29
February 2008 February
2009 2008
R 000`s R 000`s R 000`s
Cash flow statement
Cash utilised in -4,206 -1,640 -3,824
operating activities
Finance costs -68 -2,189
-
Finance income 2,307 78 6,762
Dividend income 4,172 2,923 567
Taxation (paid)refunded -3 -1 4,544
Net cash flows from 2,202 1,360 5,860
operating activities
Net cash flows from 4,011 -2,015 -66,528
investing activities
Net cash flows from -5,618 196 87
financing activities
Net increase(decrease) 595 -459 -60,581
in cash and cash
equivalents
Cash and cash 1,788 1,788 62,369
equivalents at the
beginning of the period
Cash and cash 2,383 1,329 1,788
equivalents at the end
of the period
Reviewed Audited
Unaudited
twelve six twelve
months to months to months to
28 31 August 29
February 2008 February
2009 2008
R 000`s R 000`s R 000`s
Statement of changes in
equity
Stated capital
Opening balance 59,340 59,340 59,250
- Share options 197 197 90
exercised
- Treasury shares -5,815 -1 -
bought back
Closing balance 53,722 59,536 59,340
Distributable reserves
Opening retained 55,564 55,564 46,128
earnings
(Loss)profit for the -33,011 -34,745 9,436
period
Closing balance 22,553 20,819 55,564
Fair value reserves
Opening balance 2,878 2,878 2,876
Fair value adjustments -6,888 -697 -15
net of tax
Reduction in deferred 17
tax liability as a - -
result of a change in
the tax rate
Closing balance -4,010 2,181 2,878
Other reserves
Opening balance 954 954 770
Value of services 301 134 184
provided
Closing balance 1,255 1,088 954
Fair value and other -2,755 3,269 3,832
reserves
Notes to the financial statements
1. Accounting policies
1.1 Basis of preparation
1.2
The reviewed interim financial statements of the group for the twelve months
ended 28 February 2009 have been prepared in accordance with the group`s
accounting policies which comply with International Financial Reporting
Standards ("IFRS") and are consistent with those of the previous year. They have
been prepared on a going concern basis.
This interim report complies with International Accounting Standard IAS34-
Interim Financial Reporting
2. Financial Assets
As at 28 February 2009 the group`s long term investment portfolio comprised the
following:
At 28 February 2009 At 29 February 2008
Available for sale Market Market Market Market
financial
assets Quantity Price Value Quantity Price Value
(`000) (cents) (R`000) (`000) (cents) (R`000)
Sasol
Limited
ordinary
shares 12.50 25,200 3,150 12.50 40,250 5,031
Highveld
Steel &
Vanadium
Limited
ordinary
shares 47.90 7,075 3,389 47.90 14,838 7,107
Sable
Holdings
Limited
ordinary
shares 366.93 1,501 5,507 344.82 2,200 7,586
TOTAL 12,046 19,724
Held for trading at fair value through profit and loss
2009 2008
Prudential Dividend Income
Fund-at fair value - 41 183
3. Contingent liability
The Company has received notice from SARS stating that R0.9 million VAT inputs
for the period April 2005 to December 2008 were claimed on exempt supplies.
The Company is vigorously defending this claim.
4. Related party transactions
Parties are considered related if one party has the ability to control the other
party or exercise significant influence over the other party in making financial
or operational decisions.
During the period the Company received interest from Amrich 58 Properties
(Proprietary) Limited in the amount of R 2,1 million on short term loans.
Enterprise Risk management Limited has a 50% shareholding in Amrich 58
Properties (Proprietary) Limited.
San Diego Investments (Proprietary) Limited was paid R0,5 million by the company
for professional services rendered in the various valuations performed on the
property portfolio of the Amrich group. San Diego Investments (Proprietary)
Limited is a subsidiary of Amrich 58 Properties (Proprietary) Limited.
5. Auditors review report
Grant Thornton has reviewed these interim results and their unqualified review
report is available for inspection at the Company`s registered office.
Commentary on results
Basic and diluted loss of 61.8cents (2008: earnings of 17.3 cents) and basic and
diluted headline earnings of 5.5 cents (2008: earnings of 1.5 cents) and a net
asset value of 146.7 (2008:217.6) cents per share were reported. The decrease in
net asset value of the group resulted mainly from the decrease in the value of
the property portfolio in the joint venture, the impairment of the investment in
the joint venture, as well as unrealized capital losses on listed investments.
Share option scheme and Stated capital.
The Company offers from time to time, share options to executive directors and
employees. The options are non-transferable and vest with the individual after
3, 4 and 5 years on a one third per anniversary basis. All options not exercised
within 10 years of the option date lapse. During the period under review 203 334
share options were exercised, bringing the total number of shares in issue to
50,111 million shares net of 5,564 million treasury shares.
During the period under review the share traded between a high of 150,0(2008:
250, 0) cents per share and a low of 100,0(2008: 125, 0) cents per share. The
volume of shares traded during the period was 15, 940 (2008:24,100) million
shares at an average price of 127,4 (2008: 192,0) cents per share.
Share buy backs
At the last annual general meeting held on 29 August 2008, shareholders voted to
renew the general authority granted to the company to purchase its own shares.
For this reporting period 5,564 million shares were bought back.
Dividend
The board has resolved not to declare any dividend to shareholders for this
reporting period.
Acquisition of a property portfolio
On 18 April 2008 Amrich 58 Properties (Pty) Ltd acquired the remaining 66%
shareholding in Rotaflex Investments (Pty) Ltd. This was approved at a general
meeting of ERM shareholders on the same date.
On 26 February 2009 Enterprise Risk Management acquired a 33% shareholding in
Kyalami View Business Park (Pty) Ltd, a 33% shareholding in Kyalami Heights
Investments (Pty) Ltd and a 33 % shareholding in Erf 11 and 14 Barbeque Downs
Five Investments( Pty) Ltd.
Devaluation of investment property in the joint venture.
Worsening economic conditions have taken a toll on the residential and
commercial property markets. The past few months have seen a sharp
deterioration in the performances and demand for real estate. The company
performed a professional valuation of the entire property portfolio, which was
significantly devalued.
The group`s share of the devaluation, net of deferred tax, amounted to R 19,7
million
Cautionary
On 31 October 2008 a cautionary announcement was made wherein shareholders were
informed of the proposal from a group of shareholders to purchase the entire
issued ordinary shares of ERM.
On 1 December 2008 the cautionary announcement of 31 October 2008 was withdrawn.
Shareholders were informed that beneficial shareholders of approximately 63,93%
of the issued capital of ERM ( excluding shares held in treasury) had delivered
a letter confirming their intention to make an offer of 130 cents per scheme
share to the minority shareholders.
On 7 April 2009 shareholders were advised that under authority of an order of
the South Gauteng High Court a meeting for shareholders would be held on 7 May
2009 and that all shareholders would be provided with a circular providing
further information in respect of the scheme.
On 8 May 2009 shareholders were advised that the scheme meeting held on 7 May
2009 was adjourned by the chairman to 4 June 2009 at 10h00 at Unit 1 Tuscan
Place, 138 Dytchley Road Kyalami.
Change in year end date.
Through a resolution passed on 3 December 2008 Enterprise Risk Management
Limited`s year end date was changed from end of February to end of June.
By order of the board
M Pienaar
Company secretary
Kyalami
3 June 2009
Directors
BL Gruzd (Chairman)*, MA Stein (CEO), E Gerber*,
J Kramer* * non-executive
Sponsor
Sasfin Capital - a Division of Sasfin Bank Limited
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
Registered office
138 Dytchley Road
Unit 1 Tuscan Place
Kyalami
1684
Email
marelise.erm@mweb.co.za
Date: 03/06/2009 17:07:02 Produced by the JSE SENS Department.
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