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VIL
VIL
VIL - Village - Issue Of Audited Annual Financial Statements And Notice Of
Annual General Meeting
Village Main Reef Gold Mining Company (1934) Limited
("Village")
(Incorporated in the Republic of South Africa)
(Registration Number 1934/005703/06)
JSE Code VIL ISIN : ZAE000007720
ISSUE OF AUDITED ANNUAL FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL
MEETING
Shareholders of Village are advised that the annual financial statements of
Village for the year ended 30 June 2009, incorporating the notice of annual
general meeting have been posted to shareholders today, Wednesday 30 September
2009.
The annual general meeting of Village will be held on Friday, 13 November 2009
at 10:00 at the offices of Investec bank, 100 Grayston Drive, Sandton, 2196
Directors` commentary
Our original plan to raise capital to improve the balance sheet (by way of
rights offer to shareholders) was dropped due to a JSE ruling prohibiting cash
being put into the company without it being part of a clear growth strategy.
Village remains a curtailed operation and its funding continues by way of
shareholder loans. As the year progressed more and more acquisition
opportunities were evaluated by To The Point Growth Specialists (Pty) Limited
(the majority shareholder). Some of these have been considered by the board but
they remain "work in progress" at this time. The board has also formed a
Transaction Committee consisting of the three independent non-executive
directors to further evaluate the more prospective opportunities. To The Point
Growth Specialist (Pty) Ltd has formally been retained on a success fee basis
(capped at 0,5%) to advise the committee and to source potential deals. The
board of directors remain committed, given the right opportunities, to transform
Village into a diversified, resource company with a risk profile to suit a
unique group of investors.
During the past year significant work has been undertaken to get a better
understanding and quantification of the environmental liabilities and
substantial progress has been made in this regard.
Going concern
As at 30 June 2009, the company`s liabilities, fairly valued, exceeded its
assets, due to the operating loss incurred during the year under review. The
major portion of the liabilities relates to the provision for environmental
rehabilitation liability of R5,3 million, which has increased from R5 million in
the prior year. The balance in the Environmental Rehabilitation Trust Fund was
R4,2 million at year end.
The directors believe that the company will continue to receive the support of
its shareholders. To The Point Growth Specialists (Pty) Ltd, a majority
shareholder in the company, has provided the company with a letter of financial
support to enable it to pay its ongoing day to day obligations, other than
expenditure relating to the environmental rehabilitation, incurred in the normal
course of business until 30 September 2010.
Directorate
There were no changes to the company`s directorate during the financial year.
Independent review by auditor`s
The financial statements have been audited by our auditors
PricewaterhouseCoopers Inc., who have performed their audit in accordance with
the International Auditing Standards.
A copy of their unqualified audit report is available for inspection at the
registered office of the company.
AUDITED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
2009 2008
Notes R`000 R`000
Revenue - -
Operating expenses (1,610) (442)
Other income 522 805
Investment income 78 281
Growth in rehabilitation trust 444 377
fund
Profit from sale of assets -
147
Change in estimate of provision (347) (1,870)
for rehabilitation cost
Loss before taxation 2 (1,435) (1,507)
Taxation (71) -
Net loss for the year (1,506) (1,507)
Basic loss per share - cents 4 (25) (25)
Headline loss per share - cents 4 (24) (25)
AUDITED BALANCE SHEET
AS AT 30 JUNE 2009
2009 2008
Notes R`000 R`000
ASSETS
Non-current assets
Environmental rehabilitation 3 4,194 3,816
trust
Total non-current assets 4,194 3,816
Current assets
Cash and cash equivalents 294 1,548
Total current assets 294 1,548
Total assets 4,488 5,364
EQUITY AND LIABILITIES
Capital and reserves
Share capital issued 758 758
Accumulated (loss) (1,936) (430)
Total shareholders` equity (1,178) 328
Non-current liabilities
Provision for environmental 5 5,367 5,020
rehabilitation
Total non-current liabilities 5,367 5,020
Current liabilities
Trade and other payables 228 16
Taxation 71 -
Total current liabilities 299 16
Total equity and liabilities 4,488 5,364
AUDITED STATEMENT OF CHANGES IN
EQUITY
FOR THE YEAR ENDED 30 JUNE 2009
Share Accumulated Total
capital profits
issued
R `000 R `000 R `000
Balance at 1 July 2007 758 1,054 1,812
Opening balance adjustment - 23 23
Net loss for the year - (1,507) (1,507)
Balance at 30 June 2008 758 (430) 328
Net loss for the year - (1,506) (1,506)
Balance at 30 June 2009 758 (1,936) (1,178)
AUDITED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
2009 2008
R`000 R`000
Cash flow from operating
activities
Cash utilised by operations (1,332) (407)
Interest received 78 281
Taxation paid - -
Net cash utilised in operating (1,254) (126)
activities
Cash flow from investing
activities
Proceeds from sale of property, - 397
plant and equipment
Net cash generated by/(utilised - 397
in) investing activities
(Decrease)/Increase in cash and (1,254) 271
cash equivalents
Cash and cash equivalents at 1,548 1,277
beginning of the year
Cash and cash equivalents at
the end of the period 294 1,548
Cash utilised by operations :
Loss before interest received,
sundry income and
taxation per income statement (1,512) (1,935)
Adjustment for:
Net growth on rehabilitation (378) (377)
trust funds
Net increase in provision for 347 1,870
rehabilitation
Other non-cash operating - 24
expenses
Operating loss before working (1,543) (418)
capital changes
Increase/(Decrease in trade and
other payables 211 11
Cash utilised by operations (1,332) (407)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2009
1 BASIS OF PREPARATION
These financial statements of Village Main Reef Mining Company
(1934) Limited have been prepared in accordance with International
Financial Reporting Standards (IFRS) and the South African
Companies Act of 1973. The financial statements have been prepared
under the historical cost convention.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of
applying the company`s accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where
assumptions and estimates are significant to the financial
statements.
R`000 R`000
2. LOSS BEFORE TAX 2009 2008
Loss before taxation is stated after :
Auditor`s remuneration 85 16
Technical, advisory, secretarial and 415 -
administrative services
Increase in rehabilitation provision 347 1870
Director`s fees paid in the current - -
year.
3 ENVIRONMENTAL REHABILITATION TRUST
The Village Main Reef Gold Mining Company
Nature Conservation Trust was created to
provide for the estimated cost of
pollution control and rehabilitation at
the end of the life of the mine in
accordance with statutory requirements.
The company did not make any contribution
in the current year to the trust fund.
(2008:R 0)
Balance at beginning of the year 3,816 3,439
Interest earned 444 377
Operating cost (66) -
Funds transferred to the Trust - -
Balance at the end of the year 4,194 3,816
4 BASIC AND HEADLINE LOSS PER SHARE
The calculation of basic loss per share
is based on basic loss of R 1 506 000
(2008:R1 507 000) and a weighted average
of 6 068 446 (2008:6 068 446) shares in
issue during the period.
The calculation of diluted headline loss
per share is based on headline loss of R
1 485 000 (2008: R1 507 000) and a
weighted average of 6 068 446 (2008: 6
068 446) shares in issue during the
period.
Headline loss
Loss per income statement (1,506) (1,507)
Adjustments 21 -
Headline loss for the year (1,485) (1,507)
(24) (25)
Headline loss per share - cents
5 PROVISION FOR ENVIRONMENTAL
REHABILITATION
Balance at beginning of the year 5,020 3,150
Change in estimate and inflation increase 347 1,870
Balance at the end of the year 5,367 5,020
The provision is for the ongoing care and
maintenance of tailings storage
facilities and other dump footprints.
6 CONTINGENT LIABILITY
6.1 Rehabilitation
All mining activities of the company ceased in 1995 with
treatment of surface dumps. Since then the company has been
dormant. After promulgation of the Mineral and Petroleum
Resources Development Act (MPRDA) in May 2004, the company
did not apply for a prospecting or a mining right and its
unused old-order rights thus ceased to exist as the company
had no intentions of resuming mining operations. Consequently
the shaft and underground areas and some of the dumps have
been taken over by other mining companies that applied for
the unused rights and have these areas covered under their
Environmental Management Programmes (EMPs). This includes the
groundwater aspects that were previously unclarified, but are
now being managed through a section 21 company called Central
Basin Environmental Corporation (CBEC) which is made up of
current operators in the Central Basin Area.
The outstanding areas that require clearance are two remnant
dump sites that have not met the radiation clearance
standards as required by the National Nuclear Regulator
(NNR). Radiological assessment studies have been done on
these sites and only one of the sites requires further work
of which the company is currently busy with cost assessments
of the various cleaning options as provided by independent
environmental and radiation consultants.
In light of the above it can be concluded that there is now
better understanding of the potential environmental liability
and there is ongoing work being done to clarify the matters.
6.2 Directors` fees
At the general meeting of the company held on 10 October 2008, the
shareholders of the company approved the fees payable to the
Chairman and non-executive directors (the "directors` fee") of the
company for the year ended 30 June 2009.
The following directors` fees are payable by the company for the
year ended 30 June 2009:
R`000 Chairman Directors Chairman Audit Total
fees ` fees of audit Committee
committee fees
MF Pleming 250 250
(Chairman)
F Dippenaar 120 40 160
CS Halsey 120 120
D Ncube 120 120
MJLG Rawstone 120 60 180
ZB Swanepoel 120 120
Total 250 600 60 40 950
The company`s obligation in relation to the above directors` fees
liability (by agreement with the directors) is conditional on the
company having sufficient cash resources (which excludes cash
resources held by the Village Main Reef Gold Mining Company Nature
Conservation Trust) to pay the above directors` fees in one lump
sum.
The company cannot presently determine if and when the company
will have sufficient cash resources to pay the above directors`
fees liability, and hence no provision for any liability that may
result has been made in the financial statements.
Johannesburg
30 September 2009
Sponsor to Village
Investec Bank
Date: 30/09/2009 14:05:01 Produced by the JSE SENS Department.
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