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MCU
MCU
MCU - m Cubed Holdings Limited - Abridged report for the year ended 28
February 2009, notice of annual general meeting, and renewal of cautionary
m Cubed Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1998/014568/06
Share code: MCU ISIN: ZAE000033353
("m Cubed" or "the Company" or "the Group")
ABRIDGED REPORT FOR THE YEAR ENDED 28 FEBRUARY 2009, NOTICE OF ANNUAL GENERAL
MEETING, AND RENEWAL OF CAUTIONARY
ABRIDGED REPORT
Shareholders are hereby advised that the Annual Report of m Cubed for the year
ended 28 February 2009 will be posted to shareholders on 13 May 2010. This
report contains the audited annual financial statements for the year ended 28
February 2009.
Part A : Condensed financial statements
1. Basis of preparation
The results have been prepared in accordance with International Financial
Reporting Standards (IFRS),IAS34, "Interim Financial Reporting", the
Companies Act of South Africa, (Act 61 of 1973, as amended ("Companies
Act"), and the Listing Requirements of the JSE Limited ("JSE"). The
accounting policies are consistent with those of the previous financial
period.
2. IFRS 7 disclosures
These financial statements do not contain all the material disclosures
required by International Financial Reporting Standard ("IFRS") 7,
Financial Instruments - Disclosure. All the required information is not
available from the Group`s underlying accounting records and is therefore
not in full compliance with the requirements of IFRS 7 but to the extent
possible with the information available.
3. Consolidated Balance Sheet (condensed)
2009 2008
Audited Audited
R`000 R`000
Assets
Non-current assets:
Property, plant and equipment 0 6
Financial assets 8 369 0
8 369 6
Non-current assets of disposal group 9 122 4 723 172
Current assets:
Loans and receivables 179 916 251 110
Cash and cash equivalents 218 486 126 914
398 402 378 024
Total assets 415 893 5 101 202
Equity
Capital and reserves:
Ordinary shares 7 385 7 385
Share premium 227 990 227 990
Foreign Currency Translation reserve 19 134 10 295
Accumulated loss (7 033) (2 698)
Total equity 247 476 242 972
Liabilities
Non-current liabilities of disposal group 9 122 4 723 172
Current liabilities:
Provisions 22 003 30 293
Employee benefits 111 447
Trade and other payables 114 548 91 663
Current taxation 22 633 12 655
159 295 135 058
Total liabilities 168 417 4 858 230
Total equity and liabilities 415 893 5 101 202
4. Consolidated Income Statement (condensed)
2009 2008
Audited Audited
R`000 R`000
Continuing operations:
Fee income 0 111
Net fair value gains on financial assets 33 917 36 373
Other operating income 2 372 28 433
Total income 36 289 64 917
Operating expenses (50 387) (50 497)
Expenses for asset management services (219) (3 891)
Impairment of goodwill 0 (3 000)
Loss on disposal of subsidiaries 0 (8 602)
Total expenses (50 606) (65 990)
Loss before tax (14 317) (1 073)
Income tax (5 051) (30 352)
Loss from continuing operations (19 368) (31 425)
Discontinued operations:
Profit/(Loss) from discontinued operations 15 033 (53 289)
Total Loss (4 335) (84 714)
Attributable to equity holders of the company (4 335) (84 714)
Total attributable loss per share (cents) (0,6) (11,5)
Total diluted attributable loss per share (cents) (0,6) (11,4)
5. Consolidated cash flow statement (condensed)
2009 2008
Audited Audited
R`000 R`000
Operating activities: (4 559 199) (1 962 989)
Continuing operations 80 843 741 504
Discontinued operations (4 640 042) (2 704 493)
Investing activities: 4 650 771 1 823 315
Continuing operations (8 353) 6 140
Additions to property, plant and equipment - (101)
Proceeds on disposal of property, plant and 16 20
equipment
Disposal of businesses - 6 221
Increase in investments (8 369) -
Discontinued operations 4 659 124 1 817 175
Financing activities: - 25
Continuing operations - 25
Sale of shares by share incentive trust - 25
Discontinued operations - -
Net movement in cash and cash equivalents 91 572 (139 649)
Cash and cash equivalents in subsidiaries disposed - (10 595)
of
Net cash and cash equivalents beginning of the year 126 914 277 158
Net cash and cash equivalents at end of the year 218 486 126 914
6. Consolidated statement of changes in equity (condensed)
6.1 For the year ended 28 February 2009:
Foreign
currency Accumu-
Share Share trans- lated
lation
capital premium reserve loss Total
R`000 R`000 R`000 R`000 R`000
Balance at 1 March 2008 7 385 227 990 10 295 (2 698) 242 972
Increase in translation
reserve - - 8 839 - 8 839
Net loss for the year - - - (4 335) (4 335)
Balance at 28 February 2009
7 385 227 990 19 134 (7 033) 247 476
6.2 For the year ended 29 February 2008:
Foreign
currency Accumu-
Share Share trans- lated
lation
capital premium reserve loss Total
R`000 R`000 R`000 R`000 R`000
Balance at 1 March 2007 7 382 227 863 2 123 82 121 319 489
Increase in translation
reserve - - 8 172 - 8 172
Net loss for the year - - - (84 714) (84 714)
Shares sold by share
incentive trust 3 127 - (105) 25
Balance at 29 February 2008
7 385 227 990 10 295 (2 698) 242 972
7. Segmental results
No segmental information is provided as the group is in a winding down
phase and no trading is taking place.
8. Discontinued operations
8.1 Background
m Cubed Life Limited ("m Cubed Life") reinsured its policyholder
business with PSG FutureWealth Limited ("PSG FutureWealth") with
effect from 1 March 2007. In order to give permanence to the
reinsurance transaction, the said policyholder business (i.e. the
assets and liabilities) was subsequently transferred to PSG
FutureWealth on 8 July 2008 in terms of an order of the High Court
of South Africa.
The assets and liabilities of m Cubed Life are therefore presented
herein as a discontinued operation.
8.2 Profit/(loss)
2009 2008
R`000 R`000
Net insurance premium revenue 44 218
Reinsurance rebate 0 20 961
Fee income 0 35 189
Net fair value (loss)/gains on financial assets (54 806) 403 450
Other operating income 16 622 12 844
Total income (38 140) 472 662
Fair value adjustment on financial liabilities
under investment contracts 58 807 (380 250)
Policyholder benefits on insurance contracts (4 001) (3 346)
Transfer to policyholder liabilities on insurance 2 711 (929)
contracts
Expenses for acquisition of investment contracts 0 (32 483)
Operating expenses (295) (87 880)
Expenses for asset management services 0 (2 828)
Other expenses 0 (1 543)
Total recovery of expenses/(expenses) 57 222 (509 259)
Profit/(Loss) before tax 19 082 (36 597)
Income tax (4 049) (16 692)
Profit/(Loss) from discontinued operations 15 033 (53 289)
8.3 Assets of disposal group classified as held-for-sale
2009 2008
R`000 R`000
Quoted in an active market
Listed:
Equities 0 2 458
Unlisted:
Mutual funds 196 1 110 410
Cash deposits and similar securities 8 926 36 538
Loans and receivables 0 191,152
Investment in investment contracts 0 3 370 872
9 122 4 711 430
Investment property 0 11 742
9 122 4 723 172
8.4 Liabilities of disposal group classified as held-for-sale
R`000 R`000
Insurance contract liabilities 196 32 885
Financial liabilities under investment contracts 8 926 4 690 287
9 122 4 723 172
9. Reconciliation of headline (loss)/earnings
2009 2008
R`000 R`000
Net Loss for the year (4 335) (84 714)
Loss on disposal of subsidiaries 0 8 602
Impairment of goodwill 0 3 000
Impairment of property, plant and equipment 0 911
Profit on disposal of property, plant and equipment 0 (17)
Headline loss attributable to equity holders (4 335) (72 218)
10. Net asset value per share
2009 2008
Number of shares in issue (`000) 738 537 738 537
Net asset value per share (cents) 33,5 32,9
Net tangible asset value per share (cents) 33,5 32,9
11. Earnings per share
2009 2008
Number of shares in issue (`000) 738 537 738 537
Headline loss per share (cents) (0,6) (9,8)
Diluted headline loss per share (cents) (0,6) (9,8)
Part B : Notes and directors` comments
1. Nature of business
m Cubed historically owned a number of focused investment services
businesses. The Group has largely unwound its operations with the primary
objective of converting these assets to cash to unlock maximum value for
shareholders.
2. The Regulator
As disclosed in the annual financial statements at 29 February 2008,
there remained outstanding matters with the Regulator, in terms of which
the Regulator had retained R50 million plus interest (this amount now
being R61,97 million) pending the final unwinding of the transactions
referred to in a settlement agreement concluded between m Cubed and the
Regulator on 5 September 2007, and in addition where the Regulator had
ordered that an amount of R56,3 million of m Cubed`s assets (this amount
now being R68,98 million) be blocked pending the outcome of their
investigations regarding a matter involving m Cubed Life Limited and an
investment policy transaction with Saffron Balm (Pty) Limited, a
subsidiary of Fidentia Holdings Limited.
The board of m Cubed is pleased to announce that it has concluded a
settlement agreement with the Regulator in terms of which m Cubed shall,
inter alia, make a payment of R55,05 million to the Regulator and such
payment shall, inter alia, constitute full and final settlement of all
claims by the Regulator against m Cubed and its subsidiaries. At the
instance of, and by agreement with, the Regulator the full details of the
settlement are to be treated as confidential. At the time of finalising
this annual report, this settlement agreement has not yet been
implemented.
3. Review of operations
The main contributor to the net loss for the financial year is the
accrual of the settlement amount with the Regulator. This accrual was
largely offset by an extinguishment of obligation of liabilities.
Part C : Auditors` qualified opinion
The auditors, PricewaterhouseCoopers Inc., have issued their qualified opinion
on the Group`s financial statements for the year ended 28 February 2009.
"Basis for qualified opinion:
International Financial Reporting Standard ("IFRS") 7, Financial Instruments:
Disclosures, requires disclosures in the financial statements that enable
users to evaluate the significance of financial instruments for the financial
position and performance of the Group and Company; and the nature and extent
of risks arising from financial instruments to which the Group and Company is
exposed during the period and at the end of the reporting period, and how the
Group and Company manage those risks. As described in note 1 to the financial
statements certain required disclosures have not been presented.
It is impracticable for us to include the omitted disclosures in the audit
report.
Qualified opinion:
In our opinion, except for the omission of information described in the Basis
for Qualified Opinion paragraph, the financial statements present fairly, in
all material respects, the consolidated and separate financial position of m
Cubed Holdings Limited as at 28 February 2009, and its consolidated and
separate financial performance and its consolidated and separate cash flows
for the year then ended in accordance with International Financial Reporting
Standards and in the manner required by the Companies Act of South Africa."
A copy of the auditors` qualified opinion is available on request at the
Company`s registered offices.
Part D : Conclusion
1. Prospects
The release of m Cubed`s audited condensed consolidated financial
information at 28 February 2009 marks an important milestone in achieving
the Group`s stated objective, namely to unlock value and distribute
available cash resources to shareholders. Work has commenced on the
preparation of m Cubed`s annual financials as at 28 February 2010, which
is expected to be released towards the middle of 2010.
As m Cubed will not be capable of releasing its audited financial
statements as at 28 February 2010 within the time frame required by the
JSE, the directors are of the opinion that it is still necessary for m
Cubed`s shares to be suspended on the JSE.
2. Cautionary announcement
Shareholders are further referred to the last cautionary announcement
published on SENS on 15 April 2010, and are advised to continue to
exercise caution in the trading in m Cubed shares over the counter.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of m Cubed will be held
at 1st Floor, Old College Building, 35 Church Street, Stellenbosch, 7600 on 4
June 2010 at 10h00, to transact the business as stated in the notice of the
Annual General Meeting, which is included as part of the Annual Report
distributed to shareholders on 13 May 2010.
Cape Town
12 May 2010
Registered office:
1st Floor PSG House, Alphen Park Constantia, Main Road, Constantia
Private Bag X3, Constantia, 7848
Telephone 021 799 8000 Facsimile 021 794 4674
Transfer offices:
Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg
2000
PO Box 61051, Marshalltown, 2107
Telephone: 011 370 5000, Facsimile: 011 370 5487
Directors: CA Otto (Chairman)*, CMB Bothner*, W Roux*, J van Zyl Smit*, AM
Louw*, CJ Masson(FD) *Non-executive
Auditors: PricewaterhouseCoopers Inc.
Company secretary: Probity Business Services (Pty) Ltd
Bankers: The Standard Bank of South Africa Limited
Sponsors: PSG Capital (Pty) Limited
Attorneys: Werksmans Inc.
Date: 12/05/2010 17:30:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
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employees and agents accept no liability for (or in respect of) any direct,
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