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JSE RACP
REC
RACP - RECM and Calibre Limited - Unaudited Interim financial results for the
six months ended 30 September 2010
RECM and Calibre Limited
(Formerly Velvospec Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2009/012403/06)
Preference share code: RACP
ISIN: ZAE000145041
("RAC" or "the Company")
Unaudited Interim financial results for the six months ended 30 September
2010
Notes Six months Nine
months
ended ended
30 September 31 March
2010 2010
R R
Statement of Financial Position
Assets
Current assets
Trade and other
receivables 138 000 -
Other financial 1 506
assets 347 349 -
Cash and cash 2
equivalents 157 035 70
506
642 384 70
Total assets 506
642 384 70
Equity and
liabilities
Equity
Share capital 3 50
000 000 70
Reserves 4
attributable to 108 159 -
ordinary shares
Retained income/(loss) 5
attributable to ordinary shares 329 734 (344 268)
50
437 893 (344 198)
Reserves and retained income attributable to
preference shares 3 941 046 -
Reserves 4
973 430 -
Retained income 5
2 967 616 -
54
378 939 (344 198)
Non-current
liabilities
Other financial 6 450
liabilities 000 000 -
Deferred tax
176 073 -
450
176 073 -
Current
liabilities
Loans from
shareholders - 338 693
Trade and other
payables 1 399 726 -
Current tax paid
687 646 5 575
2 087 372 344 268
Total equity and 506
liabilities 642 384 70
Statement of Comprehensive Income
Operating (3
expenses 146 347) (344 268)
Operating (loss) (3
146 347) (344 268)
Investment
income 8 567 804 -
Finance costs
(113) -
Profit/(loss)
before taxation 5 421 344 (344 268)
Taxation (1
779 726) -
Profit/(loss)
before taxation 3 641 618 (344 268)
Other comprehensive
income
Available-for-sale financial -
assets adjustments 1 257 662
Taxation related to components of other -
comprehensive income (176 073)
1 081 589 -
Total comprehensive income/(loss)
4 723 207 (344 268)
Statement of Changes in Equity
Share Share Fair Retained Total
capital premium value income/(loss) equity
adjustme
nt
assets-
availabl
e-for-
sale
reserve
R R R R R
Balance at 24
June 2009 - - - - -
Changes in
equity
Total
comprehensive - - - (344 268) (344 268)
income/(loss)
Issue of
ordinary shares 70 - - - 70
Balance 31 March
2010 70 - - (344 268) (344 198)
Changes in
equity
Total
comprehensive - - 1 081 3 641 618 4 723 207
income/(loss) 589
Issue of 49 49 950 49
ordinary shares 930 000 - - 999 930
Balance 30 50 49 950 54
September 2010 000 000 1 081 3 297 350 378 939
589
Attributable to 50 49 950 50
ordinary 000 000 108 159 329 735 437 894
shareholders
Attributable to
preference - - 973 430 2 967 615 3 941 045
shareholders
Balance 30 50 49 950 54
September 2010 000 000 1 081 89 3 297 350 378 939
Six months Nine
months
ended ended
30 September 31 March
2010 2010
R R
Statement of
Cash Flows
Cash flows from
operating activities
Cash utilised in (2
operations 602 277) (338 693)
Interest income
8 567 804 -
Finance costs
(113) -
Tax paid
(380 000) -
5 585 414 (338 693)
Cash flows from investing
activities
Purchase of (505
financial assets 089 687) -
(505
089 687) -
Cash flows from financing
activities
Proceeds on 49
share issue 999 930 70
Proceeds from 450
other financial 000 000 -
liabilities
Net movement on
shareholders` (338 693) 338 693
loans
499
661 237 338 763
Total cash movement for the period
156 964 70
Cash at
beginning of 70 -
period
Total cash and cash equivalents end of
period 157 034 70
Notes to the interim results for the period ended 30
September 2010
1 Other financial
assets
Investments 506
347 349 -
Investments comprises exposures to listed and unlisted securities.
The investment objective is to optimise returns while minimising
risks such as volatility of returns, risk of capital loss and the
risk of negative real return.
The fair values of the financial assets were determined as
follows: Listed or quoted investments are based on the quoted
market price and unlisted securities on published prices.
2 Cash and cash
equivalents
Bank
balances 157 035 70
3 Share
capital
Authorised
5 000 000 Ordinary shares of R0.01 each
50 000 50 000
100 000 000 Redeemable, participating,
non-cumulative Preference shares of R0.01 1 000 000 -
each
Issued
5 000 000 Ordinary shares of
R0.01 each 50 000 70
Share 49
premium 950 000 -
50
000 000 70
45 000 000 Redeemable, participating, non-
cumulative Preference shares of R0.01 - -
each and a premium of R9.99 per share.
Refer to note 6 for disclosure
50
000 000 70
4 Reserves
The fair value adjustment assets available-for-sale reserve
comprises all fair value adjustments on available-for-sale
financial instruments. When an asset or liability is
derecognised, the fair value adjustment relating to that asset or
liability is transferred to profit or loss.
Available-for-sale financial instruments
1 257 662 -
Deferred tax on available-for-sale
financial instruments (176 073) -
1 081 589 -
The reserves are attributable to the following classes
of shareholders:
5 000 000 Ordinary shares
108 159 -
45 000 000 Redeemable, participating, non-
cumulative preference shares 973 430 -
1 081 589 -
The reserves is divided between the ordinary and preference shares according
to Article 4.5.3.2 of the Articles of the Company. On the occurrence of a
redemption event, each preference shareholder shall be entitle to be paid, on
the relevant redemption date, in redemption of the preference shares held by
it - in reference and in priority to the holders of all other classes of
shares in the share capital of the company, as a redemption amount in respect
of each preference share held by it, an amount equal to the designated
percentage of all payments to be made to shareholders, whether in cash or in
specie, divided by the number of preference shares in issue at the relevant
date. The designated percentage means, at any relevant time, the percentage
which all the preference shares in the aggregate constitute of the entire
issued share capital of the company.
Each of the following events set out in Article 4.5 of the
company`s Articles of Association constitutes a redemption
event, namely:
> A final order of competent court is made for
the winding-up (of the company (the liquidation
event");
> A resolution by the board of directors of the company to
redeem the Preference shares before the liquidation event
(which the board of directors of the company shall be
entitled to so resolve at any time after the Preference
shares issue date);
> A resolution is passed by the ordinary shareholders or
all the shareholders, for the voluntary winding-up of the
company, and or
> A resolution is passed by the directors of the company,
for the company to cease the conduct of its business.
5 Retained
income
The retained income is attributable
to the following classes of
shareholders:
5 000 000 Ordinary shares
329 734 (344 268)
45 000 000 Redeemable,
participating, non-cumulative 2 967 616 -
preference shares
3 297 350
(344 268)
The retained income is divided between the ordinary and
preference shares according to Article 4.5.3.2 of the
Articles of the Company. On the occurrence of a redemption
event, each preference shareholder shall be entitle to be
paid, on the relevant redemption date, in redemption of the
preference shares held by it - in reference and in priority
to the holders of all other classes of shares in the share
capital of the company, as a redemption amount in respect of
each preference share held by it, an amount equal to the
designated percentage of all payments to be made to
shareholders, whether in cash or in specie, divided by the
number of preference shares in issue at the relevant date.
The designated percentage means, at any relevant time, the
percentage which all the preference shares in the aggregate
constitute of the entire issued share capital of the
company.
Each of the following events set out in Article 4.5 of the
company`s Articles of Association constitutes a redemption event,
namely:
> A final order of competent court is made for
the winding-up (of the company (the liquidation
event");
> A resolution by the board of directors of the company to
redeem the Preference shares before the liquidation event
(which the board of directors of the company shall be
entitled to so resolve at any time after the Preference
shares issue date);
> A resolution is passed by the ordinary shareholders of
all the shareholders, for the voluntary winding-up of the
company; and or
> A resolution is passed by the directors of the company,
for the company to cease the conduct of its business.
6 Other financial liabilities
Held at
amortised
cost
45 000 000 Redeemable, 450
participating, non-cumulative 000 000 -
preference shares
The other financial liabilities consists of 45 000 000
redeemable, participating, non-cumulative preference shares
of R0.01 each and a share premium of R9.99 each, which
shares are listed on the Johannesburg Stock Exchange. These
redeemable, participating, non-cumulative preference shares
share in the reserves and the retained income of the company
as per note 4 and 5.
7 Events
after
balance
sheet date
The directors are not aware of any matter or
circumstance arising since the end of the period.
Basis of
accounting
preparation
The condensed interim financial results have been prepared in
according with IFRS IAS34 - Interim Financial Reporting, the
Listings Requirements of the JSE Limited and Schedule 4 of the
South African Companies Act (Act 61 of 1973, as amended). The
accounting policies used in the preparation of these interim
results are consistent with those used in the annual financial
statements for the period ended 31 March 2010.
The interim results have been prepared in accordance with the
IFRS and IFRIC interpretations as adopted for use in South
Africa the time of the preparation of the information. As
these standards and interpretations are subject of ongoing
review, they may be amended between the date of this report and
the finalization of the annual financial statements for the
year ended 31 March 2011.
Commentary
Investment activity since listing in June of this year has been
limited. In an environment of generally expensive assets,
attractive investment opportunities are not overly abundant.
We are finding some opportunities in the more obscure corners
of the South African markets, but these have yet to translate
into meaningful allocations of capital.
At the interim reporting date, the investment portfolio can
broadly be classified as follows:
Listed 1.30%
S.A.
equities
Unlisted 1.10%
S.A.
equities
Cash and 97.70%
money
market
instrument
s
100.00%
In many instances, we are still in the process of committing
capital to investments held at 30 September. When any
individual investment reaches sufficient size to justify a more
detailed discussion thereof, we may do so. Until such time, we
limit disclosures about the portfolio in the interest of
protecting our investment opportunities.
According to our estimates, the combined equity holdings in the
portfolio are priced at approximately 63% of intrinsic value at
the reporting date. This represents attractive value, but it
must be kept in mind that in many cases the realisation of this
value can be a process spanning over a considerable period of
time.
Net asset
value (NAV)
Net Asset Value of preference shares
as at 30 September 2010 (cents per 1 009
share)
Signed on behalf of
the board
P Viljoen
Cape Town, 12 November
2010
Directors: P Viljoen (Chairman), T de
Bruyn, G Pretorius, W Stals
Company Secretary: L Potgieter
Registered
Office:
7th Floor
Claremont
Central
8 Vineyard
Road
Claremont
7700
South
Africa
Transfer Secretaries:
Link Market Services South Africa (Pty) Limited,
16th Floor,
11 Diagonal Street,
Johannesburg,
2001
South Africa
Sponsor:
Deloitte & Touche Sponsor Services (Pty) Ltd
Building 6, The Woodlands
20 Woodlands Drive
Woodmead
Sandton, 2196
South Africa
Date: 12/11/2010 12:06:02 Produced by the JSE SENS Department.
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