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NAI NAN
NAI
NAI - New Africa Investments Limited - Audited condensed consolidated
financial information of the group for the year ended 30 June 2011
NEW AFRICA INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
(Share codes: NAI and NAN)
(ISIN: ZAE000033338 and ZAE000033346)
("NAIL" or the "Group" or the "Company")
AUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP FOR THE
YEAR ENDED 30 JUNE 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited *Restated
year ended 18 months
30 June 2011 30 June 2010
Notes R`000 R`000
Administration expenses
(2,824) (7,048)
Additional disposal
consideration for KFM Radio 10,994 15,374
(Pty) Limited ("KFM
Agterskot")
Other income
1,026 1,766
Finance income 355 909
Share of profit of associate
5,975 6,275
Profit before taxation 15,526 17,276
Income tax expense 1
(317) (1,328)
Profit and total comprehensive
income for the period 15,209 15,948
Attributable to:
Owners of the Company
15,209 15,948
Non-controlling interest
- -
Profit and total comprehensive 15,209 15,948
income for the period
Basic earnings per share
(cents) 12.0 12.6
Diluted earnings per share 12.0 12.6
(cents)
Number of shares taken into
account in calculating 126,623 126,653
earnings per share (`000s)
* In terms of IAS 39, Financial Instruments: Recognition and Measurement,
shareholders for dividends represent financial liabilities. Upon prescription
and extinguishment of these financial liabilities, any difference arising
between the carrying amount of the financial liability extinguished and the
consideration paid (if any) is recognised in profit or loss. In the
comparative period, unclaimed dividends, which had prescribed, were
recognised directly in retained earnings as opposed to in profit or loss.
Consequently, the comparative figures have now been restated to reflect the
additional gain of R1.766 million in the consolidated statement of
comprehensive income. There is a nil net tax impact due to the existence of
carry-forward losses. There is a nil net impact on retained earnings, no
changes to the consolidated statement of financial position and no impact on
cash flows. This restatement only affects the period ended 30 June 2010 as
this is the first period in which the prescription was effected by the
directors. The impact on basic and diluted earnings and headline earnings per
share is a 1.4 cents increase.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited *Restated *Restated
30 June 2011 30 June 2010 31 Dec 2008
R`000 R`000 R`000
ASSETS
Non-current assets
Investment in associate 11,505
13,118 13,045
Current assets
26,685 33,853 40,151
Income tax receivable
10,395 10,395 10,395
Other receivables -
86 -
Other receivable - KFM 4
Agterskot 7,586 15,374 -
Cash and cash equivalents
8,704 7,998 29,756
TOTAL ASSETS
39,803 46,898 51,656
Equity attributable to owners
of the Company 37,440 44,517 47,676
Ordinary share capital and
share premium 4,712 4,712 4,814
Reserves
32,728 39,805 42,862
Non-Controlling interest
123 123 123
TOTAL EQUITY 47,799
37,563 44,640
Current liabilities 3,857
2,240 2,258
Trade and other payables
1,409 1,570 3,218
Loan from related party 831 - -
Provisions - 688 639
Borrowings - - -
TOTAL EQUITY AND LIABILITIES 51,656
39,803 46,898
Net asset value per share 37.6
attributable to owners of the 29.6 35.2
Company (cents)
Number of shares in issue used
in calculating net asset value 126,623 126,623 126,760
per share `000
New Africa Investments Limited Share Incentive Trust
* In terms of SIC-12: Consolidation - Special Purpose Entities, entities
which are created to achieve a narrow and well-defined purpose and are
created with legal arrangements that impose strict and sometimes permanent
limits on the decision-making powers of their governing board, trustees or
management over the operations of the SPE are required to be consolidated by
the creator. The New Africa Investments Limited Share Incentive Trust was
created by New Africa Investments Limited to facilitate the exercise and
distribution of proceeds relating to share options which were exercised by
employees as part of the TISO Consortium acquisition of NAIL in 2003. This
trust was not previously consolidated. All options were settled, however, a
slight delay in the payment of the settlements arose and interest accrued
during this period resulting in excess funds in the trust. The excess funds
have been consolidated and a corresponding provision has been raised. Based
on the aforementioned, the comparative figures have been restated to reflect
the consolidated cash and related provision of R0.639 million at 31 December
2008 and R0.688 million at 30 June 2010. There is a nil impact on retained
earnings and no changes to the consolidated statements of comprehensive
income nor to the statement of changes in equity. There is a nil impact on
basic and diluted earnings and headline earnings per share.
Borrowings and non-controlling interest
* The borrowing from the Industrial Development Corporation was provided to
Wild Coast Films (Pty) Ltd to fund the production of a film and was repayable
only out of proceeds arising from that film. In terms of IAS 39, Financial
Instruments: Recognition and Measurement, such a financial liability, which
is carried at amortised cost, is reassessed and adjusted for changes in
expected cash flows over the life of the liability. This film was written
down to a net realisable value of nil prior to the year ended 31 December
2008, however, the borrowing was not reassessed. The expected cash flows
payable in settlement of the borrowing were therefore also nil and
consequently, this liability (although not extinguished), should have been
remeasured to nil. As a result, the comparative figures have been restated to
reflect the liability at nil and a resultant increase in retained earnings of
R9.172 million. In terms of IAS 27 - Consolidated and Separate Financial
Statements (as revised 2003), a debit non-controlling/minority interest is
recognisable only when the minority has a binding obligation and is able to
make an additional investment to cover the losses. No such binding obligation
existed and, consequently, the comparative figures have been restated to
reverse the debit minority interest of R9.172 million which had been
recognised. The revised provisions of the current IAS 27 are not applied
retrospectively and therefore do not impact the restatement. There is an
overall net nil impact on retained earnings and no change to the consolidated
statements of comprehensive income. There is an overall nil impact on basic
and diluted earnings and headline earnings per share.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the
Company
Ordinary Non- Total
share controlli Equity
capital ng
and share interest
premium
Reserves Total
R`000 R`000 R`000 R`000 R`000
Balance at 01
January 2009 as 4,814 42,862 47,676 (9,049) 38,627
previously
stated
Reversal of - (9,172) (9,172) 9,172 -
debit non-
controlling
interest
Remeasurement of - 9,172 9,172 - 9,172
borrowings
Balance at 01 4,814 42,862 47,676 123 47,799
January 2009 as
restated
Total
comprehensive - 14,182 14,182 - 14,182
income for the
period as
previously
stated
Reclassification
of prescribed - 1,766 1,766 - 1,766
dividends
Total
comprehensive - 15,948 15,948 - 15,948
income for the
period as
restated
Transactions
with owners as (102) (17,239) (17,341) - (17,341)
previously
stated
Reclassification
of prescribed - (1,766) (1,766) - (1,766)
dividends
Transactions
with owners as (102) (19,005) (19,107) - (19,107)
restated
- Share capital
repurchased (102) 9 (93) - (93)
- Dividends
paid - (19,014) (19,014) - (19,014)
Balance at 30 44,640
June 2010 4,712 39,805 44,517 123
Total
comprehensive - 15,209 15,209 - 15,209
income for the
year
Transactions
with owners - (22,286) (22,286) - (22,286)
- Dividends
paid - (22,286) (22,286) - (22,286)
Balance at 30
June 2011 4,712 32,728 37,440 123 37,563
CONSOLIDATED STATEMENT OF CASH FLOWS
Audited *Restated
year ended 18 months
30 June 2011 30 June 2010
R`000 R`000
Cash utilised in operations
(2,561) (7,060)
Taxation paid
(317) (1,328)
Net cash utilised in operating
activities (2,878) (8,388)
Cash flows from investing activities
- Dividends received from Associate
5,902 4,735
- Interest received 355 909
- Agterskot refund received 18,782 -
Net cash generated from investing
activities 25,039 5,644
Cash flows from financing activities
- Dividend paid to shareholders
(22,286) (19,014)
- Loan received from related party
831 -
Net cash utilised in financing
activities (21,455) (19,014)
Net increase/ (decrease) in cash and
cash equivalents 706 (21,758)
Cash and cash equivalents at beginning
of the period 7,998 29,756
Cash and cash equivalents at end of
period 8,704 7,998
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP
1. INCOME TAX EXPENSE
South African normal tax
- -
Secondary taxation on companies
(317) (1,328)
2. HEADLINE EARNINGS
Profit attributable to owners of the
Company 15,209 15,948
Additional consideration for KFM Radio
(Pty) Ltd ("KFM Agterskot") (10,994) (15,374)
Headline earnings 4,215 574
.
Basic and diluted headline earnings
per share (cents) 3.3 0.5
3. RELATED PARTIES
The Company is jointly controlled by:
Primedia (Proprietary) Limited ("Primedia") which owns 47.4%
of the ordinary shares and 73.6% of the "N" ordinary shares;
and
Capricorn Capital Partners Investments (Proprietary) Limited
("Capricorn"), which owns 50.2% of the ordinary shares and
26.1% of the "N" ordinary shares.
The Company, prior to the acquisition by Primedia and
Capricorn in February 2009, was controlled by the TISO
Consortium, which owned 90.3% of the ordinary shares and
99.3% of the "N" Ordinary Shares. The TISO Consortium
includes Investec, Tiso Group, Capricorn Capital Partners,
Mineworkers Investment Company and Safika Investments.
Transactions with related parties are as follows:
Investec in the prior year provided sponsor and financial
advice to NAIL, on the same basis as would be available to
third parties.
R`000 R`000
Purchase of goods and services
Sponsor fee paid 143
Investment banking fee 285
428
Key Management Compensation
Salaries and other short term
employee benefits - 225
Bonuses paid - 250
- 475
Primedia - accounting and
secretarial fees 684 -
Loan from Primedia 831 -
Non-executive directors` 176 222
remuneration
Dividend paid to the TISO - 18,830
Consortium
Receivable from Primedia - refer to detail in note 4
4. OTHER RECEIVABLE
The KFM Agterskot receivable, due from Primedia, is in terms of the disposal
agreement for KFM Radio (Proprietary) Limited, which was sold by NAIL in 2004
and is due as a result of KFM`s successful challenge of SARS` decision to
disallow its R50 million trademark deduction in terms of Section 11(gA) of
the Income Tax Act. During February 2011, KFM agreed to write off period of
18 years for the deduction, in settlement of the dispute with SARS.
COMMENTARY
BASIS OF PRESENTATION
This condensed consolidated financial information for the year ended 30 June
2011 is based on the audited financial statements of the Group and has been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS") and the disclosure
requirements as outlined in IAS 34 - Interim Financial Reporting, and in
compliance with the Listing Requirements of the JSE Limited and the South
African Companies Act (2008), on a basis consistent with that of the prior
period.
These annual financial statements have been prepared under the supervision of
CJ Patricios CA(SA).
ACCOUNTING POLICIES
Except as described below, the accounting policies applied are consistent
with those of the annual financial statements for the period ended 30 June
2010, as described therein.
REVIEW OF RESULTS
The performance for the period reflects the results of the Group`s single
operating segment, its 24.9% interest in Kaya FM (Proprietary) Limited and
administrative expenses incurred, primarily in relation to the Company`s
listing on the JSE.
RETURN OF CASH TO SHAREHOLDERS
Advance Agterskot payment
In terms of the offer made in 2009 by Primedia and Capricorn, NAIL
shareholders had the option of accepting the Once-off Offer Consideration of
68 cents per NAIL share or the Agterskot Offer Consideration which comprised
of the Initial Cash portion of 26 cents per NAIL share plus the Agterskot
Amount (which includes the receipt by NAIL of additional KFM disposal
proceeds). Following the settlement of a tax dispute relating to KFM`s
trademark deduction, NAIL received an initial additional purchase
consideration from Primedia which amounted to R18.782 million. Consequently,
former NAIL shareholders who accepted the Agterskot Offer Consideration and
sold their shares in terms of the 2009 Offer were entitled to an Advance
Agterskot payment of 11.44 cents per NAIL share, which was paid, via a
dividend, to current shareholders on 3 May 2011 who in turn settled the
amounts owing to the former NAIL shareholders. The total amount of the
Advance Agterskot payment (including interest of R0.45 million thereon) was
R14.486 million.
Dividend
A dividend of 17.60 cents per share was declared to shareholders registered
on 29 April 2011. The total amount of the dividend (excluding STC thereon)
was R22.286 million.
CHANGE IN DIRECTORS
The following changes in the directorate have taken place, during the year
ended 30 June 2011:
* Ms O Ighodaro, non-executive director, resigned from the board with
effect from 31 May 2011.
* Mr CJ Patricios, previously an alternate director, was appointed as
non-executive director of the Company with effect from 1 June 2011.
GOING CONCERN
The going concern basis has been adopted in preparing the financial
information. The directors have no reason to believe that the Group will not
be a going concern in the year ahead, based on forecasts and available cash
resources.
UNCLAIMED DIVIDENDS
During the year, the directors passed a resolution, in terms of the NAIL
memorandum of incorporation to prescribe unclaimed dividends of R166 164
relating to the 2006 and 2007 financial years (2010: R1 766 214).
SUBSEQUENT EVENTS
On 14 July 2011, Primedia acquired 1 185 896 (One million one hundred and
eighty five thousand eight hundred and ninety six) ordinary and 27 193 881
(twenty seven million one hundred and ninety three thousand eight hundred and
eighty one) "N" ordinary shares from Capricorn. The total beneficial
interest held by Primedia in the shares of the Company is now 76.1% and 95.8%
of the ordinary and "N" ordinary shares respectively.
NAIL ordinary shares NAIL "N" shares
Number of % Holding Number of % Holding
shares shares
Capricorn 21.6 % 3.9 %
894,623 4,798,920
Primedia 76.1 % 95.8 %
3,150,080 117,353,859
AUDITED OPINION
The above results have been audited by PricewaterhouseCoopers Inc, a copy of
their unqualified audit opinion is available for inspection at the Company`s
registered office, 5 Gwen Lane, Sandown, 2196.
For and on behalf of the Board
SR BRUYNS CJ PATRICIOS
SANDTON
8 September 2011
Directors: SR Bruyns (Chairman), G Chadwick, R Kevan, CJ Patricios, T Volkwyn
Company Secretary: E Sather
Date: 09/09/2011 17:45:01 Produced by the JSE SENS Department.
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