| Tue 13 Sep 2005, 17:42 | | Mvela Resources - Company Announcement |
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Mvela Resources - Company Announcement
MVELAPHANDA RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1980/001395/06)
Share code: MVL & ISIN: ZAE000050266
(`Mvela Resources`)
COMPANY ANNOUNCEMENT
The Board of directors (`the Board`) wishes to advise shareholders that,
although the effect is not material or of a price sensitive nature, as it does
not affect headline earnings per share or the cash flows, the preliminary
results for the year ended 30 June 2005, published on 2 September 2005,
inadvertently did not give effect to the provisions of accounting statement AC
140: Business Combinations. This technical accounting adjustment was
identified after the publication of the reviewed preliminary results on 2
September 2005, and the Board, through the sponsor, advised the JSE and with
their approval has published this announcement.
In terms of this accounting statement goodwill arising from a business
combination is no longer amortised. The effective date of the statement is
financial years beginning after 31 March 2004. The Board had intended to make
this change as part of the required change to International Financial Reporting
Standard in the financial year commencing 1 July 2005.
As already stated above, the adjustments required do not affect headline
earnings per share or cash flows, but are rather adjustments of a technical
accounting nature and as such the Board does not believe that the adjustments
have any effect on the value of the group or its shares. It is the intention of
the Board that the published Annual Financial Statements will be circulated to
shareholders by 30 September 2005 and will reflect the adjustments required.
The results as well as the adjustments contained in this announcement have been
reviewed by the group`s auditors, PricewaterhouseCoopers Inc. Their review
opinion remains unqualified, and is available for inspection at the company`s
registered office.
The following are the effects had the provisions of the accounting statement
been accounted for:-
After
As reported Accounting
2005 for
R`000 AC 140 Change
R`000 R`000
Income Statement
Attributable income(Note 1) 181,609 172,376 (9,233)
Cents Cents Cents
Basic earnings per ordinary share 109 104 (5)
Headline earnings per ordinary 108 108 -
share
Adjusted earnings per ordinary 63 63 -
share
Balance Sheet R`000 R`000 R`000
Investment in associate 532,523 779,226 246,703
companies(Notes 1, 2 & 3)
Goodwill arising from reverse 113,995 120,869 6,874
acquisition(Note 1)
Total assets 5,361,708 5,615,285 253,577
Share capital and reserves 3,168,794 3,422,371 253,577
Total equity and liabilities 5,361,708 5,615,285 253,577
Note 1: This adjustment reflects the reversal of the net negative goodwill
amortised during the year ended 30 June 2005 (R15.8 million and R0.3 million
negative goodwill amortised on Northam Platinum Limited (`Northam`) and Trans
Hex Group Limited (`Trans Hex`) respectively, off-set by R6.9 million
amortisation of positive goodwill arising from the reverse acquisition).
Note 2: On the acquisition of the equity investments in Northam and Trans Hex
there was negative goodwill as a result of the purchase price being lower than
the fair value of the net assets acquired. As Northam and Transhex are equity
accounted, previously this negative goodwill was amortised into income and the
related investment increased over 20 years. The new accounting statement
requires the full unamortised negative goodwill as at 1 July 2004, amounting to
R263 million (Northam R258 million; Trans Hex R5 million) to be credited to
opening retained earnings and the investment in associates to be increased.
Note 3: The net effect is an increase in investment in associate companies and
an increase in opening retained earnings of R247 million (R263 million less R16
million).
The accounting statement does not require restatement of prior year figures.
The Board would like to apologise for any unintentional inconvenience that may
have been caused by this mandatory change required in terms of AC 140.
13 September 2005
Date: 13/09/2005 05:30:06 PM
Produced by the JSE SENS Department
