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Medi-Clinic Corporation Limited - Medi-Clinic And Its Subsidiaries Transition To
International Financial Reporting Standards("Ifrs")
MEDI-CLINIC CORPORATION LIMITED
Reg. No. 1983/010725/06
Share code: MDC
ISIN-code: ZAE000004370
(Incorporated in the Republic of South Africa)
Medi-Clinic and its subsidiaries transition to International Financial Reporting
Standards("IFRS")
Restatement of financial information for the year ended 31 March 2005 and the
six months ended 30 September 2004 under International Financial Reporting
Standards ("IFRS")
MEDI-CLINIC CORPORATION LIMITED AND ITS SUBSIDIARIESCOMMENTSFrom 2005 onwards
the Medi-Clinic Group ("Group") is required to prepare its consolidated
financial statements in accordance with IFRS and JSE Limited"s (JSE) Listing
Requirements. This change applies to all financial reporting for accounting
periods beginning on or after 1 April 2005 and consequently the Group"s first
published IFRS results will be its interim results for the six months ended 30
September 2005. The Group"s first published full set of financial statements
under IFRS will be for the year ending 31 March 2006. As the Group publishes
comparative information for one year in its financial statements, the date for
the transition to IFRS is 1 April 2004, which represents the start of the
earliest period of comparative information.In order to explain how Medi-Clinic"s
reported performance and financial position are impacted by IFRS, the Group has
restated information previously published under SA GAAP to the equivalent basis
under IFRS. This restatement follows the guidelines set out in IFRS 1, First-
time Adoption of International Financial Reporting Standards. The adoption of
IFRS has resulted in certain adjustments to comparative information that may not
be repeated in future reporting periods.It is important to note that this
financial information has been prepared in accordance with IFRS statements that
are expected to be effective at 31 March 2006. These are subject to ongoing
review and possible amendment by interpretive guidance from the International
Accounting Standards Board ("IASB") and may therefore be subject to change. It
should further be noted that the ultimate presentation as well as income
statement and balance sheet captions could also change.This document includes
the following:Yen Basis of preparation and explanation of transitional
arrangements and material adjustmentsYen Consolidated Balance Sheets at 1 April
2004, 30 September 2004 and 31 March 2005Yen Consolidated Income Statements for
the six months ended 30 September 2004 and the year ended 31 March 2005Yen
Reconciliation of Shareholders equity at 1 April 2004, 30 September 2004 and 31
March 2005Yen Reconciliation of Income Statements for the six months ended 30
September 2004 and the year ended 31 March 2005Yen Reconciliation of total
assets, liabilities and equity as at 1 April 2004, 30 September 2004 and 31
March 2005
BASIS OF PREPARATIONThe Group has prepared the consolidated preliminary balance
sheet at 31 March 2005 and the consolidated preliminary income statement for the
year then ended, in accordance with IFRS, to establish the financial position
and results of operations of the Group necessary to provide the comparative
information expected to be included in the Group"s first set of IFRS financial
statements for the year ending 31 March 2006.The Board acknowledges its
responsibility for the preparation of the preliminary financial information
which has been prepared in accordance with IFRS and policies expected to be
adopted when the Board prepares the Group"s first set of IFRS financial
statements for the year ending 31 March 2006.
TRANSITIONAL ARRANGEMENTSThe date of transition to IFRS for the Group is 1 April
2004. The Group"s opening balance sheet at 1 April 2004 has been restated to
reflect all existing IFRS"s expected to be applicable at 31 March 2006. At
transition, IFRS 1 allows a number of exemptions to the retrospective
application principle. The Group made the following elections relating to the
transitional arrangements:
Business combinationsThe Group has elected not to apply the retrospective
application requirements of IFRS 3, Business Combinations for combinations that
occurred prior to 1 April 2004.
Share-based paymentsThe Group has elected not to apply the provisions of IFRS 2,
Share-based Payments to employee share option scheme awards granted on or before
7 November 2002.
Employee benefitsThe Group has elected to recognise all cumulative actuarial
gains and losses as at 1 April 2004.
Cash flow statementThere have been no material adjustments to the cash flow
statement in respect of cash utilised by operating activities before taxation,
cash flows from investing activities and cash flows from financing activities
(although the composition has changed) as a result of the adoption of IFRS.
Further changesThe possibility exists that the preliminary financial information
may require adjustment before its inclusion in the Group"s first IFRS financial
statements for the year ending 31 March 2006 because of revisions or changes to
standards issued by the IASB, and interpretations or guidance on the application
of IFRS in a particular industry.
MATERIAL ADJUSTMENTSThe basis of the material adjustments between SA GAAP and
IFRS, as shown in the Reconciliation of Equity and Reconciliation of Income
Statement tables, is noted below.
Share-based paymentsThe Group grants share options to employees under an
employee share incentive scheme.In accordance with the requirements of IFRS, the
Group adjusted its retained income balance on transition date by R1,1 million
and has recognised an expense in the Income Statement of R2,3 million for 2005,
with a corresponding increase in the share-based payment reserve. The options
are measured at fair value at grant date. The fair value is recognised over the
vesting period.
Property, plant and equipmentFollowing the adoption of IAS 16 Property, Plant
and Equipment the useful lives of property, plant and equipment have been
reassessed resulting in an increase in retained income on transition date of
R46,7 million before tax (R32,7 million after tax), with a corresponding
increase in Property, plant and equipment. The Income Statement was credited
with R14,8 million before taxation (R10,3 million after taxation) for 2005, with
a corresponding increase in Property, plant and equipment.
Employee benefitsThe Group has elected to apply the employee benefits exemption.
The Group recognised a cumulative actuarial gain on the retirement benefit
obligation of R3,2 million before tax (R2,2 million after tax) on transition
date and has recognised an expense in the Income Statement of R3,2 million
before tax (R2,2 million after tax) for 2005, with a corresponding increase in
the Retirement benefit obligation.CONSOLIDATED BALANCE SHEET
Audited Unaudited Audited
31 March 30 September 1 April
2005 2004 2004
R"000 R"000 R"000
Assets
Non-current assets 2,250,812 2,198,705 2,117,740
Property, plant and
equipment 1,997,278 1,967,510 1,892,806
Intangible assets 48,144 47,449 47,874
Investments in 50,132 46,348 53,372
associates
Other investments and 63,724 60,757 49,259
loans
Deferred taxation 91,534 76,641 74,429
assets
Current assets 1,510,170 1,207,768 1,134,151
Inventories 136,434 137,579 137,846
Receivables and 525,211 481,284 545,237
prepayments
Cash and cash 848,525 588,905 451,068
equivalents --------- --------- ---------
Total Assets 3,760,982 3,406,473 3,251,891
--------- --------- ---------
Equity and liabilities
Capital and reserves
attributable to equity
holders
Share capital 35,007 35,007 35,007
Share premium 45,379 91,937 190,306
Treasury shares (38,321) (45,087) (53,093)
Share-based payment 3,352 2,201 1,051
reserve -------- -------- -------
Capital 45,417 84,058 173,271
Distributable 2,647,994 2,343,022 2,104,767
reserves --------- --------- ----------
2,693,411 2,427,080 2,278,038
Minority Interests 234,935 213,128 202,421
--------- -------- --------
Total equity 2,928,346 2,640,208 2,480,459
---------- --------- ----------
Non-current Liabilities 236,016 241,734 225,536
Interest bearing debt 159,214 174,482 167,803
Deferred taxation 3,932 3,360 3,113
liabilities
Retirement benefit 72,870 63,892 54,620
Obligations
Current liabilities 596,620 524,531 545,896
Trade and other 483,246 442,285 424,887
payables
Current portion of 80,362 63,922 74,317
interest-bearing debt
Taxation 33,012 18,324 46,692
------ ------ ------
Total liabilities 832,636 766,265 771,432
------- ------- -------
Total equity and 3,760,982 3,406,473 3,251,891
liabilities --------- --------- ----------
CONSOLIDATED INCOME STATEMENTS
Audited Unaudited
31 March 30 September
2005 2004
R"000 R"000
Revenue 4,039,907 2,002,263
Cost of Sales (2,236,117) (1,124,189)
Administration and other operating (1,083,966) (527,503)
expenses ----------- -----------
Operating profit 719,824 350,571
Income from associates 24,776 12,567
Consideration for termination of 50,000 -
agreements
Net finance income 29,306 12,624
Dividends 1 705 821
Interest received 57 051 26 944
Finance costs (29 450) (15 141)
-------- --------
Profit before taxation 823,906 375,762
Taxation (214,154) (103,712)
--------- ---------
Profit for the period 609,752 272,050
--------- ---------
Attributable to:
Equity holders of the Company 543,227 238,255
Minority interests 66,525 33,795
------- -------
609,752 272,050
------- -------
HEADLINES EARNINGS RECONCILIATION
Audited Unaudited
31 March 30 September
2005 2004
R"000 R"000
Net profit attributable to 543,227 238,255
equity holders of the Company
Impairment of goodwill 2,913 2,410
Profit on sale of property, (667) (768)
plant and equipment
After tax consideration for the (42,500) -
termination of agreements -------- --------
502,973 239,897
-------- --------
Earning per ordinary share- cents
undiluted 158.7 69.7
Headline earnings per ordinary
share-cents
undiluted 146.9 70.2
RECONCILIATION OF CHANGES IN SHAREHOLDERS EQUITY
Audited As Adjustments Adjustmen Adjustments
1 April previous- for:Share- ts for: for:
2004 ly based Retire- Property,
reported payments ment plant and
under SA benefit equipment
GAAP obligatio
ns
Share 35,007 - - - 35,007
capital -------
R"000
Share 190,306 - - - 190,306
premium -------
R"000
Treasury (53,093) - - - (53,093)
shares -------
R"000
Share- - 1,051 - - 1,051
based -----
payment
reserve
R"000
Retained 2,073,61 (1,051) 2,240 29,966 2,104,767
earnings 2 ---------
R"000
Minority 199,700 - - 2,721 202,421
interest -------
R"000
Total 2,445,53 - 2,240 32,687 2,480,459
R"000 2 ---------
Unaudited As Adjustments Adjustments
30 previous- for:Share- for:
September ly based Property,
2004 reported payments plant and
under SA equipment
GAAP
Share 35,007 - - 35,007
capital ------
R"000
Share 91,937 - - 91,937
premium ------
R"000
Treasury (45,087) - - (45,087)
shares -------
R"000
Share- - 2,201 - 2,201
based -----
payment
reserve
R"000
Retained 2,311,454 (2,201) 33,769 2,343,022
earnings ---------
R"000
Minority 209,575 - 3,553 213,128
interest -------
R"000
Total 2,602,886 - 37,322 2,640,208
R"000 ---------
Audited 31 As Adjustments Adjustments
March 2005 previously for:Share- for:
reported based Property,
under SA payments plant and
GAAP equipment
Share 35,007 - - 35,007
capital ------
R"000
Share 45,379 - - 45,379
premium ------
R"000
Treasury (38,321) - - (38,321)
shares --------
R"000
Share- - 3,352 - 3,352
based -----
payment
reserve
R"000
Retained 2,612,688 (3,352) 38,658 2,647,994
earnings ---------
R"000
Minority 230,592 - 4,343 234,935
interest -------
R"000
Total 2,885,345 - 43,001 2,928,346
R"000 ---------
RECONCILATION OF INCOME STATEMENTS
Audited Unaudited
31 March 30 September
2005 2004
R"000 R"000
Profit for the period
As previously reported under SA 603,979 270,805
GAAP
Share-based payments (2,301) (1,150)
Property, plant and equipment 14,755 6,614
Retirement benefit obligations (3,200) (3,200)
Taxation on adjustments (3,481) (1,019)
------- -------
609,752 272,050
------- -------
RECONCILIATION OF ASSETS, LIABILITIES AND EQUITY
Audited Unaudited Audited
31 March 30 1 April
2005 September 2004
R"000 2004 R"000
R"000
Assets
As previously reported 3,714,049 3,365,791 3,217,051
under SA GAAP
Property, plant and 61,435 53,294 46,680
equipment
Deferred taxation
Property, plant and (18,434) (15,972) (13,993)
equipment
Retirement benefit - - (960)
obligations
Reclassification 3,932 3,360 3,113
--------- ------ ---------
3,760,982 3,406,473 3,251,891
--------- --------- ---------
Liabilities
As previously reported 828,704 762,905 771,519
under SA GAAP
Retirement benefit - - (3,200)
obligations
Deferred taxation
Reclassification 3,932 3,360 3,113
------- ---- ------
832,636 766,265 771,432
------- ------- -------
Equity
As previously reported 2,885,345 2,602,886 2,445,532
under SA GAAP
Property, plant and 43,001 37,322 32,687
equipment
Retirement benefit - - 2,240
obligations --------- --------- ---------
2,928,346 2,640,208 2,480,459
--------- --------- ---------
SEGMENT REPORTINGThe Group operates in the private hospital industry and is not
significantly involved in other industries. The Group also has no significant
operations outside Southern Africa and therefore no segment reports are
produced.
AUDIT OPINION ON 2005 RESTATED FINANCIAL INFORMATIONThe 30 September 2004
restatements are unaudited. The restatements of the financial information for
the opening 2004 and 2005 balance sheets and financial information for the year
ended 31 March 2005, as set out on pages 11 to 15, have been audited by the
Group"s auditors, PricewaterhouseCoopers Inc., and their audit opinion is
available for inspection at the Group"s registered office. Their report,
addressed to the board of directors, includes an emphasis of matter that the
scope of their review did not include the presentation and disclosure aspects of
IFRS and was limited to the recognition and measurement criteria of IFRS only.
They further note that ammendments to the interpretive guidance issues by the
IASB, between the date of the announcement and the finalisation of the financial
statements for the year ended 31 March 2006, may result in changes to the
restatements published.
21 November 2005
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 21/11/2005 03:31:50 PM Produced by the JSE SENS Department
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