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Proper Group Limited - Abridged Audited Consolidated Annual Financial
Statements For The Year Ended 31 August 2005
PROPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/001940/06)
Share code: PRO ISIN: ZAE000027181
("Proper" or "the company")
ABRIDGED AUDITED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 AUGUST 2005
BALANCE SHEETS
as at 31 August 2005
Group Group Company Company
31 August 31 August 31 August 31 August
2005 2004 2005 2004
R"000 R"000 R"000 R"000
ASSETS
Non-current assets 383 378 383 378
Fixed assets 33 -- 33 --
Deferred taxation -- -- -- --
Loans receivable 350 -- 350 --
Amounts owing by -- 378 378
group companies --
Current assets 2 2 2 2
Sundry debtors 2 2 2 2
Total assets 385 380 385 380
EQUITY AND
LIABILITIES
Capital and reserves (460) 38 (460) 38
Share capital 307 307 307 307
Share premium 5 866 5 866 5 866 5 866
Accumulated (6 633) (6 135) (6 633) (6 135)
profits/(losses)
Non-current 844 341 844 341
liabilities
Loans payable 844 341 844 341
Current liabilities 1 1 1 1
Bank overdraft 1 1 1 1
Total equity and 385 380 385 380
liabilities
Net asset value per 17 (1,5) 0,13
share (cents)
Net tangible asset (1,5) 0,13
value per share 17
(cents)
INCOME STATEMENTS
for the 12 months ended 31 August 2005
Group Group Company Company
12 months 12 months 12 months 12 months
ended ended ended ended
31 August 31 August 31 August 31 August
2005 2004 2005 2004
R"000 R"000 R"000 R"000
Revenue -- 616 -- 616
Other income -- 12 753 -- 7 140
Operating costs (498) (6 885) (498) (6 885)
Operating (498) 6 484 (498) 871
profit/(loss)
before interest
and taxation
Interest received -- -- -- --
Interest paid -- -- -- --
Net profit/(loss) (498) 6 484 (498) 871
before taxation
Taxation -- -- -- --
Net profit/(loss)
after taxation
and end of the (498) 6 484 (498) 871
period
Earnings/(Loss) (1,62) 21,09
per share (cents)
Headline loss per (1,62) (0,62)
share (cents)
STATEMENTS OF CHANGES IN EQUITY
for the 12 months ended 31 August 2005
COMPANY
Share Share Accumula
capital premium ted Total
R"000 R"000 profit R"000
R"000
Balance at 1 307 5 866 (710) 5 463
September 2002
Net loss for the -- -- (6 296) (6 296)
year
Balance at 1 307 5 866 (7 006) (833)
September 2003
Net profit for the -- -- 871 871
period
Balance at 31 307 5 866 (6 135) 38
August 2004
Net loss for the -- -- (498) (498)
period
Balance at 31 307 5 866 (6 6333) (460)
August 2005
GROUP Share
Share Premium Revaluatio Accumulate
capital R"000 n reserve d profit Total
R"000 R"000 R"000 R"000
Balance at 1 307 5 866 7 421 (3 583) 10 011
September 2002
Surplus on -- -- -- (900)
revaluation of land (900)
and buildings
Net loss for the -- -- -- (9 036) (9 036)
period
Balance at 1 307 5 866 6 521 (12 619) 75
September 2003
Net profit for the -- -- -- 6 484 6 484
period
Liquidation of -- -- (6 521) -- (6 521)
subsidiaries
Balance at 31 307 5 866 -- (6 135) 38
August 2004
Net loss for the -- -- -- (498) (498)
period
Balance at 31 307 5 866 -- (6 6333) (460)
August 2005
CASH FLOW STATEMENTS
For the 12 months ended 31August 2005
Group Group Company Company
2005 2004 2005 2004
R"000 R"000 R"000 R"000
Cash flows from (692) (692)
operating activities
Cash receipts from -- 618 -- 618
customers
Cash paid to (498) (1310) (498) (1310)
suppliers and
employees
Cash utilised in (498) (692) (498) (692)
operating activities
Cash flows from (5) (588) (5) (588)
investing activities
Cash flow to expand
activities
28 (588) 28 (588)
Decrease/(Increase)
in loans
receivable
Acquisition - (33) (33)
Fixed Assets
Cash flow from 503 1261 503 1261
financing activities
Long term 503 1261 503 1261
liabilities raised
Increase/(Decrease) -- (19) -- (19)
in cash and cash
equivalents
Cash and cash (1) 18 (1) 18
equivalents at the
beginning of the
year
Cash and cash (1) (1) (1) (1)
equivalents at the
end of the year
COMMENTARY
Introduction
Proper is a public company, registered in the Republic of South Africa in
accordance with the Companies Act, and is listed on the JSE Limited (the
"JSE"). Proper is an investment management and holding company.
The Board is happy to announce the completion of the restructuring of the
Company, which resulted in shareholders approving the Miranda Minerals
(Pty) Ltd acquisition on the 2nd December 2005. The financial results for
the year ended 31 August 2005 reflected the ongoing restructuring of the
group and the subsequent transaction that was concluded with the
acquisition of Miranda Minerals (Pty) Ltd.
Operational review
Against the background of the company" troubled history and having
evaluated the future prospects of the group, the board decided it would be
in the best interests of shareholders to acquire new assets for the
company. The board consequently initiated negotiations with vendors on
behalf of the company, and entered into agreements with Miranda Minerals
(Pty) Ltd. Subject to the fulfillment of the conditions precedent, Proper
will become an empowered holding company with assets in the exploration and
mining sector. The main business of its wholly-owned subsidiary, Miranda,
is the prospecting and exploration, on its own or by way of strategic
partnerships, of targeted mining properties with a view to identifying and
proving resources that are commercially viable.
Miranda and Proper identified potentially commercially feasible projects on
74 of the original farms (mostly encompassing a number of contiguous
properties) out of Miranda"s portfolio of mineral rights. With the
assistance of IFC, 54 applications for "new order" permits for the
prospecting and exploration of these projects were lodged with the DME by
30 April 2005. To date, a total of 42 of these applications, encompassing
around 140 different properties, have been accepted by the DME. Miranda
has compiled and submitted to EMP"s on 41 of these projects for submission
to the DME. All remaining applications were completed in accordance with
the Mining Act and the management of Miranda is in constant contact with
the regional representatives of the DME to provide further information and
monitor progress.
The operational plan of the business is based on the four primary tiers:
the conversion of all mining rights to "new order" rights; building
capacity in management and technical functions; revenue generation by
selling "options" to strategic exploration partners and mining producers on
specific exploration and mining projects; and building the asset base by
identifying and bringing to account new deposits.
In the opinion of the directors, the prospects of the group will be a
function of the following crucial strategic initiatives: the efficiency
with which the process of finalizing the permits can be concluded and the
effectiveness with which the group"s technical capacity can respond to new
projects without unduly burdening overhead costs; the speed with which
viable new deposits are brought to account by completing initial
exploration programmes and obtaining CPR"s; the success with which
"options" on these projects are ceded to strategic exploration partners
and ultimately to mining producers; and the success of the funding model,
which will be based on both internal sources (cash flow generated from the
projects through the selling of "options") and external sources (the BEE
share issue initially, after which capital will be raised in the market
where required and when the timing is appropriate).
Financial review
The figures reflect the winding down of the previous operations in Proper,
while completing the regulatory and statutory requirements for the
acquisition of Miranda Minerals (Pty) Ltd. The directors and controlling
shareholders did not charge any directors or management fees during this
period under review. The remaining subsidiaries of the Company were sold
to Gandalf Trust for a sum of R100-00 and subsequently been liquidated.
Legal action
To the best knowledge of the company there are no legal or arbitration
proceedings instituted or pending, as at the date of this report that had a
material effect on the group"s financial position.
Subsequent events
The shareholder and regulatory approval for the Miranda acquisition was
unanimously obtained on the 2nd December 2005. No other facts or
circumstances have occurred between the accounting date and the date of
this report.
Prospects
The board is confident that the approved Miranda Minerals (Pty) Ltd
acquisition and related balance sheet restructure events, concluded during
the financial year-end, will return the Company to prosperity.
Audit opinion
Without qualifying their opinion, the auditors of the Company, Compendium
(Pretoria) Incorporated, drew attention to the note by the shareholder with
regards to the assumption of responsibility for the remaining creditors as
well as agreement to underwrite the value of the remaining investments in
the subsidiaries, in the director"s report. The audit report is available
for inspection at the registered offices of the Company.
Accounting Policies
The financial information in this report has been prepared on the
historical cost basis.
The accounting policies of the Company comply in all material respects with
South African Statements of Generally Accepted Accounting Practice and the
Companies Act of 1973. The accounting policies and methods of measurement
and recognition are consistent with those applied in the previous financial
period. The company will report in compliance with International Financial
Reporting Standards ("IFRS") from the next interim results for the period
ending 28 February 2006.
Dividends
No dividends were declared or recommended during the year (2004: Rnil).
It is anticipated that the company will not pay cash dividends in the
foreseeable future.
For and on behalf of the board
KJ Gribnitz
Chairman
Pretoria, 12 December 2005
Directors:
KJ Gribnitz (Chairman),M Van Den Berg, JP Nel, C Badenhorst
Designated Advisor:
Sasfin Capital
(a division of Sasfin Bank Ltd)
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Ltd
Registered address:
Mirkwood Estate, Klipkop JR 396, Gauteng
Date: 13/12/2005 07:10:19 AM Produced by the JSE SENS Department
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