| |
|
Note 1
Other Income and EBITDA |
|
2010
R million
(Unaudited) |
|
|
2009
R million
(Unaudited) |
|
Year ended
30 Sept
2009
R million
(Audited) |
|
| EBITDA is stated after: |
|
|
|
|
|
|
|
|
| – Cost of sales |
|
3 649,3 |
|
|
3 712,3 |
|
7 585,4 |
|
| – Other expenses excluding depreciation and amortisation |
|
820,0 |
|
|
871,8 |
|
1 518,2 |
|
| – Other income |
|
23,7 |
|
|
9,0 |
|
36,5 |
|
| – Realised (loss)/profit on foreign exchange and derivative instruments |
|
(10,5) |
|
|
8,3 |
|
37,9 |
|
| – Unrealised (loss)/profit on foreign exchange and derivative instruments |
|
(25,2) |
|
|
25,5 |
|
(4,8) |
|
| Note 2 |
|
|
|
|
|
|
|
|
| Net interest and dividend income |
|
|
|
|
|
|
|
|
| Interest received |
|
57,7 |
|
|
72,5 |
|
128,9 |
|
| – From Quince Capital (Quince) (previously RC & C
Finance Company) |
|
25,1 |
|
|
39,0 |
|
69,8 |
|
| – External |
|
32,6 |
|
|
33,5 |
|
59,1 |
|
| Interest paid |
|
(9,3) |
|
|
(21,1) |
|
(21,1) |
|
| Dividend income |
|
— |
|
|
0,2 |
|
0,4 |
|
| Total |
|
48,4 |
|
|
51,6 |
|
108,2 |
|
| Note 3 |
|
|
|
|
|
|
|
|
| Abnormal Items |
|
|
|
|
|
|
|
|
Gain on fair valuation of option in terms of agreement with NSN
(refer to note 8) |
|
— |
|
|
— |
|
299,2 |
|
| BEE transaction expense (refer to note 11) |
|
(34,0) |
|
|
— |
|
— |
|
| Taxation |
|
— |
|
|
— |
|
(37,4) |
|
| Net abnormal items after taxation |
|
(34,0) |
|
|
— |
|
261,8 |
|
| Note 4 |
|
|
|
|
|
|
|
|
| Taxation |
|
|
|
|
|
|
|
|
| The current year’s tax rate was increased by the non-deductibility of the BEE transaction expense. Both comparative periods rates were reduced by the dividend received from NSN in lieu of commission income, while the rate for the full year to September 2009 was further reduced mainly by the abnormal item being taxed at the CGT rate. |
|
|
|
|
|
|
|
|
| Note 5 |
|
|
|
|
|
|
|
|
| Number of shares used to calculate earnings per share |
|
|
|
|
|
|
|
|
| Weighted average number of shares in issue used to determine basic earnings, headline earnings and normalised headline earnings per share (millions of shares) |
|
178,7 |
|
|
178,5 |
|
178,5 |
|
| Adjusted by the dilutive effect of unexercised share options granted (millions of shares) |
|
1,6 |
|
|
0,4 |
|
1,5 |
|
| Weighted average number of shares used to determine diluted basic, diluted headline and diluted normalised headline earnings per share (millions of shares) |
|
180,3 |
|
|
178,9 |
|
180,0 |
|
| Note 6 |
|
|
|
|
|
|
|
|
| 6.1 Headline earnings |
|
|
|
|
|
|
|
|
| Profit attributable to equity holders of Reunert (IAS 33 – Basic Earnings) |
|
398,6 |
|
|
416,6 |
|
1 164,5 |
|
| Headline earnings are determined by eliminating the effect of the following items from attributable earnings: |
|
|
|
|
|
|
|
|
| Net surplus on dilution in and disposal of business |
|
— |
|
|
— |
|
(1,3) |
|
| Net (gain)/loss on disposal of property, plant and equipment and intangible assets |
|
(0,1) |
|
|
1,7 |
|
3,9 |
|
| Taxation |
|
— |
|
|
(0,3) |
|
(3,9) |
|
| Minority interest and other headline earnings adjustments |
|
— |
|
|
(1,3) |
|
(0,1) |
|
| Headline earnings |
|
398,5 |
|
|
416,7 |
|
1 163,1 |
|
| 6.2 Normalised headline earnings |
|
|
|
|
|
|
|
|
| Headline earnings (refer to note 6.1) |
|
398,5 |
|
|
416,7 |
|
1 163,1 |
|
| Normalised headline earnings are determined by eliminating the effect of the following items from attributable headline earnings: |
|
|
|
|
|
|
|
|
| Fair value of option in terms of agreement with NSN |
|
— |
|
|
— |
|
(299,2) |
|
| BEE transaction expense (refer to note 11) |
|
34,0 |
|
|
— |
|
— |
|
| IFRS 3 profit on acquisition of Nashua Communications |
|
(8,2) |
|
|
— |
|
— |
|
| Rate portion of revaluation of interest rate swap derivative assets and liabilities |
|
11,2 |
|
|
— |
|
— |
|
| Taxation effect |
|
(3,1) |
|
|
— |
|
37,4 |
|
| BEE share of headline earnings adjustments |
|
— |
|
|
0,1 |
|
0,3 |
|
| |
|
432,4 |
|
|
416,8 |
|
901,6 |
|
Net economic interest in profit attributable to BEE partners
(refer to note 11) |
|
(5,5) |
|
|
(2,4) |
|
(10,0) |
|
| Normalised headline earnings |
|
426,9 |
|
|
414,4 |
|
891,6 |
|
| Note 7 |
|
|
|
|
|
|
|
|
| Goodwill |
|
|
|
|
|
|
|
|
| Carrying value at the beginning of the period |
|
460,6 |
|
|
415,3 |
|
415,3 |
|
| Acquisition of businesses |
|
31,2 |
|
|
0,2 |
|
44,5 |
|
| Minor acquisitions in existing businesses and subsidiaries |
|
— |
|
|
— |
|
0,8 |
|
| Carrying value at the end of the period |
|
491,8 |
|
|
415,5 |
|
460,6 |
|
| Note 8 |
|
|
|
|
|
|
|
|
| Investments and loans |
|
|
|
|
|
|
|
|
| Loans – at cost |
|
46,4 |
|
|
52,3 |
|
52,1 |
|
| Other unlisted investments – at cost |
|
1,5 |
|
|
8,3 |
|
8,3 |
|
| Financial instrument – NSN option - at fair value* |
|
299,2 |
|
|
— |
|
299,2 |
|
| Financial instrument – investment in NSN - at fair value**, made up as follows: |
|
494,3 |
|
|
806,0 |
|
494,3 |
|
| Carrying value of NSN at the beginning of the period |
|
494,3 |
|
|
806,0 |
|
806,0 |
|
| Fair value adjustment |
|
— |
|
|
— |
|
(299,2) |
|
| Compensation received |
|
— |
|
|
— |
|
(12,5) |
|
 |
|
|
|
|
|
|
|
|
| Total carrying value |
|
841,4 |
|
|
866,6 |
|
853,9 |
|
| Directors’ valuation of unlisted investments |
|
|
|
|
|
|
|
|
| – Other unlisted investments (includes NSN at R793,5 million) (March 2009: R806,0 million, September 2009: R793,5 million)) |
|
795,1 |
|
|
814,3 |
|
801,8 |
|
| *Reunert holds an option to sell its investment in Nokia Siemens Networks SA (Pty) Limited (NSN) to the other shareholders of NSN and the other shareholders of NSN may call on Reunert to sell its shares in NSN. During the prior year R12,5 million of compensation, as defined in the agreement with the Nokia Siemens Networks Group (NSN group), was received in respect of a country, sales to which ceased qualifying for commission. In terms of the agreement any compensation received reduces the minimum and maximum prices of the options. |
|
| The minimum price of the put option is R793,5 million (March 2009: R806,0 million, September 2009: R793,5 million) and the maximum price of the call option is R947,5 million (March 2009: R960,0 million,September 2009: R947,5 million). The first time a sale may take place in terms of the agreement is 31 December 2010. |
|
| A valuation of the option was performed at 31 March 2010, as a result of which no adjustment was necessary to the value at 30 September 2009. |
|
| ** The fair value of the investment is the present value of the amount specified in the shareholders’ agreement with NSN group, together with discounted cash flows of estimated future commissions. |
|
| Note 9 |
|
| Quince |
|
| Quince provides asset-based financial solutions and, due to the nature of the business, its receivables and associated borrowings are disclosed separately on the face of the balance sheet. Interest income and expense are included in revenue and cost of sales respectively. |
|
| Note 10 |
|
|
|
|
|
|
|
|
| Quince and other long-term borrowings |
|
|
|
|
|
|
|
|
| Total long-term borrowings (including finance leases) |
|
710,9 |
|
|
711,3 |
|
711,0 |
|
| Less: Short-term portion (including finance leases) |
|
— |
|
|
(0,5) |
|
(0,1) |
|
| |
|
710,9 |
|
|
710,8 |
|
710,9 |
|
| Made up of: |
|
|
|
|
|
|
|
|
| Quince long-term borrowings |
|
699,9 |
|
|
699,9 |
|
699,9 |
|
| Other |
|
11,0 |
|
|
10,9 |
|
11,0 |
|
| |
|
710,9 |
|
|
710,8 |
|
710,9 |
|
| Note 11 |
|
|
|
|
|
|
|
|
| BEE transactions |
|
|
|
|
|
|
|
|
| With effect from 1 October 2009 the group disposed of 20% of its interest in Reutech Limited to an accredited BEE partner for R100,0 million. This transaction gave rise to an expense of R34,0 million in terms of IFRS 2 – Share Based Payment.
BEE transactions where the significant risks and rewards of ownership in respect of their equity interests have not passed to the BEE partners, have not been recognised as minority interests under International Financial Reporting Standards (IFRS).
Had the minority interest been recognised, the effect would be the following: |
|
| – Net economic interest in current period profit that is attributable to BEE partners |
|
5,5 |
|
|
2,4 |
|
10,0 |
|
| – Balance sheet interest that is economically attributable to BEE partners |
|
135,5 |
|
|
102,9 |
|
115,0 |
|
| Note 12 |
| Basis of preparation |
| These condensed group interim financial statements have been prepared in terms of IAS 34 – Interim Financial Reporting as well as in compliance with the Companies Act of South Africa (Act 61 of 1973) as amended and the Listings Requirements of the JSE Limited. |
| The group’s accounting policies, as per the audited annual financial statements for the year ended 30 September 2009, have been consistently applied, with the exception of the adoption of the revised IAS 1 – Presentation of Financial Statements and IFRS 8 – Operating Segments (refer to the condensed segmental analysis). The effect of IAS 1 has been the inclusion of the statement of comprehensive income and the consequent reduction in the amount of disclosure in the statement of changes in equity. |
| These accounting policies comply with IFRS. |
| Note 13 |
| Unconsolidated subsidiary |
| The financial results of Cafca Limited, a subsidiary incorporated in Zimbabwe, have not been consolidated in the group results as the directors believe there is a lack of control as defined in IAS 27 – Consolidated and Separate Financial Statements and the amounts involved are not material to the group’s results. |
| Note 14 |
| Related party transactions |
| The group entered into various transactions with related parties which occurred in the ordinary course of business and under terms that are no more favourable than those arranged with independent third parties. |
| Note 15 |
| Events after balance sheet date |
| No events occurred after the balance sheet date that require additional disclosure or adjustment. |
|
| |
|
