CPN - Capricorn Investment Holdings Limited - Audited Results for the year ended
CPN
CPN
CPN - Capricorn Investment Holdings Limited - Audited Results for the year ended
28 February 2011
CAPRICORN INVESTMENT HOLDINGS LIMITED
(formerly Cenmag Holdings Limited)
(Registration Number 1987/004821/06)
("Capricorn" or "the Company")
Share code: CPN ISIN: ZAE000149951
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2011
CONDENSED STATEMENT OF FINANCIAL POSITION
Company Group
Audited Audited
28 February 2011 28 February
2010
ASSETS R`000 R`000
Non-current assets 15 7 633
Property, plant and equipment - 7 405
Deferred tax 15 228
Current assets 5 751 13 585
Total assets 5 766 21 218
EQUITY AND LIABILITIES
Capital and reserves 5 638 16 298
Non-Controlling Interest - 482
Interest free liabilities 128 4 438
Total equity and liabilities 5 766 21 218
Number of shares in issue (000`s) 59 886 96 000
Net asset value per share information *
Net asset value per share (cents) 9.42 17.00
Net tangible asset value per share (cents) 9.42 17.00
*The shares were sub-divided on the basis of 10:1 on 15 November 2010.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Group Company Group
Disclaimed Audited Audited
Six months Year ended Year ended
ended 31 28 February 28 February
August 2010 2011 2010
R`000 R`000 R`000
Gross Revenue 20 062 - 34 615
Cost of sales -13 678 - -23 944
Gross profit 6 384 - 10 671
Operating costs -5 005 -1 097 -8 268
Operating profit/(loss) 1 379 -1 097 2 403
Finance income/(Finance costs) 132 45 826
Loss on sale of investments in - -1 081 -
subsidiary companies
Dividends received - 6 730 -
Profit before tax 1 511 4 597 3 229
Taxation -519 -31 -658
Profit after tax 992 4 566 2 571
Minority interest 14 - 30
Profit attributable to 978 4 566 2 541
shareholders
Headline earnings 978 5 647 2 541
Earnings per share information
Weighted average number of 96 000 85 611 96 000
shares in issue (000`s)*
Attributable earnings per 1.02 5.33 2.65
share (cents)
Headline earnings per share 1.02 6.60 2.65
(cents)
*The shares were sub-divided on the basis of 10:1 on 15 November 2010.
CONDENSED STATEMENT OF CASH FLOWS
Group Company Group
Disclaimed Audited Audited
Six months Year ended Year ended
ended 31 28 February 28 February
August 2010 2011 2010
Cash flows from operating 103 4 321 2 440
activities
Cash flows from investing - - -758
activities
Cash effects of financing - - -2 309
activities
Net (decrease)/increase in cash 103 4 321 -627
and cash equivalents
Cash at beginning of period 8 266 1 430 8 893
Cash at the end of period 8 369 5 751 8 266
CONDENSED STATEMENT OF CHANGES IN EQUITY - COMPANY
Share Share Other non- Retained Total
capital premium distribut- income
able
reserves
R`000 R`000 R`000 R`000
Balance at 01 96 7 581 76 1 527 9 280
March 2009
Total - - - (4 114) (4 114)
comprehensive
income for the
year
Transfer non- - - (76) 76 -
investable
reserves
Balance at 01 96 7 581 - (2 511) 5 166
March 2010
Net profit for the - - 4 566 4 566
year
Repurchase of (34) (4 060) - - (4 094)
shares
Balance at 28 62 3 521 - 2 055 5 638
February 2011
SEGMENTAL REPORTING
Group Company Group
Disclaimed Audited Audited
Six months Year ended Year ended
ended 31 28 February 28 February
August 2010 2011 2010
Revenue
Manufacturing and Service 10 107 - 13 864
Wholesaling 9 955 - 20 751
Total 20 062 - 34 615
Profit from operating
activities
Manufacturing and Service 1 192 - 1 744
Wholesaling 186 659
Total 1 378 - 2 403
RECONCILIATION OF HEADLINE
EARNINGS
Profit attributable to 978 4 566 2 541
shareholders
Adjustments for:
Loss on sale of investments in - 1 081 -
subsidiary companies
Headline (loss)/earnings 978 5 647 2 541
COMMENTARY
RESULTS
The board presents its audited results for the Company for the year ended 28
February 2011 in accordance with IAS 34: Interim Financial Reporting. The
Company was previously an investment holding company and its subsidiary
companies were involved in the manufacture and servicing of electromagnets and
motor rewinding and the wholesaling of electrical and related equipment, which
were disposed during 2010. Accordingly the Company became a cash shell with
effect from 20 December 2010.
The Company no longer holds any subsidiary companies and the Statement of
Financial Position presented has been audited and presented without
qualification. However, the acquirer of the various subsidiary companies was not
prepared to make the results of these subsidiary companies available to the
Company in order for Group financial statements to be prepared. Accordingly, the
auditor has disclaimed its opinion on the Group financial statements. This
disclaimer will not impact on the results of the Company for the forthcoming
year.
Accordingly, it is not considered meaningful to present group results for the
current year and only company results have been presented.
RECLASSIFICATION OF RESULTS
There have been no changes to the reviewed company financial results announced
on SENS on 28 December 2011, except for the following re-classifications in the
Statement of financial position and Statement of cash flows:
Company Before After Change
Reviewed 28 Audited 28 R`000
February 2011 February 2011
R`000 R`000
Statement of financial position
Current assets/Total 5 743 5 751 8
assets
Current 120 128 8
liabilities/Total
Equity and liabilities
Statement of Cash Flows
Cash flows from 3 963 4 321 358
operating activities
Cash flows from (4 094) - 4 094
investing activities
Cash effects of 4 473 - (4 473)
financing activities
Total cash movement 4 342 4 321 (21)
for the year
Cash at end of year 5 772 5 751 (21)
The re-classification of current assets and current liabilities is due to a
reversal of a previous set off of a creditor and has a minimal effect on total
assets and liabilities.
The reclassification of cash flows from investing and financing activities are
due to the fact that the share buy-back and disposal of subsidiaries were
transacted as non-- cash items.
The increase in cash flows from operating activities is due to a non cash
adjustment on settlement of group loans.
The decrease in cash movement and cash at the end of the year is due to the
reclassification of current assets and current liabilities.
The re-classifications have had a minimal effect on the results of the cash
flow.
ACCOUNTING POLICIES
The financial results have been prepared in accordance with IAS 34 - Interim
Financial Reporting in with accounting policies that comply with International
Financial Reporting Standards ("IFRS") and the Listings Requirements of the JSE
Limited ("JSE"). The accounting policies and methods of measurement and
recognition are consistent with those applied in the previous financial period.
The results have been audited by the external auditor, Horwath Leveton Boner,
whose unqualified audit report on the results of the Company and the disclaimer
of its opinion on the results of the Group are available for inspection at the
registered office of the Company.
BUSINESS OVERVIEW
Due to the Company becoming a cash shell, no revenue was generated for the year
ended 28 February 2011. The Company did however report non-operational income in
the form of R45K in finance income and R6.7 million in dividends received. In
addition there was a R1.1 million loss on sale of investment in subsidiary
companies. This resulted in headline earnings per share of 6.60 cents per share
compared to 2.65 cents per share in the prior period. The Company repurchased
approximately 37.62% of its issued capital and subsequently subdivided the share
capital from a par value of R0.01 to R0.001, thereby resulting in a dilution of
the earnings per share information. The details of the repurchase are clarified
below.
ISSUE AND REPURCHASE OF SHARES AND SUB-DIVISION OF SHARE CAPITAL
During the period under review, the Company repurchased its own shares by
obtaining a specific approval from shareholders to Capricorn shares from Blaf
Investments CC and 2 402 105 ordinary Capricorn shares from Mr Victor Farkas.
Blaf Investments CC and Mr Victor Farkas were related parties of the Company in
terms of the JSE Listings Requirements. These acquisitions were undertaken at a
repurchase price of 120 cents per share (prior to the sub-division of shares).
The shareholder approval for these acquisitions was received at a general
meeting of the Company held on 15 November 2010. No new shares were issued
during the year under review.
In addition to requesting approval of the acquisition of the shares referred to
above, the Company requested shareholders to approve a sub-division of the
authorised and issued share capital on a 10-1 basis as well as the cancellation
of the Cenmag Share Incentive Trust (the share incentive trust bearing the
former name of the Company) and the 200 000 ordinary Capricorn shares held by
it. This acquisition was also approved on 15 November 2010 (2 000 000 shares
post the sub-division).
At the end of the year, the Company had an authorised share capital comprising 1
000 000 000 ordinary shares and an issued share capital of the Company was 59
886 020 ordinary shares.
SUBSEQUENT EVENTS AND FUTURE PROSPECTS
As announced on 15 December 2011, a sale and purchase agreement has been signed
between the Company, Water Utilities Ltd and Watermark Global PLC ("Watermark")
regarding the acquisition of 100% of the shares in, and loan account and claims
against, Western Utilities Corporation (Proprietary) Limited ("WUC"), a wholly-
owned subsidiary of Watermark, for a purchase consideration of GBP4.50 million.
WUC has developed a water treatment technology and commercialisation entity
which has developed a Long Term Self Sustainable Solution for Acid Mine Drainage
("AMD") in South Africa as well as a proprietary technology in respect of a coal
briquetting project ("Briquetting Project"). The Briquetting Project is
currently at the development stage but is expected to be in production within 12
months. Off-take agreements are already in place in order to secure the income
streams of the Briquetting Project. The agreement is held with the mine where
the coal fines are generated.
Following receipt of all required approvals for the AMD project, it is also
envisaged that there will be off-take agreements with the mines for the
industrial quality water and that potable water will form the basis of a Bulk
Water Distributor network. It has been proposed that revenue will be generated
for services rendered through the implementation of the technology, the water
distribution, and through the sale of by-products generated from the AMD
Project.
The terms and conditions of this acquisition and associated transactions are
detailed in a separate announcement.
AUDIT OPINION ON THE COMPANY RESULTS
The auditor has issued an unmodified and unqualified audit opinion on the
results of the Company as presented.
Basis for the Disclaimer of the Audit Opinion on the Group Annual Financial
Statements
The Group financial statements for the year ended 28 February 2011 have not been
presented as the accounting records of the former subsidiary companies were not
made available and consequently the external auditor was not engaged by the
directors to carry out an audit.
Disclaimer of the Audit Opinion on the Group Annual Financial Statements
Because of circumstances described in the Basis for the Disclaimer of the Audit
Opinion on the Group Annual financial statements for the year ended 28 February
2011 the external auditor is unable to reach a conclusion as required for an
audit opinion.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
The audit report contains two reportable irregularities relating to the late
finalisation and posting of the annual financial statements, which will only be
rectified on signing of the annual financial statements and posting of the
annual report and the calling of the annual general meeting by way of notice.
DIRECTORS
During the period under review Messrs V Farkas, C Roux and J Farkas resigned.
Their resignations took effect on 29 November 2010. Messrs J Herbst, S Tredoux,
B McQueen and K Jarvis were appointed to the board with effect from 30 November
2010. Subsequent to year end, Mr C Pettit was appointed to the board as an
independent non-executive director. His appointment took effect on 19 July 2011.
COMPANY SECRETARY
Arcay Client Support (Proprietary) Limited was appointed as the Company
Secretary to Capricorn after 29 November 2010.
DIVIDENDS
No dividends were recommended or declared for the period.
SPECIAL RESOLUTIONS
At the general meeting of shareholders held on 15 November 2010, the following
special resolutions were presented and approved:
1 ) A specific authority to acquire 3 411 398 ordinary shares in terms of
Section 85 of the Companies Act, 61 of 1973;
2 ) A disposal of the subsidiary companies of Cenmag Holdings Limited (the
former name of the Company) in terms of Section 228 of the Companies Act,
61 of 1973;
3 ) The change of name of the Company from Cenmag Holdings Limited to Capricorn
Investment Holdings Limited;
4 ) An increase in authorised share capital to 1 000 000 000 ordinary shares
(post the sub-division);
5 ) A sub-division of the issued and authorised share capital on a 10-1 basis
from 1 cent to 0.1 cent shares; and
6 ) The cancellation of the Cenmag Share Incentive Trust and a specific
authority to acquire the 200 000 ordinary shares held by the Cenmag Share
Incentive Trust in terms of Section 85 of the Companies Act, 61 of 1973.
POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The annual report is expected to be posted to shareholders in the next week and
the details of the date and venue of the annual general meeting will be posted
to shareholders and announced on SENS in due course.
3 February 2012
Johannesburg
B McQueen Prepared by: J Herbst
Directors: B McQueen* (Chairman), J Herbst (Chief Executive Officer), S Tredoux
(Financial Director), K Jarvis*, E Greenblatt#, C Pettit# (#Non-Executive, *
Independent Non-Executives)
Company Secretary: Arcay Client Support (Proprietary) Limited
Registered Office: Number 3, Anerley Road, Parktown, Johannesburg
Transfer Secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Marshalltown 2001, PO Box 61051, Marshalltown 2107
Auditor: Horwath Leveton Boner
Sponsor: Arcay Moela Sponsors (Pty) Limited
Date: 03/02/2012 16:30:01 Produced by the JSE SENS Department.
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