Interim Report 2013 - New Zealand Exchange · 4503M Veritas Interim Report Dec 2012.indd 2 11/03/13...

Interim Report 2013

4503M Veritas Interim Report Dec 2012.indd 1 11/03/13 9:50 AM

Salvus IR08 v2.indd 1 3/25/08 5:02:44 PM

2 V E R I T A S I N V E S T M E N T S L I M I T E D I N T E R I M R E P O R T 2 0 1 3

Salvus IR08 v2.indd 2 3/25/08 5:02:47 PM4503M Veritas Interim Report Dec 2012.indd 2 11/03/13 9:50 AM


V E R I T A S I N V E S T M E N T S L I M I T E D I N T E R I M R E P O R T 2 0 1 3 1


Contents Chairman’s Report 2

F I N A N C I A L S T A T E M E N T S

Business Profile 3

Statement of Comprehensive Income 4

Balance Sheet 5

Statement of Changes in Equity 6

Statement of Cash Flows 7

Notes to the Financial Statements 8

Auditor’s Review Report 14

Corporate Directory 15





28 FEBRUARY 2013

H A L F Y E A R R E P O R T F O R F Y 2 0 1 3

The six months to 31st December 2012 was an important period for Veritas. As a listed shell the Directors continued their search for a cornerstone first acquisition to reverse list into the company.

A C Q U I S I T I O N A N N O U N C E M E N T

Having researched and analysed a number of businesses during 2012, in December 2012 Veritas announced that it had entered into an agreement to acquire 100% of the Mad Butcher franchisor business for $40 million, with the intention of raising up to $25 million of new capital to fund the cash component of the transaction along with costs. The Mad Butcher acquisition and the share offer to part fund it are subject to Veritas shareholder approval. Further details of the acquisition and share offer will be released in early March on registration of a prospectus in relation to the share offer and release of shareholder meeting documentation to NZX and shareholders.

B O A R D C O M P O S I T I O N

The Board also underwent changes following announcement the Mad Butcher acquisition. Simon Wallace has retired from the Board and two new Independent Directors appointed: Phil Newland and Stefan Preston. We thank Simon for his valuable formative work, and we are pleased to have new Directors of the calibre of Phil and Stefan joining the Board ahead of this initial acquisition.

A C C O U N T S

The enclosed financial accounts for the six months ended 31 December 2012 reflect expenditure incurred in the due diligence investigations of the Mad Butcher business as well as the first costs relating to professional fees in respect of the transaction. These costs will be met from the share offer proceeds.

T H A N K Y O U

I would like to thank the shareholders for their on-going support during the period, and the positive feedback received following the acquisition announcement. The focus of the Board is now completing the transaction, making sure the transition is seamless and focusing on executing and delivering our growth plan.

Regards

Mark DarrowChairman

Chairman’s Report





Business Profile

Nature of Business Listed non-trading company

Share Capital 57,302,229 Ordinary Shares

Share Registrar Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna, Auckland

Directors Independent Directors Mark Darrow (Chairman) Stefan Preston (appointed 16 January 2013) Phil Newland (appointed 16 January 2013)

Non Independent Directors Tim Cook Simon Wallace (resigned 16 January 2013)

Registered Office c/- Collins Asset Management Limited Level 3, 4 Viaduct Harbour Ave Auckland 1141

Date of Incorporation 23 January 2004

Auditors KPMG, 18 Viaduct Harbour Ave Auckland 1010

Solicitors Harmos Horton Lusk Level 37, Vero Centre, 48 Shortland Street Auckland 1010

Accountants Pricewaterhouse Coopers 188 Quay Street, Auckland 1142

Investor Enquiries Veritas Investments Limited c/- PO Box 5408, Auckland 1141 [email protected]

AS AT 31 DECEMBER 2012





NOTES

12 months to 30 Jun 2012

AUD I T ED $

6 months to 31 Dec 2011UNAUD I T ED $


Operating Revenue 4 22,400 358,016 390,388 Realised loss on sale of investments - (1,287,797) (1,287,797)Fair value loss on investments - - (156,098) Operating expenses (137,168) (768,790) (962,211) Other expenses 10 (452,415) - - Finance expenses - (862) (908) Finance income 6,029 60,550 186,287 Finance income ‑ net 6,029 59,688 185,379

Loss before income tax (561,154) (1,638,883) (1,830,339) Income tax expense - - - Loss for the period (561,154) (1,638,883) (1,830,339)

Other comprehensive income ‑ ‑ ‑ Total comprehensive loss for the year, net of tax (561,154) (1,638,883) (1,830,339)

Loss is attributable to:Equity holders of Veritas Investments Limited (561,154) (1,638,883) (1,830,339)

Total comprehensive loss for the year is attributable to:Equity holders of Veritas Investments Limited (561,154) (1,638,883) (1,830,339)

EARNINgS pER ShARE AttRIButABlE tO thE ORDINARy EquIty hOlDERS Of thE COmpANy DuRINg thE yEAR:

Cents Cents Cents

Weighted average number of ordinary shares on issue 7 57,302,229 20,881,695 22,777,558 Basic and diluted earnings per share (0.0098) (0.0785) (0.0804)

Statement of Comprehensive Income

FOR THE HALF YEAR ENDED 31 DECEMBER 2012

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.





The above Balance Sheet should be read in conjunction with the accompanying notes.

Balance Sheet


Assets Current assetsCash and cash equivalents 474,752 127,780 692,668 Trade and other receivables 46,101 - 25,011 Current tax receivables - 3,103 2,468 Total assets 520,853 130,883 720,147

LIABILItIesCurrent liabilities Trade and other payables 473,369 2,533 111,509 Interest bearing liabilities - 75,000 - Total liabilities 473,369 77,533 111,509

Net assets 47,484 53,350 608,638

eQUItYContributed equity 7,511,571 6,764,827 7,511,571 Accumulated losses (7,464,087) (6,711,477) (6,902,933) Total equity 47,484 53,350 608,638

For and on behalf of the Board:

Mark Darrow (Director) Tim Cook (Director)28 February 2013 28 February 2013


AUD I T ED $







The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

tOtAL eQUItY

$

ACCUMULAteD LOsses

$

COntRIBUteD eQUItY

$

V E R I T A S I N V E S T M E N T S L I M I T E D I N t E R I m R E p O R t 2 0 1 36

Balance as at 1 July 2011 20,158,346 (1,215,745) 18,942,601 Comprehensive incomeLoss for the period - (1,638,883) (1,638,883) Other comprehensive income - - - Total comprehensive loss ‑ (1,638,883) (1,638,883)

Transactions with ownersDividends paid - (3,856,849) (3,856,849) Capital distribution (13,393,519) - (13,393,519) Total transactions with owners (13,393,519) (3,856,849) (17,250,368) Balance as at 31 December 2011 (unaudited) 6,764,827 (6,711,477) 53,350

Balance as at 1 July 2011 20,158,346 (1,215,745) 18,942,601 Comprehensive incomeLoss for the year - (1,830,339) (1,830,339) Other comprehensive income - - - Total comprehensive loss ‑ (1,830,339) (1,830,339)

Transactions with ownersShares issued 746,744 - 746,744 Dividends paid - (3,856,849) (3,856,849) Capital distribution (13,393,519) - (13,393,519) Total transactions with owners (12,646,775) (3,856,849) (16,503,624) Balance as at 30 June 2012 (audited) 7,511,571 (6,902,933) 608,638

Balance as at 1 July 2012 7,511,571 (6,902,933) 608,638 Comprehensive income Loss for the period - (561,154) (561,154) Other comprehensive income - - -

Total comprehensive loss ‑ (561,154) (561,154) Transactions with owners - - - Balance as at 31 December 2012 (unaudited) 7,511,571 (7,464,087) 47,484

Statement of Changes in Equity


tOtAL eQUItY

$

ACCUMULAteD LOsses

$

sHAReCAPItAL

$





The above Statement of Cash Flows should be read in conjunction with the accompanying notes.



AUD I T ED $


6 months to 31 Dec 2012UNAUD I T ED $NOTE

CAsH fLOws fROM OPeRAtIng ACtIvItIesPayments to suppliers and employees (exclusive of goods and services tax) (248,812) (878,085) (931,892) Dividends received - 357,677 357,677 Interest received 6,029 60,550 61,866 Tax refunds received 2,467 27,283 28,097 Other revenue 22,400 339 339 Taxes paid - (321) (500) Net cash inflow/(outflow) from operating activities 8 (217,916) (432,557) (484,413)

CAsH fLOws fROM InvestIng ACtIvItIesPayments for investments at fair value through profit or loss - (1,010,614) - Proceeds from sale of investments at fair value through profit or loss - 15,769,555 14,758,941 Net cash inflow / (outflow) from investing activities ‑ 14,758,941 14,758,941

CAsH fLOws fROM fInAnCIng ACtIvItIesProceeds from issues of shares - - 691,744 Proceeds from borrowings - 75,000 - Capital distribution - (13,393,519) (13,393,519) Dividends paid to company’s shareholders - (3,856,849) (3,856,849) Net cash inflow/(outflow) from financing activities ‑ (17,175,368) (16,558,624)

Net increase (decrease) in cash and cash equivalents (217,916) (2,848,984) (2,284,096) Cash and cash equivalents at the beginning of the period 692,668 2,976,764 2,901,764 Restricted cash - - 75,000 Cash and cash equivalents at end of the period 474,752 127,780 692,668

Statement of Cash Flows

FOR THE HALF YEAR ENDED ENDED 31 DECEMBER 2012



Salv

us



The notes form part of and should be read in conjunction with these Financial Statements.



Notes to the Financial Statements

1 . G E N E R A L I N F O R M A T I O N

These condensed interim financial statements have been approved for issue by the Board of Directors on 28 February 2013.

2 . S U M M A R Y O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S

These condensed interim financial statements for the half year ended 31 December 2012 have been prepared in accordance with New Zealand generally accepted accounting practice (NZ GAAP). They comply with NZ IAS 34 and IAS 34, ‘Interim Financial Reporting’.

The condensed interim financial statements do not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the financial statements for the year ended 30 June 2012, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and New Zealand equivalents to IFRS (NZ IFRS).

(a) Basis of preparation of half year financial reportEntity reporting

The financial statements are for Veritas Investments Limited (‘the Company’) as a separate legal entity.

The Company is designated as a profit oriented entity for financial reporting purposes and is currently non trading.

Statutory base

Veritas Investments Limited is a limited liability company which is domiciled and incorporated in New Zealand. It is registered under the Companies Act 1993 and is an issuer in terms of the Securities Act 1978.

The financial statements have been prepared in accordance with the requirements of the Financial Reporting Act 1993 and the Companies Act 1993.

Accounting policy and disclosures

The accounting policies adopted are consistent with those of the previous financial year.






Salv

us




Notes to the Financial Statements

2 . S U M M A R Y O F S I G N I F I C A N T A C C O U N T I N G P O L I C I E S (continued)

(b) Going concernAt the annual general meeting held on 23 December 2011 it was agreed that the Company would not be wound up but would be re-capitalised and continue as a listed investment company. The Company has entered into an agreement to acquire a business as described in note 8. Accordingly these financial statements have been prepared on a going concern basis.

(c) Comparative balancesThe presentation of the statement of comprehensive income in these condensed interim financial statements has been changed from the annual financial statements for the year ended 30 June 2012. Comparative balances have been changed to reflect the current period presentation.

3 . S E G M E N T R E P O R T I N G

The Company is one operating segment that engages in investment activities from which it may earn revenues and incur expenses. Results are reported to the Board of Directors for the Company in its entirety.

4 . I N v E S T M E N T S A T F A I R v A L U E T H R O U G H P R O F I T A N D L O S S

As at 30 June 2012 the Company owned 32,861,600 shares in Syft Technologies Limited. These shares were valued at $Nil at 30 June 2012. During the half year ended 31 December 2012 the Company sold 1,300,000 shares recording a gain of $22,400. As at 31 December 2012 the Company owns 31,561,600 shares.

5 . C O N T I N G E N C I E S

As at 31 December 2012 the Company had no contingent liabilities or assets (31 December 2011:$Nil; 30 June 2012: $Nil).

6 . C O M M I T M E N T S

As at 31 December 2012 the Company had no capital commitments (31 December 2011:$Nil; 30 June 2012: $Nil).



Salv

us






7 . R E L A T E D P A R T Y T R A N S A C T I O N S

Until 7 November 2011, the manager of Veritas Investments Limited was Salvus Asset Management Limited. Salvus Asset Management Limited is a related party by virtue of a management contract.

Under the Management Agreement with Salvus Asset Management Limited, the Company is liable to pay a performance fee if there is a growth in the Company’s Net Asset Value per share over any rolling three year period.

Management fees and performance fees paid to Salvus Asset Management Limited for the period ending 31 December 2012 totalled $Nil (31 December 2011: $325,424; 30 June 2012: 325,424). As at 31 December 2012 $Nil remained payable to Salvus Asset Management Limited (31 December 2011: $Nil; 30 June 2012: $Nil).

As at 31 December 2012 there is no Performance Fee payable (31 December 2011: $Nil; 30 June 2012: $Nil).

In the financial year ended 30 June 2012 1,833,334 shares were issued credited as fully paid up at an issue price of 3 cents per share in consideration for the provision of $55,000 worth of legal services to the Company by Harmos Horton Lusk Limited. In the opinion of the Directors, the consideration for and terms of issue of the shares are fair and reasonable to the Company and to all existing shareholders.

Current Directors

Wallace Family Trust, a shareholder in Veritas Investments Limited, loaned $75,000 to the Company in December 2011. The trust owns 8,730,000 shares in the Company as at 31 December 2012 (31 December 2011: 909,980; 30 June 2012: 8,730,000).

Collins Asset Management Limited, a shareholder of the Company, provides accounting services to the Company. The Company did not pay for accounting services in the reported year. Collins Asset Management Limited holds 9,698,808 shares in the Company.

Mr Timothy Cook, a Director of Veritas Investments Limited and Collins Asset Management Limited held 1,761,637 shares in the Company as at 31 December 2012 (31 December 2011: Nil; 30 June 2012: 1,761,637).

All related party transactions are on an arms length basis.

NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE HALF YEAR ENDED 31 DECEMBER 2012





Salv

us




7 . R E L A T E D P A R T Y T R A N S A C T I O N S (continued)

Director InterestsMark Darrow (appointed 23 December 2011) 2,865,111 - 5,000 - 2,865,111 -

Simon Wallace (appointed 23 December 2011) 8,730,000 - 909,980 - 8,730,000 -Tim Cook (appointed 23 December 2011) 1,761,637 9,698,808 - - 1,761,637 9,698,808

In May 2012 a two for one pro rate rights issue was offered to existing shareholders. In June 2012 an additional 34,587,200 shares were issued.

Bene

fici

al

shar

ehol

ding $

non

Bene

fici

al

shar

ehol

ding $

Bene

fici

al

shar

ehol

ding $

non

Bene

fici

al

shar

ehol

ding $

Bene

fici

al

shar

ehol

ding $

non

Bene

fici

al

shar

ehol

ding $


AUD I T ED $





Salv

us






8 . R E C O N C I L I A T I O N O F P R O F I T A F T E R I N C O M E T A x T O N E T C A S H I N F L O w F R O M O P E R A T I N G A C T I v I T I E S

Loss for the period (561,154) (1,638,883) 1,830,339)

Non cash items included in loss for the periodIncrease in accounts receivable (21,090) - (25,011)Decrease in prepayments - 30,307 30,307Decrease in tax refund due 2,468 26,962 27,597Increase / (Decrease) in accounts payable 361,860 (138,740) 25,236

Items classified as investing activities Realised loss on investments - 1,287,797 1,287,797Net cash outflow from operating activities (217,916) (432,557) (484,413)

9 . N E T A S S E T v A L U E

The audited Net Asset Value (NAV) per share of the Company as at 31 December 2012 was $0.00083 per share (31 December 2011: $0.0026 per share; 30 June 2012: $0.0106 per share). The Company has historically used a NAV model to provide weekly estimates of the NAV which were released to NZX.

NOTES TO THE FINANCIAL STATEMENTS CONTINUEDFOR THE HALF YEAR ENDED 31 DECEMBER 2012




AUD I T ED $





Salv

us




1 0 . E v E N T S O C C U R R I N G A F T E R T H E R E P O R T I N G P E R I O D

On 20 December 2012 the Company entered into a conditional agreement to acquire the franchisor business and assets of Mad Butcher Holdings Limited (MBH) for a purchase price of $40 million. The purchase price will be satisfied by a combination of $20 million in cash; and $20 million by the issue of ordinary shares in Veritas Investments Limited (VIL) shares, at an issue price equal to the final offer price of the public capital raising.

The Company intends to fund the $20 million cash component of the purchase price by undertaking a public offering of $22 - $25 million of VIL shares in April 2013. Allotment of VIL shares under the capital raising will occur simultaneously with completion of the acquisition and allotment of the VIL shares to MBH thereafter.

Firm commitments to subscribe for VIL shares in the capital raising, totalling $10.2 million, have been received.

Craigs Investment Partners (CIP) has agreed to underwrite $12.7 million of the capital raising, and has in turn entered into sub underwriting agreements in respect of that underwriting commitment with Collins Asset Management Limited (as to $2.5 million) and RMI Holdings Limited (as to $2 million). Amounts subscribed as firm commitments will reduce the total CIP underwriting obligation, such that CIP’s underwriting obligation will be fully sub underwritten/reduced. The Company has also entered into a committed term sheet with ANZ for the provision of a $10 million fixed rate term loan facility.

The Company has committed funding for the acquisition in place. The acquisition is subject to shareholder approval.

The Company has incurred legal costs of $366,028, due diligence costs of $31,387 and audit costs of $55,000 in relation to the acquisition during the half year ended 31 December 2012. These costs have been included in ‘other expenses’ in the profit and loss component of the statement of comprehensive income.



Salv

us





Auditors’ review report

To the shareholders of Salvus Strategic Investments Limited

We have reviewed the attached interim financial statements in accordance with the Review Engagement Standards issued by the Institute of Chartered Accountants of New Zealand. The financial statements provide information about the past financial performance of Salvus Strategic Investments Limited and its financial position as at 31 December 2011. Directors’ responsibil it ies

The Directors of Salvus Strategic Investments Limited are responsible for the preparation of interim financial statements which give a true and fair view of the financial position of the company as at 31 December 2011 and the results of its operations and cash flows for the six months ended on that date. Reviewers’ responsibil it ies

It is our responsibility to express an independent opinion on the interim financial statements presented by the Directors and report our opinion to you. Basis of opinion

A review is limited primarily to enquiries of company personnel and analytical review procedures applied to the financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion. Our firm has also provided taxation services to the company. This has not impaired our independence as auditors of the company. The firm has no other relationship with, or interest in, the company.

Review opinion

Based on our review, nothing has come to our attention that causes us to believe that the attached interim financial statements do not give a true and fair view of the financial position of Salvus Strategic Investments Limited as at 31 December 2011, the results of its operations and cash flows for the six months ended on that date in accordance with NZ IAS 34 Interim Financial Reporting.

Auditor’s Review Report




Salv

us




Corporate Directory


Directors Independent Directors Mark Darrow (Chairman) Stefan Preston (appointed 16 January 2013) Phil Newland (appointed 16 January 2013)

Non Independent Directors Tim Cook Simon Wallace (resigned 16 January 2013)

Registered Office c/- Collins Asset Management Limited Level 3, 4 Viaduct Harbour Ave Auckland 1141

Share Registrar Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna, Auckland

Auditors KPMG, 18 Viaduct Harbour Ave Auckland 1010

Solicitors Harmos Horton Lusk Level 37, Vero Centre, 48 Shortland Street Auckland 1010

Accountants Pricewaterhouse Coopers 188 Quay Street, Auckland 1142

Investor Enquiries Veritas Investments Limited c/- PO Box 5408, Auckland 1141 [email protected]



Salv

us






Interim Report 2013 - New Zealand Exchange · 4503M Veritas Interim Report Dec 2012.indd 2 11/03/13...

Documents

Transcript of Interim Report 2013 - New Zealand Exchange · 4503M Veritas Interim Report Dec 2012.indd 2 11/03/13...