Notes to the annual financial statements

FOR THE YEAR ENDED 31 MARCH 2008

  Note 2 »
       
1. EARNINGS    
    2008   2007  
    Gross   Net   Gross   Net  
    R million   R million   R million   R million  
  HEADLINE EARNINGS RECONCILIATION        
  Net profit for the year attributable to equity holders   9 893     6 942  
  Plus/(minus):        
  – Negative goodwill –   –   (44)  (44) 
  – Net impairment of investments, assets and goodwill (15)  (8)  –   –  
  – Profit on sale and restructuring of investments (1 665)  (1 627)  (7)  (7) 
  – Net (surplus)/loss on disposal of property, plant and equipment (114)  (138)  –   –  
  – Non-headline earnings items included in equity accounted        
    earnings of associated companies and joint ventures (122)  (129)  14   1  
  Headline earnings   7 991     6 892  
  Non-recurring portion of BEE costs added back   37     –  
  Headline earnings – Excluding non-recurring portion of BEE costs     8 028     6 892  
           
  EARNINGS PER SHARE   Cents     Cents  
           
  Headline earnings per share        
  – Basic   1 692.8     1 453.6  
  – Diluted   1 649.0     1 409.2  
           
  Headline earnings per share – Excluding non-recurring portion of BEE costs      
  – Basic   1 700.7     1 453.6  
  – Diluted   1 656.8     1 409.2  
           
  Earnings per share        
  – Basic   2 095.7     1 464.2  
  – Diluted   2 048.9     1 418.5  
           
 

Earnings per share
In determining earnings per share and headline earnings per share the weighted number of shares in issue, being 472 052 993
(2007: 474 123 689), was taken into account after deduction of treasury shares as well as shares held in The Remgro Share Trust and certain associated companies.

Diluted earnings per share
In determining diluted earnings per share and diluted headline earnings per share the weighted number of shares in issue was adjusted for the deemed dilutive effect of the shares accepted by participants in the Remgro Share Scheme but not yet delivered.

Because the scheme shares have to be accounted for as treasury shares, the delivery thereof to participants will be regarded as an issue of shares. As the market value (fair value) of the shares at date of delivery will differ from the offer value, the number of shares represented by the difference will be regarded as an issue of ordinary shares for no consideration. These imputed shares total 1 908 925  (2007: 1 672 153) and have been added to the weighted number of shares to determine the dilutive effect.

Some subsidiary and associated companies have similar management incentive schemes as well as other instruments that can dilute these companies’ earnings in the future. To calculate Remgro’s diluted earnings per share, R175 million (2007: R187 million) and
R182 million (2007: R193 million) were offset against headline earnings and earnings respectively to account for the potential diluted effect.