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South African Coal Mining - Revised Reviewed Condensed Provisional Annual Results For The Year Ended 31 December 2011

Release Date: 10/07/2012 13:24:00      Code(s): SAH
South African Coal Mining Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009012/06
Share code : SAH ISIN code: ZAE0000102034
(SACMH, the group or the company)

      REVISED REVIEWED CONDENSED PROVISIONAL ANNUAL RESULTS FOR THE YEAR
                            ENDED 31 DECEMBER 2011

1.   Background  disclaimed review opinion

     Shareholders are referred to the reviewed condensed annual results of SACMH for the year
     ended 31 December 2011 which were released on SENS on 31 May 2012 and subsequently
     published in the press. The announcement stated that the financial results have been
     reviewed by the company`s auditors, Deloitte & Touche. They disclaimed their review
     opinion on a material uncertainty on the valuation of mineral rights and the companys ability
     to continue as a going concern. Their disclaimed review report was available at the
     registered offices of the company.

2.   Revised review opinion  unmodified audit report

     Deloitte & Touche have now revised their review opinion and issued an unmodified audit
     opinion with an emphasis of matter paragraph regarding the going concern status of the
     group and on subsequent events. Their revised unmodified report is available at the
     registered offices of the company.

     The conclusions of the auditors in the paragraphs of their revised report dealing with these
     matters, read as follows:

         Life of mine assessment and related impairments of mineral rights

         We also draw your attention to the subsequent events note in the directors report of the
         annual financial statements that details the changes in the assumptions used to assess
         the mineral rights valuation at year end. The main change is the forecasted coal price
         that has declined post year end as detailed in the directors report. The impact of this
         results in an estimated impairment of R106.7 million.

         Going concern status of the group

         JSW Energy India Limited have confirmed, in writing, their firm intention to continue the
         financial support to SACMH. This support is subject to JSW Energy India Limited
         remaining the majority shareholder of the group; the company obtaining board approval
         to provide the further funding; and the company obtaining regulatory approval specific to
         the laws of India.

3.   Annual financial statements  report of auditors

     In the Annual Financial Statements of SACMH to be released soon, the report of the auditors
     will include the following Emphasis of Matter paragraph:

         Emphasis of Matter  going concern

         Without qualifying our opinion, we draw attention to the directors report of to the
         financial statements which indicates that the company incurred a net loss of R98.5
         million for the year ended 31 December 2011 and, as at that date, the companys total
         assets exceeded its total liabilities by R59.3 million. The directors report highlights the
         fact that the group and companys going concern status is dependent upon JSW Energy
         Limiteds (a company listed on the Mumbai stock exchange) and operating through its
         subsidiary, JSW Natural Resources South Africa Proprietary Limited (JSWSA)
         financial support to SACMHL. JSWSA have confirmed, in writing, their firm intention to
         continue the financial support to SACMH. This support is subject to JSW Energy India
         Limited remaining the majority shareholder of the group; the company obtaining board
         approval to provide the further funding; and the company obtaining regulatory approval
         specific to the laws of India. These conditions, along with other matters, indicate the
         existence of a material uncertainty which may cast significant doubt on the companys
         ability to continue as a going concern.

         Emphasis of matter  Subsequent events - Life of mine assessment and related
         impairments of mineral rights
         We also draw your attention to the subsequent events within the directors report in the
         annual financial statements that details the changes in the assumptions used to assess
         the mineral rights valuation at year end. The main change is the forecasted coal price
         that has declined post year end as detailed in the directors report. The impact of this
         results in an estimated impairment of R106.7 million.

4.   Annual financial statements  directors report

     In the Annual Financial Statements of SACMH the Directors Report will include the following
     Subsequent Events paragraph:

         The following events have occurred subsequent to the reporting date:

         Funding

         JSW Energy has made further funds available to replace Standard Banks short-term
         facilities.

         The Groups major shareholder JSW Energy India has committed to support funding
         requirements necessary during this period, subject to the following:
          JSW obtain board approval for the additional funding at the time;
          JSW fulfills all regulatory requirements as prescribed by Indian legislation; and
          JSW remains the majority shareholder.

         JSW has demonstrated its on-going financial support throughout the financial year.
         Management is confident that despite the material uncertainty that the above conditions
         imply, JSW will continue to support the group in the foreseeable future.

         Mining operations


         Environmental approval for the mining of the Voorslag area has been applied for from
         the Department of Water Affairs. As indicated in the announcement made on 18 April
         2012 via SENS, the delays in the approval process have resulted in a reduction in
         production levels, as the Vlakfontein opencast operations were completed during the
         month of March 2012. The Company is embarking on cost reduction exercises to
         mitigate this situation.

         Mineral rights

         The Group assesses at the reporting date whether there is objective evidence that
         either a financial asset or a group of financial assets is impaired. The expected
         economic gain that is expected from the Groups investment in the mining right is
         estimated based on information available at reporting date and includes forecasts of
         future costs and returns.

         The estimated future economic benefit of the mining right at the reporting date indicated
         that no impairment was required and consequently no impairment was provided for.
         Since the statement of financial position the following index values utilised in estimating
         the expected value of future cash flows have changed as a result of changes in market
         conditions:

   Index                            As at 31 December   As at 15 June
                                        2011             2012
   Forecasted coal export price 
   AP14
   - 2012                             USD 108,55        USD 85,08
   - 2013                             USD 111.08        USD 93.85
   - Thereafter                       USD 116.13        USD101.73
   SA Rand / US Dollar exchange
   rate                                  R8,01             R8,35

       The impact of these changes on the estimated future economic benefit of the mining
       right would have resulted in an impairment of R106,7 million if applied at the reporting
       date.

  All other aspects of the results as announced on 31 May 2012 remain unaltered.


  For and on behalf of the board


  QMSM MOKOETLE                                          AJL RAYMENT
  Chairman                                       Chief Executive Officer

  10 July 2012

  Johannesburg

  Sponsor: Exchange Sponsors (2008) (Pty) Limited

  Investor Relations: Renay Tandy, Ngage Tel 011 867 7763
Date: 10/07/2012 01:24:00 Supplied by www.sharenet.co.za                     
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