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South African Coal Mining Hldgs Ltd - Reviewed Condensed Results Of Sacmh For The 6 Months Ended 30 June 2013

Release Date: 26/09/2013 14:44:00      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: ZAE0000102034
("SACMH" or "the company" or "the Group")

REVIEWED CONDENSED RESULTS OF SACMH AND ITS SUBSIDIARIES ("THE GROUP")
for the six months ended 30 June 2013

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

                                                                Reviewed         Audited   
                                                                   As at           As at   
                                                                 30 June     31 December   
R'000                                                               2013            2012   
ASSETS                                                                                     
Non-current assets                                               483 018         490 864   
Property, plant and equipment                                     82 750          90 596   
Intangibles                                                      349 768         349 768   
Investments                                                       50 500          50 500   
Current assets                                                    14 929          39 841   
Inventories                                                          242             499   
Trade and other receivables                                       13 598          33 712   
Cash and cash equivalents                                          1 089           5 630   
Current assets held for sale                                                             
Total assets                                                     497 947         530 705   
EQUITY AND LIABILITIES                                                                     
Capital and reserves                                            (53 020)          10 585   
Issued capital and premium                                       233 885         233 885   
Accumulated loss                                               (286 905)       (223 300)   
Non-current liabilities                                          505 166         472 278   
Shareholder's loan                                               368 870         312 782   
Non-interest bearing liabilities                                                 23 200   
Non-current provisions                                            41 353          41 353   
Deferred taxation                                                 94 943          94 943   
Current liabilities                                               45 801          47 842   
Current portion of interest bearing liabilities                    2 486           1 051   
Current portion of non-interest bearing liabilities               34 800          11 600   
Current portion of provisions                                      2 933           2 933   
Trade and other payables                                           5 582          32 013   
Bank overdraft                                                                      245   
Total equity and liabilities                                     497 947         530 705   

CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME  
 
                                                                Reviewed        Reviewed   
                                                           Six months to   Six months to   
                                                                 30 June         30 June   
R'000                                                               2013            2012   
Turnover                                                           7 568         135 710   
Cost of sales                                                    (5 861)       (127 287)   
Gross profit                                                       1 707           8 423   
Foreign exchange loss                                           (49 997)         (2 733)   
Rehabilitation provision                                                        (1 746)   
Depreciation                                                     (7 847)        (14 483)   
Amortisation of mining rights                                                  (10 689)   
Finance income                                                                           
Operating expenses                                               (3 607)        (11 778)   
Operating loss before finance costs and taxation                (59 744)        (33 006)   
Finance costs                                                    (3 861)         (5 936)   
Loss before taxation                                            (63 605)        (38 942)   
Taxation                                                                          3 482   
Total comprehensive loss attributable to shareholders           (63 605)        (35 460)   
Total comprehensive income attributable to:                                                
  Equity holders                                               (63 605)        (35 460)   
Loss attributable to equity holders                             (63 605)        (35 460)   
Headline and diluted loss per share                               (0,14)          (0,08)   

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOW          
         
                                                                Reviewed        Reviewed   
                                                           Six months to   Six months to   
                                                                 30 June         30 June   
R'000                                                               2013            2012   
Cash flows generated from operations                             (2 535)          12 605   
Finance charges paid                                             (3 861)         (5 936)   
Interest received                                                                        
Net cash from/(utilised) in operating activities                 (6 396)           6 669   
Cash flows from investing activities                                                       
Purchase of property, plant and equipment                                         (560)   
Proceeds on sale of assets held for resale                                               
Net cash used in investing activities                                             (560)   
Cash from financing activities                                                             
New loan from shareholder                                          2 100          22 813   
Repayment of SBSA loan                                                          (7 890)   
Net cash from financing activities                                 2 100          14 923   
Net decrease in cash and cash equivalents                        (4 296)          21 032   
Cash and cash equivalents at the beginning of the period           5 385        (16 523)   
Cash and cash equivalents at the end of the period                 1 089           4 509   


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY    
                        
                                         Share     Share   Accumulated              
R'000                                  capital   premium          loss      Total   
Balance at 30 June 2011                 45 246   188 639      (94 639)    139 246   
Total comprehensive loss                                    (79 862)   (79 862)   
Balance at 31 December 2011             45 246   188 639     (174 501)     59 384   
Total comprehensive loss                                    (35 460)   (35 460)   
Balance at 30 June 2012                 45 246   188 639     (209 961)     23 924   
Total comprehensive loss                                    (13 339)   (13 339)   
Balance at 31 December 2012             45 246   188 639     (223 300)     10 585   
Total comprehensive loss                                    (63 605)   (63 605)   
Balance at 30 June 2013                 45 246   188 639     (286 905)   (53 020)   


NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME STATEMENT   

                                                                     30 June    30 June   
                                                                        2013       2012   
                                                                    Reviewed   Reviewed   
Weighted number of ordinary shares in issue ('000)                   452 454    452 454   
Determination of headline loss:                                                           
Basic and diluted loss per share                                      (0,14)     (0,08)   
Impairments per share                                                                   
Loss on sale/scrapping of non-current assets per share (cents)                          
Headline and diluted loss per share                                   (0,14)     (0,08)   


Statement of compliance and basis of preparation
The reviewed condensed consolidated interim results have been prepared, under the supervision of David Miller CA(SA), Chief
Financial Officer, in accordance with and containing International Financial Reporting Standards (IFRS), including the information
required by International Accounting Standard (IAS) 34, Interim Financial Reporting, the AC 500 standards issued by the
Accounting Practices Board, the Listings Requirements of the JSE Limited and in compliance with the requirements of the South
African Companies Act, No 71 of 2008. The accounting policies used are in terms of IFRS and are consistent with those of the
Annual Financial Statements as at 31 December 2012.

The condensed consolidated financial report has been prepared in accordance with the historical cost convention, except
for certain financial instruments which are stated at fair value, and is presented in Rand, which is SACMH's functional and
presentation currency.

The interim results have been reviewed by the group's auditors, Mazars. Their unqualified review opinion is available for inspection
at the company's registered office. Their review was conducted in accordance with ISRE 2410 "Review of interim financial
information performed by the independent auditor of the entity".

These financial results have been prepared on the going concern basis taking into account that JSW Energy Limited (a company
listed on the Indian stock exchanges and operating through its subsidiary JSW Energy Natural Resources South Africa Proprietary
Limited, continues to support SACMH as reflected in the Annual Report for the year ended 31 December 2012 issued in
June 2013.

COMMENTARY
1. Performance for the six months to 30 June 2013
   Operations at the Group's Umlabu Colliery continue to be suspended pending the finalisation of the Water Use Licence
   Application (WULA) by the Department of Minerals and Resources (DMR). All assets and infrastructure are being maintained
   under a "Care and Maintenance" programme.

   The Group is utilising its logistical and infrastructural assets to generate rental income to offset the costs incurred while
   operations remain suspended. This has resulted in a greater than 10% movement in the following items reflected in the
   statement of comprehensive income:
   - Turnover
   - Cost of sales
   - Gross profit
   - Operating expenses

2.   Foreign exchange loss
     The depreciation of the US$/ZAR rate from R8,67 to R10,13 during the reporting period resulted in an unrealised loss of
     R50 million (2012: R3 million) on the shareholder's loan.

3.   Depreciation
     Depreciation charges of R7,8 million (2012: R14,5 million) are lower than the previous comparative period as a result of
     accelerated charges in the previous year.

4.   Statement of reserves and resources and prospects
     The are no changes to the Group's estimated reserves and resources.

5.   Financing activities
     Finance costs of R3,9 million (2012: R5,9 million) on shareholders' advances are at lower rates than liabilities to third parties
     repaid during the previous period.
     During the period the Group's major shareholder advanced a further R2,1 million to the Group for working capital purposes.
     Increases in the shareholder's loan relate to foreign exchange movements as discussed in note 2 above.

6.   Asset management
     Working capital requirements have been reduced by more than 10% during the period as a result of suspension of
     operations at Umlabu Colliery, this includes:
     - Inventory
     - Accounts receivable
     - Accounts payable

7.   Taxation
     No taxation has been provided as the Group has incurred a taxable loss for the period. No adjustment of the deferred
     tax provisions was made (2012: R3,5 million) as there was no change reduction in the carrying value of the mineral right
     or rehabilitation liability.

8.   Mining Rights
     The carrying value of Mining Rights is tested against expected economic benefit based on expected cash flows discounted
     to their present value to determine whether there is any impairment of the value of the Mineral Rights at year-end.
     No impairment was considered necessary.
     
     The following significant assumptions have been made in determining the economic value of mineral rights:
     - Selling Prices  the API4 index as quoted by McCloskeys;
     - Foreign Exchange  the forecast as quoted by The Standard Bank of South Africa Limited; and
     - Discount Rate  expected future cash flows have been discounted to their present value based on a Weighted Average
        Cost of Capital (WACC) of 19% (2012: 17,3%).

9.   Going concern
     The Group incurred a net loss of R63 million (2012: R35 million) during the six months. The Group's going concern has
     been underwritten by the support of JSW Energy (a company listed on the Indian stock exchanges) which operates
     through its subsidiary JSW Energy Natural Resources South Africa Proprietary Limited ("JSWENRSAL") supporting
     SACMH. JSW Energy has confirmed its support in writing of their intention to continue financial support of SACMH, subject
     to the following:
     - JSW obtains Board approval for additional funding at the time;
     - JSW fulfils all regulatory requirements as prescribed by Indian legislation; and
     - JSW remains the majority shareholder.
     
     In terms of the loan agreements JSW Energy has undertaken not to accept repayment of its loan accounts until such stage
     as SACMH's assets, fairly valued, exceed its liabilities.

10.  Events after the reporting period
     The loan from The Standard Bank of South Africa has been settled in full, the necessary funds were advanced by JSW
     Energy, India. Consequently all amounts due have been reclassified to current non-interest bearing liabilities.
     
     Other than the abovementioned, there have been no further subsequent events for the period ended 30 June 2013.

11.  Capital expenditure commitments
     The Group has no capital expenditure commitments.

12.  Contingencies and commitments
     There have been no changes from those disclosed in the Group's Integrated Report for the year ended 31 December 2012.

13.  Prospects
     Until such stage as approval of the WULA for the Voorslag reserve at Umlabu Colliery is received, operations will remain
     suspended. The Group is actively pursuing opportunities to lease its logistical and its infrastructural assets to third parties in
     the interim to offset the costs of Care and Maintenance'.

     No commitment has been received from the DMR with regard to finalisation of the WULA.

     This general forecast has not been reviewed or audited by the auditors.

14.  Related party transactions
     During the period under review, Group entities entered into the following trading transactions with related parties that are
     not members of the Group:

                                                                2013      2012   
                                                               R'000     R'000   
Interest paid                                                                    
  Mainsail Trading 55 (Pty) Limited                             406       761   
  JSW Energy Natural Resources South Africa (Pty) Limited   349 860     2 440   
Loans from related parties                                                       
  Mainsail Trading 55 (Pty) Limited                          19 010    17 375   
  JSW Energy Natural Resources South Africa (Pty) Limited   349 860   218 254   

There were no other related party transactions during the period.



15. Changes to directorate
    There have been no changes to the board of directors during the period under review.

QMSM Mokoetle                                                DGA Miller
Chairman                                                     Chief Financial Officer and Acting Chief Executive Officer

26 September 2013

Directors:                        QMSM Mokoetle (Independent non-executive Chairman), DGA Miller (CFO/Acting CEO)
                                  VP Garg (non-executive)*, PP Menon (non-executive)* *Indian

Registered office:                1st Floor, 198 Oxford Road, Illovo, Sandton

Company secretary:                Mrs PF Smit

Transfer secretary:               Computershare Investor Services (Pty) Limited

Sponsor:                          Exchange Sponsors

Auditors:                         Mazars Incorporated

Website:                          www.sacmh.co.za
Date: 26/09/2013 02:44:00 Supplied by www.sharenet.co.za                     
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