Wrap Text
Unaudited Interim Consolidated Financial Statements for the period ended 30 November 2015
Rockwell Diamonds Inc.
(A company incorporated in accordance with the laws
of British Columbia, Canada)
(Incorporation number BC0354545)
(South African registration number: 2007/031582/10)
Share code on the
JSE Limited: RDI
ISIN: CA77434W2022
Share code on the TSX: RDI CUSIP Number: 77434W103
(“Rockwell” or “the Group”)
15 January 2016
Unaudited Interim Consolidated Financial Statements for the period
ended 30 November 2015
Consolidated Statements of Financial Position
As at As at
Amounts in Canadian 30 November 28 February
Dollars (‘000) 2015 2015
Assets
Non-current assets
Mineral property interests 24 320 16 518
Investment in associates 453 396
Property, plant and equipment 32 547 27 001
Investments and deposits 1 436 1 502
Rehabilitation deposits 2 043 3 376
Total non-current assets 60 799 48 793
Current assets
Inventories 3 142 2 177
Loans to related parties - 8
Current tax receivable 32 37
Trade and other receivables 5 706 4 889
Assets held for sale - 13 525
Cash and cash equivalents 704 576
Total current assets 9 584 21 212
Total assets 70 383 70 005
Equity and liabilities
Equity
Share capital 147 435 147 435
Reserves (13 872) (8 575)
Retained loss (115 373) (102 076)
Total equity attributable to the
equity holdersof the Group 18 190 36 784
Non-controlling interest (621) (2 369)
Total equity 17 569 34 415
Liabilities
Non-current liabilities
Loans and borrowings 23 474 3 844
Finance lease obligation 626 1 276
Deferred tax 3 567 2 995
Rehabilitation obligation 6 157 5 987
Total non-current liabilities 33 824 14 102
Current liabilities
Loans from related parties 163 162
Loans and borrowings 3 235 2 296
Finance lease obligation 628 708
Trade and other payables 12 859 10 902
Liabilities held for sale - 7 420
Bank overdraft 2 105 -
Total current liabilities 18 990 21 488
Total liabilities 52 814 35 590
Total equity and liabilities 70 383 70 005
Consolidated Statements of Financial Performance
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 Nov 30 Nov 30 Nov 30 Nov
Dollars (‘000) 2015 2015 2014 2014
Sale of diamonds 6 913 27 459 17 430 41 361
Beneficiation income 155 9 814 1 427 9 515
Cost of sales before
amortization and
depreciation (12 156) (36 296) (22 092) (48 655)
Gross (loss) profit before
amortization and
depreciation (5 088) 977 (3 235) 2 221
Amortization of
mineral property interests (391) (1 247) (225) (631)
Depreciation of property,
plant and equipment (1 505) (4 364) (1 357) (4 334)
Rehabilitation
obligation recognized (56) (121) (99) (340)
Gross loss (7 040) (4 755) (4 916) (3 084)
Other income 126 641 438 563
General, administration
and business development
expenses (734) (3 996) (1 505) (4 349)
Loss on sale of subsidiary (79) (1 853) - -
Realized foreign exchange
with sale of subsidiary - 1 276 - -
Loss before net
finance costs (7 727) (8 687) (5 983) (6 870)
Finance income 78 127 8 274
Foreign exchange loss
on US$ loans (1 995) (4 818) - -
Finance costs (875) (2 216) (223) (610)
Loss after net
finance costs (10 519) (15 594) (6 198) (7 206)
Share of profit from equity
accounted investment 31 122 (173) (88)
Loss before
taxation (10 488) (15 472) (6 371) (7 294)
Taxation 1 162 2 112 1 621 1 407
Loss for the period (9 326) (13 360) (4 750) (5 887)
Loss attributable
to:
Owners of the parent (9 346) (13 297) (4 825) (5 811)
Non-controlling interest 20 (63) 75 (76)
(9 326) (13 360) (4 750) (5 887)
Loss per share
Basic and diluted loss per
share (cents) (17.13) (24.37) (8.96) (10.80)
Consolidated Statements of Comprehensive Income
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 Nov 30 Nov 30 Nov 30 Nov
Dollars (‘000) 2015 2015 2014 2014
Loss for the period (9 326) (13 360) (4 750) (5 887)
Other comprehensive income
net of taxation
Items that are or may be
reclassified to profit or
loss
Exchange differences on
translating foreign
operations (1 521) (2 672) 514 (16)
Realized foreign exchange
differences with sale of
subsidiary - (1 276) - -
Other comprehensive income
for the period net of
taxation (1 521) (3 948) 514 (16)
Total comprehensive income
for the period (10 847) (17 308) (4 236) (5 903)
Total comprehensive income
attributable to:
Owners of the Group (10 917) (17 378) (4 286) (5 825)
Non-controlling interest 70 70 50 (78)
Total comprehensive income
for the period (10 847) (17 308) (4 236) (5 903)
Consolidated Statements of Changes in Equity
Foreign Share-
currency based Total
Amounts in Canadian Share translation payment net
Dollars (‘000) capital reserve* reserve* reserve*
Balance at 01 March 2014 147 073 (18 799) 8 790 (10 009)
Total comprehensive income
for the period
Loss for the period - - - -
Other comprehensive income - (14) - (14)
Total comprehensive income
for the period - (14) - (14)
Share-based payment expense - - 97 97
Share options exercised 33 - (16) (16)
Shares issued to employees 347 - - -
Share issue costs (1) - - -
Total changes 379 (14) 81 51
Balance as at
30 Nov 2014 147 452 (18 813) 8 871 (9 942)
Balance at 01 March 2015 147 435 (17 605) 9 030 (8 575)
Total comprehensive income
for the period
Loss for the period - - - -
Other comprehensive income - (4 081) - (4 081)
Total comprehensive income
for the period - (4 081) - (4 081)
Share-based payment expense - - 59 59
Sale of subsidiary - (1 275) - (1 275)
Total changes - (5 356) 59 (5 297)
Balance at 30 Nov 2015 147 435 (22 961) 9 089 (13 872)
Total equity
attributable Non-
to equity control-
Amounts in Canadian Retained holders of ling Total
Dollars (‘000) capital the Group interest equity
Balance at 01 March 2014 (88 096) 48 968 (1 737) 47 231
Total comprehensive income
for the period
Loss for the period (5 811) (5 811) (76) (5 887)
Other comprehensive income - (14) (2) (16)
Total comprehensive income
for the period (5 811) (5 825) (78) (5 903)
Share-based payment expense - 97 - 97
Share options exercised - 17 - 17
Shares issued to employees - 347 - 347
Share issue costs - (1) - (1)
Total changes (5 811) (5 381) (78) (5 459)
Balance as at
30 Nov 2014 (93 907) 43 603 (1 815) 41 788
Balance at 01 March 2015 (102 076) 36 784 (2 369) 34 415
Total comprehensive income
for the period
Loss for the period (13 297) (13 297) (63) (13 360)
Other comprehensive income - (4 081) 133 (3 948)
Total comprehensive income
for the period (13 297) (17 378) 70 (17 308)
Share-based payment
expense - 59 - 59
Sale of subsidiary - (1 275) 1 678 403
Total changes (13 297) (18 594) 1 748 (16 846)
Balance at 30 Nov 2015 (115 373) 18 190 (621) 17 569
* Currency translation differences arising on the conversion of the
net investment in foreign operations from the functional currency to
the Company's presentation currency are accumulated in the foreign
currency translation reserve.
** Equity settled share-based payment transactions are accumulated in
the share-based payment reserve.
Consolidated Statements of Cash Flows
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 Nov 30 Nov 30 Nov 30 Nov
Dollars (‘000) 2015 2015 2014 2014
Cash flows from operating
activities
Cash receipts from
customers 11 899 38 239 16 888 52 083
Cash paid to suppliers
and employees (11 504) (39 142) (19 592) (52 198)
Cash generated from
(utilized by)
operations 395 (903) (2 704) (115)
Finance income 33 125 8 274
Finance costs 13 (210) (576) (576)
Tax paid - - 1 1
Net cash inflow (outflow)
from operating activities 441 (988) (3 271) (416)
Cash flows from investing
activities
Purchase of property,
plant and equipment (450) (1 357) (1 411) (2 964)
Proceeds from sale of
property, plant and
equipment 2 87 17 355
Purchase of mineral
property interests (13) - 5 (578)
Proceeds from sale of
mineral property
interests - 502 - -
Proceeds from sale of
subsidiary 543 3 410 - -
Investment in joint
venture - - (104) (207)
Acquisition of subsidiary
and business combination - (1 708) - -
Decrease (increase) in
related party loans (2) 30 - -
Decrease (increase) in other
financial assets 62 (22) 3 192 2 692
Decrease (increase) in
rehabilitation deposits 1 343 1 625 (2 159) (1 672)
Net cash inflow (outflow)
from investing activities 1 485 2 567 (460) (2 374)
Cash flows from financing
activities
Proceeds on share issue - - 16 16
Share issue costs - - (1) (1)
(Repayment of) proceeds
from loans and borrowings (775) (3 752) 2 256 2 251
Repayment of (proceeds from)
finance lease obligations (171) (580) 1 904 1 765
Net cash outflow from
financing activities (946) (4 332) 4 175 4 031
Net movement in cash and
cash equivalents for the
period 980 (2 753) 444 1 241
Cash and cash equivalents
at the beginning of the
period (2 381) 576 (963) (1 760)
Cash and cash equivalents
released from assets held
for sale - 776 - -
Total net cash and cash
equivalents at end of the
period (1 401) (1 401) (519) (519)
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 Nov 30 Nov 30 Nov 30 Nov
Dollars (‘000) 2015 2015 2014 2014
Loss per share
Basic and diluted
loss per share
Basic loss per share
Cents per share (17.13) (24.37) (8.96) (10.80)
Basic loss per share was calculated based on a weighted
average number of ordinary shares of 54 558 244 for the 3 months
ended 30 November 2015 (3 months ended 30 November 2014: 54 427 244) and
54 558 244 for the 9 months ended 30 November 2015 (9 months ended
30 November 2014: 53 819 099).
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 Nov 30 Nov 30 Nov 30 Nov
Dollars (‘000) 2015 2015 2014 2014
Reconciliation of loss for
the period to basic loss
Loss for the period (9 326) (13 360) (4 750) (5 887)
Adjusted for:
Loss attributable to non
controlling interest (20) 63 (75) 76
Basic loss attributable to
owners of the Group (9 346) (13 297) (4 825) (5 811)
Diluted loss per share is equal to loss per share because there are no
dilutive potential ordinary shares in issue.
At 30 November 2015 and 30 November 2014 the impact of share-based payment
options were excluded from the weighted average number of shares as the
effect would have been anti- dilutive.
3 months 9 months 3 months 9 months
ended ended ended ended
Amounts in Canadian 30 Nov 30 Nov 30 Nov 30 Nov
Dollars (‘000) 2015 2015 2014 2014
Basic and diluted
headline loss per share
Headline loss per
share (cents) (17.14) (23.77) (8.87) (10.32)
Reconciliation between basic
loss and headline loss
Basic loss attributable to
owners of the Group (9 346) (13 297) (4 825) (5 811)
Adjusted for:
Profit on disposal of
assets (11) (11) - -
Loss (profit) on disposal of
mineral property 4 (161) - -
Realized foreign exchange
with sale of subsidiary - (1 276) - -
Loss on sale of property,
plant and equipment - - - 258
Loss on sale of subsidiary - 1 774 - -
Headline loss attributable to
owners of the Group (9 353) (12 971) (4 825) (5 553)
The basic and diluted headline loss per share disclosure is provided
based on the listing requirements of the Johannesburg Stock Exchange
(Group's secondary listing). The disclosure of basic and diluted
headline loss per share is provided in accordance with Circular
2/2013 as issued by the South African Institute of Chartered
Accountants. Headline loss represents the basic loss attributable
to the owners of the Group excluding certain remeasurements.
At 30 November 2015 and 30 November 2014 the impact of share-based
payment options were excluded from the weighted average number of
shares, for the purpose of the diluted headline loss per share
calculation, as the effect would have been anti-dilutive.
Subsequent events
$3,235 of convertible debentures and credit facilities were refinanced
during December 2015 for a period of 24 months.
The Company has conducted an in-depth strategic and operational review
of the business to assess its strategic direction,including its commitment
to processing 500,000m3 per month from its MOR operations and undertake
significant restructuring to place the business on a sustainable footing.
The review included an analysis of management, operational and reporting
structures and at the same time identifying overhead and operational cost
reductions with the aim of achieving sustainable cash flow going forward.
The review will result in substantial restructuring involving, inter alia,
downsizing of the workforce,transfer of its head office to the Mines and
closure of its Saxendrift operation by the end of February 2016.
Apart from the above management is not aware of any matter or circumstance
arising since the end of the financial period, requiring amendment to the
amounts and disclosures in these financial statements.
Segmental information
The Group has three reportable operating segments, as described below, which
are the Group's operating divisions. These divisions offer different diamond
product characteristics, qualities, geological characteristics, processes and
services, and are managed separately because they require different technology
and profit or cost strategies. For each of the divisions the Group executive
committee (chief operating decision making body) reviews internally managed
reports on at least a monthly basis.
The following describes the operations in each of the Group's reportable
segments:
• Northern Cape operation is associated with the mining of Paleo Channels
and Rooikoppie gravels and the recovery of high value and larger carat
size diamonds;
• North West operation is associated with the mining of potholes and
the recovery of lower value and smaller carat size diamonds; and
• Corporate represents the corporate management and administrative function
of the Group.
The reconciliation column represents the inter group transactions
eliminated on consolidation. All reportable segments are located in the same
geographical jurisdiction. Information regarding the results of each of the
reportable segments is included below.
For the 9 months ended 30 November 2015
Amounts in Canadian Northern North Corporate Recon-
Dollars (‘000) Cape West ciling Total
Total assets 58 243 - 58 817 (46 677) 70 383
Total liabilities 71 637 - 27 854 (46 677) 52 814
External revenue 36 208 1 065 - - 37 273
Loss for the period (5 708) (14) (7 638) - (13 360)
For the 9 months ended 30 November 2014
Amounts in Canadian Northern North Corporate Recon-
Dollars (‘000) Cape West ciling Total
Total assets 54 090 16 119 72 248 (65 183) 77 274
Total liabilities 73 064 22 798 4 807 (65 183) 35 486
External revenue 37 273 13 603 - - 50 876
Loss for the period (4 410) (318) (1 159) - (5 887)
Corporate information
Registered office – South Africa:
Level 1, Wilds View, Isle of Houghton, Corner Carse O’Gowrie and
Boundary Roads, Houghton Estate, Johannesburg 2198
PO Box 3011, Houghton 2041, South Africa
Telephone: +27 11 484 0830 Facsimile: +27 86 262 2838
Corporate address – Canada:
2900–550 Burrard Street, Vancouver, British Columbia,
Canada V6C 0A3
Telephone: +1 604 631 3131 Facsimile: +1 604 631 3232
Toll Free: 1 866 635 3131
Corporate advisor: Allan Hochreiter Proprietary Limited
4 Fricker Road, Illovo, Sandton 2196, South Africa
JSE sponsor: PSG Capital
First Floor, Building 8 Inanda Greens Business Park,
54 Wierda Road West, Wierda Valley, Sandton 2196
International broker: Northland Capital Partners Limited
60 Gresham Street, London, EC2V 7BB United Kingdom
Auditors: KPMG Inc Chartered Accountants
KPMG Crescent, 85 Empire Road, Parktown 2193, South Africa
Transfer agents - South Africa:
Computershare Investor Services Proprietary Limited
(Registration number 2004/0036471/07)
Ground Floor, 70 Marshall Street Johannesburg 2001, South Africa
Transfer agents - Canada: Computershare Investor Services Inc.
3rd Floor, 510 Burrard Street, Vancouver, British Columbia,
Canada V6C 3B9
Lawyers - South Africa: Brink Falcon Hume Inc Attorneys
Second Floor, 8 Melville Road, Illovo, Sandton 2196, South Africa
Lawyers - Canada: Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, Ontario,
Canada, M5H 2T6
Date: 15/01/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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