Wrap Text
Unaudited Results for the Eight Months Ended 31 August 2012
MINE RESTORATION INVESTMENTS LIMITED
(formerly Capricorn Investment Holdings Limited)
(Registration Number 1987/004821/06)
("MRI" or "the Company")
Share code: MRI ISIN: ZAE000149951
UNAUDITED RESULTS for the 8 months ended 31 August 2012
During the period under review, MRI was, for the purposes of International
Financial Reporting Standards (“IFRS”), acquired by Western Utilities
Corporation Proprietary Limited (“WUC”). The legal acquisition of WUC by
MRI is a reverse-acquisition in terms of IFRS 3: Business Combinations.
WUC’s financial year-end was previously the end of December each year. The
Companies and Intellectual Properties Commission (“CIPC”) approved the
change of the year-end of WUC to end of February each year in line with
the financial year-end of MRI. Accordingly, the results presented below
are presented for an 8-month period to 31 August 2012. This coincides with
the 6-month period of MRI to 31 August 2012. As a result of this change
and the need to reflect a continuation of WUC in the results of MRI
presented to shareholders of MRI, the amounts reflected in the comparative
disclosures (the 6-month period to 30 June 2011 and the 12-months to 31
December 2011) are not the comparative results of MRI as previously
published.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
8-months to 6-months to 12-months to
August 2012 June 2011 December 2011
R R R
Revenue - 1 326 000 -
Other income 28 598 - 1 418 580
Operating expenses and recoveries 3 985 230 (1 844 214) (12 067 822)
Operating profit/(loss) 4 013 828 (518 214) (10 649 242)
Investment revenue 90 866 - 8 498
Interest expense (2 023 224) (4 268 000) (3 626 973)
Gain on a bargain purchase - - 46 958 960
Profit/(Loss) before taxation 2 081 469 (4 786 214) 32 691 243
Taxation credit/(charge) 244 053 1 340 000 (9 440 225)
Profit/(Loss) for the period 2 325 522 (3 446 214) 23 251 018
Other comprehensive income - - -
Total comprehensive income/(loss) 2 325 522 (3 446 214) 23 251 018
Profit/(Loss) attributable to:
Equity holders 2 375 493 (3 446 214) 6 821 097
Non-controlling interests (49 971) - 16 429 921
Total comprehensive income/(loss)
attributable to:
Equity holders 2 375 493 (3 446 214) 6 821 097
Non-controlling interests (49 971) - 16 429 921
Basic and diluted earnings/(loss) 0.01 (0.06) 0.11
per share
Basic and diluted headline 0.01 (0.06) (0.17)
earnings/(loss) per share
Weighted average number of shares 168 733 565 59 886 020 59 886 020
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 August 30 June 2011 31 December
2012 2011
R R R
Assets
Non-Current Assets
Property, plant and equipment 2 950 132 51 000 9 949
Intangible assets 92 143 996 44 836 000 93 040 709
Investment in associate 1 000 000 - 1 000 000
Other financial assets - 4 880 -
Deferred tax 6 380 120 3 717 000 6 365 120
102 474 248 48 608 880 100 415 778
Current Assets
Trade and other receivables 126 539 1 539 000 45 478
Prepayments - 22 000 24 413
Cash and cash equivalents 10 890 109 561 000 584 234
11 016 648 2 122 000 654 125
Total Assets 113 490 896 50 730 880 101 069 903
Equity and Liabilities
Equity
Amount attributable to equity holders 59 404 652 (11 218 900) (951 589)
Non-Controlling Interest 16 379 950 - 16 429 921
75 784 602 (11 218 900) 15 478 332
Liabilities
Non-Current Liabilities
Deferred tax 13 177 429 - 13 428 509
Loans from Group companies - 39 375 000 49 738 354
Other financial liabilities 24 212 684 20 582 000 22 357 781
37 390 113 59 957 000 85 524 644
Current Liabilities
Trade and other payables 316 181 1 992 780 66 927
316 181 1 992 780 66 927
Total Equity and Liabilities 113 490 896 50 730 880 101 069 903
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Retained Amount Non- Total equity
capital, earnings attributable Controlling
Share to Equity Interest
Premium and Holders
Reverse
Acquisition
Reserve
R R R R R
Group
Balance at 01 100 (7 772 786) (7 772 686) - (7 772 686)
January 2011
Total - (3 446 214) (3 446 214) - (3 446 214)
comprehensive
loss for the
period
Total changes - (3 446 214) (3 446 214) - (3 446 214)
Balance at 30 100 (11 219 000) (11 218 900) - (11 218 900)
June 2011
Total - 10 267 311 10 267 311 16 429 921 26 697 232
comprehensive
income for
the period
Total changes - 10 267 311 10 267 311 16 429 921 26 697 232
Balance at 31 100 (951 689) (951 589) 16 429 921 15 478 332
December 2011
Reverse 17 952 147 - 17 952 147 - 17 952 147
acquisition
Issue of 40 028 601 - 40 028 601 - 40 028 601
additional
shares
Total - 2 375 493 2 375 493 (49 971) 2 325 522
comprehensive
profit for
the period
Total changes 57 980 748 2 375 493 60 356 241 (49 971) 60 306 270
Balance at 31 57 980 848 1 423 804 59 404 652 16 379 950 75 784 602
August 2012
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
8 months to 6 months to 12 months to
August 2012 June 2011 December 2011
R R R
Cash flows utilised in operating
activities
Cash utilised in operations 4 910 604 (2 353 461) (12 878 018)
Interest income 90 866 - 8 498
Finance costs (2 023 224) (4 268 000) (3 626 973)
Taxation paid (7 027) - -
Cash utilised in operating activities 2 971 219 (6 621 461) (16 496 493)
Cash flows from investing activities
Purchase of property, plant and (2 947 878) - (10 000)
equipment
Proceeds on disposal of property, plant - - 10 000
and equipment
Purchase of intangible assets - (330 319) (696 068)
Proceeds on disposal of intangible - - 120 000
assets
Disposal of financial assets - - 4 880
Net cash outflow on business - - (1 000 000)
combination
Investment in associate company - - (1 000 000)
Net cash acquired on reverse- 3 694 000 - -
acquisition
Net cash available from/(utilised in) 746 122 (330 319) (2 571 188)
investing activities
Cash flows from financing activities
Proceeds on raising of new share 40 028 601 - -
capital
(Repayment of)/Proceeds on advance of (35 294 969) 5 518 166 15 881 520
loans from Group companies
Increase in other financial liabilities 1 854 903 1 523 697 3 299 478
Net cash available from financing 6 588 535 7 041 863 19 180 998
activities
Total cash movement for the year 10 305 875 90 083 113 317
Cash and cash equivalents at the 584 234 470 917 470 917
beginning of the year
Cash and cash equivalents at end of the 10 890 109 561 000 584 234
period
NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED RESULTS
for the 8-months ended 31 August 2012
1. BASIS OF PREPARATION
These condensed consolidated financial statements have been prepared under
the supervision of M van den Berg in accordance IFRS, the interpretations
adopted by the International Accounting Standards Board, South African
interpretations of Generally Accepted Accounting Practice (the AC500
series) and include the disclosures required by IAS34 Interim Financial
Reporting.
The financial statements have been prepared using accounting policies that
comply with IFRS and which are consistent with those applied in the
preparation of the financial statements for the year ended 31 December
2011.
2. REVERSE-ACQUISITION AND CHANGE IN FINANCIAL PERIOD
During the period under review, MRI (Formerly Capricorn Investment
Holdings Limited) was, from an IFRS perspective, acquired by WUC by way of
a reverse-acquisition. The acquisition is a reverse-acquisition in terms
of IFRS 3 Business Combinations. Accordingly, MRI is regarded as the legal
parent and accounting acquired and WUC is regarded as the legal subsidiary
company and the accounting acquirer. In accordance with this accounting
treatment, the following has taken place:
a) The identifiable assets and liabilities of MRI were brought into the
books and measured at their fair-value;
b) The condensed consolidated financial statements issued are those of
MRI, the legal parent and accounting acquirer, but are described in
the notes as a continuation of the financial statements of WUC, the
legal subsidiary company and accounting acquirer. WUC’s results
have, been adjusted to retrospectively reflect the legal capital of
MRI. As such, the financial statements reflect a continuation of the
financial statements of WUC.
c) The year-end of WUC was 31 December of every year. CIPC approved the
change of the year-end of WUC to the last day of February every
year, in line with the year-end of MRI. Accordingly, the results for
MRI are shown for an 8-month period to 31 August 2012, being a 6-
month period or MRI. As a result of this change and the need to
reflect a continuation of WUC in the results of MRI being currently
presented, the amounts reflected in the comparative disclosures
those at 30 June 2011 and 31 December 2011.
3. REVIEW REPORT
The condensed consolidated financial statements have not been reviewed by
the external auditor.
4. COMMENTARY
HISTORIC PERSPECTIVE
MRI changed its name from Capricorn Investment Holdings Limited to reflect
the new nature of its business and the new focus of the Company post the
acquisition of WUC. The acquisition of WUC has created two new strategic
areas of focus areas for the Company, namely Acid Mine Drainage (“AMD
Project”) and Coal Fines Briquetting (“Coal Briquetting Project”). Both
these projects are focused on reducing the environmental impact of mining,
whilst at the same time are aimed at producing a significant return on
investment for shareholders. The Coal Briquetting Project is expected to
be commissioned in the first quarter of 2013 and should take three months
to reach full production. This project is expected to provide a
significant return on capital invested. Revenues generated from this
project will be used to further capitalise the Company and will be used to
provide the capital to invest and grow this part of our business.
With regards the AMD Project, the South African government is currently
drafting the scope of work required for a tender to be submitted by
interested parties. WUC intends to participate in this tender. WUC has
already completed a Bankable Feasibility Study for the project, including
documenting engineering and environmental authorisation processes. This
project remains a strategic focus area of the Company in the future going
forward and we expect that the tender will be initiated soon.
RESULTS OF OPERATIONS
The results of the operations of MRI, and its subsidiary company, WUC
(“the Group”), for the 8-month period ended 31 August 2012 reflects the
ongoing cost of MRI while it builds and commissions the Coal Briquetting
Project’s plant. Revenue from the Coal Briquetting Project is expected to
commence during 2013.
WUC intends to tender for the Long Term solution and therefore according
to the Bankable Feasibility Study the information we have generated over
the past 5 years is well worth R44 million. This is not the only AMD
project in the world and the technology and information generated has
application in other areas like South and North America.
The value for the briquetting project is based on a discounted cash flow
model of the resources that is included in the agreement with LME and
Keaton and the plant being constructed at the site. Once this plant is
operational the intention is to expand to the larger coal producers who
produce significantly more fines although at lower grades.
The company is still committed to purchase plant and equipment to the
value of R 13.5 million on the briquetting project.
WUC incurred charges from Watermark at December 2011. Subsequent to the
issue of the financial statements of WUC in January 2012 the terms were
changed and these costs reversed . As a result operating expenses show a
net recovery for the period ended August 2012.
Interest paid has been reduced and now only relates to the repayment of
interest bearing loans pursuant raised at the time of the reverse-listing
of WUC into MRI.
Taxation credits and charges primarily result from adjustments to deferred
taxation.
FUTURE PROSPECTS
The board of directors of MRI (“the Board”) will continue to pursue the
awarding of the water use licences required by WUC for its AMD technology.
It is also anticipated that the Coal Briquetting Project will commence
operations in early 2013 - this should contribute significantly to the
overall profitability of the Group.
5. SEGMENT INFORMATION
The group is not presently managed by segment. Accordingly, no segment
information is provided. As operations become established, this will
likely change.
6. HEADLINE EARNINGS/(LOSS) PER SHARE
The earnings and weighted average number of ordinary shares used in the
calculation of headline earnings/(loss) per share are as follows:
Reconciliation of earnings to headline earnings attributable to equity
holders of the parent:
8-months to 6-months to 12-months to
August 2012 June 2011 December 2011
Earnings/(loss)per share 0.01 (0.06) 0.11
Headline earnings/(loss) per share 0.01 (0.06) (0.17)
HEPS Calculation
Profit/(Loss) for the year 2 375 493 (3 446 214) 6 821 097
Adjustments
Gain on bargain purchase price, net - - (17 243 330)
of tax
Headline earnings/(loss) 2 375 493 (3 446 214) (10 422 233)
Weighted average number of shares 168 733 565 59 886 020 59 886 020
in issue
Actual number of share in issue 455 695 274 59 886 020 59 886 020
7. CHANGES IN SHARE CAPITAL AND SHARE PREMIUM
During the year, the Company was the subject of a reverse-acquisition of
MRI by WUC culminating in the issue by MRI of 395 809 254 new ordinary
shares to the shareholders of WUC for the acquisition of 100% of the share
capital in, and loan account claims against, WUC held by Watermark Global
Limited (“Watermark”). Additional shares were also issued to other parties
as disclosed in the circular to shareholders. Some of the funds raised in
the issue were used to repay certain loan accounts that were due to
Watermark.
8. RELATED PARTY TRANSACTIONS
Loans advanced by Watermark to WUC were repaid out of the funds raised at
the time of the reverse-listing of WUC.
As the largest shareholders, Trinity Asset Management (Proprietary)
Limited and Watermark have committed to jointly underwrite any shortfall
in the working capital of MRI to the maximum value of R4 million for the
period until 30 June 2013.
Other than mentioned above, and other than loans advanced or received in
the normal course of business, there have been no significant changes in
the related party relationships during the year.
9. ACQUISITION OF BUSINESSES
Other than the reverse-acquisition of WUC by MRI there were no other
acquisitions during the current year. Acquisitions undertaken by WUC in
the prior year include:
Acquisition of 51% of Octavovox (Proprietary) Limited
R
Net asset value 47,958,960
Consideration 1,000,000
Gain on bargain purchase-price 46,958,960
The reverse-acquisition took effect from 15 December 2011 and was made in
order to provide WUC with the funding it required to complete and make
commercial the Coal Briquetting Project. The reverse-acquisition will
facilitate the growth of the Group in the medium term.
WUC acquired 51% of Octavovox (Proprietary) Limited which will serve as
the holder of all supply and construction contracts and 50% of Prodiflex
Coal (proprietary) Limited will serve as the project managers responsible
for all service contracts.
10. EVENTS AFTER THE END OF THE REPORTING PERIOD
No significant transactions, which require disclosure, have occurred since
the end of the period to the date of this announcement.
11. CHANGES TO THE COMPOSITION OF THE BOARD
During the period under review, Mrs. E Greenblatt and Messrs B McQueen and
K Jarvis resigned. Their resignations took effect on 5 April 2012 and 30
April 2012 respectively.
Mr S Tredoux’s role as financial director changed to that of an
independent non-executive director with effect from 30 April 2012.
Similarly, Mr J Herbst’s role changed from chief executive officer to non-
executive director with effect from 30 April 2012.
In addition, and as a result of the reverse-acquisition, the following new
appointments to the board were made with effect from 30 April 2012:
Quinton George – Non-Executive Chairman
Jaco Schoeman – Chief Executive Officer
Michelle van den Berg – Financial Director
Anthon Meyer – Independent Non-Executive Director
Chris Roed – Independent Non-Executive Director
Sandile Swana – Independent Non-Executive Director
The new board now consists of the following directors:
Quinton George – Non-Executive Chairman
Jaco Schoeman – Chief Executive Officer
Michelle van den Berg – Financial Director
Anthon Meyer – Independent Non-Executive Director
Chris Roed – Independent Non-Executive Director
Sandile Swana – Non-Executive Director
James Herbst – Non-Executive Director
Steve Tredoux – Independent Non-Executive Director
Charles Pettit - Non-Executive Director
12. DIVIDENDS
No dividend will be declared for the financial period ended 31 August
2012. (2011: Nil).
30 November 2012
Johannesburg
Q George Prepared by: M van den Berg
CORPORATE INFORMATION
Mine Restoration Investments Limited
Country of incorporation and domicilium: South Africa
Postal address
PO Box 825, Irene, 0062, Pretoria
Tel no:+27 (012) 345 4037
Fax no:+27 (012) 345 4808
Web: www.minerestoration.co.za
Directors: Q George# (Chairman), J Schoeman (Chief Executive
Officer), M van den Berg (Financial Director), A Meyer*, C Roed*, S
Swana*, J Herbst#, S Tredoux*, C Pettit# (#Non-Executive, *
Independent Non-Executives)
Company Secretary: Neil Esterhuysen & Associates Inc
Registered Office: Units 23&24 Norma Jean Square, 244 Jean Avenue,
Centurion
Transfer Secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Marshalltown 2001, PO Box 61051, Marshalltown
2107
Auditor: Horwath Leveton Boner
Sponsor: Arcay Moela Sponsors (Pty) Limited
Date: 30/11/2012 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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