Wrap Text
Reviewed results for the period ended 28 February 2013
MINE RESTORATION INVESTMENTS LIMITED
(formerly Capricorn Investment Holdings Limited)
(Registration Number 1987/004821/06)
(“MRI” or “the Company” or “the Group”)
Share code: MRI ISIN: ZAE000149951
REVIEWED RESULTS FOR THE PERIOD ENDED 28 FEBRUARY 2013
CONDENSED STATEMENT OF FINANCIAL POSITION
Group
28 February 2013 31 December 2011
R’000 R’000
ASSETS
Non-current assets
Property, plant and equipment 10 798 10
Intangible assets 92 411 93 041
Investment in associate - 1 000
Deferred tax 7 173 6 365
Current assets
Trade and other receivables 610 69
Cash and cash equivalents 314 584
Total assets 111 306 101 069
EQUITY AND LIABILITIES
Capital and reserves 39 886 (952)
Non-controlling interest 17 352 16 430
LIABILITIES
Non-current liabilities
Loan from group company - 49 738
Other financial liabilities 27 002 22 358
Deferred tax 25 626 13 428
Current liabilities
Current tax payable 33 -
Trade and other payables 1 407 67
Total equity and liabilities 111 306 101 069
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Group
14 months ended 12 months ended
28 February 2013 31 December 2011
R’000 R’000
Other income 20 021 48 377
Operating expenses (9 048) (12 053)
Operating profit 10 973 36 324
Investment revenue 177 8
Finance cost (4 908) (3 626)
Profit before taxation 6 242 32 706
Taxation (11 415) (9 455)
Profit/(loss) after tax (5 173) 23 251
Profit/(loss) attributable to Owners
of the parent (5 095) 6 821
Non-controlling interest (78) 16 430
(5 173) 23 251
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:
Group
14 months ended 12 months ended
28 February 2013 31 December 2011
Basic earnings/(loss) per share
Profit/(loss) attributable to equity
(5 095) 6 821
shareholders (R‘000)
Weighted average number of shares in
292 106 59 886
issue (‘000)
Basic earnings/(loss) per share
(1.74) 11.39
(cents)
Reconciliation of earnings to headline earnings attributable to equity
holders of the parent:
Group
14 months ended 14 months ended
28 February 2013 28 February 2013
Headline earnings/(loss) per share
Profit/(loss) after taxation (R’000) (5 095) 6 821
Headline earnings/(loss)adjustment
Gain on bargain purchase(R‘000) (14 043) (17 243)
Total headline earnings/(loss)
(19 138) (10 422)
(R’000)
Weighted average number of shares in
292 106 59 886
issue (‘000)
Headline (loss) per share (cents) (6.55) (17.40)
CONDENSED STATEMENT OF CASHFLOWS
Group
14 months ended 12 months ended
28 February 2013 31 December 2011
R’000 R’000
Cash flows from operating activities (4 337) (16 496)
Cash flow from investing activities (10 815) (2 571)
Cash flows from financing activities 14 882 19 180
Net increase/(decrease) in cash and
(270) 114
cash equivalents
Cash at beginning of the period 584 470
Cash at the end of the period 314 584
CONDENSED STATEMENT OF CHANGES IN EQUITY
Share Share Total Reverse Retained Total Non- Total
capital premium share acquisition income attributable to controlling equity
R’000 R’000 capital reserves R’000 equity holders interest R’000
R’000 R’000 of the R’000
GROUP group/company
R’000
Balance at 01 January 2011 (7 772) (7 772) (7 772)
Profit for the period 6 821 6 821 16 430 23 251
Total comprehensive income for the
period 6 821 6 821 16 430 23 251
Balance at 01 January 2012 (951) (951) 16 430 15 479
Loss for the period (5 095) (5 095) (78) (5 173)
Total comprehensive loss for the
period (5 095) (5 095) (78) (5 173)
Issue of shares on reverse-
acquisition 455 78 329 78 784 78 784 78 784
Reverse-acquisition adjustment (31 066) (31 066) (31 066)
Share issue expenses (1 785) (1 785) (1 785) (1 785)
Balance at 28 February 2013 455 76 544 76 999 (31 066) (6 046) 39 887 16 352 56 239
RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE GROUP 2013
OPENING ADDITIONS DEPRECIATION TOTAL
BALANCE
R’000 R’000 R’000 R’000
Plant and machinery - 310 (13) 297
Furniture and fixtures 1 13 (1) 13
Office equipment 1 19 (4) 16
IT equipment 6 - (6) -
Computer software 2 - (2) -
Plant construction in progress - 10 472 - 10 472
10 10 814 (26) 10 798
RECONCILIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE GROUP 2011
OPENING ADDITIONS DISPOSALS DEPRECIATION TOTAL
BALANCE
R’000 R’000 R’000 R’000 R’000
Furniture and 56 - - (55) 1
fixtures
Office equipment 12 - - (11) 1
IT equipment 14 10 (10) (8) 6
Computer software 8 - - (6) 2
90 10 (10) (80) 10
RECONCILIATION OF INTANGIBLE ASSETS FOR THE GROUP 2013
OPENING ADDITIONS AMORTISATION TOTAL
BALANCE THROUGH
BUSINESS
COMBINATIONS
R’000 R’000 R’000 R’000
Rehabilitation and processing 47 959 - - 47 959
rights
AMD project 45 082 - (2 630) 42 452
Intellectual property - 2 000 - 2 000
93 041 2 000 (2 630) 92 411
RECONCILIATION OF INTANGIBLE ASSETS FOR THE GROUP 2011
OPENING ADDITIONS ADDITIONS DISPOSALS TOTAL
BALANCE THROUGH
BUSINESS
COMBINATIONS
R’000 R’000 R’000 R’000 R’000
Rehabilitation and - - 47 959 - 47 959
processing rights
AMD project 44 506 696 - (120) 45 082
44 506 696 47 959 (120) 93 041
COMMENTARY
RESULTS
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
Acquisition”). 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 31 December. The Companies
and Intellectual Properties Commission (“CIPC”) approved the change
of the year-end of WUC to end of February in line with the financial
year-end of MRI. Accordingly, the results presented herein are
presented for a 14-month period to 28 February 2013. As a result of
this change and the need to reflect a continuation of WUC in the
group results, the comparative figures are not the results of MRI as
previously published.
BASIS OF PREPARATION
The condensed Group financial statements for the year ended 28
February 2013 have been prepared in accordance with the measurement
and recognition criteria of IFRS, IAS 34: Interim Financial
Reporting, SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and the requirements of the Companies
Act No. 71 of South Africa, 2008 as amended.
The condensed group financial statements for the period ended 28
February 2013 were compiled under the supervision of M van den Berg,
the financial director. The accounting policies are consistent with
those of the most recent financial statements.
The financial results have been reviewed by the Company’s
independent auditor, Horwath Leveton Boner, and their unmodified
review opinion is available for inspection at the registered office
of the Company.
Any reference to future financial performance included in this
announcement has not been reviewed or reported on by the Company’s
auditor.
BUSINESS OVERVIEW
The headline loss per share is 6.55 cents compared to a headline
loss per share of 17.4 cents reported for the period ended 31
December 2011 and to a headline loss per share of 52 cents reported
in terms of the profit forecast included in the circular to
shareholders dated 2 April 2012.
MRI, previously Capricorn Investment Holdings Limited (“Capricorn”),
changed its name to reflect the new business and focus of the Group
post the Acquisition. The Acquisition has brought two new strategic
focus areas to the Company, namely Acid Mine Drainage (“AMD”) and
Coal Fines Briquetting (“the Briquetting Project”). Both these
projects are focussed on reducing the environmental impact of mining
whilst producing a significant return on investment for
shareholders.
As detailed in various announcements released on SENS, the last of
which was dated 17 May 2013, due to a number of factors, it is
expected that the commercial commissioning of the Briquetting
Project will commence in July 2013, with full production in
September 2013. The Group is engaged in raising additional capital
of R9 707 145 to purchase plant and equipment to complete the
Briquetting Project.
The reasons for delay are as follow:
a) Excessive rainfall in the months of February 2013 to April
2013 has hindered safe working on the site and the mine area
was being inaccessible for heavy duty transport.
b) Suitable local mobile machinery was not available in order to
reduce costs.
c) The civil work was delayed because all of the safety and
medical inductions needed to be completed again to create a
new system of safety documentation acceptable so that the
subcontractor could go onto site.
d) Due to the nature of the fill area, longer excavation was
required to be performed and larger amounts of waste needed to
be removed.
Despite the delays, management is still optimistic about the
Briquetting Project and when it will go into commercial operation.
Revenues generated from this project will be used to further
capitalise the Company and invest and grow the business. The Company
is continuously evaluating various projects for implementation of
the technology.
With regards to the AMD project, government requested further
information which had to be submitted to the Department of Water
Affairs by 31 January 2013 by interested parties, of which WUC is
one. WUC has already completed a Bankable Feasibility Study
including engineering and environmental authorisation processes for
the project. This project remains a strategic focus of the Group
going forward. Government is expected to award the tender in
September 2013.
NAME CHANGE
A general meeting was held on 30 April 2012 to approve the
Acquisition and the reverse-acquisition, shareholders also approved
the change of name of Capricorn to Mine Restoration Investments
Limited. The special resolution adopting the name change has been
registered with CIPC.
BUSINESS COMBINATIONS
REVERSE-ACQUISITION
During the period under review, MRI 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
acquiree 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 acquiree, but
are described in the notes as a continuation of the financial
statements of WUC, the legal subsidiary company and accounting
acquirer. The results have been adjusted to reflect the legal
capital of MRI. However, the financial statements reflect a
continuation of the financial statements of WUC.
c) The reverse-acquisition took effect from 25 June 2012 and was
made in order to provide WUC with the funding required to
complete the Briquetting Project. The reverse-acquisition will
facilitate the growth of the Group in the medium term. MRI
acquired the entire issued shares; and shareholder claims
against WUC.
Mine Restoration Investments Limited
R’000
Assets at 25 June 2012
Bank 142
Loan 1 078
Trade and other receivables 1 126
Liabilities at 25 June 2012
Trade and other payables (90)
Fair value of assets less liabilities 2 256
Loan acquired from Watermark Global plc 46 572
Consideration paid (34 785)
Gain on bargain purchase attributable to Equity holders 14 043
of Parent
The fair-value of the consideration transferred is calculated using
the quoted market price of MRI at date of the business combination
comprising 59 866 020 shares at 19 cents per share and R 23 407 594
being the cash portion of the purchase consideration for all the
shares and claims against WUC held by Watermark Global plc (“WET”),
the previous shareholder of WUC. The reverse acquisition was
effected by the issue of 182 300 030 shares in MRI at 19 cents per
share to WET and the cash consideration.
BUSINESS COMBINATIONS 2011
Octavovox (Pty) Ltd
In the previous financial year (15 December 2011) WUC acquired 51%
of Octavovox (Pty) Ltd; which will serve as the holder of all supply
and construction contracts of the Group. The cash consideration was
R1 million, which relates to the rehabilitation and processing
contract acquired by Octavovox (Pty) Ltd. The fair value of the
intangible asset arising on the business combination in Octavovox
(Pty) Ltd was R 47 958 960.
R’000
Fair value of rehabilitation and processing contract 47 958
acquired
Consideration transferred (1 000)
Gain on bargain purchase 46 958
Attributable to:
Equity holders of parent 23 949
Non-controlling interest 23 009
Gain on bargain purchase 46 958
Prodiflex Coal (Pty) Ltd
In the previous financial year (15 December 2011) WUC acquired 50%
of Prodiflex Coal (Pty) Ltd; which will serve as the project manager
responsible for all service contracts. The cash consideration was R1
million, which relates to the intellectual property acquired for the
Briquetting Project.
R’000
Fair value of the intellectual property 2 000
Consideration transferred (1 000)
Non-controlling interest (1 000)
Gain on bargain purchase -
Where the fair value of the assets and liabilities acquired exceed
the consideration transferred, this has resulted in a gain on
bargain purchase. The gains from the bargain purchase is included in
other income of the Group.
RESULTS OF OPERATIONS
The results of the operations of the Group, for the 14-month period
ended 28 February 2013 reflect ongoing costs while the Briquetting
Project’s plant is being completed. Revenue from the Briquetting
Project is expected to commence during the last quarter of 2013.
AMD
WUC has submitted, on request from the Department of Water Affairs
(“DWA”), information about its AMD technology and project to inform
the Feasibility study currently being completed. A tender for the
Long Term Solution of the AMD problem is envisaged to be issued by
the DWA in due course. The technology developed over the past 5
years has been evaluated under a Bankable Feasibility Study.
The directors are of the opinion that it is probable that the
expected future economic benefits that are attributable to the AMD
project will flow to the Group, either as part of the Long Term
Solution for AMD in the Witwatersrand Mining Area or through various
other opportunities currently being investigated. The costs
associated with the technology can also be reliably measured.
Therefore, in accordance with IAS 38, the AMD project has been
recognised in the Statement of financial position. The technology
and information developed has application in other countries, for
example: South and North America.
Briquetting Project
The carrying value of the rehabilitation and processing rights for
the Briquetting Project is based on a discounted cash flow model.
Agreements were entered into with Leeuw Mining and Exploration
Limited and Keaton Energy Holding for the construction of the plant
on their site. Once this plant is operational the intention is to
expand in order to supply the larger coal producers who produce
significantly more coal fines although at lower grades. There is a
Notarial Covering Bond limited, to R 20 000 000 registered, over the
plant to cover the value of loan between Octavovox (Pty) Ltd and
WUC.
The Group is committed to purchasing plant and equipment to the
value of R 9 707 145 to complete the Briquetting Project.
The terms of the WET loan at 31 December 2011 were subsequently
changed, resulting in a recovery of costs.
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 implementation of its technology for AMD treatment through WUC.
It is also anticipated that the Briquetting Project will commence
operations in July 2013.
SEGMENT INFORMATION
The Group is not presently managed by segment. Accordingly, no
segment information is provided. As the projects become operational,
this information will then be presented.
CHANGES IN SHARE CAPITAL AND SHARE PREMIUM
During the period, MRI was the subject of a reverse-acquisition by
WUC, culminating in the issue by MRI of 182 300 030 new ordinary
shares to the shareholder of WUC - for the acquisition of 100% of
the share capital in and claims against WUC held by WET. An
additional 1 765 948 shares were issued to the sponsor and corporate
advisor in part settlement of fees due. Subsequently, 210 526 316
additional shares were issued to investors to raise R40 million in
cash.
An additional 216 960 new ordinary shares were issued to the sponsor
and corporate advisor in further part settlement of fees due.
Details of the share issue were disclosed in the circular to
shareholders. A portion of the funds raised in the share issue were
used to repay a portion on the loan account that was due to WET.
RELATED PARTY TRANSACTIONS
Loans advanced by WET 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 underwrote any shortfall in the working
capital of MRI to the maximum value of R4 million for the period
until 30 June 2013. This funding was called upon. As part of the
funding agreement an additional 14 812 520 new ordinary shares of no
par value was issued for cash on 28 March 2013.
A company, Auctus PM Consulting, controlled by the Chief Executive
Officer of MRI, was paid R 56 000 for services rendered.
Other than mentioned above, and other than loans advanced or
received in the normal course of business, there have been no other
related party relationships during the year.
EVENTS AFTER THE END OF THE REPORTING PERIOD
Application for a grant from the Department of Trade and Industry
has been approved to the value of R1 406 568 per annum, to be paid
over 2 years.
The major shareholders of MRI have jointly undertaken to provide
additional funding of up to R5 million for working capital to 28
February 2014.
A new Memorandum of Incorporation was adopted on 9 May 2013 and the
par value shares were converted to shares of no par value.
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
Charles Pettit - Non-Executive Director
After the period under review, Mr. Charles Pettit resigned. His
resignation took effect on 18 April 2013 and Mr. Richard Tait was
appointed as a Non-Executive Director in his stead.
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
Stephen Tredoux – Independent Non-Executive Director
Richard Tait - Non-Executive Director
DIVIDENDS
No dividend will be declared for the financial period ended 28
February 2013. (2012: Nil).
For and on behalf of the board
31 May 2013
Johannesburg
Q George Prepared by: M van den Berg
CORPORATE INFORMATION
Mine Restoration Investments Limited
Country of incorporation and domicile: 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*, R Tait# (#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: Sasfin Capital (a division of Sasfin Bank Limited)
28 May 2013
Johannesburg
Date: 31/05/2013 09:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
