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Reviewed Condensed Results Of SACMH For The 6 Months Ended 30 June 2013
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
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