Wrap Text
Reviewed provisional group results for the year ended 31 December 2013
SOUTH AFRICAN COAL MINING HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1994/009012/06
Share code: SAH ISIN code: ZAE000102034
("SACMH", "the Group" or "the Company")
REVIEWED PROVISIONAL
GROUP RESULTS
FOR THE YEAR ENDED
31 DECEMBER 2013
The reviewed condensed annual results for the year ended 31 December 2013 are presented below.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2013
31 December 31 December
2013 2012
R'000 Reviewed Audited
ASSETS
Non-current assets 367 094 490 864
Property, plant and equipment 82 176 90 596
Intangible assets 234 418 349 768
Investments 50 500 50 500
Current assets 11 451 39 841
Inventories – 499
Trade and other receivables 7 499 33 712
Cash and cash equivalents 3 952 5 630
Total assets 378 545 530 705
EQUITY AND LIABILITIES
Capital and reserves (149 219) 10 585
Issued capital and premium 233 885 233 885
Accumulated loss (383 104) (223 300)
Non-current liabilities 525 326 472 278
Shareholder's loan 418 395 312 782
Non-interest bearing liabilities – 23 200
Non-current provisions 44 286 41 353
Deferred taxation 62 645 94 943
Current liabilities 2 438 47 842
Trade and other payables 2 438 32 013
Current portion of non-interest bearing liabilities – 11 600
Current portion of interest bearing liabilities – 1 051
Current portion of provisions – 2 933
Bank overdraft – 245
Total equity and liabilities 378 545 530 705
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2013
31 December 31 December
2013 2012
R'000 Reviewed Audited
Revenue 23 180 224 168
Cost of sales (13 386) (203 501)
Gross profit 9 794 20 667
Foreign exchange/(losses) (61 244) (12 026)
Rehabilitation provision – 6 255
Net impairment charge (115 350) –
Gain on assets held for resale – 3 260
Profit on sale of assets 800 –
Depreciation (8 421) (22 127)
Amortisation of mining right – (14 087)
Finance income 2 6
Operating expenses (6 447) (21 709)
Operating loss before finance costs and taxation (180 866) (39 761)
Finance costs (11 236) (11 233)
Loss before taxation (192 102) (50 994)
Taxation 32 298 2 195
Loss for the year (159 804) (48 799)
Other comprehensive income – –
Total comprehensive loss for the year (159 804) (48 799)
Total comprehensive loss attributable to ordinary shareholders (159 804) (48 799)
Headline loss per share (cents) (17,14) (11,51)
Headline diluted loss per share (cents) (17,14) (11,51)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
for the year ended 31 December 2013
Share Share Accumulated
R'000 capital premium loss Total
Balance at 31 December 2011 – Audited 45 246 188 639 (174 501) 59 384
Total comprehensive loss for the year – – (48 799) (48 799)
Balance at 31 December 2012 – Audited 45 246 188 639 (223 300) 10 585
Total comprehensive loss for the year – – (159 804) (159 804)
Balance at 31 December 2013 – Reviewed 45 246 188 639 (383 104) (149 219)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2013
31 December 31 December
2013 2012
R'000 Reviewed Audited
Cash flows generated from/(utilised in) operations 431 17 735
Finance charges paid (11 236) (11 233)
Interest received 2 6
Net cash utilised in operating activities (10 803) 6 508
Net cash generated from/(used in) investing activities 800 (1 023)
Net cash from financing activities 8 570 16 423
Net decrease in cash and cash equivalents (1 433) 21 908
Cash and cash equivalents at beginning of year 5 385 (16 523)
Cash and cash equivalents at end of year 3 952 5 385
NOTE TO THE STATEMENT OF COMPREHENSIVE INCOME
31 December 31 December
2013 2012
R'000 Reviewed Audited
Basic earnings loss (159 804) (48 799)
Adjusted for:
Impairment of mining right 115 350 –
Tax effect of impairment of mining right (32 298) –
Loss/(profit) on sale of non-current assets (800) (3 260)
Headline loss (77 552) (52 059)
Diluted average number of shares ('000) 452 454 452 454
Basic and diluted loss per share (cents) (35,32) (10,79)
Weighted average shares in issue for the year ('000) 452 454 452 454
Diluted average shares in issue ('000) 452 454 452 454
Headline and diluted loss per share (cents) (17,14) (11,51)
Net asset value per share (cents) (32,98) 2,34
Tangible less all intangibles: net asset deficit value per share (cents) (70,28) (53,32)
Statement of compliance and basis of preparation
The condensed provisional financial statements have been prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS) and in terms of IAS 34 Interim
Financial Reporting, the SAICA Reporting Guides, as issued by the Accounting Practice Committee, the Companies Act of South
Africa and the Listings Requirements of the JSE Limited. The accounting policies and methods of computation used to prepare
the financial statements have been consistently applied to all periods presented and are consistent with those used in the annual
financial statements for the financial year ended 31 December 2013.
The financial statements have been prepared on the going concern basis taking into account the fact that the Group is dependent
on JSW Energy Limited (a company listed on the Indian stock exchanges and operating through its subsidiary JSW Energy
Natural Resources South Africa (Proprietary) Limited) ("JSW"), which will continue to support SACMH. JSW have indicated their
firm intention to continue financial support in writing subject to the following:
- JSW obtains board approval for the additional funding at the time,
- JSW fulfils all regulatory requirements as prescribed by India legislation, and
- JSW remains the majority shareholder, and retain the management and operational control of SACMH.
JSW have demonstrated their on-going support during the current financial year.
Review opinion
The condensed consolidated Group results have been reviewed by Mazars, who have performed the review in accordance with
ISRE 2410 "Review of interim financial information performed by the independent auditor of the entity". A copy of the modified
review report with an emphasis of matter on going concern is available at the registered office of the Company.
COMMENTARY
1. Performance for the 12 months to 31 December 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 Water Affairs (DWAF). All assets and infrastructure is 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 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 to R8,67 to R10,68 during the reporting period resulted in an unrealised foreign
exchange loss of R61,2 million (2012: R12,0 million) on the shareholder's loan.
3. Depreciation
Depreciation charges of R8,4 million (2012: R22,1 million) are lower than the previous comparative period as a result of
accelerated charges in the previous year.
4. Amortisation of mining right
No amortisation charge was recorded (2012: R14,1 million) as no mining activities were conducted during the year.
5. Statement of reserves and resources and prospects
The are no changes to the Group's estimated reserves and resources as no mining activities took place.
6. Financing activities
During the period the Group's major shareholder advanced a further R36,9 million to the Group to settle obligations with
The Standard Bank of South Africa Limited and for working capital purposes. Further increases in the shareholder's loan
relate to foreign exchange movements as discussed in note 2 above.
7. 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
All current portions of interest and non-interest-bearing liabilities were settled during the year.
8. Taxation
No taxation has been provided as the Group has incurred a taxable loss for the year. An adjustment of the deferred tax
provisions of R32,3 million (2012: R2,2 million) was made as a result of the reduction in the carrying value of the mineral
right.
9. 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.
An impairment of R115,3 million (2012: Nil) has been raised against the value of Mining Rights as a result of the reduction
of the forecast export price of coal as well as the increase in anticipated mining costs.
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.
- Discount Rate – expected future cash flows have been discounted to their present value based on a Weighted Average
Cost of Capital (WACC) of 20,7% (2012: 17,3%).
10. Going concern
The Group incurred a net loss of R160 million (2012: R49 million) during the year. 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.
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. The Group's Life of Mine plan, reflects that operations are expected
to produce positive cash flows after servicing capital requirements by 2016 once the WULA is received.
11. Events after the reporting period
Save for the resignation of the Group's CFO and acting CEO there have been no reportable subsequent events for the year
ended 31 December 2013.
12. Capital expenditure commitments
The Group has no capital expenditure commitments.
13. Contingencies and commitments
There have been no changes from those disclosed in the Group's Integrated Report for the year ended 31 December 2012.
14. Prospects
Until such stage as approval of the WULA for the Voorslag reserve at Umlabu Colliery is received operations will remain
suspended. The Group will continue 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 Department of Water Affairs with regard to finalisation of the WULA.
15. 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 1 696 1 434
– JSW Energy Natural Resources South Africa (Pty) Limited 7 393 4 840
Loans from related parties
– Mainsail Trading 55 (Pty) Limited 19 874 18 179
– JSW Energy Natural Resources South Africa (Pty) Limited 398 521 294 603
There were no other related party transactions during the year.
16. Changes to directorate
There have been no changes to the board of directors during the period under review.
For and on behalf of the board
QMSM Mokoetle DGA Miller
Chairman Chief Financial Officer and Acting Chief Executive Officer
28 March 2014
Johannesburg
Directors: QMSM Mokoetle (Independent Non-executive Chairman)
DGA Miller (CFO/Acting CEO)
VP Garg (Non-executive)*
PP Menon (Non-executive)* *India
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: 28/03/2014 04:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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