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Unaudited condensed interim consolidated financial statements for the period ended 31 May 2014
Rockwell Diamonds Inc.
(A company incorporated in accordance with
the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(South African registration number: 2007/031582/10)
Share code on the JSE Limited: RDI
ISIN: CA77434W2022 Share code on the TSXV: RDI
CUSIP Number: 77434W103
("Rockwell" or "the Group")
11 July 2014
Unaudited condensed interim consolidated financial statements for
the period ended 31 May 2014
Consolidated statements of financial position
Amounts in Canadian Dollars
As at As at
31 May 28 Feb
2014 2014
Assets
Non-current assets
Mineral property interests 26 595 699 26 641 671
Investment in associates and
joint ventures 367 347 232 616
Property, plant and equipment 29 050 750 30 720 684
Investments and deposits 5 766 989 5 385 602
Rehabilitation deposits 1 628 706 1 701 493
Total non-current assets 63 409 491 64 682 066
Current assets
Inventories 8 817 580 4 607 953
Loans to related parties 109 539 185 706
Current tax receivable 35 441 35 649
Trade and other receivables 6 425 088 8 500 922
Cash and cash equivalents 1 049 612 1 324 328
Total current assets 16 437 260 14 654 558
Total assets 79 846 751 79 336 624
Equity and liabilities
Equity
Share capital 147 072 697 147 072 948
Reserves (10 160 246) (10 008 873)
Retained loss (87 691 873) (88 096 415)
Total equity attributable to
the equity holders of the Group 49 220 578 48 967 660
Non-controlling interest (1 786 045) (1 737 222)
Total equity 47 434 533 47 230 438
Liabilities
Non-current liabilities
Loans and borrowings 3 330 621 3 240 461
Finance lease obligation 93 117 110 017
Deferred tax 6 441 593 5 925 500
Rehabilitation obligation 6 539 464 6 459 061
Total non-current liabilities 16 404 795 15 735 039
Current liabilities
Loans from related parties 4 218 4 258
Loans and borrowings 1 953 651 1 953 651
Finance lease obligation 108 092 165 069
Trade and other payables 11 439 231 11 162 756
Bank overdraft 2 502 231 3 085 413
Total current liabilities 16 007 423 16 371 147
Total liabilities 32 412 218 32 106 186
Total equity and liabilities 79 846 751 79 336 624
Consolidated statement of comprehensive income
Amounts in Canadian dollars
3 months 3 months
ended ended
31 May 31 May
2014 2013
Sale of diamonds 9 709 065 7 822 954
Beneficiation income 5 428 265 1 217 223
Production cost (10 874 237) (7 965 492)
Operating profit before
amortization and depreciation 4 263 093 1 074 685
Amortization of mineral
property interests (237 371) (192 786)
Depreciation of property,
plant and equipment (1 418 863) (1 067 366)
Gross profit (loss) 2 606 859 (185 467)
Other income (68 414) 125 795
General and administration
expenses (1 496 818) (1 270 409)
Rehabilitation obligation
recognized (119 703) (72 140)
Profit (loss) before net
finance costs 921 924 (1 402 221)
Finance income 129 180 168 262
Finance costs (187 335) (200 209)
Profit (loss) after net
finance costs 863 769 (1 434 168)
Share of profit from equity
accounted investment 33 964 31 536
Profit (loss) before taxation 897 733 (1 402 632)
Taxation (552 982) 236 385
Profit (loss) for the period 344 751 (1 166 247)
Other comprehensive income
net of taxation
Items that are or may be reclassified
to profit or loss
Exchange differences on translating
foreign operations (252 826) (5 639 281)
Other comprehensive income for
the period net of taxation (252 826) (5 639 281)
Total comprehensive income for
the period 91 925 (6 805 528)
Profit (loss) attributable to:
Owners of the Group 404 542 (1 177 707)
Non-controlling interest (59 791) 11 460
Profit (loss) for the period 344 751 (1 166 247)
Total comprehensive income
attributable to:
Owners of the Group 140 748 (7 038 105)
Non-controlling interest (48 823) 232 577
Total comprehensive income for
the period 91 925 (6 805 528)
Profit (loss) per share
Basic and diluted profit (loss)
per share (cents) 0.76 (2.41)
Consolidated statements of changes in equity
Amounts in Canadian Dollars
Share Foreign Share- Total
capital currency based net
trans- payment reserves
lation reserve**
reserve*
Balance at
01 March 2013 146 862 257 (20 039 067) 8 164 304 (11 874 763)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (5 860 398) - (5 860 398)
Total comprehensive
income for the period - (5 860 398) - (5 860 398)
Share-based payment
transactions - - 89 452 89 452
Disposal of subsidiary - - - -
Share issue costs (5 450) - - -
Total changes (5 450) (5 860 398) 89 452 (6 748 653)
Balance as at
31 May 2013 146 856 807 (25 899 465) 8 253 756 (17 645 709)
Balance at
01 March 2014 147 072 948 (18 799 318) 8 790 445 (10 008 873)
Total comprehensive
income for the period
Profit for the period - - - -
Other comprehensive
income - (263 794) - (263 794)
Total comprehensive
income for the period - (263 794) - (263 794)
Share-based payment
transactions - - 112 421 112 421
Share issue costs (251) - - -
Total changes (251) (263 794) 112 421 (151 373)
Balance at
31 May 2014 147 072 697 (19 063 112) 8 902 866 (10 160 246)
* 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 changes in equity
Amounts in Canadian Dollars
Retained Total Non- Total
loss equity control- equity
attri- ling
butable interest
to equity
holders of
the Group
Balance at
01 March 2013 (77 478 322) 57 509 172 (2 137 472) 55 371 700
Total comprehensive
income for the period
Loss for the period (1 177 707) (1 177 707) 11 460 (1 166 247)
Other comprehensive
income - (5 860 398) 221 117 (5 639 281)
Total comprehensive
income for the period (1 177 707) (7 038 105) 232 577 (6 805 528)
Share-based payment
transactions - 89 452 - 89 452
Disposal of subsidiary 320 635 320 635 - 320 635
Share issue costs - (5 450) - (5 450)
Total changes (857 072) (7 611 175) 232 577 (7 378 598)
Balance as at
31 May 2013 (78 335 394) 50 875 704 232 577 48 970 809
Balance at
01 March 2014 (88 096 415) 48 967 660 (1 737 222) 47 230 438
Total comprehensive
income for the period
Profit for the period 404 542 404 542 (59 791) 344 751
Other comprehensive
income - (263 794) 10 968 (252 826)
Total comprehensive
income for the period 404 542 140 748 (48 823) 91 925
Share-based payment
transactions - 112 421 - 112 421
Share issue costs - (251) - (251)
Total changes 404 542 252 918 (48 823) 204 095
Balance at
31 May 2014 (87 691 873) 49 220 578 (1 786 045) 47 434 533
Consolidated statements of cash flows
Amounts in Canadian Dollars
3 months 3 months
ended ended
31 May 31 May
2014 2013
Cash flows from operating
activities
Cash receipts from customers 15 128 877 7 462 763
Cash paid to suppliers
and employees (14 006 248) (10 449 159)
Cash generated from (used in)
operations 1 122 629 (2 986 396)
Finance income 40 907 73 234
Finance costs (69 303) (200 209)
Net cash inflow (outflow)
from operating activities 1 094 233 (3 113 371)
Cash flows from investing
activities
Purchase of property,
plant and equipment (489 393) (1 621 661)
Proceeds from sale of
property, plant and equipment 356 199 42 739
Purchase of mineral property
interests (282 650) -
Investment in joint venture (102 610) -
Proceeds from sale of subsidiary - 2 556 318
Net movement in related
party loans 75 071 (67 210)
Net movement in investments and
deposits (324 444) (155 894)
Increase (decrease) in
rehabilitation deposits 62 889 (15 610)
Net cash outflow from
investing activities (704 938) 738 682
Cash flows from financing
activities
Share issue costs (251) (5 450)
Repayment of loans and
borrowings (2 539) -
Repayment of finance lease
obligations (78 039) (47 457)
Net cash outflow from
financing activities (80 829) (52 907)
Total cash movement for
the period 308 466 (2 427 596)
Cash and cash equivalents
at the beginning of the year (1 761 085) 2 730 705
Total cash and cash equivalents
at end of the period (1 452 619) 303 109
Joint venture - Gumrock Proprietary Limited
Gumrock Proprietary Limited ("Gumrock")
is an unlisted joint arrangement in which
the Group has joint control and a 50%
ownership interest. Gumrock was founded
by the Group and a private mining
contractor, in order to effectively mine
the Group's Kwartelspan mineral property.
Establishment of the operation commenced
during Q1 2015.
Gumrock is structured as a separate vehicle
and the Group has a residual interest in
its net assets. Accordingly, the Group has
classified its interest in Gumrock as a
joint venture, which is equity accounted.
Amounts in Canadian Dollars
As at As at
31 May 28 Feb
2014 2014
Carrying amount
Initial contribution and purchase
of 50% interest 102 610 -
Share of profit from equity accounted
investment - -
Closing balance 102 610 -
The joint venture had no other
comprehensive income for the period.
Summarised financial information of
joint venture
Total assets 1 918 964 -
Total liabilities 1 918 964 -
Net assets - -
Revenue - -
Total comprehensive income for
the quarter - -
Capital commitments and
contingent liabilities of joint venture - -
Profit (loss) per share
Amounts in Canadian Dollars
3 months 3 months
ended ended
31 May 31 May
2014 2013
Basic and diluted profit (loss)
per share
Cents per share 0.76 (2.41)
Basic profit (loss) per share was
calculated based on a weighted
average number of common shares of
53 523 244 for the 3 months ended
31 May 2014 (3 months ended
31 May 2013: 48 832 600).
Reconciliation of profit (loss)
for the period to basic profit (loss)
Profit (loss) for the period 344 751 (1 166 247)
Adjusted for:
Profit (loss) attributable to
non-controlling interest 59 791 (11 460)
Basic profit (loss) attributable to
owners of the Group 404 542 (1 177 707)
At 31 May 2014 and 31 May 2013 the
impact of share-based payment
options were excluded from the
weighted average number of shares, for
the purpose of the diluted loss per
share calculation, as the effect
would have been anti-dilutive.
Basic and diluted headline loss per share
Cents per share * 1.12 (2.51)
Reconciliation between basic loss and
headline loss Basic profit (loss)
attributable to owners of the Group 404 542 (1 177 707)
Adjusted for:
Loss (profit) on disposal of property,
plant and equipment 226 671 (16 924)
Share of profit from equity accounted
investment * (33 964) (31 536)
Headline earnings (loss) attributable
to owners of the Group * 597 249 (1 226 167)
The basic and diluted headline earnings (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 earnings (loss) per share is provided in
accordance with Circular 2/2013 as issued by the South African
Institute of Chartered Accountants. Headline earnings (loss)
represents the basic earnings (loss) attributable to the
owners of the Group excluding certain re-measurements.
At 31 May 2014 and 31 May 2013 the impact of share-based payment
options were excluded from the weighted average number of shares, for
the purpose of the diluted headline earnings (loss) per share
calculation, as the effect would have been anti-dilutive.
* 31 May 2013 restated due to Circular 2/2013 which is the new
requirement applicable for financial statements issued after 30 April
2013.
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 4722 Facsimile: +27 86 501 6328
Corporate address – Canada: 1020–800 West Pender Street, Vancouver,
British Columbia, Canada V6C 2V6
Telephone: +1 604 684 636 Facsimile: +1 604 684 8092
Toll Free: 1 800 667 2114
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: Mc Millan LLP
Royal Centre 1055 West Georgia Street, Suite 1500 Vancouver,
British Columbia, Canada V6E 4N7
Date: 11/07/2014 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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