Wrap Text
Unaudited Condensed Interim Consolidated Financial Statements for the period ended 31 August 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")
10 October 2014
Consolidated statements of financial position
Amounts in Canadian Dollars ('000)
As at As at
31 Aug 28 Feb
2014 2014
Assets
Non-current assets
Mineral property interests 26 594 26 642
Investment in associates
and joint ventures 415 233
Property, plant and equipment 28 335 30 719
Investments and deposits 6 014 5 386
Rehabilitation deposits 1 193 1 701
Total non-current assets 62 551 64 681
Current assets
Inventories 10 227 4 608
Loans to related parties 335 186
Current tax receivable 35 36
Trade and other receivables 5 219 8 501
Cash and cash equivalents 2 197 1 325
Total current assets 18 013 14 656
Total assets 80 564 79 337
Equity and liabilities
Equity
Share capital 147 073 147 073
Reserves (10 391) (10 009)
Retained loss (89 082) (88 096)
Total equity attributable to
the equity holders of the Group 47 600 48 968
Non-controlling interest (1 865) (1 737)
Total equity 45 735 47 231
Liabilities
Non-current liabilities
Loans and borrowings 3 390 3 241
Finance lease obligation 75 110
Deferred tax 6 075 5 926
Rehabilitation obligation 6 617 6 459
Total non-current liabilities 16 157 15 736
Current liabilities
Loans from related parties 4 4
Loans and borrowings 1 929 1 954
Finance lease obligation 66 165
Trade and other payables 13 513 11 162
Bank overdraft 3 160 3 085
Total current liabilities 18 672 16 370
Total liabilities 34 829 32 106
Total equity and liabilities 80 564 79 337
Consolidated statements of financial performance
Amounts in Canadian Dollars ('000)
3 months 6 months 3 months 6 months
ended ended ended ended
31 Aug 31 Aug 31 Aug 31 Aug
2014 2014 2013 2013
Sale of diamonds 14 222 23 931 8 614 16 437
Beneficiation income 2 660 8 088 1 255 2 472
Cash cost of sales (15 689) (26 563) (7 336) (15 301)
Operating profit
before amortization
and depreciation 1 193 5 456 2 533 3 608
Amortization of
mineral property
interests (169) (406) (188) (381)
Depreciation of
property, plant
and equipment (1 558) (2 977) (1 103) (2 171)
Rehabilitation
obligation recognized (121) (241) (1 158) (1 230)
Gross (loss) profit (655) 1 832 84 (174)
Other income 193 125 153 279
General and admini-
stration expenses (1 347) (2 844) (1 016) (2 286)
Loss before net
finance costs (1 809) (887) (779) (2 181)
Finance income 137 266 86 254
Finance costs (200) (387) (197) (398)
Loss after net
finance costs (1 872) (1 008) (890) (2 325)
Share of profit
from equity accounted
investment 51 85 24 56
Loss before taxation (1 821) (923) (866) (2 269)
Taxation 339 (214) (578) (341)
Loss for the period (1 482) (1 137) (1 444) (2 610)
Loss attributable to:
Owners of the parent (1 391) (986) (1 376) (2 554)
Non-controlling
interest (91) (151) (68) (56)
(1 482) (1 137) (1 444) (2 610)
Consolidated statements of comprehensive income
Amounts in Canadian Dollars ('000)
3 months 6 months 3 months 6 months
ended ended ended ended
31 Aug 31 Aug 31 Aug 31 Aug
2014 2014 2013 2013
Loss for the period (1 482) (1 137) (1 444) (2 610)
Other comprehensive
income net of taxation
Items that are or may
be reclassified to
profit or loss
Exchange differences
on translating foreign
operations (277) (530) 118 (5 521)
Other comprehensive
income for the period
net of taxation (277) (530) 118 (5 521)
Total comprehensive
income for the period (1 759) (1 667) (1 326) (8 131)
Total comprehensive
income attributable to:
Owners of the Group (1 680) (1 539) (1 258) (8 295)
Non-controlling
interest (79) (128) (68) 164
Total comprehensive
income for the period (1 759) (1 667) (1 326) (8 131)
Loss per share
Per share information
Basic and diluted loss
per share (cents) (2.60) (1.84) (2.81) (5.22)
Consolidated statements of changes in equity
Amounts in Canadian Dollars ('000)
Share Foreign Share- Total
capital currency based net
trans- payment reserves
lation reserve**
reserve*
Balance at 01 Mar 2013 146 862 (20 039) 8 164 (11 875)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (5 741) - (5 741)
Total comprehensive
income for the period - (5 741) - (5 741)
Share-based payment
transactions - - 130 130
Disposal of
subsidiary - - - -
Share issue costs (5) - - -
Total changes (5) (5 741) 130 (5 611)
Balance at 31 Aug 2013 146 857 (25 780) 8 294 (17 486)
Balance at 1 Mar 2014 147 073 (18 799) 8 790 (10 009)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (553) - (553)
Total comprehensive
income for the period - (553) - (553)
Share-based payment
transactions - - 171 171
Total changes - (553) 171 (382)
Balance at 31 Aug 2014 147 073 (19 352) 8 961 (10 391)
Retained Total Non- Total
loss equity control- equity
attri- ling
butable interest
to equity
holders of
the Group
Balance at 01 Mar 201 3 (77 478) 57 509 (2 137) 55 372
Total comprehensive
income for the period
Loss for the period (2 554) (2 554) (56) (2 610)
Other comprehensive
income - (5 741) 220 (5 521)
Total comprehensive
income for the period (2 554) (8 295) 164 (8 131)
Share-based payment
transactions - 130 - 130
Disposal of subsidiary 321 321 - 321
Share issue costs - (5) - (5)
Total changes (2 233) (7 849) 164 (7 685)
Balance at 31 Aug 2013 (79 711) 49 660 (1 973) 47 687
Balance at 1 Mar 2014 (88 096) 48 968 (1 737) 47 231
Total comprehensive
income for the period
Loss for the period (986) (986) (151) (1 137)
Other comprehensive
income - (553) 23 (530)
Total comprehensive
income for the period (986) (1 539) (128) (1 667)
Share-based payment
transactions - 171 - 171
Total changes (986) (1 368) (128) (1 496)
Balance at 31 Aug 2014 (89 082) 47 600 (1 865) 45 735
* 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 cash flows
Amounts in Canadian Dollars ('000)
3 months 6 months 3 months 6 months
ended ended ended ended
31 Aug 31 Aug 31 Aug 31 Aug
2014 2014 2013 2013
Cash flows from
operating activities
Cash receipts from
customers 18 017 35 195 10 574 18 036
Cash paid to
suppliers and
employees (16 344) (32 400) (6 977) (17 424)
Cash generated from
operations 1 673 2 795 3 597 612
Finance income 295 266 86 254
Finance costs - - (52) (347)
Net cash inflow
from operating
activities 1 968 3 061 3 631 519
Cash flows from
investing activities
Purchase of property,
plant and equipment (1 064) (1 553) (3 424) (5 044)
Proceeds from sale
of property, plant
and equipment (18) 338 - 41
Purchase of mineral
property interests (300) (583) (7) (7)
Proceeds from sale
of subsidiary - - - 2 556
Investment in joint
venture - (103) - -
Net movement in
related party loans (281) (206) 11 (56)
Net movement in other
financial assets (176) (500) (168) (324)
Decrease in rehabili-
tation deposits 424 487 (15) (32)
Net cash outflow from
investing activities (1 415) (2 120) (3 603) (2 866)
Cash flows from
financing activities
Share issue costs - - - (5)
Proceeds from
convertible loan (2) (5) (5) (5)
Repayment of finance
lease obligations (61) (139) (79) (127)
Net cash outflow from
financing activities (63) (144) (84) (137)
Net movement in cash
and cash equivalents
for the period 490 797 (56) (2 484)
Cash and cash equiva-
lents at the beginning
of the period (1 453) (1 760) 303 2 731
Total net cash and
cash equivalents at
end of the period (963) (963) 247 247
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. Gumrock mines the Kwartelspan mineral property.
Gumrock is structured as a separate vehicle in which the Group has
a residual interest. Accordingly Gumrock is considered to be a
joint venture, and is equity accounted.
As at As at
31 Aug 28 Feb
2014 2014
Carrying amount
Initial cost 103 -
The joint venture did not earn a profit
for the period.
Summarised financial information of
joint venture
Total assets 1 919 -
Total liabilities 1 919 -
Total investment in associates
and joint ventures 415 233
Loss per share
3 months 6 months 3 months 6 months
ended ended ended ended
31 Aug 31 Aug 31 Aug 31 Aug
2014 2014 2013 2013
Basic and diluted
loss per share
Basic loss per
share
Cents per share (2.60) (1.84) (2.81) (5.22)
Basic loss per share was calculated based on a weighted average
number of ordinary shares of 53 523 244 for the 3 months ended
31 August 2014 (3 months ended 31 August 2013: 48 942 745) and
53 523 244 for the 6 months ended 31 August 2014 (6 months ended
31 August 2013: 48 887 673).
Reconciliation of
loss for the period
to basic loss
Loss for the period (1 482) (1 137) (1 444) (2 610)
Adjusted for:
Loss attributable
to non-controlling
interest 91 151 68 56
Basic loss attribu-
table to owners of
the Group (1 391) (986) (1 376) (2 554)
Diluted loss per share is equal to loss per share because there are
no dilutive potential ordinary shares in issue.
At 31 August 2014 and 31 August 2013 the impact of share-based
payment options were excluded from the weighted average number of
shares as the effect would have been anti-dilutive.
Basic and diluted
headline loss per
share
Headline loss per
share (cents) (2.64) (1.53) (2.86) (5.37)
Reconciliation between
basic loss and headline
loss
Basic loss attribu-
table to owners of
the Group (1 391) (986) (1 376) (2 554)
Adjusted for:
Loss (profit) on
sale of property,
plant and equipment 27 254 1 (16)
Share of profit from
equity accounted
investment * (51) (85) (24) (56)
Headline loss attribu-
table to owners of
the Group (1 415) (817) (1 399) (2 626)
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 remeasurements.
At 31 August 2014 and 31 August 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 August 2013 restated due to Circular 2/2013 which is the new
requirement applicable for financial statements issued after
30 April 2013.
Subsequent events
The Group announces that the BEE agreement with African Renaissance
Holdings (“ARH”) to acquire a 30% equity stake in its MOR operations
lapsed due to the conditions precedent not having been fulfilled.
Rockwell announces that it has entered into a new vendor financed
BEE partnership with a BEE SPV comprising MIH Newco (70% holding
in SPV) and an employee trust to be established for the benefit of
the BEE employees of Rockwell RSA (30% holding in SPV). The
transaction is based on similar terms as the previous transaction
with ARH. MIH will acquire 30% of Rockwell’s MOR operations for a
total acquisition consideration of ZAR72.7 million ($7.2 million).
This transaction is subject to shareholder approval.
Segmental information
The Group has three reportable operating segments, as described
below, which are the Group’s operating divisions. These divisions
offer different diamond product characteristics, qualities,
geological characteristics, processes and services, and are managed
separately because they require different technology and profit or
cost strategies. For each of the divisions the Group executive
committee (chief operating decision making body) reviews internally
managed reports on at least a monthly basis.
The following describes the operations in each of the Group’s
reportable segments:
- Northern Cape operation is associated with the mining of Paleo
Channels and Rooikoppie gravels and the recovery of high value and
larger carat size diamonds;
- North West operation is associated with the mining of potholes and
the recovery of lower value and smaller carat size diamonds; and
- Corporate represents the corporate management and administrative
function of the Group.
The reconciliation column represents the inter group transactions
eliminated on consolidation. All reportable segments are located in
the same geographical jurisdiction. Information regarding the results
of each of the reportable segments is included below.
For the 6 months ended 31 August 2014
Northern North Corporate Reconciling Total
Cape West
Total assets 54 646 18 779 71 751 (64 612) 80 564
Total liabilities 71 275 25 688 2 478 (64 612) 34 829
External revenue 24 702 7 317 - - 32 019
Loss for the
period (44) (639) (454) - (1 137)
For the 6 months ended 31 August 2013
Northern North Corporate Reconciling Total
Cape West
Total assets 49 750 16 200 65 646 (54 351) 77 245
Total liabilities 58 229 23 246 2 435 (54 351) 29 559
External revenue 15 801 3 108 - - 18 909
Loss for the
period (2 091) (191) (328) - (2 610)
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 0830 Facsimile: +27 86 262 2838
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: 10/10/2014 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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