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Reviewed provisional group annual financial statements for the year ended 28 February 2015
Chrometco Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/026265/06)
Share code: CMO
ISIN: ZAE00007020249
("Chrometco" or "the group")
Reviewed provisional group annual financial statements for the year ended
28 February 2015
Provisional consolidated statement of financial position
Reviewed as Restated as
at 28 Feb at 28 Feb
2015 2014
Note R'000 R'000
Assets
Non-current assets 187 599 196 926
Property, plant and equipment 8 2 268 7
Intangible assets 183 752 190 625
Environmental rehabilitation investment 10 1 579 478
Deferred taxation - 5 816
Current assets 8 373 14 992
Inventory - 79
Trade and other receivables 1 039 448
Cash and cash equivalents 7 334 14 465
Total assets 195 972 211 918
Equity and liabilities
Capital and reserves 160 927 178 950
Stated capital 54 187 54 187
Retained earnings 74 539 91 351
Non-controlling interest 32 201 33 412
Non-current liabilities 33 866 32 131
Deferred taxation 30 964 32 131
Environmental rehabilitation provision 11 2 902 -
Current liabilities 1 179 837
Trade and other payables 1 179 313
Taxation payable - 524
Total equity and liabilities 195 972 211 918
Provisional consolidated statement of comprehensive income
Reviewed for Audited for
year ended year ended
28 Feb 2015 28 Feb 2014
Note R'000 R'000
Revenue 1 208 13 715
Turnover 5 672 12 900
Cost of sales - (13 181)
Gross profit 672 (281)
Other income 6 1 102 85
Amortisation of intangible assets (6 873) (6 873)
Change in measurement - VAT - 6 018
Operating expenses (8 749) (7 701)
Loss before interest and taxation (13 848) (8 752)
Investment income 536 815
Finance cost (157) -
Loss before taxation 7 (13 469) (7 937)
Taxation 9 (4 553) 7 631
Loss for the year (18 022) (306)
Other comprehensive income - -
Total comprehensive loss for the year (18 022) (306)
Loss and Total comprehensive loss for
the year attributable to: (18 022) (306)
Owners of the company (16 812) 904
Non-controlling interest (1 210) (1 210)
Basic (loss)/earnings per share (cents) (8.20) 0.44
Diluted (loss)/earnings per share (cents) (6.11) 0.33
Provisional consolidated statement of cash flows
Reviewed for Restated for
year ended year ended
28 Feb 2015 28 Feb 2014
R'000 R'000
Cash flows from operating activities (6 012) (4 910)
Cash flows from investing activities (1 119) (393)
Cash flows from financing activities - -
Net decrease in cash and cash equivalents (7 131) (5 303)
Cash and cash equivalents at the beginning of
the year 14 465 19 768
Cash and cash equivalents at the end of the year 7 334 14 465
Provisional consolidated statement of changes in equity
Share Non
Capital and Retained Controlling
Premium Earnings Interest Total
R'000 R'000 R'000 R'000
Balance at 1 March 2013 54 187 90 447 34 622 179 256
Total comprehensive loss for
the year - 904 (1 210) (306)
Balance at 1 March 2014 54 187 91 351 33 412 178 950
Total comprehensive loss for
the year - (16 812) (1 211) (18 023)
Balance at 28 February 2015 54 187 74 539 32 201 160 927
Commentary – Financial and operational overview
1. The directors present the reviewed results for the year ended 28 February
2015.
2. Basis of preparation
The provisional reviewed group annual financial statements for the year ended
28 February 2015 have been prepared in accordance with the framework concepts
and the recognition and measurement criteria of International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, as well as the presentation and disclosure
requirements of IAS 34 – Interim Financial Reporting, the JSE Limited
Listings Requirements and the South African Companies Act, 71 of 2008, as
amended. The group accounting policies and methods of measurement and
recognition comply in material respects with IFRS and are consistent with those
applied in the financial period ended 28 February 2014.
The provisional group annual financial statements were prepared by the
company’s previous financial director, TW Scott (CA) SA.
3. Auditors report
The unmodified review report issued on these provisional financial statements
by Chrometco group’s auditors, Mazars, is available for inspection at the
company's registered office during normal office hours.
4. Nature of business
The company is involved in the exploration of mineral resources and the
possible beneficiation thereof. There has been no change to the group’s mineral
resources and reserves statement from the statement presented in the prior
year’s integrated annual report.
5. Turnover
Revenue for the current year primarily comprises sales of chrome ore. The
company has an arrangement in terms of which a third party extracts chrome ore
from the Rooderand Mine, for which the company is entitled to variable price
depending on grade. Turnover decreased from R12.9 million to R0.7 million in
the current year due to the fact that current year’s chrome production has been
intermittent (refer to note 15) and the comparative period’s chrome sales
represented the sale of stockpiled ore.
6. Other income
The group received approximately R1 million from the final liquidation of DCM
Chrome Proprietary Limited (“DCM”). Pursuant to the Mining and Management
Agreement entered into between the company and DCM, an amount of R10m was due
to the company for mining activities undertaken by DCM in the 2011/2012
financial year. DCM failed to make the final payment to Chrometco and
subsequently was placed into liquidation.
7. Net loss for the period
Net loss for the period is arrived at after taking the following items into
account:
Legal and professional fees of R2.3 million, which increased from R1.068
million in the prior period. The increase in legal fees is due to transaction
costs relating to chrome mining arrangements, BEE restructuring, as well as
other ongoing activities relating the group’s section 11 and section 102
applications with the Department of Mineral Resources.
Operating overheads at the Rooderand Mine decreased to R1.56 million compared
to R1.81 million in the prior year as a result of cost cutting efforts.
The company incurred an increase of R0.48 million relating to the increase in
its environmental rehabilitation provision.
Salaries and remuneration expenses decreased to R1.30 million compared to
R1.78 million in the prior period as a result of cost cutting efforts.
8. Property, plant and equipment
Computer Furniture Decommissioning
2015 Equipment and Fittings Cost Total
Cost
Balance at 1 March 2014 - 35 - 35
Additions 18 - 2 298 2 316
Balance at 28 February 2015 18 35 2 298 2 351
Accumulated depreciation
Balance at 1 March 2014 - 28 - 28
Depreciation 5 7 43 55
Balance at 28 February 2015 5 35 43 83
Carrying amount at
28 February 2014 - 7 - 7
Carrying amount at
28 February 2015 13 - 2 255 2 268
9. Taxation
Taxation expense for the year increased to R4.553 million compared to a saving
of R7.631 million in the prior year. The year-on-year movement is primarily due
to the fact that the company derecognised deferred tax assets of R5.816 million
during the current year together with the reversal of taxable temporary
differences of intangible assets of R1.2 million. The deferred tax asset was derecognised as probable future taxable profits cannot reasonably be assured.
10. Environmental rehabilitation investment
During the year, the group contributed approximately R1.5 million to an
environmental rehabilitation investment fund (managed by Guardrisk Insurance
Company Limited).
2015 2014
R'000 R'000
Balance at beginning of the year 478 -
Cash contributions to fund 1 474 597
Net investment management fees (373) (119)
Balance at the end of the year 1 579 478
11. Environmental rehabilitation provision
During the year, the company recognised a provision for decommission costs
and environmental rehabilitation relating to surface mining activities at the
Rooderand Chrome Mine.
2015 2014
R'000 R'000
Balance at beginning of the year - -
Decommissioning cost capitalised to property, plant and
equipment 2 298 -
Increase in rehabilitation provision for the period 447 -
Interest unwind on rehabilitation provision 157 -
Balance at the end of the year 2 902 -
12. Net asset value per share
2015 2014
Net asset value per share attributable to
owners of the company (cents) 62.81 71.02
Closing number of shares ('000) 204 929 204 929
13. Reconciliation between loss and headline loss per share
2015 2014
R'000 R'000
(Loss)/earnings attributable to owners of the company (16 812) 904
Adjustments:
Profit on disposal of plant - (85)
Headline (loss)/profit attributable to owners of the
company (16 812) 819
Headline (loss)/profit per share (cents) (8.20) 0.40
Diluted headline (loss)/profit per share (cents) (6.11) 0.33
Weighted average number of shares (`000) 204 929 204 929
Potential ordinary shares with dilutive effect 70 000 70 000
Diluted weighted average number of shares 274 929 274 929
14. Change in classification
The company reclassified cash-based environmental rehabilitation investments of
R0.478 million in the comparative year from cash to environmental rehabilitation investments, as this more correctly reflects the nature of the asset. This also resulted in an increase to investing activities of the same amount in the statement of cash flows.
15. General review of operations.
During the period under review, the group focused its attention on the
following important issues:
- Conducting mining operations at the group’s Rooderand Chrome Mine;
- Development of Platinum Group Metal (“PGM”) opportunities on the group’s
Rooderand property;
- DMR related activities required to conclude of the acquisition of the PGM
prospecting rights from Nkwe Platinum SA and Realm Resources; and
- Commercialization of the Rooderand chrome resource; and
- Optimisation of the allocation of capital resources.
Ore production at the Rooderand Chrome Mine was lower than planned due to
geological complexities, and production is intermittent to allow for periods of
drilling, exploration and planning.
16. Prospects
The group currently has a chrome mine in the North West province of the
Republic of South Africa and is focusing on the consolidation of the PGM
resources on its Rooderand chrome property while simultaneously extracting
value from its chrome resource.
The company is also interested in the exploration and beneficiation of mineral
related opportunities.
17. Changes to the board
There were no changes to the board during the period under review. Subsequent
to financial year end, Mr. T. Scott resigned as financial director of the
company. The company is actively in the process of recruiting a suitable
replacement (as announced on SENS on 26 May 2015).
18. Dividends
No dividend has been declared for the period (2014: R nil).
For and on behalf of the board of directors
PJ Cilliers
Managing Director
JG Scott
Chairman
Directors: JG Scott* (Chairman), PJ Cilliers (MD), R Rossiter+, E Bramley*,
IWS Collair+, R McConnachie+ (alternate to Mr. Rossiter).
* non-executive
+ independent non executive
29 May 2015
Designated Advisor: PSG Capital
Company Secretary: The Green Board Company Secretaries
Registered Office
70 Marshall Street
Johannesburg
Postal address: Sparrebosch Building The Greens Office Park
Charles de Gaulle Crescent
Highveld Park Ext. 12
0169
www.chrometco.co.za
Date: 29/05/2015 04:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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