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Unaudited interim results for the six months ended 31 August 2015
Mine Restoration Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/004821/06)
Share Code: MRI
ISIN Code: ZAE000164562
("MRI" or the “Company")
Unaudited interim results for the six months ended 31 August 2015
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
six months six months 12 months
to August to August to February
2015 2014 2015
R’000 R’000 R’000
Coal fines revenue 2 642 2 827 9 110
Cost of sales (1 232) - (3 824)
Other income (see note
5) 1 003 29 506 33 105
Operating expenses (3 956) (12 572) (20 843)
Impairments (31 009) (25 872)
Operating profit/(loss) (32 552) 19 761 (8 324)
Investment revenue - - -
Finance cost - (3 059) (5 421)
(Loss)/Profit before
taxation (32 552) 16 702 (13 745)
Taxation 5 876 (2 804) 4 683
(Loss)/Profit) for the
period (26 676) 13 898 (9 062)
Other comprehensive
income - - -
Total comprehensive
income/(loss) (26 676) 13 898 (9 062)
(Loss)/Profit
attributable to:
Owners of the parent (26 720) 12 016 5 345
Non-controlling
interests 44 1 882 (14 407)
Total comprehensive
(loss)/income
attributable to:
Equity holders (26 720) 12 016 5 345
Non-controlling
interests 44 1 882 (14 407)
Basic (loss)/earnings
per share (3.11) 2.17 0.74
Diluted (loss)/earnings
per share (3.11) 2.15 0.73
Weighted average number
of shares (‘000) 858 749 554 227 727 114
Diluted weighted
average number of
shares in issue (‘000) 858 749 559 227 732 114
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
31 August 31 August 28 February
2015 2014 2015
R’000 R’000 R’000
Assets
Non-current assets
Property, plant and
equipment 4 123 14 348 11 585
Intangible assets - 46 453 21 384
Goodwill - 1 053 -
Deferred tax 85 4 288 111
4 208 66 142 33 080
Current assets
Trade and other
receivables 133 824 1 349
Cash and cash
equivalents 74 120 596
207 944 1 945
Total assets 4 415 67 086 35 023
Equity and liabilities
Equity
Amount attributable to
equity holders 569 31 974 25 304
Non-controlling
interest (156) 15 316 (973)
413 47 290 24 330
Liabilities
Non-current liabilities
Deferred tax - 14 736 6 036
Other financial
liabilities - - -
- 14 736 6 036
Current liabilities
Other financial
liabilities 250 - 553
Trade and other 3 752 5 060 3 260
payables
Deferred income - - 844
4 002 5 060 4 657
Total equity and
liabilities 4 415 67 086 35 023
Condensed consolidated statement of changes in equity
Reserve
for
capital
Share Capital based
capital reserve payments
R’000 R’000 R’000
Balance at 28 February 61 304 5 000 -
2013 (restated)
Total comprehensive - - -
loss for the period
Issue of shares on 2 963 - -
reverse acquisition
Balance at 31 August 64 267 5 000 -
2013 (restated)
Total comprehensive - - -
loss for the period
Issue of shares 2 500 - -
Share issue expenses (500) - -
Balance at 28 February 66 267 5 000 -
2014
Total comprehensive - - -
profit for the period
Reserve for capital - - 559
based payment –
directors options
Issue of shares 16 757 - -
Balance at 28 February 83 024 5 000 559
2015
Total comprehensive - - -
profit for the period
Release on NCI on share - - -
purchase
Issue of shares 1 996 - -
Balance at 31 August 85 020 5 000 559
2015
Amount
attri- Non-
butable Con-
Retained to equity trolling Total
earnings holders interest equity
R’000 R’000 R’000 R’000
Balance at
28 February
2013
(restated) (12 295) 54 009 17 352 71 361
Total
comprehen-
sive loss (4 284) (4 284) 38 (4 246)
for the
period
Issue of
shares on
reverse
acquisition - 2 963 - 2 963
Balance at
31 August
2013
(restated) (16 579) 52 688 17 390 70 078
Total
comprehen-
sive loss
for the
period (52 046) (52 046) (3 956) (56 002)
Issue of
shares - 2 500 - 2 500
Share issue
expenses - (500) - (500)
Balance at
28 February
2014 (68 625) 2 642 13 434 16 076
Total
comprehen-
sive profit
for the
period 5 345 5 345 (14 407) (9 063)
Reserve for
capital
based
payment –
directors
options - 559 - 559
Issue of
shares - 16 757 - 16 757
Balance at
28 February
2015 (63 280) 25 304 (973) 24 330
Total
comprehen-
sive profit
for the
period (26 720) (26 720) 44 (26 676)
Release on
NCI on
share
purchase - - 773 773
Issue of
shares - 1996 - 1 996
Balance at
31 August (90 010) 569 (156) 413
2015
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
six months six months 12 months
to August to August to February
2015 2014 2015
R’000 R’000 R’000
Cash flows from
operating activities (683) 17 421 (4 904)
Cash flows from
investing activities (32) (241) (394)
Cash flows from
financing activities 193 (20 045) 2 909
Total cash movement for
the period (552) (2 865) (2 389)
Cash and cash
equivalents at the
beginning of the period 596 2 985 2 985
Cash and cash
equivalents at end of
the period 74 120 596
Commentary
1. Basis of preparation
These condensed consolidated interim financial statements have been
prepared by N Preston in accordance IFRS, SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting
Standards Council, the Companies Act No 71 of 2008, as amended and
the JSE Limited Listings Requirements and include the disclosures
required by IAS34 Interim Financial Reporting and AC 500 standards
as issued by the Accounting Practices Board.
The financial statements have been prepared using accounting
policies that comply with IFRS and which are consistent with those
applied in the preparation of the audited financial statements for
the year ended 28 February 2015.
These condensed consolidated interim financial statements have not
been reviewed by the external auditor.
2. Financial results
The Company endured an extremely challenging operating environment
for the period under review, with the impact of the severe drought
in northern KwaZulu-Natal, and falling coal prices, forcing
management to place the Vryheid operations on care-and-maintenance,
and retrench staff. As there are no realistic prospects of
conditions improving in the foreseeable future, the board has also
taken the decision to impair the value of assets to the realizable
market value, and to fully impair the intangible asset relating to
the processing right of the dump. The net effect of this is that
shareholders suffered a comprehensive loss of R26.72 million (2014:
profit of R12.12 million).
3. Status and overview of projects
During the period under review, the Company continued to try
optimise its coal fines processing plant at Keaton Energy Holdings
Limited’s Vaalkrantz Colliery, near Vryheid. Having upgraded
capacity during the previous year with the implementation of new
screening technology, provided by Virto in return for a royalty,
the operation continued to battle with slurry handling. The Company
brought in expertise from a dredging and slurry handling company
for a 3 month trial period, which ended in May, but which failed to
have a material impact on performance.
As outlined in the SENS announcements of 26 June and 20 July 2015,
the lack of water available to our operation from Vaalkrantz
rendered the project commercially viable, and the Company took the
very difficult step of placing the operation on care-and-
maintenance in July, resulting in the retrenchment of the workforce.
It is the considered view of management and the board that there
are no realistic prospects of reopening the operation, and the
Company is investigating opportunities to realise value from its
assets either through a sale or redeployment in other projects.
4. Future prospects
The Company has entered into test work with a number of external
parties, in conjunction with Virto, and has been in discussion with
several parties about potentially installing and operating a coal
fines processing plant of similar scale to the Vaalkrantz operation.
However, owing to the current operating environment for the coal
mining industry, most parties are reluctant to incur any new
capital or operating expenditure, and there are no prospects of
imminent projects.
As outlined in the detailed cautionary SENS announcement on 26 June
2015, and updated in a subsequent SENS announcement, the Company
entered into a memorandum of agreement in terms of which, MRI will
acquire up to 39.2% of the issued share capital of IMBS, a South
African company that has developed proprietary technology for the
processing of super-fine iron ore into a scrap metal substitute,
with a demonstration unit in Phalaborwa. Shareholders are advised
to refer to the above-mentioned SENS announcement for full details.
5. Segment information
AMD Coal
project Briquetting Parent Total
R’000 R’000 R’000 R’000
Segmental reporting –
February 2015
Segmental total
assets - 34 643 380 35 023
Segmental total
liabilities - (8 850) (1 844) (10 693)
Net segment
assets/(liabilities) - 25 793 (1 464) 24 330
Segmental revenue - 9 110 - 9 110
Segmental other
income - 210 32 895 33 105
Segmental expenses - (37 638) (13 640) (51 278)
Segmental
profit/(loss) - (28 318) 19 255 (9 063)
Income from
termination of non-
recourse loan
included in segmental
profit/(loss)
DBSA loan - - - -
Provision for capital
gains tax - - - -
Segmental reporting –
August 2014
Segmental total
assets 342 66 104 640 67 086
Segmental total
liabilities (3 193) (15 560) (1 043) (19 796)
Net segment
assets/(liabilities) (2 851) 50 544 (403) 47 290
Segmental revenue - 2 827 - 2 827
Segmental other
income 28 968 177 361 29 506
Segmental expenses (4 723) (8 144) (5 568) (18 435)
Segmental
profit/(loss) 24 245 (5 140) (5 207) 13 898
Income from
termination of non-
recourse loan
included in segmental
profit/(loss)
DBSA loan 28 968 - - 28 968
Provision for capital
gains tax (2 965) - - (2 965)
During the period under review, the only operating segment was the
coal processing and briquetting operation, which ceased operating
in July 2015.
6. Headline earnings/(loss) per share (“HEPS”)
Reconciliation of earnings to headline earnings attributable to
equity holders of the parent:
Unaudited Unaudited Audited
Six months Six months 12 months
to August to August to February
2015 2014 2015
(Loss)/earnings per share
(cents) (3.11) 2.17 0.74
(loss)/diluted earnings per
share (cents) (3.11) 2.15 0.73
Headline (loss)/earnings per
share (cents) (0.18) 2.17 2.27
Diluted headline (loss)/
earnings per share (cents) (0.18) 2.15 2.25
HEPS Calculation
(Loss)/profit for the year
(R’000) (26 720) 12 016 5 345
Impairment of intangible
assets and goodwill (R’000) 21 384 - 10 708
Impairment of property, plant
and equipment (R’000) 9 625 - 3 123
Deferred tax on impairments
of assets (R’000) (5 876) - (2 703)
Headline (loss) /earnings
(R’000) (1 587) 12 016 16 473
Weighted average number of
shares in issue (‘000) 858 749 554 227 727 114
Actual number of shares in
issue (‘000) 858 749 833 624 732 114
Diluted HEPS calculation
(Loss)/profit for the year
(R’000) (26 720) 12 016 5 345
Impairment of intangible
assets and goodwill (R’000) 21 384 - 10 708
Impairment of property, plant
and equipment (R’000) 9 625 - 3 123
Deferred tax on impairments
of assets (R’000) (5 876) - (2 703)
Headline earnings/(loss)
(R’000) (1 587) 12 016 16 473
Diluted weighted average
number of shares in issue
(‘000) 858 749 559 227 732 114
7. Changes in share capital
Since the last reporting period, as detailed in the SENS
announcement dated 29 May 2015 and the period under review, the
Company issued the following new shares:
– 21 428 570 at an issue price of R0.07 per share to buy out the
minority shareholders of Octavovox on 23 April 2015; and
– 8 000 000 at an issue price of R0.062 per share as a cash issue
on 21 July 2015;
8. Events after the end of the reporting period
One of the conditions of the IMBS transaction was that, MRI would
provide a loan of R10 million to IMBS, repayable in IMBS shares if
the deal is consummated, or repaid in cash if not. As outlined in
the SENS announcement of 1 September 2015, MRI obtained funding on
commercial terms and has fulfilled that obligation. The funding was
provided by Stellar Capital Partners, in addition to a R2.4 million
working capital facility to allow the Company to meet its ongoing
commitments. Both facilities mature on 31 December 2015, but
because the originally contemplated timelines have not been
achieved, the Company continues to work with IMBS to attempt to
consummate the transaction, and is in discussions with its funder
to try amend the financing arrangements accordingly.
No other material events have taken place since the prior reporting
period.
9. Changes to the composition of the Board
Since the prior reporting period, the following changes to the
board have taken place:
– Mr Carl-Heinz Gernandt resigned as Financial Director on 31 May
2015;
– Mr Luc Albinski was appointed as a Non-Executive Director on 1
June 2015; and
– Mr Norman Robert Preston has been appointed as Financial Director
of the Company with effect from 1 November 2015.
10. Going concern
The financial period under review reflects a challenging financial
period, with a net loss after tax of R26.72 million. The cash flow
forecasts prepared by the directors indicate that the Company will
require additional funding within the next 12 months in order to
meet its commitments as they fall due, with no revenue generating
operations. These conditions indicate the existence of a material
uncertainty which may cast doubt about the Company’s ability to
continue as a going concern. The board, however, remains confident
that the Company retains the continued support of its major
shareholders to provide additional funding should other sources not
be forthcoming.
The directors have a reasonable expectation, having regard to the
current status and the future strategy of the Company, that the
Company has sufficient resources to continue as a going concern and
have therefore concluded that it is appropriate to prepare the
financial statements on a going concern basis. Accordingly, the
financial statements do not include the adjustments that would
result if the Company was unable to continue as a going concern.
11. Dividends
No dividend will be declared for the interim financial period ended
31 August 2015 (2014: Nil).
30 November 2015
Johannesburg
Q George
Prepared by: N Preston
Corporate information
Mine Restoration Investments Limited
Country of incorporation and domicilium: South Africa
Postal address: PO Box 825, Irene, 0062, Pretoria
Physical address: The Zone Loft Offices West, 31 Tyrwhitt
Avenue, Rosebank
Tel no:+27 (0) 11 036 3100
Fax no:+27 (0) 86 654 6818
Web: www.minerestoration.co.za
Directors: Q George# (Chairman), C Roed*, R Tait (CEO), S
Caddy* , L Albinski*, N Preston (CFO)
(#Non-Executive, * Independent Non-Executives)
Company Secretary: Neil Esterhuysen & Associates Inc
Registered Office: The Zone Loft Offices West, 31 Tyrwhitt
Avenue, Rosebank
Transfer Secretaries: Computershare Investor Services (Pty)
Limited, 70 Marshall Street, Marshalltown 2001, PO Box 61051,
Marshalltown 2107
Auditor: Grant Thornton Johannesburg Partnership
Corporate and Designated Adviser: Stellar Advisers Proprietary
Limited
Date: 30/11/2015 04:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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