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Financial report for the half year ended 31 December 2015
COAL OF AFRICA LIMITED
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN: AU000000CZA6
JSE/ASX/AIM share code: CZA
("CoaL or the "Company" or the "Group")
FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2015
CORPORATE DIRECTORY
REGISTERED OFFICE Suite 8, 7 The Esplanade
Mt Pleasant, Perth, WA 6153
Telephone: +61 8 9316 9100
Facsimile: +61 8 9316 5475
Email: perth@coalofafrica.com
SOUTH AFRICAN OFFICE South Block
Summercon Office Park
Cnr Rockery Lane and Sunset Avenue
Lonehill
Telephone: +27 10 003 8000
Facsimile: +27 11 388 8333
BOARD OF DIRECTORS Non-executive
Bernard Pryor (Chairman)
Andrew Mifflin
Khomotso Mosehla
Peter Cordin
Rudolph Torlage
Thabo Mosololi
Executive
David Brown
De Wet Schutte
COMPANY SECRETARY Tony Bevan
AUSTRALIA UNITED KINGDOM SOUTH AFRICA
AUDITORS Deloitte Touche Tohmatsu N/A Deloitte & Touche
Tower 2 Deloitte Place
Brookfield Place Building 1
123 St Georges Terrace The Woodlands
Perth WA 6000 20 Woodlands Drive
Australia Woodmead 2052
South Africa
BANKERS National Australia Bank Limited Investec Bank plc ABSA Bank
Level 1, 1238 Hay Street 2 Gresham Street The Podium
West Perth WA 6005 London EC2V 7QP Norton Rose Building
Australia United Kingdom 15 Alice Lane
Sandton South Africa
AUSTRALIA UNITED KINGDOM SOUTH AFRICA
BROKERS Euroz Securities Limited Mirabaud N/A
Level 18, Alluvion 21 St James' Street
58 Mounts Bay Road London SW1Y 4JP
Perth WA 6000 United Kingdom
Australia
LAWYERS Squire Patton Boggs (AU) Squire Patton Boggs (UK) Edward Nathan
LLP Sonnenbergs
Level 21 2 Park Lane 150 West Street
300 Murray Street Leeds Sandton
Perth WA 6000 LS3 1 ES Johannesburg 2196
Australia United Kingdom South Africa
NOMAD/ N/A Peel Hunt LLP Investec Bank Limited
CORPORATE Moor House 100 Grayston Drive
SPONORS 120 London Wall Sandown 2196
London EC2Y 5ET Johannesburg
United Kingdom South Africa
DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
The Directors of Coal of Africa Limited ("CoAL" or "the Company") submit herewith the financial report of Coal of Africa
Limited and its subsidiaries ("the Group") for the half-year ended 31 December 2015. All amounts are expressed in US
Dollars unless stated otherwise.
In order to comply with the provision of the Corporations Act 2001, the directors report as follows:
Directors
The names of the directors of the company during or since the end of the half-year are:
Bernard Pryor* (Chairman) Thabo Mosololi*
Andrew Mifflin* David Brown**
Rudolph Torlage* De Wet Schutte**
Peter Cordin*
Khomotso Mosehla*
* - Non-executive director
** - Executive director
The above named directors held office during and since the end of the half-year.
Review of Operations
Principal activity and nature of operations
The principal activity of the Company and its subsidiaries is the exploration and development of coking and thermal coal
properties in South Africa.
The Company's principal coking and thermal coal assets and projects include:
- The Vele Colliery, on care and maintenance, a coking and thermal colliery;
- The Makhado Project, a coking and thermal coal project;
- Four exploration stage coking and thermal coal projects, namely Chapudi, Generaal, Makhado extension and Mopane,
- in the Soutpansberg Coalfield (the GSP project); and
- The Mooiplaats Colliery currently on care and maintenance and subject to a formal sale process.
The Company's focus on safety continued and no lost time incidents ("LTIs") were recorded during the six months (FY2015
H2: nil).
Vele Colliery - Limpopo (Tuli) Coalfield (100% owned)
The Vele coking and thermal coal colliery ("Vele Colliery") recorded no LTIs during the period.
The original Vele Colliery Integrated Water Usage Licence ("IWUL"), valid until March 2016, has been renewed for a further
20 years, and also amended in line with the requirements for the Plant Modification Project (PMP) at the Colliery.
During H2 2015, the Company commenced a process to obtain approval relating to a non-perennial stream diversion. This
decision is anticipated in H2 2016. Once this regulatory approval in respect of the Colliery has been received, the final
decision to proceed with the PMP will be placed before the board, which will include an assessment of forecast global coal
prices.
Makhado Coking Coal Project (74% owned)
As required under South African mining legislation, a minimum 26% black economic empowerment ("BEE") shareholding is
required for mining and exploration projects. CoAL previously signed a Memorandum of Agreement to enable a Broad Based
Black Economic Empowerment consortium comprising seven local communities to acquire a 20% interest in the Makhado
Project and during the period the Company continued the process of identifying suitable BEE shareholders to acquire a
further 6% interest in the project. These transactions have been formalised and will ensure that the Makhado Project has the
requisite ownership structure.
Subject to the results of FEED/development funds being acquired, Makhado's 26-month construction phase is expected to
begin during H2 CY2016, with a further four month ramp-up phase resulting in the production of 5.5 million tonnes per
annum ("Mtpa") of saleable product. During Q2 FY2016 the optimisation study and The Front-End Engineering Design
("FEED") was awarded to the International engineer and project delivery group DRA. The study follows on the original works
performed by DRA during the Definitive Feasibility Study completed in 2013 and includes the infrastructure components of
the project, and also the integration of the work of a number of specialist consultants.
The Company has officially been granted an IWUL for a period of 20 years concluding all regulatory approvals for the
Makhado Project. The award of the IWUL for Makhado further signifies government's commitment to the flagship project, and
its potential to foster socio economic transformation.
An interim court interdict seeking to halt any mining or construction activity was issued against the Makhado Project during
Q2 FY2014. The matter was heard in the North Gauteng High Court on 3 December 2015 with judgement handed down on
Tuesday 8 December 2015 on two matters. The first relates to the condition to compel CoAL to conduct a Strategic Regional
Impact Assessment and secondly a review of the Environmental Authorisation. The condition compelling CoAL to conduct a
Strategic Regional Impact Assessment has been set aside. The interim interdict against the Environmental Authorisation
remains in place pending the review of the authorisation.
CoAL does not anticipate at this time that the process will affect Makhado's construction timetable.
Greater Soutpansberg Project (MbeuYashu) (74% owned)
The MbeuYashu Project recorded no LTIs during the period.
Mooiplaats Colliery - Ermelo Coalfield (74% owned)
The Mooiplaats thermal coal colliery was placed on care and maintenance during the September 2013 quarter and recorded
no LTIs during the period (FY2016 Q1: nil).
During the quarter the Company continued discussions with potential purchasers and is assessing options regarding a
transaction at the colliery.
Corporate
Baobab Mining and Exploration (Proprietary) Limited ("Baobab")
During the period the Company entered into a non-binding Memorandum of Understanding ("MOU") with Qingdao Hengshun
Zhongsheng Group Co Ltd ("Hengshun") with respect to a proposed equity investment in Baobab, a subsidiary of CoAL.
Baobab is the legal owner of the mining right for the Makhado Project. Hengshun is an industrial conglomerate incorporated
in Qingdao, Shandong Province, China and listed on the Shenzen Stock Exchange.
The current MOU includes the following commercial considerations:
1) Hengshun proposes to acquire up to 34% of Baobab at a mutually agreed consideration. The preliminary terms of
negotiation between both parties are based on an indicative cash acquisition price of approximately $113.94 million
which implies a Makhado Project value of at least $335 million. The final transaction valuation would be subject to both
parties' negotiation, a valuation report issued by an internationally reputable accounting firm and the conclusion of a
formal subscription and sale agreement between both parties.
2) The proposed equity investment is subject to an Engineering, Procurement and Construction contract ("EPC") being
awarded to Hengshun. The value of the EPC contract is approximately $400 million, but will be confirmed by the
completion of a FEED which will be completed in H1 CY 2016.
3) The equity investment is subject to a formal due diligence process as well as approval of the transaction from both the
CoAL and Hengshun boards of directors.
4) The 34% equity investment will entitle Hengshun to nominate a to be agreed number of directors to the board of Baobab,
but the effective management of Baobab and operatorship of the Makhado project will remain the responsibility of CoAL.
5) A debt package may also be provided by Hengshun on commercial arm's length terms.
6) Hengshun has the right to match any alternative proposals for the provision of the mining contract.
7) The MOU is a non-binding document which is also subject to CoAL shareholder and any other necessary regulatory
approvals.
Universal Coal Plc ("Universal")
In November 2015 the Company announced the terms of a recommended Offer to be made by CoAL for the acquisition of
Universal Coal Plc ("Universal"). The Company had previously communicated its intention to acquire a cash generating
project to boost the Company cash flow during the construction of the Makhado Project. The Universal transaction has been
identified as a value enhancing investment and will provide the enlarged group with immediate coal production and cash flow
as well as a diversified portfolio of production, development and exploration projects with expected synergies to the existing
CoAL business. Successful completion of the Offer will create a balanced and focused South African coal miner.
CoAL has received signed statements of intent to accept the Offer from Universal Shareholders (including the Independent
Universal Directors) in respect of 202 768 708 Universal Shares, representing 40.1 percent of Universal's total issued share
capital, including Coal Development Holdings B.V., Universal's second largest shareholder with an interest of approximately
28.4% of Universal's total issued share capital. Each of these Universal Shareholders has also stated their intention to elect
for the Loan Note Alternative in respect of their entire holding of Universal Shares. The Company has agreed that it requires
a minimum of 50.1% acceptance of the offer in order for the acquisition to be committed.
On 3 March 2016, at the general meeting of CoAL shareholders, the necessary resolutions were passed approving the
acquisition of Universal.
The transaction is expected to close on 15 April 2016.
Yishun Brightrise Investment PTE Limited ("Yishun")
In September 2015, Yishun subscribed for 183, 231, 261 shares in Coal for GBP9,436,663 ($14.5 million). The Company
and Yishun have also entered into a Loan Agreement in terms of which Yishun has agreed to lend the Company $10 million.
The loan bears no interest and is repayable in certain circumstances.
Financial review
The loss for the six months under review was $14.3 million, or 0.76 cents per share compared to a loss of $0.8 million, or
0.07 cents per share for the prior corresponding period.
The loss for the period under review of $14.3 million (H1 2014: $0.8 million) includes:
- net foreign exchange loss of $9.4 million (2014: profit of $14.3 million) arising from the translation of inter-group loan
balances, borrowings and cash due to changes in the ZAR:USD and AUD:USD exchange rates during the period;
- employee benefit expense of $2.0 million (2014 expense: $2.5 million) due to the issue of share options
- other expenses of $3.2 million (2014: $10.8 million) was lower due to exceptional expenses incurred in the prior period
for the liquidation of EVOC and Greenstone which resulted in a $3.7 million write-off of loans due to CoAL and penalties
incurred of $0.6 million for the Envi Coal legal case;
- depreciation of $0.2 million (2014: $0.3 million) and amortisation of $0.4 million (2014: $0.5 million).
As at 31 December 2015, the Company had cash and cash equivalents of $30.0 million compared to cash and cash
equivalents of $17.8 million at 30 June 2015.
Authorised and issued share capital
CoAL had 1,927,001,328 fully paid ordinary shares in issue as at 31 December 2015. The holders of ordinary shares are
entitled to one vote per share and are entitled to receive dividends when declared.
Dividends
No dividends were declared or paid during the six months.
Highlights and events after the reporting period
In January 2016, the IWUL for Vele Colliery in the Limpopo Province was renewed for a further twenty years and the IWUL
for the Makhado Projected was granted for a period of 20 years.
In terms of the Company's recommended offer for Universal, the terms of the offer was varied to extend the offer period to
15 April 2016. On 3 March 2016, at the general meeting of CoAL shareholders, the necessary resolutions approving the
acquisition of Universal were passed. In addition, as at 3 March 2016, acceptances of the offer from Universal Shareholders
(including Universal CDI Holders) representing 269,570,685 Universal Shares, equating to approximately 53.20% of the total
number of Universal Shares in issue were received, satisfying the condition to the offer set out in paragraph 1(a) of Part A of
Appendix VI of the Offer Document.
On 3 March 2016, CoAL and its subsidiary company MbeuYashu Proprietary Limited ("MbeuYashu") received a notice from
Rio Tinto Minerals Development Limited ("Rio Tinto") and Kwezi Mining Proprietary Limited, alleging that CoAL is in breach
of an obligation under the agreements pursuant to which MbeuYashu acquired interests in Chapudi Coal Proprietary Limited
and Kwezi Mining Exploration Proprietary Limited and therefore all amounts owed by CoAL and MbeuYashu are now due for
payment.
CoAL is in the process of challenging the validity of the notice.
The original amount owed by CoAL and MbeuYashu was $75 million. Currently a total of $19 million is owing and CoAL and
MbeuYashu have met and are meeting all their payment obligations, with final settlement to be made on 15 June 2017.
Rounding off of amounts
The Company is a company of the kind referred to in ASIC Class Order 98/100, date 10 July 1998, and in accordance with
that Class Order amounts in the directors' report and the half-year financial report are rounded off to the nearest thousand
dollars, unless otherwise indicated.
Auditor's Independence Declaration
The auditor's independence declaration is included on page 26 of the half-year report.
The half-year report set out on pages 8 to 24, which has been approved on the going concern basis, was approved by the
board on 14 March 2016 and was signed on its behalf by:
Bernard Robert Pryor David Hugh Brown
Chairman Chief Executive Officer
14 March 2016 14 March 2016
Dated at Johannesburg, South Africa, this 14th day of March 2016.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014
Note $'000 $'000
Continuing operations
Revenue - 2
Cost of sales - -
Gross profit - 2
Depreciation and amortisation (614) (790)
Foreign exchange (loss)/profit 4 (9,369) 14,292
Employee benefits expense (2,036) (2,532)
Other expenses 4 (3,168) (10,761)
Operating lease expenses (97) (114)
Other income 335 249
Operating (loss)/profit (14,949) 346
Interest income 327 250
Finance costs (384) (716)
Loss before tax (15,006) (120)
Income tax credit 1,067 -
Net loss for the period from continuing operations (13,939) (120)
Operations held for sale
Loss for the period from operations held for sale 8 (386) (707)
LOSS AFTER TAX (14,325) (827)
Other comprehensive loss, net of income tax
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations (39,693) (42,665)
Total comprehensive loss for the period (54,018) (43,492)
Loss for the period attributable to:
Owners of the parent (14,325) (827)
Non-controlling interests - -
(14,325) (827)
Total comprehensive profit / (loss) attributable to:
Owners of the parent (54,018) (43,492)
Non-controlling interests - -
(54,018) (43,492)
Loss per share 11
From continuing operations and operations held for sale
Basic (cents per share) 0.77 0.07
Diluted (cents per share) 0.76 0.07
From continuing operations
Basic (cents per share) 0.75 0.01
Diluted (cents per share 0.74 0.01
The accompanying notes are an integral part of these condensed consolidated financial statements
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
31 Dec 2015 30 June 2015
Note $'000 $'000
ASSETS
Non-current assets
Development, exploration and evaluation assets 7 192,121 232,813
Property, plant and equipment 12,722 16,259
Intangible assets 10,710 11,682
Other receivables 1,140 1,746
Other financial assets 5,624 3,411
Restricted cash 12 808 1,023
Deferred tax assets 4,143 2,320
Total non-current assets 227,268 269,254
Current assets
Inventories 192 236
Trade and other receivables 878 792
Other financial assets 380 468
Cash and cash equivalents 12 30,025 17,759
31,475 19,255
Assets classified as held for sale 8 13,917 18,118
Total current assets 45,392 37,373
Total assets 272,660 306,627
LIABILITIES
Non-current liabilities
Deferred consideration 9 17,013 15,422
Provisions 3,604 5,733
Total non-current liabilities 20,617 21,155
Current liabilities
Deferred consideration 9 1,200 3,265
Trade and other payables 2,197 2,719
Borrowings 10 10,000 -
Provisions 314 294
Current tax liabilities 1,225 1,285
14,936 7,563
Liabilities associated with assets held for sale 8 2,435 3,354
Total current liabilities 17,371 10,917
Total liabilities 37,988 32,072
NET ASSETS 234,672 274,555
EQUITY
Issued capital 6 1,006,437 992,374
Accumulated deficit (729,958) (718,081)
Reserves (42,382) (313)
Equity attributable to owners of the parent 234,097 273,980
Non-controlling interests 575 575
TOTAL EQUITY 234,672 274,55
The accompanying notes are an integral part of these condensed consolidated financial statements
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
Issued Accumulated Share Capital Foreign Attributable Non- Total
capital deficit based profits currency to owners of controlling equity
payment reserve translation the parent interests
reserve reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 July 2015 992,374 (718,081) 7,205 91 (7,609) 273,980 575 274,555
Total comprehensive loss for the period - (14,325) - - (39,693) (54,018) - (54,018)
Loss for the period – continuing operations - (13,939) - - - (13,939) - (13,939)
Loss for the period – operations held for sale - (386) - - - (386) - (386)
Other comprehensive loss, net of tax - - - - (39,693) (39,693) - (39,693)
Shares issued for capital raising 14,895 - - - - 14,895 - 14,895
Share issue costs (832) - - - - (832) - (832)
Share based payments - - 154 - - 154 - 154
Share options cancelled or lapsed - - (82) - - (82) - (82)
Share options expired - 2,448 (2,448) - - - - -
Balance at 31 December 2015 1,006,437 (729,958) 4,829 91 (47,302) 234,097 575 234,672
Balance at 1 July 2014 935,891 (790,964) 82,464 91 52,263 279,745 575 280,320
Total comprehensive loss for the period - (827) - - (42,665) (43,492) - (43,492)
Loss for the period – continuing operations - (120) - - - (120) - (120)
Loss for the period – operations held for sale - (707) - - - (707) - (707)
Other comprehensive loss, net of tax - - - - (42,665) (42,665) - (42,665)
935,891 (791,791) 82,464 91 9,598 236,253 575 236,828
Shares issued for capital raising 47,811 - - - - 47,811 - 47,811
Share issue costs (2,307) - - - - (2,307) - (2,307)
Share based payments - - 1,481 - - 1,481 - 1,481
Share options expired - 79,451 (79,451) - - - - -
Balance at 31 December 2014 981,395 (712,340) 4,494 91 9,598 283,238 575 283,813
The accompanying notes are an integral part of these condensed consolidated financial statements
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014
$'000 $'000
Cash Flows from Operating Activities
Receipts from customers 124 883
Payments to employees and suppliers (5,565) (18,856)
Cash used in operations (5,441) (17,973)
Interest received 327 191
Interest paid (384) (656)
Income taxes paid - -
Net cash used in operating activities (5,498) (18,438)
Cash Flows from Investing Activities
Purchase of property, plant and equipment (75) (20)
Proceeds on disposal of property plant and equipment 32 -
Decrease in restricted cash - 4,073
Payments for exploration and evaluation assets (143) (72)
Increase in other financial assets (3,000) (985)
Payments for development assets (14) (692)
Net cash (used in)/generated from investing activities (3,200) 2,304
Cash Flows from Financing Activities
Proceeds from the issue of shares and options 14,541 47,811
Share issuance costs (832) (2,307)
Repayment of borrowings - (6,124)
Repayment of deferred consideration (992) (6,590)
Proceeds from borrowings 10,000 -
Net cash generated by financing activities 22,717 32,790
NET INCREASE IN CASH AND CASH EQUIVALENTS 14,019 16,656
Cash and cash equivalents at the beginning of the half-year 17,759 2,099
Foreign exchange differences (1,753) 1,796
Cash and cash equivalents at the end of the half-year 12 30,025 20,551
The accompanying notes are an integral part of these condensed consolidated financial statements
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
1. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act
2001 and AASB 134: 'Interim Financial Reporting'. Compliance with AASB 134 ensures compliance with International
Financial Reporting Standard IAS 34 'Interim Financial Reporting'. The half-year report does not include notes of the
type normally included in an annual financial report and should be read in conjunction with the most recent annual
financial report.
Basis of preparation
The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the
revaluation of financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.
All amounts are presented in United States dollars, unless otherwise noted.
The company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance
with that Class Order amounts in the directors' report and the half-year financial report are rounded off to the nearest
thousand dollars, unless otherwise indicated.
The accounting policies and methods of computation adopted in the preparation of the half-year financial report are
consistent with those adopted and disclosed in the company's 2015 annual financial report for the financial year ended
30 June 2015, except for the impact of the Standard and Interpretations described below. These accounting policies
are consistent with the Australian Accounting Standards and with International Financial Reporting Standards ("IFRS").
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board ("the AASB") that are relevant to their operations and effective for the current reporting period.
New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are
relevant to the Group include:
- AASB 2015-3 'Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031
Materiality'
Impact of the application of AASB 2015-3 'Amendments to Australian Accounting Standards arising from the
Withdrawal of AASB 1031 Materiality'
Completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations.
2. GOING CONCERN
These consolidated financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activities and the realisation of assets and the settlement of liabilities in the normal
course of business.
The Consolidated Entity has incurred a net loss after tax for the half year ended 31 December 2015 of $14.3 million
(31 December 2014: loss of $0.8 million), including a foreign exchange loss of $9.4 million and depreciation and
amortisation charges of $0.6 million. During the six month period ended 31 December 2015 net cash outflows from
operating activities were $5.1 million (31 December 2014 net outflow: $18.4 million) and net cash outflows from
investing activities were $3.2 million (31 December 2014 net inflow: $2.3 million). As at 31 December 2015 the
Consolidated Entity had a net current asset position of $16.5 million (30 June 2015: net current asset of $11.7 million),
excluding assets and liabilities associated with assets held for sale.
The Company successfully completed a capital raising with Singapore-registered Yishun for GBP 9,436,663
($14,540,813). A Loan Agreement was also entered into with Yishun for $10 million which is interest free and is only
repayable under limited circumstances.
The board of directors of the Company have made an offer for the acquisition of the entire issued and to be issued
share capital of Universal, with the acquisition expected to be completed on or around 25 April 2016.
Under the terms of the offer, eligible Universal shareholders will be entitled to receive, for each Universal share held:
- AUD$0.20 in cash and 1 new Coal of Africa Limited share; or
- Subject to eligibility under applicable securities laws, a non-converting, secured loan note with a principal
amount of AUD$0.25 per loan note.
Restricted Universal shareholders will not be entitled to participate in the cash and share offer but will instead be
entitled to receive, for each Universal share held:
- AUD$0.25 in cash; or
- Subject to eligibility under applicable securities laws, a non-converting, secured loan note with a principal
amount of AUD$0.25 per loan note.
The cash and share offer represents a total offer consideration comparable to AUD$0.25 per Universal share, based
on AUD$0.20 in cash and 1 new Coal of Africa Limited share valued at AUD$0.05, and equates to an aggregate value
of approximately AUD$126.4 million ($91 million) for the 505,685,447 Universal shares currently in issue.
The Loan Notes will have a maximum 18 month term and carry interest at a rate of 12.68% per annum for the first
12 months after the date of issue, and 15% per annum for the remainder of the term. The loan notes will be redeemable
by the holder on the first anniversary of the date of issue and otherwise will be redeemed in full at the end of the
18 month term.
At the date of this report and considering the cash flows from the capital raising and the loan from Yishun, the
Directors are confident that the Consolidated Entity will be able to continue as a going concern. Additionally, operating
cash flows associated with Universal Coal's producing mines are expected to supplement the consolidated entity's
cash position.
Based on the above facts the Directors believe it is appropriate that these consolidated financial statements be
prepared on the going concern basis.
3. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group
that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to
assess its performance.
Information reported to the Group's Chief Executive Officer ("CEO") for the purposes of resource allocation and
assessment of performance is more specifically focused on the stage within the mining pipeline that the operation
finds itself in. During the period, the CEO determined that it was more appropriate to review the operating results of
the identified segments and make decisions about resources to be allocated to the segment and assess its
performance from an entity perspective rather than a consolidated perspective. Accordingly, the presentation of the
information has changed from the prior period for total assets. The prior period total assets have been restated to
reflect the change.
The Group's reportable segments under AASB 8 are therefore as follows:
- Exploration;
- Development;
- Mining (discontinued operation)
The Exploration segment is involved in the search for resources suitable for commercial exploitation, and the
determination of the technical feasibility and commercial viability of resources. As at 31 December 2015, projects
within this reportable segment include three exploration stage coking and thermal coal complexes, namely:
- the Chapudi Complex (which comprises the Chapudi Project, the Chapudi West Project and the Wildebeesthoek
Project);
- the Soutpansberg Complex (which comprises the Voorburg Project, the Mt Stuart Project and the Jutland Project);
- the Makhado Complex (comprising the Makhado Project, the Makhado Extension Project and the Generaal
Project).
The Development segment is engaged in establishing access to and commissioning facilities to extract, treat and
transport production from the mineral reserve, and other preparations for commercial production. As at 31 December
2015 projects included within this reportable segment include the Vele Colliery, in the early operational and
development stage.
The Mining segment is involved in day to day activities of obtaining a saleable product from the mineral reserve on a
commercial scale and consists of the Mooiplaats Colliery. As of 30 June 2014, the Mooiplaats Colliery has been
classified as operations held for sale.
The Group evaluates performance on the basis of segment profitability, which represents net operating (loss) / profit
earned by each reportable segment.
Each reportable segment is managed separately because, amongst other things, each reportable segment has
substantially different risks.
The Group accounts for intersegment sales and transfers as if the sales or transfers were to third parties, i.e. at
current market prices.
The Group's reportable segments focus on the stage of project development and the product offerings of coal mines in
production.
In order to reconcile the segment results with the consolidated statement of profit or loss and other comprehensive
income the discontinuing operations should be deducted from the segment total and the corporate results (as per the
reconciliation later in the note should be included).
The following is an analysis of the Group's results by reportable operating segment for the period under review:
For the six months ended 31 December 2015
Continuing operations Discontinuing
operations
Exploration Development Mining Total
Revenue - - - -
Cost of sales - - - -
Gross loss - - - -
Depreciation and amortisation (34) (24) - (58)
Foreign exchange profit / (loss) (4,635) - 2 (4,633)
Employee benefits expense (53) (174) (142) (369)
Other expenses (188) (530) (271) (989)
Operating lease expenses (8) - (8) (16)
Other income - 1 2 3
Operating profit / (loss) (4,918) (727) (417) (6,062)
Interest income - - 32 32
Finance costs (383) - (1) (384)
Loss before tax (5,301) (727) (386) (6,414)
For the six months ended 31 December 2014
Continuing operations Discontinuing
operations
Exploration Development Mining Total
Revenue 2 - - 2
Cost of sales - - (248) (248)
Gross loss 2 - (248) (246)
Depreciation and amortisation (37) (33) - (70)
Foreign exchange profit / (loss) (3,151) - 3 (3,148)
Employee benefits expense (63) (225) (180) (468)
Other expenses (109) (3,396) (280) (3,785)
Operating lease expenses (4) - (9) (13)
Other income 4 - 6 10
Operating profit / (loss) (3,358) (3,654) (708) (7,720)
Interest income - 31 59 90
Finance costs (413) (43) (58) (514)
Loss before tax (3,771) (3,666) (707) (8,144)
The following is an analysis of the Group's assets by reportable operating segment:
Restated
31 Dec 2015 30 June 2015 30 June 2015
$'000 $'000 $'000
Exploration 72,846 90,085 124,715
Development 69,194 86,832 117,160
Total assets – continuing operations 142,040 176,917 241,875
Mining – discontinued operation 12,008 15,679 18,118
Total segment assets 154,048 192,596 259,993
Reconciliation of segment information to the consolidated financial statements:
31 Dec 2015 31 Dec 2014
$'000 $'000
Total loss for reportable segments (6,414) (8,144)
Depreciation and amortisation (556) (719)
Foreign exchange (loss)/profit (4,734) 17,443
Employee benefits expense (1,809) (2,244)
Other expenses (2,450) (7,258)
Operating lease expenses 29 (110)
Other income 215 245
Interest income 327 219
Finance costs - (259)
Loss for the period from operations held for sale 386 707
Loss before tax (15,006) (120)
Restated
31 Dec 2015 30 June 2015
$'000 $'000
Total segment assets 154,048 192,596
Corporate assets 729,178 867,407
Consolidation adjustments:
Elimination of Investment in subsidiaries (227,353) (244,589)
Elimination of related party loans (544,117) (687,256)
Development, exploration and evaluation adjustments 221,884 258,010
Property, plant and equipment adjustments (73,211) (94,639)
Assets held for sale 13,917 18,118
Other (1,686) (3,020)
Total assets 272,660 306,627
4. RESULTS FOR THE PERIOD
Loss for the period from continuing operations has been arrived at after charging or (crediting):
31 Dec 2015 31 Dec 2014
$'000 $'000
Foreign exchange (loss)/profit
Unrealised (9,291) (16,175)
Realised (78) 1,883
(9,369) (14,292)
Other expenses
Other expenses for the six months ended 31 December 2015 includes $24,000 (2014: Nil) related to the revaluation of
investments, $261,000 (2014: $416,000) for environmental expenses, $358,000 (2014: Nil) for the impairment of the
Tshikunda Mining Proprietary Limited investment, $513,000 (2014: Nil) relating to transaction costs for the offer by
CoAL for Universal Coal Plc and social labour plan costs of $104,000 (2014: $2.7 million). In the prior period, there
were additional expenses for the liquidation of EVOC and Greenstone which resulted in the loans being written of for
$3.7 million.
5. DIVIDENDS
No dividend has been paid or is proposed in respect of the half-year ended 31 December 2015 (2014: Nil).
6. ISSUED CAPITAL
During the reporting period, YBI, subscribed for and were issued 183,231,261 CoAL shares for GBP 9,436,663
($14,540,813). CoAL shares were also issued to Ndilo Mineral Resources Proprietary Limited ("Ndilo") and Basane
Investment Holdings Proprietary Limited ("Basane") in terms of the Sale of shares and claims agreement entered into
for Tshikunda Mining Proprietary Limited in March 2015. This agreement was an amendment to the Sale of Shares
and claims agreement entered into in November 2007. In terms of the agreement, 201,454 shares were issued for a
consideration of ZAR5,000,000 ($354,252). Ndilo was issued 120,872 shares and Basane was issued 80,582 shares.
31 Dec 2015 30 June 2015
$'000 $'000
1,006,437 992,374
1,927,001,328 (2015: 1,743,568,613) fully paid ordinary shares
Movements in issued capital
Opening balance 992,374 935,891
Shares issued for capital raising, net of costs 14,063 56,483
1,006,437 992,374
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Options
The following unlisted options to subscribe for ordinary fully paid shares are outstanding at 31 December 2015:
Number Issued Exercise Price Expiry Date
2,670,000 ZAR7.60 30 June 2016
3,932,928 ZAR1.75 30 June 2017
20,000,000* ZAR1.32 21 October 2018
3,525,000 ZAR1.20 1 February 2019
3,525,000 ZAR1.32 1 February 2019
3,525,000 ZAR1.40 1 February 2019
40,000,000 ZAR0.30 1 June 2016
5,000,000 GBP0.055 26 November 2018
* Issued to Investec as part of the short term bridging facility and vest six months after granting.
On 27 November 2015, 14,174,528 Performance Rights were issued to senior management. The Performance Right
factors in a hurdle rate based on the compound annual growth rate of total shareholder return across the period from
the grant date, 27 November 2015, ending on 1 December 2018. The Performance Rights were valued using a hybrid
employee share option pricing model to simulate the total shareholder return of CoAL at the expiry date using a
Monte-Carlo model.
7. DEVELOPMENT, EXPLORATION AND EVALUATION ASSETS
31 Dec 2015 30 June 2015
$'000 $'000
Development, exploration and evaluation assets comprise:
Exploration and evaluation assets 99,873 118,498
Development expenditure 92,248 114,315
Balance at end of period 192,121 232,813
A reconciliation of development, exploration and evaluation assets is presented below:
Exploration and evaluation assets
31 Dec 2015 30 June 2015
$'000 $'000
Balance at beginning of period 118,498 139,991
Additions 149 145
Adjustment to rehabilitation asset (47) -
Foreign exchange differences (18,727) (21,638)
Balance at end of period 99,873 118,498
Balance at beginning of period 114,315 131,720
Additions 14 2,454
Adjustment to rehabilitation asset (434) -
Foreign exchange differences (21,647) (19,859)
Balance at end of period 92,248 114,315
As of 31 December 2015 the net book value of the following project assets were included in Development assets:
- Vele Colliery: $92 million
In terms of AASB 136 – Impairment of Assets management have identified the coal commodity price as an indicator that the
Vele assets may be impaired and have performed a formal impairment assessment as at 31 December 2015.
Management have adopted the fair value less costs of disposal approach to estimate the recoverable amount of the project,
before comparing this amount with the carrying value of the associated assets and liabilities in order to assess whether an
impairment of the carrying value is required under AASB 136. As a result of the impairment testing completed no impairment
is required as at 31 December 2015.
In calculating fair value less costs of disposal, management have forecast the cash flows associated with the project over its
expected life of 18 years until 2033. The cash flows are estimated for the assets of the colliery in its current condition
together with capital expenditure required for the colliery to resume operation and discounted to its present value using a
post-tax discount rate that reflects the current market assessments of the risks specific to the Vele Colliery. The identification
of impairment indicators and the estimation of future cash flows require management to make significant estimates and
judgments. Details of the key assumptions used in the fair value less costs of disposal calculation at 31 December 2015 are
included below.
Key assumptions
2017 2018 2019 LT
Thermal coal price (USD, nominal)(1) 62 68 74 79(2)
Hard coking coal price (USD, nominal)(3) 101 116 130 145(4)
Exchange rate (USD / ZAR, nominal) 16.0 16.6 17.2 17.8(5)
Discount rate(4) 16.1%
Inflation rates USD 2.5%
ZAR 6.0%
Production start date February 2018
(1) Management's assumptions reflect the Richards Bay export thermal coal (API4) price.
(2) LT thermal coal price equivalent to USD 72 per tonne in 2016 dollars
(3) Management's assumption of the hard coking coal price is made after considering relevant broker forecasts
(4) LT hard coking coal price equivalent to USD 132 per tonne in 2016 dollars
(5) From 2020, the exchange rate is derived with reference to the 2019 assumption, and inflated by the compounding
differential between USD and ZAR inflation rates
(4) Management prepared a nominal ZAR-denominated, post-tax discount rate, which was calculated with reference to
the Capital Asset Pricing Model (CAPM).
Impairment Assessment
USD million
Carrying Value of Vele Cash Generating Unit 92
Value of Vele using the discounted cash flow method 120
Sensitivity Analysis
Changes in key assumptions in the table below would have the following approximate impact on the recoverable amount of
the Vele Colliery as calculated using the discounted cash flow method and excluding the effect of the value attributable to
resources outside the LOM.
Sensitivity Change in variable Effect on fair value less
costs of disposal
Long term coal prices +10.0% 24
-10.0% (25)
Long term exchange rate +10.0% 23
-10.0% (24)
Discount rate +1.0% (9)
-1.0% 9
Operating costs +10.0% (14)
-10.0% 14
Delays in production start date +12 months (17)
Excluded from the value of the Vele Colliery derived from the discounted cash flow model, is any value attributable to
resources remaining after the projections made in the life of mine model. In order to assess the potential value of resources
outside of the life of mine plan, a resource valuation was undertaken by management in January 2016 in consultation with
valuations experts. This valuation applied a weighted average multiple of ZAR 3.8/tonne of resources, which resulted in an
indicative valuation of ZAR837 million at that time.
8. DISCONTINUED OPERATIONS
31 Dec 2015 30 June 2015
$'000 $'000
Carrying amounts of
Holfontein Investments Proprietary Limited ('Holfontein') - -
Langcarel Proprietary Limited ('Mooiplaats') 11,482 14,764
11,482 14,764
Assets associated with discontinued operations
Holfontein - -
Mooiplaats 13,917 18,118
13,917 18,118
Liabilities associated with discontinued operations
Holfontein - -
Mooiplaats 2,435 3,354
2,435 3,354
11,482 14,764
Holfontein
The Company is in the process of finalising agreements for the disposal of the Holfontein Thermal Coal Project near
Secunda in Mpumalanga.
Mooiplaats
The Company has announced a long term strategy to dispose of its thermal assets in order to focus on the
development of the coking coal assets. The Company is actively seeking a buyer for this business and expects to
complete a sale during the next financial year. A non-binding memorandum of understanding has been received by the
Company providing an indicative price for the disposal of Mooiplaats. The Group has not recognised any impairment
on the Mooiplaats Colliery during the period.
The major classes of assets and liabilities of Mooiplaats at the end of the reporting period are as follows:
31 Dec 2015 30 June 2015
$'000 $'000
Assets classified as held for sale
Property, plant and equipment 13,487 16,770
Other financial assets 181 710
Restricted cash 208 264
Inventories 3 13
Trade and other receivables 2 238
Cash and cash equivalents 36 123
13,917 18,118
Liabilities classified as held for sale
Provisions 2,160 2,855
Trade payables and accrued expenses 275 499
2,435 3,354
Net assets of Mooiplaats 11,482 14,764
The loss for the half-year from the discontinued operations is analysed as follows:
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014
$'000 $'000
Revenue - -
Other gains - 69
- 69
Expenses (386) (776)
Loss before tax (386) (707)
Loss for the period from operations held for sale (attributable to owners of the
parent) (386) (707)
Cash flows from discontinued operations held for sale
Net cash outflows from operating activities (410) (412)
Net cash outflows from investing activities (274) 436
Net cash outflows from financing activities 638 -
Net cash outflows (46) 24
9. DEFERRED CONSIDERATION
The deferred consideration relates to the second tranche (part of the total acquisition price of $75 million for Chapudi
and Kwezi) of $30 million payable to Rio Tinto. The Company is required to make a minimum payment of $100,000
plus interest per month as well as additional committed money on the sale of non-core assets. The interest on the
arrangement is 4%. The current portion of the deferred consideration consists of the minimum payment of $100,000
for the next 12 months.
10. BORROWINGS
During the period, a loan for $10 million was provided to the Company by its shareholder Yishun. The loan bears no
interest and is only repayable in limited circumstances.
11. LOSS PER SHARE
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014
Cents per Cents per
share share
Basic loss per share
From continuing operations 0.75 0.01
From discontinued operations 0.02 0.06
0.77 0.07
11.1 Basic loss per share
$'000 $'000
Loss for the period attributable to owners of the parent (14,325) (827)
Loss for the period from operations held for sale 386 707
Loss used in the calculation of basic loss per share from continuing operations (13,939) (120)
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014
'000 shares '000 shares
Weighted number of ordinary shares
Weighted average number of ordinary shares for the purposes of basic loss per
share 1,865,824 1,182,035
11.2 Diluted loss per share
11.3 Headline loss per share (In line with JSE listing requirements)
The calculation of headline loss per share at 31 December 2015 was based on the headline loss attributable to
ordinary equity holders of the Company of $14.0 million (2014: $0.8 million) and a weighted average number of
ordinary shares outstanding during the period ended 31 December 2015 of 1,865,823,514 (2014: 1,182,035,280).
The adjustments made to arrive at the headline loss are as follows:
Six months Six months
ended ended
31 Dec 2015 31 Dec 2014
$'000 $'000
Loss for the period attributable to ordinary shareholders 14,325 827
Adjust for:
Impairment losses (358) -
Headline earnings 13,967 827
Headline loss per share (cents per share) 0.75 0.07
12. CASH AND CASH EQUIVALENTS
31 Dec 2015 30 Jun 2015
$'000 $'000
Bank balances 30,025 17,759
Bank balances associated with discontinued operations (refer Note 8) 36 123
30,061 17,882
Restricted cash 808 1,023
Restricted cash associated with discontinued operations (refer Note 8) 208 264
1,016 1,287
13. CONTINGENCIES AND COMMITTMENTS
The Group has contingent liabilities as listed below:
Ferret Mining Proprietary Limited
During the prior financial year, Ferret's 26% shareholding in Mooiplaats Mining Limited was re-instated. Although they
are not entitled to any assets or claims in the Mooiplaats group, they are entitled to receive ZAR15.0 million ($1.0
million) upon the successful disposal of the Mooiplaats Colliery. This has been taken into account in determining the
fair value less costs to sell of the Mooiplaats Colliery.
Issue of Share Options to De Wet Schutte
In terms of his appointment as Chief Financial officer, Mr Schutte is entitled to receive 6,600,000 options in three equal
tranches over a three year period (Year 1: 2,200,000 at ZAR 1, 20, Year 2: 2,200,000 at ZAR 1, 32, Year 3: 2,200,000
at ZAR 1, 45) These are granted in accordance with the Company's employee share option plan and are subject to
shareholder approval.
Makhado Water Commitment
CoAL has agreed to acquire water allocation for the Makhado Project from water users situated near the proposed
colliery and the Company has undertaken to increase supply assurance without impacting negatively on the water
available for agriculture. The parties have in principle agreed to avoid endangering local agriculture by creating new
water, primarily by reducing losses, improving distribution and countering leakages and evaporation. The creation of
new water will be financed either through CoAL's funds, outside funding or a Public-Private-Partnership with one or
more organs of State or other appropriate entities.
The overall objective is the co-existence of mining and agriculture and includes a feasibility study and the completion
of projects identified in the study which will facilitate the creation of new water. In terms of the agreement, the
Company will be required to pay a total of $7.9 million. The first payments of $1.8 million are due 90 and 180 days
after the granting of the IWUL, a further $0.6 million is payable eight months after the IWUL is granted and the balance
within five years of the granting.
Commitments
In addition to the commitments of the parent entity, subsidiary companies have financial commitments in terms of the
NOMR granted by the South African DMR. The commitments are based on the revenue generated by the colliery
during the financial year, and/or quantities of coal sold by the colliery during the financial year.
There are no other significant contingent liabilities as at 31 December 2015.
14. EVENTS SUBSEQUENT TO REPORTING DATE
In January 2016, the IWUL for Vele Colliery in the Limpopo Province was renewed for a further twenty years and the
IWUL for the Makhado Projected was granted for a period of 20 years.
In terms of the Company's recommended offer for Universal, the terms of the offer was varied to extend the
offer period to 15 April 2016. On 3 March 2016, at the general meeting of CoAL shareholders, the
necessary resolutions approving the acquisition of Universal were passed. In addition, as at 3 March 2016,
acceptances of the offer from Universal Shareholders (including Universal CDI Holders) representing
269,570,685 Universal Shares, equating to approximately 53.20% of the total number of Universal Shares
in issue were received, satisfying the condition to the offer set out in paragraph 1(a) of Part A of Appendix
VI of the Offer Document.
On 3 March 2016, CoAL and its subsidiary company MbeuYashu received a notice from Rio Tinto and
Kwezi Mining Proprietary Limited, alleging that CoAL is in breach of an obligation under the agreements
pursuant to which MbeuYashu acquired interests in Chapudi Coal Proprietary Limited and Kwezi Mining
Exploration Proprietary Limited and therefore all amounts owed by CoAL and MbeuYashu are now due for
payment.
CoAL is in the process of disputing the validity of the notice.
The original amount owed by Coal and MbeuYashu was $75 million. Currently a total of $19 million is owing and CoAL
and MbeuYashu have met and are meeting all their payment obligations, with final settlement to be made on 15 June
2017.
15. KEY MANAGEMENT PERSONNEL
Remuneration arrangement of key management personnel are disclosed in the annual financial report.
16. FINANCIAL INSTRUMENTS
This note provides information about how the Group determines fair values of various financial assets and financial
liabilities.
16.1 Fair value of the Group's financial assets and financial liabilities that are measure at fair value on a recurring basis
Some of the Group's financial assets and financial liabilities are measured at fair value at the end of each reporting
period. The following table gives information about how the fair values of these financial assets and financial liabilities
are determined (in particular, the valuation technique(s) and inputs used).
31 Dec 30 Jun
2015 2015
1. Other financial Assets - Assets - Level 2 Value N/A N/A
assets – Unlisted $3.2m $3.1m certificate
Investments obtained from
investment
institution
2. Other financial Assets - Assets - Level 1 Quoted prices N/A N/A
assets – Listed $0.4m $0.5m in an active
Investments market
DIRECTORS' DECLARATION
The Directors declare that in the directors' opinion,
1. The condensed financial statements and notes of the consolidated entity are in accordance with the
following:
a. complying with accounting standards and the Corporations Act 2001; and
b. giving a true and fair view of the consolidated entity's financial position as at 31 December 2014 and
of its performance for the half-year ended on that date.
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors, made pursuant to section 303(5)
of the Corporations Act 2001.
On behalf of the Directors
Bernard Robert Pryor David Hugh Brown
Chairman Chief Executive Officer
14 March 2016 14 March 2016
Dated at Johannesburg, South Africa, this 14th day of March 2016.
AUDITORS' INDEPENDENCE DECLARATION
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 (0) 9365 7001
www.deloitte.com.au
The Board of Directors
Coal of Africa Limited
Suite 8, 7 The Esplanade
Mount Pleasant WA 6153
14 March 2016
Dear Board Members
Auditor's Independence Declaration to Coal of Africa Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
of independence to the directors of Coal of Africa Limited.
As lead audit partner for the review of the financial statements of Coal of Africa Limited for the half year ended
31 December 2015, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
INDEPENDENT AUDITORS' REVIEW REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 (0) 9365 7001
www.deloitte.com.au
Independent Auditor's Review Report
to the members of Coal of Africa Limited
We have reviewed the accompanying half-year financial report of Coal of Africa Limited, which
comprises the condensed statement of financial position as at 31 December 2015, and the condensed
statement of profit or loss and other comprehensive income, the condensed statement of cash flows
and the condensed statement of changes in equity for the half-year ended on that date, selected
explanatory notes and the directors' declaration of the consolidated entity comprising the company
and the entities it controlled at the end of the half-year or from time to time during the half-year as set
out on pages 8 to 25.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation of the half-year financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the Corporations
Act 2001 and for such internal control as the directors determine is necessary to enable the preparation
of the half-year financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that makes us
believe that the half-year financial report is not in accordance with the Corporations Act 2001
including: giving a true and fair view of the consolidated entity's financial position as at 31 December
2015 and its performance for the half-year ended on that date; and complying with Accounting
Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the
auditor of Coal of Africa Limited, ASRE 2410 requires that we comply with the ethical requirements
relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review
is substantially less in scope than an audit conducted in accordance with Australian Auditing
Standards and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Auditor's Independence Declaration
In conducting our review, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Coal of Africa Limited would be in the same terms if given to
the directors as at the time of this auditor's review report.
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the half-year financial report of Coal of Africa Limited is not in accordance with the
Corporations Act 2001, including:
(a) giving a true and fair view of the Consolidated Entity's financial position as at 31 December 2015
and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the
Corporations Regulations 2001.
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Perth, 14 March 2016
Date: 14/03/2016 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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