Wrap Text
Reviewed condensed results for the six months ended 30 June 2015
South African Coal Mining Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009012/06
Share code: SAH ISIN: ZAE000102034
("SACMH" or "the company")
REVIEWED CONDENSED RESULTS OF
SACMH AND ITS SUBSIDIARIES
("THE GROUP") FOR THE SIX
MONTHS ENDED 30 JUNE 2015
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
As at As at
30 June 31 December
R’000 Notes 2015 2014
ASSETS
Non-current assets 303 430 320 638
Property, plant and equipment 72 022 74 682
Intangible assets 12 180 908 180 908
Deferred tax 9 – 14 548
Investments in subsidiaries 50 500 50 500
Current assets 1 579 8 190
Trade and other receivables 11 320 4 845
Cash and cash equivalents 1 259 3 345
Total assets 305 009 328 828
EQUITY AND LIABILITIES
Capital and reserves (289 786) (228 473)
Issued capital and premium 233 885 233 885
Accumulated loss (523 671) (462 358)
Non-current liabilities 592 341 553 940
Shareholders’ loan 537 152 498 693
Non-current provisions 10 46 576 46 576
Deferred taxation 9 8 613 8 613
Other liability – 58
Current liabilities 2 453 3 361
Trade and other payables 2 453 3 361
Total equity and liabilities 305 009 328 828
CONSOLIDATED CONDENSED STATEMENTS OF PROFIT AND LOSS AND
COMPREHENSIVE INCOME
Reviewed Reviewed
six months to six months to
R’000 Notes 30 June 2015 30 June 2014
Revenue 3 3 490 11 328
Cost of sales (5 203) (6 879)
Gross profit/(loss) (1 713) 4 449
Foreign exchange loss (31 379) (30 497)
Depreciation 4 (2 663) (3 638)
Operating expenses (3 633) (4 470)
Operating (loss) before finance costs and taxation (39 388) (34 156)
Finance costs 7 (7 380) (5 095)
(Loss) before taxation (46 767) (39 251)
Taxation 9 (14 545) –
(Loss) for the year (61 313) (39 251)
Other comprehensive income – –
Total comprehensive loss attributable to ordinary
shareholders (61 313) (39 251)
Loss attributable to ordinary shareholders (61 313) (39 251)
Loss attributable to minority shareholders (20 070) (2 642)
Loss attributable to majority shareholders (41 243) (36 609)
Loss per share (cents) (13.55) (8.67)
Diluted loss per share (cents) (13.55) (8.67)
STATEMENTS OF CASH FLOWS
Reviewed Reviewed
six months to six months to
R’000 Note 30 June 2015 30 June 2014
Cash flows generated from operations 5 (2 086) (2 434)
Net cash from operating activities (2 086) (2 434)
Cash from financing activities – –
Net decrease in cash and cash equivalents (2 086) (2 434)
Cash and cash equivalents at the beginning of the period 3 345 3 952
Cash and cash equivalents at the end of the period 1 259 1 518
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated
R’000 capital premium loss Total
Balance at 31 December 2013 45 246 188 639 (383 104) (149 219)
Total comprehensive loss – – (39 251) (39 251)
Balance at 30 June 2014 45 246 188 639 (422 354) (188 469)
Balance at 31 December 2014 45 246 188 639 (462 358) (228 473)
Total comprehensive loss – – (61 313) (61 313)
Balance at 30 June 2015 45 246 188 639 (523 671) (289 786)
NOTE TO THE STATEMENT OF COMPREHENSIVE INCOME
30 June 2015 30 June 2014
Reviewed Reviewed
Ordinary shares (’000)
– In issue 452 454 452 454
– Weighted average 452 454 452 454
– Diluted weighted average 452 454 452 454
R’000 R’000
Determinations of headline loss:
Loss attributable to ordinary shareholders (61 313) (39 251)
Less: Tax effect 14 545
Headline loss (46 768) (39 251)
Headline and diluted loss per share (cents) (10.34) (8.67)
Statement of compliance and basis of preparation
"The condensed consolidated interim results have been prepared, under the supervision of the Chief Financial Officer
Chandraprakash Tated CA. The directors take full responsibility for the preparation of this report, in accorance with and
containing the information required by International Accounting Standard (IAS) 34, Financial Reporting Guides as issued by the
Accounting Practices Committee, the Listings Requirements of the JSE and in compliance with the requirements of the South
African Companies Act, No 71 of 2008. The accounting policies used are in terms of IFRS and are consistent with those of the
Annual Financial Statements as at 31 December 2014. The Directors take full responsibility for the preparation of this report.
The condensed consolidated financial report has been prepared in accordance with the historical cost convention except for certain
investments which are stated at fair value, and is presented in Rands, which is SACMH’s functional and presentation currency.
The interim results have been reviewed by the group’s auditors, Nkonki Inc. Their unqualified review conclusion with an emphasis
of matter on SACMH’s ability to continue as a going concern with the details as disclosed in commentary point 13, is available
for inspection at the company’s registered office. Their review was conducted in accordance with ISRE 2410 "Review of interim
financial information performed by the independent auditor of the entity."
These financial results have been prepared on the going-concern basis taking into account that JSW Energy Limited (a company
listed on the Indian stock exchanges and operating through its subsidiary, JSW Energy Natural Resources South Africa
Proprietary Limited), continues to support SACMH as reflected in its annual report for the year ended 31 December 2014 issued
in August 2015.
COMMENTARY
1. Performance for the six months to 30 June 2015
Operations at the Group’s Umlabu Colliery continue to be suspended pending the finalisation of the Water Use License
Application (WULA) by the Department of Minerals and Resources (DMR). All assets and infrastructure are being maintained
under a "Care and Maintenance" programme.
The group is utilising its logistical and infrastructural assets to generate rental income to offset the costs incurred while
operations remain suspended.
2. Foreign exchange loss
The decline of the US$/ZAR rate from R11.57 to R12.27 during the reporting period resulted in an unrealised loss of R31.379
million (2014: R30.497 million) on the shareholders’ loan.
3. Revenue
Revenue has been reduced to R 3.490 million (2014: R 11.328 million) due to less income from renting of logistic assets.
4. Depreciation
Depreciation charges of R2.6 million (2014: R3.6 million) are lower than the previous year as a result of assets having been
fully depreciated in prior years.
5. Cash flow statement generated from operation for Interim review period: (R’000)
30 June 2015 30 June 2014
Reviewed Reviewed
Net profit per income statement (61 313) (39 251)
Adjustments for non-cash items
Deferred tax 14 545 –
Forex losses 31 379 30 497
Interest (not yet paid) 7 080 4 659
Depreciation 2 663 3 638
Changes in working capital
Accounts receivable 4 525 (12)
Accounts payable (966) 2 903
Cash flow from operations (2 086) 2 434
6. Statement of reserves and resources and prospects
The resources of 10.mt of coal classified as proven and probable reserves in the integrated annual report for the year ended 31
December 2013 and provisional results released on 18 June 2015 have been reclassified and the measured and indicated coal
resources that were previously converted to reserves, have been reclassified as resources as the coal could not be economically
extracted as a result of the downturn in the economy and the drop in world coal prices. No material changes have taken place since
the last reporting period. The reserves and resources statement has been approved by the JSE, a copy of which is available on the
company’s website.
7. Financing activities
Finance costs of R7.38 million (2014: R5.1 million) are as a result of the shareholders’ loan value being inflated by the Forex Rate and
subsequently greater interest charges on the increased value being charged.
8. Asset management
Working capital has reduced by 118% due to trading volumes with suppliers and customers being reduced at Umlabu Colliery.
9. Income and deferred tax
30 June 31 December
2015 2014
R’000 R’000
Deferred tax was raised on the following items
(a) Mineral rights – –
(b) Rehabilitation provision – 13 041
(c) Gain on loans acquired from subsidiaries (8 613) (8 613)
(d) Bad debts provision – 1 504
(8 613) 5 935
Due to uncertainty over realisation of deferred tax asset balance resulting from the rehabilitation costs and bad debts provision, it was
decided to charge off the deferred tax asset in the current year through the income statement as follows:
Description R’000
Reversal of deferred tax assets due to uncertainly of realisation 14 545
Total 14 545
10. Non-curent provisions
This pertains to rehabilitation provision of R46 576 (2014: R46 576) in the current year. There has been no movement as the mine is
under care and maintenance.
11. Trade and other receivable
Movement of trade and other receivables during interim period:
Reviewed Audited
As at As at
30 June 31 December
R’000 2015 2014
Gross trade and other receivables 7 927 12 104
Less: provision for doubtful debts (7 607) (7 259)
Net trade and other receivables 320 4 845
12. Mining Rights
The carrying value of Mining Rights is tested against expected economic benefit based on expected cash flows discounted to
their present value to determine whether there is any impairment of the value of the Mineral Rights at year-end. No impairment was
considered necessary as management has already impaired the mining rights by R 168.860 million and as per management internal
working no further impairment is required.
The following significant assumptions have been made in determining the economic value of mineral rights:
- Selling prices – the API4 index as quoted by McCloskeys.
- Foreign exchange – the forecast as quoted by The Standard Bank of South Africa.
- Discount rate – expected future cash flows have been discounted to their present value based on a Weighted Average Cost of
Capital (WACC) of 13.01% (2014: 20.7%).
13. Going concern
The Group incurred a loss of R61.3 million (2014: R39.25 million) during the 6 months ended 30 June 2015. The Group’s interim
financial statements have been prepared on a going concern basis as there is no intention to close the company. The Group’s going
concern is based on the conditional support of JSW Energy (a company listed on the Indian Stock Exchanges) which operates through
its subsidiary JSW Energy Natural Resources South Africa Proprietary Limited ("JSWENRSAL") supporting SACMH. JSW Energy has
confirmed its support in writing of their intention to continue financial support of SACMH. Subject to the following:
- JSW obtains Board approval for additional funding at the time;
- JSW fulfills all regulatory requirements as prescribed by Indian legislation; and
- JSW remains the majority shareholder.
In terms of the loan agreements JSW Energy has undertaken not to accept repayment of its loan accounts until such stage as
SACMH’s assets, fairly valued, exceed its liabilities.
14. Events after the reporting period
At the end of June 2015, Comogen Proprietary Limited, a historically disadvantaged South African Company that is 100% black-
owned and controlled, acquired 26% of the shareholding of SACMH thereby rectifying the Company Broad-Based Black Economic
Empowerment status to comply with legislative requirements.
On 15 October 2016 the Company published a SENS announcement to the effect that it proposed delisting and that JSWSA, which
currently held 67.27% of the issued shares, were offering to purchase the remaining shares for a consideration equal to 9 cents per
share. A copy of the announcement can be viewed on the company’s website. The circular is expected to be released at the end of
March.
In November 2015 a contract was signed with Destridex Proprietary Limited ("Destridex") for the utilisation of the Coal Processing Plant
at Umlabu Colliery. Negotiations are currently being finalised with Destridex for the use of the Voorslag Rail Siding. It is anticipated that
Destridex will commence production during April 2016.
15. Composition of the Audit and Remuneration Committees
Messrs MCH Dhlamini (Chairman) and JM Mokgokong and His Excellency K Ashraff, being independent non-executive directors, were
appointed as members of the Audit and Risk Committee on 19 May 2015.
His Excellency K Ashraff (Chairman) and Messrs MCH Dhlamini and JM Mokgokong were appointed members of the Remuneration
and Nominations Committee on 19 May 2015.
16. Capital expenditure commitments
The group has no capital expenditure commitments.
17. Contingencies and commitments
There are no contingencies and commitments at reporting date.
18. Prospects
Until such stage as approval of the WULA for the Voorslag reserve at Umlabu Colliery is received, operations will remain suspended.
The group is actively pursuing opportunities to lease its logistical as well as its infrastructure to third parties in the interim to offset the
costs of "Care and Maintenance".
No commitment has been received from the DWAF with regard to finalisation of the WULA.
19. Related party transactions
During the period under review, group entities entered into the following trading transactions with related parties that are not members of the group.
2015 2014
R’000 R’000
Finance cost in
– Mainsail Trading 1 024 908
– JSW Natural Energy Resources South Africa Proprietary Limited 6 055 3 932
Loans balance with related parties
– Mainsail Trading 22 746 21 722
– JSW Natural Energy Resources South Africa Proprietary Limited 514 405 476 971
20. Changes to directorate
The following directors have been appointed to/resigned from the board during the period under review:
His Excellency K Ashraff (appointed as independent non-executive) 30 January 2015
Mr KG Harris (appointed as Chief Executive Officer) 2 February 2015
Mr MCH Dhlamini (appointed as independent non-executive) 18 May 2015
M Mokogong (appointed as independent non-executive) 18 May 2015
Mr QMSM Mokoetle resigned as chairman and a director of the Company on 15 February 2016
A chairman has not yet been appointed to replace Mr Mokoetle and this will be discussed at the next board meeting which has yet
to be scheduled.
KG Harris CP Tated
Chief Executive Officer Chief Financial Officer
9 March 2016
Directors: KG Harris(CEO), CP Tated (CFO)*, K Ashraff (Independent non-executive)**, MCH Dhlamini (Independent
non-executive), LR Mamba (Non-executive), JM Mokgokong (Independent non-executive), PP Menon
(Non-executive)*
*India ** Swaziland
Registered office: 1st Floor, 198 Oxford Road, Illovo, Sandton
Company secretary: Mrs PF Smit
Transfer secretary: Computershare Investor Services Proprietary Limited
Sponsor: Exchange Sponsors
Auditors: Nkonki Incorporated
Website: www.sacmh.co.za
Date: 15/03/2016 08:46:00 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
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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