Wrap Text
Reviewed provisional group for the year ended 31 December 2015
South African Coal Mining Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009012/06
Share code : SAH ISIN code: ZAE0000102034
(“SACMH”, “the Group” or “the Company”)
REVIEWED PROVISIONAL GROUP RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015
The reviewed condensed annual results for the year ended 31 December 2015 are presented below.
PROVISIONAL CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER
2015
Restated
31 December
31 December
2015
Notes 2014
Reviewed
Audited
R’000
R’000
Assets
Non-current assets 293 812 321 386
Property, plant and equipment 14 62 404 75 430
Intangible assets 180 908 180 908
Deferred Tax - 14 548
Investments 50 500 50 500
Current assets 570 8 190
Trade and other receivables 294 4 845
Cash and cash equivalents 276 3 345
Total assets 294 382 329 576
Equity and liabilities
Capital and reserves (428 918) (229 791)
Issued capital and premium 233 885 233 885
Accumulated loss (398 268) (199 141)
Revaluation reserve (264 535) (264 535)
Non-current liabilities 715 215 553 940
Shareholder’s loan 659 962 498 693
Non-current provisions 46 576 46 576
Deferred taxation 9 8 677 8 613
Other liability
- 58
Current liabilities 8 085 5 427
Trade and other payables 2 507 3 309
Current provisions 2 672 -
Other liability 2 906 2 118
Total equity and liabilities 294 382 329 576
PROVISIONAL CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE
YEAR ENDED 31 DECEMBER 2015
Restated
31 December
31 December
2015
2014
Notes Reviewed Audited
R’000 R’000
Revenue 18 841 42 595
Cost of sales (13 086) (37 714)
Gross profit 5 755 4 881
Foreign exchange losses (141 745) (75 575)
Net impairment charge 13 (2 002) (53 510)
Depreciation 14 (11 025) (6 004)
Finance income 54 28
Other income - 400
Operating expenses (18 210) (9 462)
Operating loss before finance costs and taxation (167 173) (139 242)
Finance costs (16 069) (9 907)
Loss before taxation (183 242) (149 149)
Taxation (15 885) 68 577
Loss for the year (199 127) (80 572)
Total comprehensive loss for the year (199 127) (80 572)
Total comprehensive loss attributable to ordinary shareholders (199 127) (80 572)
Loss attributable to Minority shareholders (65 712) (26 589)
Loss attributable to Majority shareholders (133 415) (53 983)
Weighted average number of shares (‘000) 452 454 452 454
Diluted average number of shares (‘000) 452 454 452 454
Basic loss per share (cents) 2 (44.01) (17.81)
Diluted loss per share (cents) 2 (44.01) (17.81)
Headline loss per share (cents) 2 (44.01) (9.29)
PROVISIONAL CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the year ended 31 December 2015
Share Share Revaluation Accumulated Total
Capital Premium reserve loss R’000
R’000 R’000 R’000 R’000
Balance at 31 December 2013 –
45 246 188 639 (264 535) (118 569) (149 219)
Audited
Total comprehensive loss for the
- - - (80 572) (80 572)
year
Balance at 31 December 2014 –
45 246 188 639 (264 535) (199 141) (229 791)
Audited (Restated)
Total comprehensive loss for the
- - - (199 127) (199 127)
year
Balance at 31 December 2015 –
45 246 188 639 (264 535) (398 268) (428 918)
Reviewed
PROVISIONAL CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2015
31 December 31 December
2015 2014
Reviewed Audited
R’000 R’000
Cash flows generated from operations (5 815) 4 549
Finance charges paid - (184)
Interest received 54 28
Tax paid - -
Net cash for operating activities (5 761) 4 393
Cash flows from investing activities - -
Cash flows from financing activities
Repayment of shareholders loans - (5 000)
Increase in shareholders loans 4 800 -
RBCT Loan movement (2 108) -
Net cash from financing activities 2 692 (5 000)
Net decrease in cash and cash equivalents (3 069) (607)
Cash and cash equivalents at beginning of year 3 345 3 952
Cash and cash equivalents at end of year 276 3 345
Notes to the Provisional results as at 31 December 2015
Note 1
Provisional statement of compliance and basis of preparation
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE
Limited Listings Requirements for provisional reports and the requirements of the Companies Act of South Africa.
The Listings Requirements require provisional reports to be prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of
the condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the
previous consolidated annual financial statements.
These provisional reports were prepared under the supervision of Chandra Prakash Tated, CA( India), CFO.
The financial statements have been prepared on the going concern basis taking into account the fact that the Group
is dependent on JSW Energy Limited, a company listed on the Indian Stock Exchanges and operating through its
subsidiary JSW Energy Natural Resources South Africa (Proprietary) Limited), (“JSW”) which will continue to
support SACMH. JSW have indicated their firm intention to continue financial support in writing subject to the
following:
- JSW obtains board approval for the additional funding at the time,
- JSW fulfils all regulatory requirements as prescribed by India legislation, and
- JSW remains the majority shareholder, and retain the management and operational control of SACMH.
JSW have demonstrated their on-going support during the current financial year.
Note 2
Earnings and Headline Earnings per Share
31 December Restated
2015 31
Reviewed December
R’000 2014
Audited
R’000
Basic earnings loss (199 127) (80 572)
Diluted earnings loss (199 127) (80 572)
Headline earnings reconciliation:
Basic earnings loss (199 127) (80 572)
Adjusted for: - 53 510
Impairment of mining right - (14 983)
Headline loss (199 127) (42 045)
Ordinary shares (‘000)
- In Issue 452 454 452 454
- Weighted Average 452 454 452 454
- Diluted Weighted Average 452 454 452 454
Basic loss per share (cents) (44.01) (17.81)
Diluted loss per share (cents) (44.01) (17.81)
R’000 R’000
Determinations of headline loss:
Loss attributable to ordinary shareholders (199 127) (80 994)
Headline Loss
(199 127) (42 467)
Headline loss per share (cents)
(44.01) (9.29)
Review Conclusion
The condensed consolidated group results have been reviewed by Nkonki, who have performed the review in
accordance with ISRE 2410 “Review of interim financial information performed by the independent auditor of the
entity”. A modified report with an emphasis of matter on going concern has been issued. A copy of the full modified
review report is available at the registered office of the company. An extract of the emphasis of matter in the report
is as follows:
““Without qualifying our conclusion, we draw attention to note 11 of the commentary which indicates that the
company incurred a loss of R199.1 million. These conditions, along with other matters as set forth in note 11 of
the condensed consolidated financial statements, indicate the existence of a material uncertainty which may cast
significant doubt on the company’s ability to continue as a going concern”.
In addition, the Group's going concern status is dependent on the continued financial support of JSW Energy
Limited (a company listed on the Indian stock exchange and operating through its subsidiary, JSW Energy Natural
Resources South Africa Proprietary Limited (JSWSA). JSWSA has confirmed, in writing, their firm intention to
continue their financial support to South African Coal Mining Holdings Limited (SACMH).
This support is subject to JSW India Limited remaining the majority shareholder of the Group; the Company
obtaining board approval to provide the further funding; and the Company obtaining regulatory approval specific to
the laws of India. These conditions, along with other matters, indicate the existence of a material uncertainty which
may cast significant doubt on the Company's ability to continue as a going concern.”
Commentary
1. Performance for the 12 months to 31 December 2015
Operations at the Group’s Umlabu Colliery continue to be suspended pending the finalisation of the Water
Use Licence Application (WULA) by the Department of Water Affairs (DWAF). All assets and infrastructure
are being maintained under a “Care and Maintenance” program.
The Group is utilising its logistical and infrastructural assets to generate rental income to offset the costs
incurred while operations remain suspended. This has resulted in a movement in the following items
reflected in the statement of comprehensive income:
- Turnover decreased by R23.754 million
- Cost of sales decreased by R24.628 million
- Gross profit increased by R0.874 million
- Operating expenses increased by R8.748 million
2. Foreign exchange loss
The depreciation of the US$/ZAR rate from R10.674 to R15.398 during the reporting period resulted in an
unrealised foreign exchange loss of R141.7 million (2014: R75.3 million) on the shareholders loan.
3. Depreciation
Depreciation charges of R11 million (2014: R6 million) are higher than the comparative period as a result
of continued strain on the global coal market and uncertainty as to when mining operations can resume.
4. Amortisation of mining right
An assessment was made of the expected future cash flows from the mining rights held by the company.
Based on the assessment, no amortisation charge was recorded (2014: Nil) as no mining activities were
conducted during the year.
5. Statement of reserves and resources and prospects
There are no changes to the Group’s estimated reserves and resources as no mining activities took place.
6. Financing activities
The movement on the shareholders loan relates to foreign exchange movement as a result of the
weakening Rand, an addition of R4.8 million to the loan from JSW and interest on the capital amount.
7. Asset management
The significant decrease in trade receivables is due to the write off of long outstanding accounts as bad
debt. This was done in order to present the figure on a conservative basis.
Cash and cash equivalents reduced significantly due to additional expenses incurred for delisting
purposes during the current financial year.
Trade and other payables reduced due to less operating expenses in South African Coal Mining
Operations (Pty) Ltd with less suppliers outstanding at year end.
8. Directors’ remuneration
The following non-executive, independent directors were paid directors’ fees (total cost to company)
during the financial year as follows:
- Mr QMSM Mokoetle R 176 090
- Mr A Ashraff R 145 840
- Mr HMC Dhlamini (Chairman: Audit Committee) R 127 510
- Mr JM Mokgokong R 112 165
- Mr LR Mamba (Chairman: Board) R 36 690
Total: R 598 295
9. Income and deferred tax
2015 2014
R’000 R’000
Deferred tax was raised on the following items:
a. Rehabilitation Provision - 13 044
b. Gain on loss acquired from subsidiaries ( 8 613) (8 613)
c. Bad debts provision - 1 504
d. Prepayments (64) -
_______ ______
(8 677) 5 935
Due to uncertainty over realisation of deferred tax assets balance resulting from the rehabilitation cost
and bad debts provision, the deferred tax asset previously raised was reversed in the current year.
10. 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 (2014: R53.5 million) has been raised against the value of
Mining Rights during the financial year.
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 13.10% (2014: 19.41%)
11. Going Concern
The Group incurred a loss of R199.1 million (2014: R80.6 million) during the 12 months ended 31
December 2015.
The Group’s final 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 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 the additional funding at the time,
- JSW fulfils all regulatory requirements as prescribed by India legislation, and
- JSW remains the majority shareholder, and retain the management and operational control of
SACMH.
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.
12. Restatement
During the current year, it was found that expenses incurred in relation to the RBCT Deferred Loan in
2014 were not accounted for in that year. A correction has been processed whereby the RBCT Deferred
Loan was increased by R 2 066 000 with a corresponding increase in RBCT Expense.
During inspection of the fixed asset register in 2015, it was found that certain assets had been incorrectly
depreciated by amounts greater than their carrying value, resulting in assets being reflected at negative
values. A correcting journal was passed that reduces accumulated depreciation by the following amounts:
- Office Equipment by R 1 916
- Owned Assets by R 26 945
- Site Establishment by R 2 042
- Plant and Equipment by R 717 252
The correction of these errors has resulted in the following changes:
Statement of Financial Audited Restated Difference
Position 31 31 31 December 2014
December December R’000
2014 2014
R’000 R’000
Assets
Non-current assets
Property, Plant and Equipment 74 682 75 430 748
Equity and liabilities
Current liabilities
Other Liability (52) (2 118) (2 066)
Statement of Profit or Loss
Depreciation (6 752) (6 004) 748
Operating Expenses (7 396) (9 462) (2 066)
Basic loss per share (17.51) (17.81) (0.29)
Diluted loss per share (17.51) (17.81) (0.29)
Headline earning per share (9.00) (9.29) (0.29)
13. Impairment and Reversal of Impairment
During a site inspection conducted in relation to the audit of the 2015 financial statements, it was
ascertained that the following assets needed to be impaired in order to accurately reflect their fair value:
2015 2014
Item R’000 R’000
Impairment:
- Furniture and Fittings (52) -
- Land and Buildings (1 464) -
- Plant and Equipment (185) -
- Leased Equipment (301) -
- Mineral Rights - (53 510)
Net Impairment Charge (2 002) (53 510)
14. Property, Plant and Equipment
Item Opening Depreciation Impairments Closing
Balance as at Balance as at
01/01/2016 31/12/2016
R’000 R’000 R’000 R’000
Furniture & Fittings 1 028 (242) (52) 734
Land and buildings 58 356 (3 945) (1 464) 52 947
Plant and equipment 5 251 (2 764) (185) 2 302
SACMEC leased 474 (174) (301) (1)
Motor vehicles 214 (100) - 114
Big tools 52 (43) - 9
Plant and equipment 1 629 (376) - 1 253
upgrades
Earth moving equipment 367 (73) - 294
Parnaby plant cost 1 700 (340) - 1 360
Spiral plant cost 1 618 (603) - 1 015
Exploration drilling 1 863 (1 863) - -
Site establishment 2 878 (502) - 2 376
75 430 (11 025) (2 002) 62 404
15. Events After the Reporting Period
On 1 March 2016, the company entered into a service agreement with Signature Business Solutions (Pty)
Limited to provide professional services of drawing up of financial statements and monthly basic
bookkeeping.
The directors are not aware of any other material event which occurred after the reporting date and up to
the date of this report.
16. Capital expenditure commitments
The Group has no capital expenditure commitments.
17. Contingencies and commitments
There have been no changes from those disclosed in the Group’s Integrated Report for the year ended
31 December 2014.
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 will continue to lease its logistical and its infrastructural
assets to third parties in the interim to offset the costs of ‘Care and Maintenance’.
No commitment has been received from the Department of Water Affairs with regard to finalisation of the
WULA.
19. Proposed de-listing of SACMH
Shareholders are referred to the firm intention announcement made on 19 October 2015 and various other
subsequent announcements on SENS regarding an offer made by JSW SA to all remaining SACMH
shareholders and the subsequent de-listing of SACMH.
The release of these results will enable the offeror and the company to complete the circular and re-submit
it to the JSE and the Take-over Regulation Panel for approval.
20. Related Parties
During the period under review, Group entities entered into the following transactions with related parties
that are not members of the group:
2015 2014
R’000 R’000
Interest paid
-Mainsail Trading 55 (Pty) Limited 2 009 1 849
-JSW Energy Natural Resources South Africa (Pty) Limited 12 716 7 875
Loan repayment
-JSW Energy Natural Resources South Africa (Pty) Limited - (5 000)
Loan addition
-JSW Energy Natural Resources South Africa (Pty) Limited 4 800 -
Loans from Related Parties
- Mainsail Trading 55 (Pty) Limited 23 731 21 722
- JSW Energy Natural Resources South Africa (Pty) Limited 636 232 476 971
There were no other related party transactions or balances during the year.
21. Changes to directorate
Mr QMSM Mokoetle resigned as chairman and a director of the Company on 15 February 2016. Mr L R
Mamba, non-executive director of the company, was appointed as Chairman to replace Mr Mokoetle.
L R Mamba CP Tated
Chairman Chief Financial Officer
Directors: L R Mamba (Non-executive Chairman), K G Harris (CEO), CP Tated (CFO),
K Ashraff (Indpendent non-executive), PP Menon(non-executive)*, MHC
Dhlamini (independent non-executive), JM Mokgokong (independent non-
executive) *India
Registered office: c/o Umlabu Mine, Farm Voorslag, Ermelo/Breyten R36, 2360
Company secretary: Mrs P F Smit
Transfer secretary: Computershare Investor Services (Pty) Ltd
Sponsor: Exchange Sponsors
Auditors: Nkonki
Website: www.sacmh.co.za
Date: 01/08/2016 01:06:00 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,
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.
Sharenet Sites 
