Wrap Text
Reviewed condensed consolidated results for the six months ended 30 June 2016
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 CONSOLIDATED
CONDENSED RESULTS OF SACMH AND
ITS SUBSIDIARIES ("THE GROUP") FOR
THE SIX MONTHS ENDED 30 JUNE 2016
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
Reviewed Restated
As at As at
30 June 31 December
R'000 Notes 2016 2015
ASSETS
Non-current assets 289 527 294 040
Property, plant and equipment 58 119 62 404
Intangible assets 12 180 908 180 908
Loans to shareholders - 228
Investment in subsidiaries 50 500 50 500
Current assets 2 650 342
Trade and other receivables 11 2 309 66
Cash and cash equivalents 341 276
Total assets 292 177 294 382
EQUITY AND LIABILITIES
Capital and reserves (426 943) (429 512)
Issued capital and premium 233 885 233 885
Accumulated loss (396 293) (398 862)
Revaluation reserve (264 535) (264 535)
Non-current liabilities 708 270 715 215
Shareholders' loan 645 652 659 962
Non-current provisions 10 53 751 46 576
Deferred taxation 9 8 867 8 677
Other liability - -
Current liabilities 10 850 8 679
Trade and other payables 4 603 3 101
Current provisions 3 202 2 672
Other liability 3 045 2 906
Total equity and liabilities 292 177 294 382
CONSOLIDATED CONDENSED STATEMENTS OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
Reviewed Restated
six months to six months to
R'000 Notes 30 June 2016 30 June 2015
Revenue 3 4 098 3 490
Cost of sales - (5 222)
Gross profit/(Loss) 4 098 (1 732)
Foreign exchange gain/(loss) 28 762 (31 379)
Other income 82
Depreciation 4 (4 202) ( 2 663)
Operating expenses (15 627) (3 633)
Operating profit/(loss) before finance costs and taxation 13 113 (39 407)
Finance costs 7 (10 355) (7 380)
Profit/(Loss) before taxation 2 758 (46 787)
Taxation 9 (189) (14 545)
Profit/(loss) for the year 2 569 (61 332)
Other comprehensive income - -
Total comprehensive loss attributable to ordinary shareholders 2 569 (61 332)
Profit/(loss) attributable to ordinary shareholders 2 569 (61 332)
Profit/(loss) attributable to Minority shareholders 841 (20 076)
Profit/(loss) attributable to Majority shareholders 1 728 (41 256)
Earnings/(loss) per share in (cents) 0.57 (13.56)
Diluted earnings/(loss) per share (cents) 0.57 (13.56)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Reviewed Restated
six months to six months to
R'000 30 June 2016 30 June 2015
Cash flows generated from operations (5 049) (2 086)
Net cash from operating activities (5 049) (2 086)
Cash flows from financing activities
Sale of property, plant and equipment 120 -
Net cash from operating activities 120
Cash flows from financing activities
Increase in shareholders' loans 4 855 -
RBCT loan movement 139 -
Cash from financing activities 4 994 -
Net decrease in cash and cash equivalents 65 (2 086)
Cash and cash equivalents at the beginning of the period 276 3 345
Cash and cash equivalents at the end of the period 341 1 259
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation Accumulated
R'000 capital premium reserve loss Total
Balance at 31 December 2014 45 246 188 639 (264 535) (199 141) (229 791)
Total comprehensive loss - - - (61 332) (61 332)
Balance at 30 June 2015 45 246 188 639 (264 535) (260 473) (291 123)
Balance at 31 December 2015 45 246 188 639 (264 535) (398 862) (429 512)
Total comprehensive income - - - 2 569 2 569
Balance at 30 June 2016 45 246 188 639 (264 535) (396 293) (426 942)
NOTE TO THE STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE
INCOME
30 June 2016 30 June 2015
R'000 Reviewed Restated
Basic earnings profit/(loss) 2 569 (61 332)
Diluted earnings profit/(loss) 2 569 (61 332)
Headline earnings reconciliation:
Basic earnings profit/(loss) 2 569 (61 332)
Adjusted for:
Tax effect - 14 545
Headline profit/(loss) 2 569 (46 787)
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 earnings/(loss):
Profit/(loss) attributable to ordinary shareholders 2 569 (61 332)
Less: Tax effect - 14 545
Headline profit/(loss) 2 569 (46 787)
Headline and diluted profit/(loss) per share(cents) 0.57 (10.34)
Statement of compliance and basis of preparation
The condensed consolidated interim financial statements have been prepared under the supervision of the Chief Financial Officer, Chandra
Prakash Tated CA. The directors take full responsibility for the preparation of this report, in accordance 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 2015.
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 thousand Rand (R'000) denomination, 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 2015 issued in September 2016.
COMMENTARY
1. Performance for the six months to 30 June 2016
Operations at the Groups Umlabu Colliery continue to be suspended pending the finalisation of the Water Use Licence 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 gain
The decrease of the US$/ZAR rate from R15.56 to R14.86 during the reporting period resulted in an unrealised gain of R28.762 million
(2015: loss of R31.379 million) on the shareholders loan.
3. Revenue
Revenue has increased to R4.098 million (2015: R3.490 million) due to more income from renting of logistic assets.
4. Depreciation
Depreciation charges of R4.2 million (2015: R2.7 million) are higher than the previous year as a result of assets that had depreciation
against them reversed as a result of a prior period error.
5. Cash flow statement generated from operations for interim review period
30 June 2016 30 June 2015
R'000 Reviewed Restated
Net profit/(loss) per income statement 2 569 (61 332)
Adjustments for non-cash item
Depreciation 4 202 2 663
Profit on sale of assets (37) -
(Profit)/loss on foreign exchange (28 762) 31 379
Finance costs (not yet paid) 10 355 7 080
Movements in provisions 7 176 -
Deferred tax 189 14 545
Changes in working capital
Accounts receivable (2 243) 4 545
Accounts payable 1 502 (966)
Cash flow from operations (5 049) (2 086)
6. Statement of reserves and resources and prospects
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 R10.4 million (2015: R7.4 million) are as a result of the Shareholders' loan value being increased by an additional loan
being granted by JSW to Umlabu during the period.
8. Asset management
Working capital has increased by 24% due to trading volumes with suppliers and customers being reduced at Umlabu Colliery.
9. Income and deferred tax
30 June 2016 31 December 2015
R'000 R'000
Deferred tax was raised on the following items:
a) Gain on loans acquired from subsidiaries (8 613) (8 613)
b) Bad debts provision (253) -
c) Prepayments - (64)
(8 866) (8 677)
Prepayments made on behalf of JSW fell due during the period. As a result, the deferred tax liability attached thereto was recognised
through the statement of profit and loss. A provision for bad debts was raised, resulting in a deferred tax liability being recognised
through the statement of profit and loss. The impact of these movements in the deferred tax liability on the statement of profit and loss
are summarised as follows:
Description R'000
Reversal of deferred tax liability on prepayments 64
Raising of deferred tax liability on bad debts provision (253)
Total (189)
10. Non-current provisions
This pertains to the rehabilitation provision of R53.751 million (2015: R46.576 million) in the current year. The increase in the provision was driven
mainly by inflation caused by the weakening of the exchange rate from 2015 to 2016. The mine remains under care and maintenance.
11. Trade and other receivables
Movement of trade and other receivables during interim period:
Reviewed Restated
As at As at
R'000 30 June 2016 31 December 2015
Gross trade and other receivables 3 566 66
Less provision for doubtful debts (1 257) -
Net trade and other receivables 2 309 66
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 during the reporting period.
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 13.1 % (2015: 13.1%).
13. Going concern
We draw attention to the fact that as at 30 June 2016, the Group had accumulated losses of (R396 293 000) and that the Group's
total liabilities exceed its assets by (R426 943 000). The Group's going concern has been underwritten by the 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 fulfils 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
On 9 September 2016, the Company published a circular to the effect that it proposed delisting from the JSE and that JSWSA, which
currently held 67.27% of the issued shares, were offering to purchase the remaining shares for a consideration equal to nine cents per
share. The general meeting where the delisting is to be ratified is expected to occur on 12 October 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:
Finance cost in ("R'000") 2016 2015
-Mainsail Trading 1 119 1 024
-JSW Natural Energy Resources South Africa Proprietary Limited 8 704 6 055
Loans Balance with Related Parties
-Mainsail Trading 24 850 22 746
-JSW Natural Energy Resources South Africa Proprietary Limited 620 801 514 405
20. Restatement
During the current year, it was found that expenses incurred in paying one of our service providers during the 2015 year actually related
to expenses paid on behalf of JSW Natural Energy Resources South Africa Proprietary Limited. As a result, trade and other receivables
was reduced by R228 360 and loans to Shareholders was increased by the same amount.
An account statement was received from one of our creditors during September 2016, indicating that an amount was still outstanding
to them as at 31 December 2015. As a result, trade and other payables was increased by R593 619 and accumulated loss was
increased by the same amount. Of this amount, R19 224 related to the six months ending 30 June 2015, necessitating an increase of
operating expenses by the said amount.
The correction of these errors have resulted in the following changes.
Restated
30 June 31 December
2015 2015 Difference
Statement of Financial Position R'000 R'000 R'000
Assets
Non-current assets
Loans to Shareholders - 228 228
Trade and Other Receivables 294 66 (228)
Equity and liabilities
Equity
Accumulated Loss (398 268) (398 862) (594)
Current liabilities
Trade and Other Payables 2 507 3 101 594
Restated
30 June 30 June
2015 2015 Difference
Statement of Profit or Loss R'000 R'000 R'000
Operating Expenses (3 614) (3 633) (19)
Basic loss per share (13.55) (13.56) (0.01)
Diluted loss per share (13.55) (13.56) (0.01)
Headline earning per share (13.55) (13.56) (0.01)
21. Changes to directorate
The following directors have been appointed to, or resigned from (as the case may be) the board during the period under review:
His Excellency K Ashraff (appointed as independent non-executive) 3 February 2015
Mr KG Harris (appointed as Chief Executive Officer) 3 February 2015
Mr MCH Dhlamini (appointed as independent non-executive) 19 May 2015
JM Mokogong (appointed as independent non-executive) 19 May 2015
LR Mamba (appointed as non-executive) 21 September 2015
Mr QMSM Mokoetle resigned as chairman and a director of the Company on 15 February 2016. Me LR Mamba was appointed as
chairman by resolution of the board on 24 June 2016.
KG Harris CP Tated
Chief Executive Officer Chief Financial Officer
30 September 2016
Directors: LR Mamba (Chairman), KG Harris (CEO), CP Tated (CFO)*, K Ashraff (independent non-executive)**,
MCH Dhlamini (independent non-executive), JM Mokgokong (independent non-executive) PP Menon (non-executive)*
*India ** Swaziland
Registered office: Building 6, Woodmead Willows Office Park, 19B Morris Street, Woodmead, Johannesburg
Company secretary: Mr FJ Jansen van Rensburg
Transfer secretary: Computershare Investor Services Proprietary Limited
Sponsor: Exchange Sponsors
Auditors: Nkonki Incorporated
Website: www.sacmh.co.za
Date: 29/09/2016 04:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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