Wrap Text
Unaudited Interim Consolidated Financial Statements
for the period ended 31 August 2016
Rockwell Diamonds Inc.
(A company incorporated in accordance with the laws of British
Columbia, Canada)
(Incorporation number BC0354545)
(South African registration number: 2007/031582/10)
Share code on the
JSE Limited: RDI
ISIN: CA77434W2022
Share code on the TSX: RDI CUSIP Number: 77434W103
(“Rockwell” or
“the Group”)
17 October 2016
Unaudited Interim Consolidated Financial Statements
for the period ended 31 August 2016
Consolidated Statements of Financial Position
As at As at
31 August 29 February
Amounts in Canadian Dollars (’000) 2016 2016
Assets
Non-current assets
Mineral property interests 23 428 23 871
Investment in associates 539 452
Property, plant and equipment 27 723 25 506
Investments and deposits 1 441 1 344
Rehabilitation deposits 1 167 1 103
Total non-current assets 54 298 52 276
Current assets
Inventories 2 616 2 100
Trade and other receivables 3 369 4 083
Cash and cash equivalents 23 58
Total current assets 6 008 6 241
Total assets 60 306 58 517
Equity and liabilities
Equity
Share capital 147 472 147 472
Reserves (13 742) (13 607)
Retained loss (130 376) (130 358)
Total equity 3 354 3 507
Liabilities
Non-current liabilities
Loans and borrowings 25 649 26 573
Finance lease obligation - 430
Deferred tax 4 867 4 867
Rehabilitation obligation 8 628 7 753
Total non-current liabilities 39 144 39 623
Current liabilities
Loans from related parties 1 182 1 218
Finance lease obligation 765 594
Trade and other payables 15 301 12 185
Bank overdraft 560 1 390
Total current liabilities 17 808 15 387
Total liabilities 56 952 55 010
Total equity and liabilities 60 306 58 517
Consolidated Statements of Financial Performance
3 months 6 months 3 months 6 months
ended ended ended ended
Amounts in 31 August 31 August 31 August 31 August
Canadian Dollars (‘000) 2016 2016 2015 2015
Sale of diamonds 10 576 22 673 12 277 20 546
Beneficiation income 2 839 3 208 8 689 9 659
Cost of sales before
amortization and
depreciation (11 717) (20 890) (11 791) (24 140)
Gross profit before
amortization and
depreciation 1 698 4 991 9 175 6 065
Amortization of mineral
property interests (659) (932) (747) (856)
Depreciation of property,
plant and equipment (1 152) (2 295) (1 559) (2 859)
Rehabilitation obligation
recognized (514) (556) (32) (65)
Gross (loss) profit (627) 1 208 6 837 2 285
Other income 216 270 143 515
General, administration
and business development
expenses (995) (1 708) (1 658) (3 262)
Loss on sale of subsidiary - - - (1 774)
Realized foreign exchange
with sale of subsidiary - - - 1 276
(Loss) profit before net (1 406) (230) 5 322 (960)
finance costs
Finance income 1 19 10 49
Foreign exchange profit
(loss) on US$ loans 1 567 1 632 (2 823) (2 823)
Finance costs (791) (1 508) (1 037) (1 341)
(Loss) profit after net
finance costs (629) (87) 1 472 (5 075)
Share of profit from equity
accounted investment 33 69 58 91
(Loss) profit before
taxation (596) (18) 1 530 (4 984)
Taxation 8 - (384) 950
(Loss) profit for the period (588) (18) 1 146 (4 034)
(Loss) profit attributable to:
Owners of the parent (588) (18) 1 195 (3 951)
Non-controlling interest - - (49) (83)
(588) (18) 1 146 (4 034)
(Loss) earnings per share
Basic and diluted (loss)
earnings per share (cents) (1.07) (0.03) 2.19 (7.24)
Consolidated Statements of Comprehensive Income
3 months 6 months 3 months 6 months
ended ended ended ended
Amounts in 31 August 31 August 31 August 31 August
Canadian Dollars (‘000) 2016 2016 2015 2015
(Loss) profit for the
period (588) (18) 1 146 (4 034)
Other comprehensive income
net of taxation
Items that are or may be
reclassified to profit or loss
Exchange differences on
translating foreign
operations 302 (151) (971) (1 185)
Realized foreign exchange
differences with sale of
subsidiary - - - (1 276)
Other comprehensive income
for the period net of
taxation 302 (151) (971) (2 461)
Total comprehensive income
for the period (286) (169) 175 (6 495)
Total comprehensive
income attributable to:
Owners of the Group (286) (169) 205 (6 495)
Non-controlling interest - - (30) -
Total comprehensive income
for the period (286) (169) 175 (6 495)
Consolidated Statements of Changes in Equity
Foreign Share-
currency based
Amounts in Canadia Share translation payment Total
Dollars (‘000) capital reserve* reserve** reserves
Balance at
01 March 2015 147 435 (17 605) 9 030 (8 575)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (2 511) - (2 511)
Total comprehensive
income for the period - (2 511) - (2 511)
Share-based payment
expense - - 50 50
Sale of subsidiary - (1 276) - (1 276)
Total changes - (3 787) 50 (3 737)
Balance as at
31 August 2015 147 435 (21 392) 9 080 (12 312)
Balance at
01 March 2016 147 472 (22 706) 9 099 (13 607)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (151) - (151)
Total comprehensive
income for the period - (151) - (151)
Share-based payment expense - - 16 16
Total changes - (151) 16 (135)
Balance at
31 August 2016 147 472 (22 857) 9 115 (13 742)
Total
attribu-
table to Non-
equity control-
Amounts in Canadia Retained holders of ling Total
Dollars (‘000) loss the Group interest equity
Balance at
01 March 2015 (102 076) 36 784 (2 369) 34 415
Total comprehensive
income for the period
Loss for the period (3 951) (3 951) (83) (4 034)
Other comprehensive
income - (2 511) 83 (2 428)
Total comprehensive
income for the period (3 951) (6 462) - (6 462)
Share-based payment
expense - 50 - 50
Sale of subsidiary - (1 276) - (1 276)
Total changes (3 951) (7 688) 1 678 (6 010)
Balance as at
31 August 2015 (106 027) 29 096 (691) 28 405
Balance at
01 March 2016 (130 358) 3 507 - 3 507
Total comprehensive
income for the period
Loss for the period (18) (18) - (18)
Other comprehensive income - (151) - (151)
Total comprehensive income
for the period (18) (169) - (169)
Share-based payment
expense - 16 - 16
Total changes (18) (153) - (153)
Balance at
31 August 2016 (130 376) 3 354 - 3 354
* Currency translation differences arising on the conversion of the
net investment in foreign operations from the functional currency to
the Company’s presentation currency are accumulated in the foreign
currency translation reserve.
** Equity settled share-based payment transactions are accumulated in
the share- based payment reserve.
Consolidated statements of cash flows
3 months 6 months 3 months 6 months
ended ended ended ended
Amounts in 31 August 31 August 31 August 31 August
Canadian Dollars (‘000) 2016 2016 2015 2015
Cash receipts from
customers 14 910 26 748 17 478 26 340
Cash paid to suppliers
and employees (10 906) (20 685) (13 756) (27 638)
Cash generated from
(utilised by) operations 4 004 6 063 3 722 (1 298)
Finance income 1 19 53 92
Finance costs (768) (1 460) (112) (223)
Net cash inflow (outflow)
from operating activities 3 237 4 622 3 663 (1 429)
Cash flows from investing
activities
Purchase of property,
plant and equipment (2 102) (3 839) (647) (907)
Proceeds from sale of
property, plant and
equipment 5 220 89 89
Purchase of mineral
property interests (21) (21) - -
Proceeds from sale of
mineral property interests - - - 515
Proceeds from sale of
subsidiary - - 601 2 867
Acquisition of subsidiary
and business combination - - - (1 708)
Advances from related
party loans - - 8 28
Repayment of related
party loans (71) (36) - -
Increase in investments
and deposits (1 082) (1 194) (13) (84)
Decrease in rehabilitation
deposits 1 151 1 133 316 282
Repayment of loan from
buyers of subsidiary - 1 712 - -
Net cash (outflow) inflow
from investing activities (2 120) (2 025) 354 1 082
Cash flows from financing
activities
Advances from loans and
borrowings 215 1 511 (4 898) (2 977)
Repayment of loans and
borrowings (1 606) (2 968) - -
Repayment of finance
lease obligations (175) (345) (201) (409)
Net cash outflow from
financing activities (1 566) (1 802) (5 099) (3 386)
Net movement in cash
and cash equivalents for
the period (449) 795 (1 082) (3 733)
Cash and cash equivalents
at the beginning of
the period (88) (1 332) (1 299) 576
Cash and cash equivalents
released from assets
held for sale - - - 776
Total net cash and cash
equivalents at end of
the period (537) (537) (2 381) (2 381)
Sale of subsidiary
An acquisition consortium assumed control of Tirisano on March 28,
2015, and therefore the Group accounted for the sale as of that date.
The cash consideration was to be settled by way of two initial
payments totaling ZAR20 million ($1.8 million), followed by 20
equal monthly instalments of ZAR2 million ($0.17 million), of which
12 have been received to date. Therefore as at 29 February 2016,
ZAR22 million ($1.8 million) was outstanding on the sale price.
This was received in the period under review, after agreement of
an early settlement discount of ZAR2 million.
Carrying value of assets sold
Property, plant and equipment 1 417
Mineral property interests 8 000
Rehabilitation obligation (2 072)
Rehabilitation deposits 1 739
Trade and other receivables 1 142
Trade and other payables (238)
Loans and borrowings (3 720)
Loan to related party 8
Outside shareholders 1 678
Total net assets sold 7 954
Net assets sold 7 954
Loss on sale of subsidiary 1 774
6 180
Consideration
Cash received 2 098
Deferred consideration - outstanding at year end 2 770
Deferred consideration - received since acquisition 1 312
6 180
Business combination
On May 25, 2015, Rockwell announced the closing of the
Bondeo 140 cc acquisition (“Steyn Transaction”), and assumed
control on May 28, 2015. All required approvals and long term
acquisition credit facilities were secured.
The acquisition was accounted for as an acquired business in terms
of IFRS 3: Business Combinations. It included the purchase of 100%
of the issued share capital in Pioneer Minerals Proprietary Limited
which owns the Remhoogte property, from Bondeo 140 cc, the Holsloot
and Bo-Karoo properties and certain earthmoving equipment and plant.
The movable assets acquired have been included in a first security
charge securing the two long term acquisition credit facilities from
Diacore and Emerald as disclosed in note 9.
The following summarises the fair value of assets and liabilities
acquired
Mineral property interests 13 130
Property, plant and equipment 13 385
Deferred tax (3 368)
Rehabilitation obligation (994)
Other liabilities (99)
Total identifiable net assets 22 054
The Group financed the purchase consideration through
Cash (513)
Bridging finance – Diacore (paid directly by vendor
to seller) (20 346)
Bridging finance – Mark Bristow (1 195)
(22 054)
Net cash outflow on acquisition
Cash consideration paid (1 708)
(Loss) earnings per share
3 months 6 months 3 months 6 months
ended ended ended ended
Amounts in 31 August 31 August 31 August 31 August
Canadian Dollars (‘000) 2016 2016 2015 2015
Basic and diluted (loss)
earnings per share
Basic (loss) earnings
per share
Cents per share (1.07) (0.03) 2.19 (7.24)
Basic earnings (loss) per share was calculated based on a weighted
average number of ordinary common shares of 54 983 244 for the
3 months ended 31 August 2016 (3 months ended 31 August 2015:
54 558 244) and 54 983 244 for the 6 months ended 31 August 2016
(6 months ended 31 August 2015: 54 558 244).
Reconciliation of earnings (loss) for the period to basic
3 months 6 months 3 months 6 months
ended ended ended ended
Amounts in 31 August 31 August 31 August 31 August
Canadian Dollars (‘000) 2016 2016 2015 2015
(Loss) profit for the
period (588) (18) 1 146 (4 034)
Adjusted for:
Loss attributable to
non-controlling interest - - 49 83
Basic (loss) earnings
attributable to owners
of the Group (588) (18) 1 195 (3 951)
Diluted (loss) earnings per share is equal to (loss) earnings per
share because there are no dilutive potential ordinary
shares in issue.
At 31 August 2016 and 31 August 2015 the impact of share-based payment
options were excluded from the weighted average number of shares as the
effect would have been anti-dilutive.
Basic and diluted headline (loss) earnings per share
3 months 6 months 3 months 6 months
ended ended ended ended
Amounts in 31 August 31 August 31 August 31 August
Canadian Dollars (‘000) 2016 2016 2015 2015
Headline (loss) earnings
per share (cents) (1.08) (0.40) 2.17 (6.65)
Reconciliation between
basic (loss) earnings
and headline (loss)
earnings
Basic (loss) earnings
attributable to owners
of the Group (588) (18) 1 195 (3 951)
Adjusted for:
Profit on disposal of assets (4) (204) (11) (11)
Profit on disposal of mineral
property - - - (165)
Realized foreign exchange
with sale of subsidiary - - - (1 276)
Loss on sale of subsidiary - - - 1 774
Non-controlling interest
portion of above adjustment - - - -
Headline (loss) earnings
attributable to owners of
the Group (592) (222) 1 184 (3 629)
The basic and diluted headline (loss) earnings per share disclosure
is provided based on the listing requirements of the Johannesburg
Stock Exchange (Group’s secondary listing). The disclosure of basic
and diluted headline (loss) earnings per share is provided in
accordance with Circular 2/2013 as issued by the South African
Institute of Chartered Accountants. Headline (loss) earnings
represents the basic (loss) earnings attributable to the owners of
the Group excluding certain remeasurements.
At 31 August 2016 and 31 August 2015 the impact of share-based
payment options were excluded from the weighted average number of
shares, for the purpose of the diluted headline (loss) earnings per
share calculation, as the effect would have been anti-dilutive.
Segmental information
The Group has three reportable operating segments, as described
below, which are the Group’s operating divisions. These divisions
offer different diamond product characteristics, qualities,
geological characteristics, processes and services, and are managed
separately because they require different technology and profit or
cost strategies. For each of the divisions the Group executive
committee (chief operating decision making body) reviews internally
managed reports on at least a monthly basis. The following describes
the operations in each of the Group’s reportable segments:
– Northern Cape operation is associated with the mining of Paleo
Channels and Rooikoppie gravels and the recovery of high value and
larger carat size diamonds;
– North West operation is associated with the mining of potholes and
the recovery of lower value and smaller carat size diamonds; and
– Corporate represents the corporate management and administrative
function of the Group.
The reconciliation column represents the inter group transactions
eliminated on consolidation. All reportable segments are located in
the same geographical jurisdiction. Information regarding the results
of each of the reportable segments is included below.
For the 6 months ended 31 August 2016
Amounts in
Canadian Northern North Corpo- Recon-
Dollars (‘000) Cape West rate ciling Total
Total assets 59 369 - 937 - 60 306
Total liabilities (34 092) - (22 660) - (56 752)
External revenue (25 881) - - - (25 881)
Inter segment
revenue - - 1 311 - 1 311
Profit/(loss) for
the period 651 - (669) - (18)
For the year ended 29 February 2016
Amounts in
Canadian Northern North Corpo- Recon-
Dollars (‘000) Cape West rate ciling Total
Total assets 56 394 - 4 504 (2 081) 58 817
Total liabilities (25 523) - (27 406) (2 081) (55 010)
External revenue (46 274) (1 065) - - (47 339)
Inter-segment
revenue - - - - -
Loss for the yea (18 350) (4 027) (5 304) - (27 681)
For the 6 months ended 31 August 2015
Amounts in
Canadian Northern North Corpo- Recon-
Dollars (‘000) Cape West rate ciling Total
Total assets 70 739 - 64 253 (51 770) 83 222
Total liabilities 78 911 - 27 676 (51 770) 54 817
External revenue 29 140 1 065 - - 30 205
Profit/(loss) for the
period 1 751 (15) (5 770) - (4 034)
The Group's primary listing is on the TSX and the Group's secondary
listing is on the JSE.
Corporate information
Registered office – South Africa: Level 1, Wilds View, Isle of
Houghton Corner Carse O’Gowrie and Boundary Roads Houghton Estate,
Johannesburg 2198
PO Box 3011, Houghton 2041, South Africa
Telephone: +27 11 484 0830
Facsimile: +27 86 262 2838
Corporate address – Canada:
2900–550 Burrard Street, Vancouver
British Columbia, Canada V6C 0A3
Telephone: +1 604 631 3131
Facsimile: +1 604 631 3232
Toll Free: 1 866 635 3131
JSE sponsor: PSG Capital
First Floor, Building 8 Inanda Greens Business Park,
54 Wierda Road West, Wierda Valley, Sandton 2196
International broker: Northland Capital Partners Limited
60 Gresham Street, London, EC2V 7BB United Kingdom
Auditors: KPMG Inc Chartered Accountants
KPMG Crescent, 85 Empire Road, Parktown 2193, South Africa
Transfer agents - South Africa:
Computershare Investor Services Proprietary Limited
(Registration number 2004/0036471/07)
Ground Floor, 70 Marshall Street Johannesburg 2001, South Africa
Transfer agents - Canada: Computershare Investor Services Inc.
3rd Floor, 510 Burrard Street, Vancouver, British Columbia
Canada V6C 3B9
Lawyers - South Africa:
Brink Falcon Hume Inc Attorneys
Second Floor, 8 Melville Road, Illovo, Sandton 2196, South Africa
Lawyers - Canada:
Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, Ontario,
Canada, M5H 2T6
Date: 17/10/2016 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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