Wrap Text
Reviewed condensed consolidated interim results
for the six months ended 31 August 2016
Oakbay Resources and Energy Limited
Incorporated in the Republic of South Africa
(Registration number: 2009/021537/06)
Share code: ORL
ISIN: ZAE 000196085
("Oakbay Resources" or "the Group" or "the Company")
Reviewed condensed consolidated interim results
for the six months ended 31 August 2016
Salient features and financial highlights
* Excellent safety results with over 6 600 fatality free shifts now completed.
* Revenue increased by 86%.
* Coal production of 614 726 tonnes following the acquisition of the
Brakfontein Colliery in February 2016.
* Gold production of 106.59 kilograms.
* Loss per share and Headline loss per share declined by 30%.
Condensed consolidated interim statements of financial position
Unaudited
Reviewed 31 August Audited
31 August 2015 29 February
2016 Restated 2016
Notes R'000 R'000 R'000
Assets
Non-current assets 10 677 517 7 857 029 10 725 731
Plant and equipment 2 083 128 1 978 206 2 081 515
Investment property 1 029 - 1 029
Mineral resources 7 912 830 5 205 629 7 966 572
Deferred tax 10 597 440 602 667 594 659
Long-term receivables 10 300 9 128 10 614
Environmental rehabilitation
guarantee deposits 2 439 2 439 2 439
Environmental rehabilitation
obligation investments 70 351 58 960 68 903
Current assets 334 713 450 995 504 150
Inventories 192 912 205 578 183 516
Amounts owing by
related parties 12 123 865 19 933 44 380
Trade and other
receivables 17 258 25 751 51 277
Cash and cash
equivalents 678 199 733 224 977
Total assets 11 012 230 8 308 024 11 229 881
Equity and liabilities
Equity 5 731 558 4 935 387 5 775 197
Stated capital 466 398 466 398 466 398
Retained income 5 265 160 4 468 989 5 308 799
Non-controlling
interest 1 969 482 746 563 1 994 047
7 701 040 5 681 950 7 769 244
Liabilities
Non-current liabilities 2 943 501 2 156 994 2 973 222
Amount owing to holding
company 12 373 574 408 516 383 074
Other financial
liabilities 11 75 720 74 660 82 349
Deferred tax 10 2 215 592 1 457 576 2 230 640
Environmental rehabilitation
provision 13 278 615 216 242 277 159
Current liabilities 367 689 469 080 487 415
Amount owing to holding
company 12 25 850 - -
Other financial
liabilities 11 36 088 195 492 235 147
Trade and other
payables 82 661 61 435 87 679
Amounts owing to
related parties 12 222 796 212 153 164 589
Current tax payable 294 - -
Total liabilities 3 311 190 2 626 074 3 460 637
Total equity and
liabilities 11 012 230 8 308 024 11 229 881
Net asset value and share
information Net asset
value per share
attributable to the
owners of the
entity (cents) 716,44 616,92 721,90
Total number of ordinary
shares in issue 800 000 000 800 000 000 800 000 000
Condensed consolidated interim statements of profit or loss and other
comprehensive income
Unaudited
Reviewed 6 months Audited
6 months ended 12 months
ended 31 August ended
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Revenue 243 510 130 724 273 714
Cost of sales (162 519) (101 227) (227 757)
Gross profit 80 991 29 497 45 957
Other income 6 891 3 216 20 287
Other operating expenses (139 537) (57 514) (67 301)
Operating (loss)/profit (51 655) (24 801) (1 057)
Finance income 4 368 12 000 49 392
Finance costs (38 452) (21 503) (46 836)
(Loss)/Profit before tax (85 739) (34 304) 1 499
Income tax expense 17 535 (9 206) (18 412)
(Loss)/profit for the period (68 204) (43 510) (16 913)
Other comprehensive income - - -
Total comprehensive (loss)/income
for the period (68 204) (43 510) (16 913)
Total comprehensive (loss)/income
attributable to: (43 639) (33 589) (5 092)
Owners of the company (24 565) (9 921) (11 821)
Non-controlling interest (68 204) (43 510) (16 913)
Earnings per share information
Per share information (5,45) (4,20) (0,64)
Basic loss per share (cents)^ (5,45) (4,20) (0,64)
Diluted basic loss per share
(cents)*^ (5,45) (4,20) (0,68)
Headline loss per share (cents)^ (5,45) (4,20) (0,68)
Diluted headline loss per share
(cents)*^
Reconciliation between total basic
loss and total headline loss
Total comprehensive loss for the
period (68 204) (43 510) (16 913)
Loss attributable to non-
controlling interest 24 565 9 921 11 821
Total basic loss for the period
attributable to owners of the
company (43 639) (33 589) (5 092)
Adjusted for:
After tax profit on the disposal of
plant and equipment - - (484)
Non-controlling interest thereon - - 126
Total headline loss for the period
attributable to owners of the
company (43 639) (33 589) (5 450)
Reconciliation between ordinary
shares in issue and weighted number
of ordinary shares
Number of shares in issue -
beginning of the period 800 000 000 800 000 000 800 000 000
Shares issued during the period - - -
Number of shares in issue -
beginning of the period* 800 000 000 800 000 000 800 000 000
*There are no dilutive potential ordinary shares in issue which results in
no dilutionary effect.
The headline earnings per share is calculated in terms of the requirements
of Circular 2/2015 as issued by the South African Institute of Chartered
Accountants (”SAICA”).
Condensed consolidated interim statement of changes in equity
Stated Retained
Capital earnings
R’000 R’000
Balance at 28 February 2015 466 398 4 502 578
Total comprehensive loss for the period# - (33 589)
Issue of shares to non-controlling shareholders - -
Changes in ownership interest - control not lost - -
Unaudited balance at 31 August 2015 restated 466 398 4 468 989
Total comprehensive loss for the period# - 28 497
Issue of shares to non-controlling shareholders - –
Changes in ownership interest - control not lost - 811 313
Audited balance at 29 February 2016 466 398 5 308 799
Total comprehensive loss for the period# - (43 639)
Reviewed balance at 31 August 2016 466 398 5 265 160
Equity
attributable
to the Non-
owners of controlling Total
the company interest equity
R’000 R’000 R’000
Balance at 28 February 2015 4 968 976 756 484 5 725 460
Total comprehensive loss for the
period# (33 589) (9 921) (43 510)
Issue of shares to non-
controlling shareholders – – –
Changes in ownership interest -
control not lost – – –
Unaudited balance at 31 August
2015 restated 4 935 387 746 563 5 681 950
Total comprehensive loss for the
period# 28 497 (1 900) 26 597
Issue of shares to non-
controlling shareholders – 2 060 697 2 060 697
Changes in ownership interest -
control not lost 811 313 (811 313) –
Audited balance at 29 February
2016 5 775 197 1 994 047 7 769 244
Total comprehensive loss for the
period# (43 639) (24 565) (68 204)
Reviewed balance at 31 August
2016 5 731 558 1 969 482 7 701 040
#The total comprehensive loss for the period represents loss for the
reporting period as no element of other comprehensive income exists.
Condensed consolidated interim statements of cash flows
Unaudited
Reviewed 6 months Audited
6 months ended 12 months
ended 31 August ended
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Cash flows from operating activities
Cash generated from operations 37 029 5 068 52 863
Finance income 2 920 (82) 20 463
Finance costs (667) 3 708 (14 398)
Net cash generated from operating
activities 39 282 8 694 58 928
Cash flows from investing activities
Acquisitions resulting in additions of
plant and equipment (21 780) (20 384) (73 281)
Proceeds on disposal of plant and
equipment - - 2 064
Acquisitions resulting in expansion of
investment property - - (1 029)
Increase in long-term receivables (1 488) - -
Net cash used in investing activities (23 268) (20 384) (72 246)
Cash flows from financing activities
Proceeds from other financial
liabilities – – 46 907
Repayment of other financial
liabilities (234 140) (37 500) (37 500)
Proceeds from loans from holding
company 25 850 42 002 45 489
Repayment of loans from holding
company (9 500) – -
Net finance lease repayments - (1 685) (1 686)
Proceeds/(repayment) of amounts owning
to related parties 57 457 33 670 (4 490)
Proceeds from amounts owing by related
parties (79 980) (16 126) (1 487)
Net cash generated from financing
activities (240 313) 20 361 47 233
Total movement in cash and equivalents
for the period (224 299) 8 671 33 915
Cash and equivalents at the beginning
of the period 224 977 191 062 191 062
Total cash and equivalents at the end
of the period 678 199 733 224 977
Commentary
The directors are pleased to present the reviewed interim results for the
six month period ended 31 August 2016 (“the period”). Oakbay Resources
reported a 86% increase in turnover due to the positive earnings effect
of coal mining activities undertaken during the period under review.
Furthermore, the Group reported a 150% deterioration in loss before
tax primarily due to the substantially lower gold production, compared
to the prior period, as well as the effect of increased amortisation
and depreciation charges.
The six months ended 31 August 2016 marks the first reporting period
for which the financial results of the Group's coal mining activities
are reflected. The Group acquired the Brakfontein Colliery on
29 February 2016 as part of its strategy to position itself as
a diversified miner and supplier of energy related natural resources.
1. Basis of preparation
The reviewed condensed consolidated financial statements of the Group
are prepared as a going concern on a historical cost basis except for
certain financial instruments, which are stated at fair value as
applicable.
The reviewed condensed consolidated financial statements have been
prepared in accordance with the framework concepts and the measurement
and recognition requirements of International Financial Reporting
Standards (“IFRS”), the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council
and the information as required by IAS 34: Interim Financial Reporting,
the Listings Requirements of JSE Limited, and the Companies Act of
South Africa (Act 71 of 2008), as amended. The principal accounting
policies, which comply with IFRS, have been consistently applied in
all material respects in the current and comparative periods.
The accounting policies applied in the reviewed condensed consolidated
financial statements are the same as those applied in the Group’s
consolidated financial statements. All new interpretations and
standards were assessed and adopted with no material impact.
These reviewed condensed consolidated financial statements should
be read in conjunction with the Group’s consolidated financial
statements for the period ended 30 June 2016, which have been
prepared in accordance with IFRS. A copy of the full set of the
Group’s consolidated financial statements can be obtained from
the Company’s registered office.
2. Management's responsibility
The reviewed condensed consolidated financial statements for the
period ended 31 August 2016 were prepared under the supervision of
Mr TW Scott, CA (SA), the Group Financial Director. The reviewed
condensed consolidated financial statements comprise the condensed
statement of financial position at 31 August 2016 and the condensed
statements of profit or loss and other comprehensive income, changes
in equity and cash flows for the reporting period ended then.
The board of directors of Oakbay Resources (“the Board”) takes full
responsibility for the preparation of this report and that the financial
information has been correctly extracted from the underlying
consolidated financial statements.
3. Supplementary information
Except for supplementary information provided in the commentary of
this report, the unaudited interim results for the six-month period
ended 31 August 2015 have been included in the condensed consolidated
financial statements and segmental reporting analysis as supplementary
information. The supplementary information has not been reviewed by the
Group’s auditor as indicated.
4. Independent review by the Auditor
These condensed consolidated interim financial statements have been
reviewed by the Company's auditors, SizweNtsalubaGobodo Inc. The review
of the condensed consolidated interim financial statements was performed
in accordance with ISRE 2410, Review of Interim Financial Information
Performed by the Independent Auditor of the Entity. The auditors issued
and unmodified review conclusion.
The auditor’s review report issued in terms of the condensed consolidated
financial statements does not necessarily report on all the information
contained in this announcement. Any reference to future financial performance
included in this announcement has not been reviewed or reported on by the
Company’s auditor. This includes the supplementary information provided
in terms of the condensed consolidated financial statements and segmental
reporting analysis.
A copy of the auditor’s unmodified review report on the condensed consolidated
financial statements is available for inspection at the Company’s registered
office, together with the financial statements identified in the auditor’s
review report. Shareholders are advised to obtain the relevant auditor’s
review report and set of financial statements to gain a full understanding
of the nature of the respective auditor’s engagement.
5. Nature of the business
Oakbay Resources’ business activity is the mining and exploration of mineral
resources, particularly uranium, gold and coal deposits, and the beneficiation
thereof. The group owns one of the most significant uranium projects in Africa,
Shiva Uranium, which boasts one of the largest high quality uranium ore bodies
in the world, as well as a world class uranium processing plant that has
been recently commissioned. At the Shiva Uranium mine, located near Klerksdorp
in the North-West Province of South Africa, the group mines and produces gold
while it focuses on the development of its uranium project.
Oakbay Resources also mines and supplies thermal coal from its Brakfontein
project, located near Delmas in the Mpumalanga Province of South Africa.
6. Financial performance and position
Revenue increased by 86% compared to the prior period mainly due to the impact
of coal sales from the Group's newly acquired coal operations at the Brakfontein
Colliery. Total comprehensive losses for the period increased from R43.510
million in the prior period to R68.204 million by 31 August 2016 primarily as a
result of increased amortisation charges relating to the Brakfontein acquisition
as well as additional depreciation charges to plant and equipment purchased in
the second half of the 2015/2016 financial year.
The company had a strong financial position at 29 February 2016 with total assets
of R11.012 billion compared to total liabilities of R3.311 billion.
7. Safety
The group’s Shiva Uranium mine continues with its excellent safety record, with
zero fatalities and serious injuries being experienced during the six months
under review.
The Shiva Uranium mine has achieved over 6 600 fatality free production shifts
by the end of 31 August 2016, with five lost time injuries taking place during
this period. The company is firmly committed to safety practices at its operations
and ensures that mine employees and management strive toward and ensure safe
working practices. The company’s health and safety committee is responsible
for monitoring safety plans and implementing safety initiatives at the mine.
Mine management specifically emphasises the importance of using “on-the-job”
safety training initiatives as well as constant supervision of safety standards
and safety compliance.
Safety and the reduction of safety risk continues to remain the highest priority
for management, and the company looks forward to improving its safety performance
going forward, with an overall goal of zero harm.
8. Segmental analysis
Operational segments
Information related to each reportable segment is set out below. Segment profit
or loss after tax is used to measure performance because management believes that
this information is the most relevant in evaluating the results of the respective
segments relative to other entities that operate in the same industries.
Revenue
from
external
customers EBITDA*
R’000 R’000
Gold operations
31 August 2016^^ 67 803 (38 236)
31 August 2015^ 98 778 (501)
29 February 2016^^^ 185 012 758
Coal/Contract Mining
31 August 2016^^ 175 707 61 428
31 August 2015^ 31 946 8 817
29 February 2016^^^ 88 702 78 029
Uranium Development
31 August 2016^^ - (2 269)
31 August 2015^ - (5 667)
29 February 2016^^^ - (4 382)
Central Services
31 August 2016^^ - (890)
31 August 2015^ - (16 153)
29 February 2016^^^ - (46 194)
Total operations
31 August 2016^^ 243 510 20 033
31 August 2015^ 130 724 (13 504)
29 February 2016^^^ 273 714 28 211
Depreciation Finance income
R’000 R’000
Gold operations
31 August 2016^^ (14 222) -
31 August 2015^ (8 904) -
29 February 2016^^^ (19 069) -
Coal/Contract Mining
31 August 2016^^ (55 668) -
31 August 2015^ (869) -
29 February 2016^^^ - -
Uranium Development
31 August 2016^^ (853) -
31 August 2015^ - -
29 February 2016^^^ (1 739) -
Central Services
31 August 2016^^ (945) 4 368
31 August 2015^ (1 524) 12 000
29 February 2016^^^ (8 460) 49 392
Total operations
31 August 2016^^ (71 688) 4 368
31 August 2015^ (11 297) 12 000
29 February 2016^^^ (29 268) 49 392
Profit or
(loss) for
Finance cost the period
R’000 R’000
Gold operations
31 August 2016^^ - (52 458)
31 August 2015^ - (9 405)
29 February 2016^^^ - (18 311)
Coal/Contract Mining
31 August 2016^^ - 5 760
31 August 2015^ - 7 948
29 February 2016^^^ - 78 029
Uranium Development
31 August 2016^^ - (3 122)
31 August 2015^ - (5 667)
29 February 2016^^^ - (6 121)
Central Services
31 August 2016^^ (38 452) (35 919)
31 August 2015^ (21 503) (27 180)
29 February 2016^^^ (46 836) (52 098)
Total operations
31 August 2016^^ (38 452) (85 739)
31 August 2015^ (21 503) (34 304)
29 February 2016^^^ (46 836) 1 499
* Earnings before interest taxation depreciation and amortisation (EBITDA)
is equal to the operating profit or (loss) before taking depreciation or
amortisation into account.
^ The information relating to this period is unaudited.
^^ The information relating to this period is audited.
^^^ The information relating to this period has been audited. The group did
not have any inter-segmental revenue.
Segmental assets and liabilities
The amounts provided to management with respect to total assets and liabilities
are measured in a manner consistent with that of the financial statements.
These assets and liabilities are allocated based on the operations of the
segment and the physical location of the asset. The table below provides
information on segment assets and liabilities as per the statement of
financial position.
Total segment Total segment
assets liabilities
R'000 R'000
Gold operations
31 August 2016^^ 543 053 278 615
31 August 2015^ 781 159 -
29 February 2016^^^ 545 273 277 159
Coal/Contract Mining
31 August 2016^^ 2 782 521 758 824
31 August 2015^ - -
29 February 2016^^^ 2 782 521 773 063
Uranium Development
31 August 2016^^ 6 635 166 1 457 577
31 August 2015^ 6 625 232 1 457 577
29 February 2016^^^ 6 635 168 1 457 577
Central Services
31 August 2016^^ 1 051 490 816 174
31 August 2015^ 901 633 1 168 497
29 February 2016^^^ 1 266 919 952 838
Total operations
31 August 2016^^ 11 012 230 3 311 190
31 August 2015^ 8 308 024 2 626 074
29 February 2016^^^ 11 229 881 3 460 637
^ The information relating to this period is unaudited.
^^ The information relating to this period has been reviewed.
^^^ The information relating to this period has been audited.
The chief operating decision-maker reviews the group’s internal reporting in
order to assess performance and has determined the operating segments based
on these reports. The business performance of the operating segments is
evaluated from the market and product performance perspective. The segments
have not changed from the prior reporting period.
The segment relating to the coal operations of the entity reflects the coal
contract mining in the previous reporting periods at the Brakfontein Colliery,
which was acquired during February 2016, referred to as "contract mining"
and the mining of coal for the Group's own benefit in the current period,
since the acquisition, referred to as "coal mining".
The head office, gold operations and uranium development segments all operate
in the Republic of South Africa. All segment revenue has been derived from
South African operations based on the geographic location of customers
and all segment assets are located in the Republic of South Africa based
on the physical geographic location of the assets.
9. Operational overview
Key indicators
6 months 6 months 12 months
ended ended ended
31 August 31 August 29 February
2016 2015 2016 Movement*
Gold bearing ore
milled (tonnes) 254 957 343 073 657 606 (26%)
Gold sold (kg) 106.59 215.34 377.08 (51%)
Coal mined (tonnes) 614 726 420 304 1 100 000 46%
* The movement is based on the comparison of the respective tonnes and
kilograms for the periods ended 31 August 2016 and 31 August 2015 as both
of these periods are reflective of operations for a six-month period. The
tonnes and kilograms reflected for the period 29 February 2016 represents
a twelve-month period and is therefore not comparable.
Gold operations
Gold production from opencast gold mining operations at the Shiva Uranium mine
for the six months ended 31 August 2016 amounted to a total of 3,430 ounces
(106.59 kg). This was significantly lower to gold production in the comparative
period, during which 6,293 ounces (215.34 kg) of gold was produced during the
six months ended 31 August 2015.
Gold production for the six months has been primarily constrained by the
effect of the declining availability and efficiency of the gold treatment
plant, coupled with production issues in the opencast section. The company
also experienced several production stoppages during the period due to
ongoing security issues at the Shiva Uranium mine.
Mine management has been focused on improving plant availability and reliability.
Significant achievements have recently been made in this regard and increasing
plant availability has recently come on line. Plant recoveries remain a concern
for management and efforts are currently underway to realise a significant and
immediate improvement in plant efficiency and performance.
The company is also investigating higher grade gold opportunities with a view
to improving overall gold production.
Uranium operations and further exploration
The company’s recently completed an option analysis study on its uranium project;
the results of which indicated that the potential for the Shiva Uranium project
is significantly more promising than the results indicated in the 2009 bankable
feasibility study. The company intends to focus on immediately implementing the
recommendations of the study, which will be a pre-cursor to the forthcoming
second bankable feasibility study.
Ongoing underground development on the uranium section continued successfully
during the six month under review, and the company is well placed to ramp-up
development on its underground uranium operations in the future.
Coal operations
Following the successful completion of the acquisition of the Brakfontein
Colliery in February 2016, the group is pleased to report the first operational
results of its coal mining activities. The acquisition marks the group’s first
step in expanding and diversifying its activities, especially with regard to
energy related natural resources.
Coal production for the six months ended 31 August 2016 totalled 614,726 tonnes,
with average monthly production at approximately 102,000 tonnes per month.
Consistency in achieving targeted monthly production remains management’s
primary concern, and management is focusing on improving the reliability and
efficiency of its opencast equipment. Coal production during the six months
was also interrupted by several labour stoppages due to strike action
undertaken by mine employees.
10. Deferred tax
Unaudited
Reviewed 31 August Audited
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Deferred tax asset 597 440 602 667 594 659
Deferred tax liability (2 215 592) (1 457 576) (2 230 640)
Total net deferred tax liability (1 618 152) (854 909) (1 635 981)
Deferred tax asset
Deductible temporary differences on
uranium and gold operations 596 242 602 667 593 461
Deductible temporary differences on
coal operations 1 198 - 1 198
Total deferred tax asset 597 440 602 667 594 659
Deferred tax liability
Taxable temporary differences on
mineral resource assets - gold and
uranium (1 457 577) (1 457 576) (1 457 576)
Taxable temporary differences on
mineral resource assets - coal (758 015) - (773 064)
Total deferred tax liability (2 215 592) (1 457 576) (2 230 640)
Reconciliation of net deferred tax
liability
Balance at the beginning of the
period (1 635 981) (845 703) (845 703)
Deferred tax asset acquired through
business combination - - 1 198
Deferred tax liabilities acquired
through business combination - - (773 064)
Charge to profit or loss 17 829 (9 206) (18 412)
Balance at the end of the period (1 618 152) (854 909) (1 635 981)
Deferred tax has been measure at the rates that are expected to apply when
the group realises the carrying amount of its assets, or settles the carrying
amount of its liabilities.
A deferred tax asset is recognised for deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable
that taxable profit will be available against which the deductible temporary
differences can be utilised and to the extent that sufficient taxable
temporary differences exist against which deductible temporary differences
can be utilised before they expire.
The deferred tax assets and deferred tax liabilities has not been offset in
the statement of financial position as the Group has no legal right to settle
current tax amounts on a net basis although the deferred tax amounts are
levied by the same taxing authority.
11. Other financial liabilities
Unaudited
Reviewed 31 August Audited
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Industrial Development Corporation
("IDC") borrowings
Balance at the beginning of the period 123 732 146 186 146 186
Repayments for the period (37 500) (37 500) (37 500)
Fair value adjustment - 1 530 (3 235)
Accrued finance cost for the period 25 576 9 584 18 281
Balance at the end of the period 111 808 119 800 123 732
Bank of Baroda (“BoB”) facility
Balance at the beginning of the period 193 764 146 858 146 858
(Repayment)/drawn-down on loan facility (196 640) - 46 906
Finance costs for the period 2 876 3 494 -
Balance at the end of the period - 150 352 193 764
Analysis of current and non-current
portions of other financial liabilities
Non-current portion of other financial
liabilities 75 720 74 660 82 349
Current portion of other financial
liabilities 36 088 195 492 235 147
Total balance at the end of the period 111 808 270 152 317 496
Terms and conditions relating to the IDC loan
In terms of the restructured loan agreement, which was effective 24 June
2014, the terms of the loan are such that it attracts interest at prime plus 2%
and is repayable at the maturity date of the loan on 31 March 2018. The
repayment of the capital amount remained unchanged with remaining payments
of R37.5 million due on 30 June 2017 and 31 March 2018 respectively.
There are fair value adjustments that were recorded in profit or loss due to
changes in timing of the cash flows relating to the interest portion.
Previously the interest on the capital amount of the loan was assumed to
be due and payable on a quarterly basis based on the interpretation of the
restructured loan agreement. The revised interpretation provides for interest
to be repaid at the maturity date of the loan of 31 March 2018. The change in
the timing of the repayment of interest was not considered
to be a significant modification as the change in value is less than 10%
The loan is secured against the moveable and immovable property of Shiva
Uranium Proprietary Limited.
Terms and conditions relating to the BoB facility
Borrowings on the BoB facility are secured against, and to the extent of,
cash fixed deposits invested by the Company and held at the BoB. The loans bear
interest at variable rates linked to investment rates on fixed deposits and has
no fixed terms of repayment. The facility was settled in full during the current
period using cash fixed deposits on hand at the BoB. The loan is denominated
in South African Rands.
12. Related parties
Balances related to related parties
Unaudited
Reviewed 31 August Audited
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Amounts owing by related parties
Tegeta Exploration and Resources
Proprietary Limited 116 306 14 692 38 336
Surya Crushers Proprietary Limited 7 370 4 575 5 522
Other 189 666 522
Balance at the end of the period 123 865 19 933 44 380
Amounts owing to related parties
Action Investments Proprietary
Limited 115 652 129 590 114 446
Confident Concepts Proprietary
Limited 79 718 - -
JIC Engineering Services
Proprietary Limited - 28 946 -
Scipio Proprietary Limited - 3 184 -
Westdawn Investments Proprietary
Limited 21 664 44 798 45 632
Unlimited Investments Proprietary
Limited 4 511 4 511 4 511
Other 1 251 1 124 -
Balance at the end of the period 222 796 212 153 164 589
Amounts owing to the holding
company - Oakbay Investments
Proprietary Limited
Non-current portion of amounts
owing to the holding company 373 574 408 516 383 074
Current portion of amounts owing to
the holding company 25 850 - -
Balance at the end of the period 399 424 408 516 383 074
Terms and conditions of the Action Investments loan
The loan granted by Action Investments is unsecured, bears interest at LIBOR
plus 3%. The principle and interest accrued on the loan shall become due and
payable upon written demand from the lender. No notice to repay the loan has
been received at the reporting date. The loan is denominated in South
African Rands.
Terms and conditions of the Oakbay Investments Proprietary Limited loan
The loan granted by Oakbay Investments Proprietary Limited is unsecured,
bears no interest and is repayable on 367 days after notice of repayment is
issued by the shareholder to the company. No notice to repay the loan has
been received at the reporting date. For purposes of determining the fair
value of the loan, a discounted cash flow model has been applied on the
basis that the interest rate applicable is the prime interest rate less
3% representing the risk adjusted opportunity cost of borrowings.
General terms and conditions related to amounts owing by or to related parties
All other related party loans are unsecured, bear no interest and there are
no specified fixed terms of repayment. All of these loans are denominated
in South African Rands.
Outstanding related party balances in terms of monthly transactional accounts,
do not attract interest and neither are settlement policies strictly adhered
to. This does not apply to loan accounts for which the terms and conditions
are set out above.
Transactions with related parties*
Unaudited
Reviewed 31 August Audited
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Services rendered to related parties 45 407 - 104 508
Tegeta Exploration and Resources
Proprietary Limited 842 - 9 311
Surya Crushers Proprietary Limited 46 249 - 113 819
Services rendered from related parties
Westdawn Investments Proprietary
Limited 23 968 - 29 878
Confident Concepts Proprietary Limited 79 718 - -
103 686 - 29 878
*Only transactions with related parties, that are considered to be material,
are disclosed and included in under this note.
13. Environmental rehabilitation provision
Unaudited
Reviewed 31 August Audited
31 August 2015 29 February
2016 Restated 2016
R'000 R'000 R'000
Reconciliation of the balance for
the period
Balance at the beginning of the
period 277 159 209 811 209 811
Unwinding of interest 8 583 8 287 12 861
(Reversed)/capitalised to property,
plant and equipment (2 221) (359) 43 604
Revision of estimate in environmental
rehabilitation provision recognised
in profit or loss (4 906) (1 497) 4 030
Acquired through business combination - - 6 853
Balance at the end of the period 278 615 216 242 277 159
The environmental provision includes estimated costs for the rehabilitation
of gold, uranium and coal mining sites. The group is required by law to
undertake rehabilitation works as part of their ongoing operations. The
group makes contributions into environmental rehabilitation obligation
funds and holds guarantees to fund a portion of the estimated costs of
rehabilitation.
Change in estimates arise from changes in resources, changes in life of mine
as well as changes in laws and regulations governing environmental matters.
Increases in decommissioning provisions relate to the increase in the
expected future discounted cost of decommissioning plant and equipment.
Changes in estimates relating to decommissioning provisions are included
in the cost of property, plant and equipment. Changes in the rehabilitation
provision relates to the expected future discounted costs of rehabilitating
mining areas.
Changes in estimates relating to rehabilitation provisions are recognised as
an expense in the period in which the change in estimate arises.
14. Financial instruments information
The group has not disclosed the fair values of financial instruments measured at
amortised cost as their carrying amounts closely approximate their fair values.
There were no financial instruments measured at fair value that were individually
material at the end of the reporting period.
15. Capital commitments
The Group does not have any capital commitments for which specific board approval
has been obtained as at 31 August 2016.
16. Changes to the Board of Directors
The following changes were effected to the Board of Directors during the six-month
period ended 31 August 2016:
* Mr AK Gupta resigned as Non-Executive Chairman with effect from 08 April 2016.
* Mr V Gupta resigned as Chief Executive Officer with effect from 08 April 2016.
* Mr J Roux was appointed as Chief Executive Officer with effect from 17 May 2016.
* Mr N Howa was appointed as Non-executive director with effect from 09 June 2016
and subsequently resigned with effect from 17 October 2016.
* Mr TW Rensen previously the company’s Lead Independent Non-executive Director,
was appointed as Independent Non-executive Chairman with effect from 08 April 2016.
17. Events after the reporting period
* The company successfully appointed a JSE approved sponsor on 1 September 2016.
* In October 2016, legal proceedings involving the Group, its holding company, Oakbay
Investments Proprietary Limited and several others indicated that five transactions
and/or activities pertaining to the Oakbay Resources and Energy group of companies
were reported to the Financial Intelligence Centre ("the FIC") in terms of section
29 of the financial Intelligence Centre Act ("FICA"). The Group has not yet been able
to identify or confirm the existence of the reported transactions in its accounting
records and banking statements, and requires further information to do so. The Group
has not yet been able to procure this additional information from the FIC. Further to
this, the Audit Committee has requested that the Group's external auditors perform an
independent investigation of these transactions, and shareholders will be updated
accordingly on the results of this investigation upon its conclusion.
Other than mentioned in this report, there were no other material events after the
reporting date that require disclosure.
18. Dividend declaration
In line with group strategy, no dividend has been declared for the interim period.
19. Prior period errors
The Group has previously communicated the impact of a prior period error relating to
the unrecognised deferred tax assets relating to unutilised tax losses and tax credits
in Shiva Uranium Proprietary Limited, which was predominantly acquired when the original
acquisition of that entity took place, and was accounted for as a business combination
in terms of IFRS 3: Business Combinations, during the financial period ended
28 February 2011.
The prior period error resulted in the restatement of the previously reported interim
financial results for the six-month period ended 31 August 2015. The table below reflects
the impact of the prior period error on this comparative information:
Reporting period ended 31 August 2015
Unaudited
As previously Unaudited Unaudited
reported Adjustments Restated
R’000 R’000 R’000
Consolidated statement of financial
position
Deferred tax assets - 602 667 602 667
Total assets - 602 667 602 667
Stated capital 466 398 - 466 398
Retained income 4 023 015 445 974 4 468 989
Non-controlling interest 589 870 156 693 746 563
Total equity 5 079 283 602 667 5 681 950
Deferred tax liabilities 1 457 576 - 1 457 576
Total liabilities 1 457 576 - 1 457 576
Net asset value per share
attributable to the owners of the
entity (cents) 561,18 55,75 616,92
Consolidated statement of profit or
loss and other comprehensive income
Income tax expense - (9 206) (9 206)
Loss and total other comprehensive
loss for the period (34 304) (9 206) (43 510)
Total comprehensive (loss)
attributable to:
Owners of the company (26 777) (6 812) (33 589)
Non-controlling interest (7 527) (2 394) (9 921)
(34 304) (9 206) (43 510)
Earnings per share information
Per share information
Basic loss per share (cents) (3,35) (0,85) (4,20)
Diluted basic loss per share
(cents) (3,35) (0,85) (4,20)
Headline loss per share (cents) (3,35) (0,85) (4,20)
Diluted headline loss per share
(cents) (3,35) (0,85) (4,20)
For and behalf of the Board of Directors
TW Rensen J Roux
Chairman Chief Executive Officer
30 November 2016 30 November 2016
Directors
TW Rensen* (Chairman) (Irish), J Roux (Chief Executive Officer), TW Scott
(Financial Director), DJ Nyamane*, MV Pamensky*.
*This director is a Independent Non-executive director.
Administrative information
Registered office
Grayston Ridge Office Park
Block A, Lower Ground Floor
144 Katherine Street
Sandown
Sandton
South Africa
Postal address
Postnet Suite 458
Private Bag X9
Benmore
South Africa
2010
Company secretary
iThemba Governance and Statutory Solutions Proprietary Limited
Monument Office Park
Block 5 Suite 201
79 Steenbok Avenue
Monument Park
South Africa
P O Box 25160
Monument Park
South Africa
0105
External auditors
SizweNtsalubaGobodo Inc.
20 Morris Street East
Woodmead Johannesburg South Africa
P O Box 2939
Saxonwold
South Africa
2132
Transfer Secretaries
Trifecta Capital Services Proprietary Limited
Capital House
31 Beacon Road Florida North Roodepoort South Africa
P O Box 61272
Marshalltown
South Africa
2107
Sponsor
River Group
2 Kloof Trio
211 Kloof Street
Waterkloof
South Africa
P O Box 2579
Brooklyn Square
South Africa
0075
www.oakbay.co.za
30 November 2016
Johannesburg
Corporate advisor and sponsor
River Group
Date: 30/11/2016 05:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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