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interim results For the half year ended 30 June 2017
HWANGE COLLIERY COMPANY LIMITED
(Incorporated in Zimbabwe under registration number 381/1954)
ZSE Share Code: HCCL.ZW ISIN: ZW0009011934
JSE Share Code: HCCL.ZW ISIN: ZW0009011934
LSE Share Code: HCCL.ZW ISIN: ZW0009011934
UNAUDITED CONDENSED INTERIM FINANCIAL RESULTS
For the half year ended 30 June 2017
CHAIRMAN’S STATEMENT
On behalf of the Board of Directors, I present the unaudited condensed financial results of Hwange Colliery Company
Limited for the half year ended 30 June 2017.
FINANCIAL RESULTS
For the six (6) months under review, revenue was US$18.8 million compared to US$24.5 million recorded during the same
period last year. This represented a 23% decline and was caused by low sales volumes as a result of low production
volumes for the period January to April 2017.
The operating loss was US$16.2 million compared to an operating loss of US$25.9 million for the comparative period
last year. Despite a number of once off costs incurred during the period, the Company’s loss after tax narrowed by 5%
to US$27 million from US$28.5 million loss recorded for the same period in 2016.
The Company strategically adopted cost containment measures with a resultant effect of reducing both operating and
administrative costs. Finance costs for the period amounted to US$7.2 million compared to US$1.8 million for the same
period last year.
Total non-current assets decreased by 13% to US$141.8 million from US$162.4 million for the same period in 2016.
PERFOMANCE
The company’s performance over the last six month fell short of budgetary targets due to low production levels during
the period January to April 2017 that were attributable to working capital constraints. Monthly production average
was 94,216 tonnes compared to the budgeted monthly production of 175,425 tonnes. Whilst the monthly production for
the period January to April averaged 42 000 tonnes, a significant improvement in production was witnessed in May and
June which recorded 170 000 and 230 000 tonnes respectively.
Total sales tonnage was 450,557 against a budget of 1,082,935 and an actual of 585,689 for the same period last year.
HCC/HIC coal sales during the period increased by 37.5% from 125,544 tonnes to 172,573 tonnes.
Sales of coal fines and breeze increased by 13.7% from 41,982 tonnes to 47,749 tonnes for the comparative periods.
Coke sales volume decreased from 39 842 tonnes achieved in the first half of 2016 to 7 069 tonnes for the period
under review. This was attributed to the cancellation of toll coking arrangements.
There was a significant reduction in cost of sales which were 51% below the figure recorded for the same period last
year. This was a function of low sales volumes which were 135 132 tonnes less than same period last year as well as
improved production volumes and efficiencies as from May 2017 which lowered the unit cost. Cost reduction initiatives
also contributed to lower cost of sales than the same period last year.
Whilst the financial statements still reflect a loss position, they show remarkable progress in the Company’s
turnaround programme. One of the major objectives of the Board during the 2017 financial year is to reverse the gross
trading loss position which has been a feature over the last few years to a gross trading profit position as a major
step to achieve net profitability.
During the six month period revenue declined by 23% but however cost of sales decline by 51% which reflect a major
improvement towards achieving a gross profit trading position. There was thus a
significant reduction in the trading loss from $18 million to $2.1 million in the six month to June 2017 compared to
the same period last year.
The care and maintenance cost of $5.2 million relate to the costs of maintaining underground and the coke works which
both were not operational during the period under review. Should the $5.2 million be factored into the cost of sales
figure, there is still a reduction in the cost of sales and resultant significant improvement in the gross trading
profit position. The cost of sales improvement is largely attributable to various turnaround initiatives relating to
cost control and improvement in efficiencies.
The loss for the period has been affected by some once off items. There is a provision of redundancy costs of $3.5
million relating to a voluntary retrenchment exercise where 222 employees participated. This retrenchment exercise
will result in a reduction in the cost base in future periods. Underground operations are expected to resume towards
the end of the second half whilst there are no firm plans as yet to resume coke works operations. As such, there
will be a slight reduction in the care and maintenance costs for the second half of the financial year and a
significant reduction from the beginning of the 2018 financial year.
As part of the turnaround strategy, the Company obtained some treasury bills from the Government of Zimbabwe. The
conversion of these treasury bills to fund various turnaround initiatives resulted in a once off loss of $3.5
million. There was a significant increase in the finance cost from $1.5 million to $7.2 million. This increase is
largely as a result of the $111.5 million treasury bills which the Company obtained. This finance cost will from the
second half of the financial year and especially from 2018, be more than compensated by a significant increase in
production, volumes, sales revenue and gross trading profit position.
SCHEME OF ARRANGEMENT
The creditors’ scheme of arrangement was aimed at stabilising the Company from a downward spiral in its overall
performance. The Company successfully held its Creditors’ Scheme of Arrangement meeting with its Creditors on the
26th of April 2017 where 88.75% of the Creditors by number and 95.93% by value voted in favour of the scheme. The
High Court of Zimbabwe sanctioned the Company’s scheme on the 15th of May 2017.
The legal process establishing the scheme was concluded and implementation was on-going. Payments of the agreed
initial deposits to Creditors, in accordance with the scheme of arrangement, commenced by end of June 2017. The
operating space the Company needed has been created and the Board is confident the turnaround efforts shall yield the
desired results.
The Company is grateful for the support rendered by all its creditors in supporting the Company’s scheme of
arrangement. This support afforded a win-win situation for the Company and its Creditors. The Company also expresses
its gratitude to its team of advisers to the scheme of arrangement for competently and professionally advising the
Company on this transaction.
OUTLOOK
As demonstrated by the half-year results, signs of recovery are tangible. The narrowing of the loss position
especially the gross trading loss confirms the Company is on course to recovery.
The turnaround strategy gained momentum only in the last two months of the first half of the financial year. The
effect of the turnaround strategy will continue to increase gradually during the second period of the financial year
which is expected to generate a net profit for the period. The reopening of underground operations is targeted
towards the end of the second half of the year with the financial benefits only being realised in the 2018 financial
year. The strategic priorities for the company’s half-year were the following;
INCREASING AND REALIGNING PRODUCTION
The Company has deliberately taken measures to increase production and the results are visible.
OPEN CAST MINING
Given the country’s dependence on coal fired electricity generation, the Company took steps to increase production of
both thermal and industrial coal. The working capital constraints in the Company’s Open Cast production are being
addressed on an on-going basis. US$3million working capital was injected in March 2017 and resulted in a production
increase from an average of 90 000 tonnes to 170 000 tonnes in May, and 230 000 tonnes in June 2017 thus exceeding
its break-even tonnage. Engagements with financial institutions continue being made to ensure further working capital
injection.
Production increase was also a result of the successful implementation of a 100 days’ change management program
dubbed "Project Gijima" aimed at improving the culture and productivity of staff. In this program, cross functional
team of teams were formed that focussed on improving equipment availability, spare parts availability, production in
the first two hours of every shift, actual production per shift and quality of products.
In the first three months of the second half of the year, teams will focus on further improvements in safety,
quality, increased throughput from processing and deliveries, overall equipment availability and increasing sales
from export markets.
Production contribution from the Company’s mining contractor continues to augment production from its own operations.
Resuscitation of Underground Mine Operations
While there has been a delay in bringing back the underground mine back into production, it remains the Company’s key
strategy that underground mine commences before the end of this financial year. The key piece of equipment for the
underground mine operations is the Continuous Miner and the Board is pleased to report that this machine was
delivered at the mine. However the other equipment such as shuttle cars, roof bolter, electrical equipment, to name a
few, are still to be delivered.
The resuscitation of underground mine operations undoubtedly increases the Company’s capacity to generate export
sales from coking coal and coke. These products make a significant contribution to the Company’s profitability. The
Company’s generation of the much needed foreign currency has spinoff effects in other sectors and re-affirms its role
as a key player to the national economy.
Coke Production
The company remains focused on the production of high value products particularly coke. To this end, the Company was
engaged in discussions aimed at facilitating the takeover of the Hwange Coal Gasification Company (HCGC) Coke Oven
Battery pursuant to a BOOT Agreement with its Chinese partners in HCGC.
Once the takeover is concluded and the resuscitation of underground mine operations is complete, coking coal supplies
to the coke oven battery for coke production is set to improve and increase the company’s capacity to generate high
value revenue.
Cost Reduction
The Company’s deliberate cost reduction strategy contributed to the reduction of both the operating and
administrative costs. Administrative costs were 14% below the same period last year with the reduction mainly on the
employment costs following the Company’s short working months for the period January to March 2017 as well as the
changes in the company’s employment cost structure.
It remains the Company’s commitment that the comprehensive cost cutting initiatives coupled with other measures on
production increase, the Company shall turn from a gross loss to a gross profit position by end of the year.
Marketing costs were however 14% above costs for the same period last year as a result of the drive to increase
market share in order to sale the increased stock volumes.
Improvement in operational and equipment efficiencies remain a key area of focus. Review of input and contractor
costs remains ongoing.
The commencement of the Company’s medical aid scheme and funeral insurance cover has underpinned Company’s conviction
to improve the welfare of its staff at optimal cost.
Zimbabwe Power Company’s Stage 3 Expansion
The expansion of Zimbabwe Power Company’s Stage 3 shall result in increased coal demand where it is expected that the
Company shall supply an additional 200,000 tonnes of coal per month for power generation purposes. To this end, HCCL
will commence exploration and drilling of the Western Areas Concession. Thereafter, mine development will follow
after securing funding for this phase.
Lumimbi West Coal Concession
A 25 year coal supply agreement was signed with an Independent Power Producer (IPP). This IPP will construct a coal
fired power station which will initially consume 200 000 tonnes per month of coal in approximately 3 years’ time.
Market Dominance
The international prices of coal remain firm. The government’s initiatives to promote locally manufactured goods have
caused an increase in capacity utilisation of the local industry. In addition, tobacco production has continued to
grow year on year. These demand side factors have created a pull effect for the Company’s coal. The Company’s
products will be available to its customer base directly or through its partners where it does not have foot print.
Close collaboration with the National Railways of Zimbabwe and with Beitbridge-Bulawayo Railway for deliveries in the
southern region is the hallmark for this success.
REALISATION OF POTENTIAL
Strategic plans to unearth the Company’s potential are being developed and these include:-
a) Development of Western Areas and Lubimbi West coal concessions granted by the Government of Zimbabwe and
exploration is due to commence beginning quarter 4, 2017.
b) Development of the coal bed methane opportunity.
c) Explore the potential, if any, of converting coal into fuels.
d) Utilise the vast coal fines dumps to fire a thermal power plant or convert the material into
briquettes.
DIRECTORATE
Post the reporting date, Messrs W. T. Kutekwatekwa and A. M Ngapo resigned from the Board of Directors effective 18th
and 28th July 2017 respectively. The Company acknowledges the contribution made by the two resigned Directors and
wishes them well in their current and future endeavours.
There are still vacancies on the Board which require shareholders to make appointments in order to strengthen the
Board.
CORPORATE GOVERNANCE
The Board is committed to ensuring good corporate governance. To confirm this commitment, the Board attended a
refresher course on good corporate governance on the 23rd of February 2017 under the facilitation of the Zimbabwe
Leadership Forum (Quality Corporate Governance Centre).
The Board and Management shall attend a joint refresher session on good corporate governance in the last quarter of
2017.
APPRECIATION
Whilst the half year results are still disappointing, they demonstrate signs of recovery resultant from a concerted
team effort to turnaround the Company. The Board is grateful for the support rendered by all stakeholders to the
Company’s turnaround plans.
I would like to express my gratitude to my fellow Directors, Management and Staff for their collective efforts and
dedication to the Company.
W. Chitando Board Chairman
21 August 2017
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
For the six months ended June 2017
Notes 30 June 30 June 31 December
2017 2016 2016
USD USD USD
Unaudited Unaudited Unaudited
Revenue 5 18 814 733 24 481 645 39 911 465
Cost of sales (20 957 538) (42 783 403 ) (77 742 700)
Gross(loss)/profit (2 142 805 ) (18 301 758 ) (37 831 235 )
Other Income 218 760 218 534 545 008
Other gains and losses (3 609) - 790 000
(net)
Marketing costs (333 237) (292 314) (2 473 101)
Administrative costs (6 415 219) (7 492 249) (47 582 295)
Care and maintenance costs (5 278 313) - -
Redundancy costs (2 345 979) - -
Operating loss (16 300 402) (25 867 787) (86 551 623)
Loss on disposal of
treasury bills (3 575 410) - -
Finance Cost (4 623 896) (1 852 830) (1 992 977)
Share of loss from equity (63 113) (765 952) (1 365 390)
accounted investments
LOSS BEFORE TAX (24 562 821) (28 486 569) (89 909 990)
Income tax 6 - - -
LOSS FOR THE PERIOD/YEAR (24 562 821) (28 486 569) (89 909 990
Other comprehensive income:
Other comprehensive income - - -
for the period/year, net of
tax
TOTAL COMPREHENSIVE LOSS
FOR THE PERIOD/ YEAR (24 562 821) (28 486 569) (89 909 990
Attributable loss per share 6 (0.13) (0.16) (0.49)
-basic
-diluted 6 (0.13) (0.16) (0.49)
Headline loss per share 6 (0.13) (0.16) (0.48)
-basic
-diluted 6 (0.13) (0.16) (0.48)
CONDENSED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
Notes 30 June 30 June 31 December
2017 2017 2017
USD USD USD
Assets
Non-current assets
Property, plant and 7 112 433 601 127 210 600 119 261 362
equipment
Investment property 8 4 490 000 3 700 000 4 490 000
Investments accounted for 9 14 753 031 15 415 582 14 816 144
using the equity method
Intangible assets 10 862 411 1 131 940 968 842
Inventories non-current 9 218 421 15 009 021 9 218 421
portion
141 757 464 162 467 143 148 754 769
Current assets
Stripping activity asset 11 - 4 804 187 -
Inventories 12 22 381 506 25 470 961 15 228 838
Trade and other receivables 13 22 021 505 30 778 163 18 295 306
Cash and cash equivalents 14 511 763 360 488 340 024
Treasury bills 15 29 618 795 - -
74 533 569 61 413 799 33 864 168
Total assets 216 291 033 223 880 942 182 618 937
EQUITY AND LIABILITIES
Capital reserves
Share Capital 16 45 962 789 45 962 789 45 962 789
Non-distributable reserves 4 358 468 4 358 468 4 358 468
Share premium 577 956 577 956 577 956
Revaluation reserve 39 948 518 39 948 518 39 948 518
Accumulated losses (283 154 774) (197 168 532) (258 591
953)
(192 307 043) (106 320 801) (167 744
222)
Non-current Liabilities
Lease Liability 17.1 700 000 2 013 044 700 000
Borrowings 18 145 940 958 17 237 866 78 634 350
Payables 19.1 184 776 428 - -
331 417 386 19 250 910 79 334 350
Current liabilities
Lease Liabilities 17.2 397 723 19 949 799 377 161
Borrowing 18.2 - 12 589 456 12 396 334
Trade and other payables 19 53 162 651 256 199 532 237 037 122
Provisions 20 13 565 466 12 157 196 11 163 342
Current tax liability 10 054 850 10 054 850 10 054 850
77 180 690 310 950 833 271 028 809
Total Equity and 216 291 033 233 880 942 182 618 937
liabilities
CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2017
Non-
Share distributable Share Revaluation Accumulated
Capital Reserves Premium reserve Losses Total
USD USD USD USD USD USD
Balance at
1 January 2017
45 962 789 4 358 468 577 956 39 948 518 (258 592 953) (167 744 222)
Total
comprehensive loss
for the period - - - - (24 562 821) (24 562 821)
(unaudited)
Balance at 30 June
2017 (unaudited)
45 962 789 4 358 468 577 956 39 948 518 (283 154 774) (192 307 043)
Balance at 1
January 2016 45 962 789 4 358 468 577 956 39 948 518 (168 681 963) (77 834 232)
Total
Comprehensive loss
for the period - - - - (28 486 569) (28 486 569)
(unaudited)
Balances at June
2016 (unaudited) 45 962 789 4 358 468 577 956 39 948 518 (197 168 532) (106 320 801)
Balance at 1
January 2016 45 962 789 4 358 468 577 956 39 948 518 (168 681 963) (77 834 232)
Total
Comprehensive loss
for the year - - - - (89 909 990) (89 909 990)
(audited)
Balances at 31
December 2016
(audited0 45 962 789 4 358 468 577 956 39 948 518 (258 591 953) (167 744 222)
CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2017
Notes 30 June 30 June 31 December
2017 2016 2016
USD USD USD
Unaudited Unaudited Unaudited
Cash generated from operating
activities
Loss before taxation (24 562 821) (28 486 569) (89 909 990)
Adjustment for non-cash items 11 782 590 11 820 397 22 838 277
Net Effect of changes in working
capital (37 193 581) 16 523 635 25 972 734
Net cash (utilised in)/generated from
operations (49 973 812) (142 537) (41 098 979)
Interest paid - (28 656) (19 725)
Tax paid - - -
Net cash (utilised in)/ generated
from operating activities (49 973 812) (171 193) (41 118 704)
Cash flows from investing activities
Purchase of property (77 120) (13 443) (68 642)
Net cash utilised in investing (77 120) (13 443) (68 642)
activities
Cash flows from financing activities
Proceeds from borrowings 53 375 561 - 59 216 000
Repayment of borrowings (3 091 497) (125 000) (18 216 000)
Net cash generated from/(utilised in)
financing activities 50 284 064 (125 000) 41 000 000
Net (decrease)/increase in cash and
cash equivalents 233 132 (309 636) (187 346)
Cash and cash equivalents at
beginning of the period/year 278 631 465 977 465 977
Cash and cash equivalents at 14 511 763 156 341 278 631
beginning of the period/year
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
for the six months ended 30 June 2017
1 Nature of operations
Hwange Colliery Company Limited is a Company whose principal activities include extraction, processing and
distribution of coal and coal products and provision of health services, provision of properties for rental and
various retail goods and services.
2 Basis of preparation of the condensed financial statements
The condensed interim financial statements for the six months ended 30 June 2017 have been prepared in accordance
with IAS 34, ‘Interim financial reporting’. They do not include all of the information required for full annual
financial statements and should be read in conjunction with the audited annual financial statements for the year
ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards;
Companies Act(Chapter 24:03) and the relevant statutory instruments (SI 33/99 and SI 62/96).
The company is a limited liability company incorporated and domiciled in Zimbabwe. It is listed primarily on the
Zimbabwe Stock Exchange (ZSE), and also on the Johannesburg Stock Exchange (JSE) and London Stock Exchange (LSE).
This condensed interim financial information have been reviewed, not audited. These condensed interim financial
statements were approved for issue by the board of directors on 19 September 2017.
3 Significant accounting policies
The interim financial statements have been prepared in accordance with the accounting policies adopted in the
Company’s most recent annual financial statements for the year ended 31 December 2016.
4 Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from these estimates.
In preparing the condensed interim financial statements, the significant judgements made by management in applying
the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied
to the audited annual financial statements as at and for the year ended 31 December 2016.
5 Revenue
6 Months to 6 Months to 6 Months to
30 June 30 June 31 December
2017 2016 2016
Tonnes Tonnes Tonnes
Coal Sales
HCC/HIC 172 573 125 544 291 457
HPS coal 223 166 378 321 545 617
Coal fines and 47 749 41 982 101 019
breeze
Total coal sales 443 488 545 847 938 093
Coke tonnes 7 069 39 842 4 653
Total sales 450 557 585 689 942 746
USD USD USD
Mining 15 457 085 20 460 370 32 274 013
Estates 3 082 171 3 645 564 7 075 689
Medical Services 275 477 375 711 561 763
Total 18 814 733 24 481 645 39 911 465
6 Taxation
6.1 Basic
Basic loss per share is calculated by dividing the loss attributable to shareholders by the weighted average number
of ordinary shares in issue during the period/year.
Loss attributable (24 562 821) (28 486 569) (89 909 990)
to shareholders
Weighted average
number of ordinary 183 757 366 183 757 366 183 720 699
shares in issue
Basic loss per (0.13) (0.16) (0.49)
share
6.2 Diluted
Loss used to
determine diluted (24 562 821) (28 486 569) (89 909 990)
loss per share
The weighted average number of ordinary shares for the purpose of diluted loss per share, reconciles to the weighted
average number of ordinary shares used in the calculation of basic loss per share as follows.
6.3 Headline loss per share
Headline loss per share excludes all items of a capital nature and represents an after tax amount. It is calculated
by dividing the headline loss shown below by the number of shares in issue during the year.
Reconciliation between headline loss and basic loss:
30 June 30 June 31 December
2017 2016 2016
USD USD USD
Unaudited Unaudited Audited
IAS 33 - Losses (24 562 821) (28 486 182) (89 909 990)
Non-recuring items:
Proceeds on sale of scrap (3 198) (7 307) (12 312)
Retrenchment costs - - 2 020 787
Tax effect of the above - - (517 182)
Headline losses (24 566 019) (28 493 480) (88 418 697)
Weighted average number of ordinary
shares in issue 183 757 366 183 757 366 183 720 699
Headline (0.13) (0.16) (0.48)
7. Property, plant and equipment
Carrying amount at the beginning of
the period/year
119 261 362 136 344 524 136 344 524
Additions 77 120 31 425 102 142
Disposals - (1 075 376) (1 075 367)
Charge to profit or loss - - -
Depreciation charge for the period
/year (6 904 881) (8 089 973) (16 109 937)
Carrying amount at the end of the
period/year 112 433 601 127 210 600 119 261 362
8. Investment property
Fair Value 4 490 000 3 700 000 4 490 000
Investment property comprises of:
-Land situated at lot 7 of stand 2185, Salisbury Township Harare with an administration building thereon.
-Land situated at stand 555, Bulawayo Township Bulawayo with an administration building thereon.
8.1 The following amount has been recognised in profit and loss:
Rental income 175 318 124 795 407 193
9. Investment in equity accounted
investments
Investments in associates (note 11.1) - 174 982 63 113
Investments in Joint venture (note
11.2) 14 753 031 15 240 600 14 753 031
15 415 582 14 816 144
9.1 Investment in associates
Carrying amount as at beginning of
period/year 63 113 231 148 231 148
Share of loss (63 113) (56 166) (168 035)
Carrying amount as at end of - 174 982 63 113
period/year
The Company holds a 49% of voting and equity interest in clay products (Private) Limited. The Company also holds a
44% voting and equity interest in Zimchem Refineries (Private) Limited. The investments are accounted for using
equity method.
The Company did not recognise losses for the period amounting to USD 336 429 (2016: USD 333 390) for Zimchem
Refineries (Private) Limited as the cumulative losses exceed the carrying amount of the investment in associate.
9.2 Investment in joint venture
Carrying amount as at 1 January 14 753 031 15 950 386 15 950 386
Share of loss - (709 786) (1 197 355)
Carrying amount at the end of the 14 753 031 15 240 600 14 753 031
period/year
Hwange Coal Gasification (Private) Limited is the only jointly controlled entity and the ultimate ownership interest
is 25%. The investment in the joint venture has been accounted for using the equity method.
10 Intangible assets.
Opening Carrying amount 968 841 1 238 371 1 238 371
Additions - - -
Impairment losses - - -
Amortisation charge (106 431) (106 431) 269 530)
Closing carrying amount 862 410 1 131 940 968 841
Intangible assets comprise of mining rights and an enterprise resource planning (ERP) software. The Company acquired
the ERP software to support the administration and control of the Company. Some modules for mine planning and
marketing are still to be developed. Mining rights comprise new coal mining claims acquired during the year. No
intangible assets have pledged as security for liabilities.
11 Stripping activity assets.
Carrying amount at 1 January - 4 849 819 4 849 819
Pre-stripping costs incurred - 464 400 -
Impairment of stripping activity asset - - 4 849 819
Costs charged/(credited) to cost of - 510 032 -
sales
Closing carrying amount - 4 804 187 -
12 Inventories
Raw Materials 13 107 614 7 766 184 8 656 781
Finished goods
Coal and coal fines 9 273 892 15 098 800 5 709 283
Coke - 2 605 977 862 744
22 381 506 25 470 961 15 228 838
13 Trade and other payables
Trade 16 746 975 16 717 650 12 886 722
Other 5 274 530 14 060 513 5 408 584
22 021 505 30 778 163 18 295 306
14 Cash and cash equivalents.
For the purposes of statement of cash flows, cash and cash equivalents include cash on hand and in banks and
investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of
the period/year as shown in the statement of cash flows can be reconciled to the related items in the statement of
financial position as follows:
Bank and cash balances 511 763 360 488 340 024
Bank overdraft - (204 147) (61 393)
511 763 156 341 278 631
15 Treasury bills
Government of Zimbabwe 29 618 795 - -
As part of the ongoing restructuring plan, the Government of Zimbabwe through the Ministry of Finance and Economic
Development issued treasury bills of USD 41 million and USD 18.216 million in settlement of the Mota Engil and
RBZ/PTA Bank loan, respectively. The Government of Zimbabwe indicated that Hwange Colliery Company should issue
preference shares against these treasury bills once due process and approvals have been sought and as such the USD
111.3 million has been recognised as a non-interest bearing loan in June 2017.
16 Share Capital
Authorised
204 000 000 ordinary shares of USD
0.25 each 51 000 000 51 000 000 51 000 000
Issued and fully paid
110 237 432 Ordinary shares of USD 27 559 358 27 559 358 27 559 358
0.25 each
5 962 366 Ordinary shares issued under
share option scheme 1 514 039 1 514 039 1 514 039
29 073 397 29 073 397 29 073 397
67 557 568 'A' Ordinary shares of USD
0.25 each 16 889 392 16 889 392 16 889 392
45 962 789 45 962 789 45 962 789
17 Lease liability
17.1 Non-current
Finance lease liabilities due after
one year 700 000 2 013 044 700 000
17.2 Current
Finance lease liabilities due within 397 723 19 949 799 377 161
one year
18 Borrowings
Average interest on borrowings was
7.14%
18.1 Non-current
Loans due after one year 145 940 958 17 237 866 78 634 350
18.2 Current
Bank overdraft - 204 147 61 393
Loans payable within one year - 12 385 309 12 334 941
- 12 589 456 12 396 334
19. Trade and other payables
Current
Trade 23 356 436 121 801 922 60 741 155
Other 29 806 215 134 397 610 176 295 967
53 162 651 256 199 532 237 037 122
Non-current
Trade 60 843 209 121 801 922 60 741 155
Other 123 933 219 134 397 610 176 295 967
184 776 428 256 199 532 237 037 122
19.1 Non-current liabilities – Payables
Payables amount of $184,776,428 relates to trade creditors, statutory creditors and employee obligations which will
be paid over a period exceeding 12 months as per the terms and conditions of the creditors’ scheme of arrangement.
20. Provisions
20.1 Provisions for rehabilitation
At the beginning of the period/year 6 371 883 5 726 693 5 726 693
Additional provisions made during the
period/year 370 024 499 999 645 190
At the end of the period/year 6 741 907 6 226 692 6 371 883
20.2 Other provisions
Leave pay and other provisions 6 823 559 5 930 504 4 791 459
Total provisions 13 565 466 12 157 196 11 163 342
21 Segment Reporting
Management currently identifies the Company’s three business units as its operating segments. These operating
segments are monitored by the Company’s Board of Directors and strategic decisions are made on the basis of adjusted
segment operating results.
Segment information for the reporting periods is as follows:
Mining Estates Medical
USD USD Services Total
USD USD
30 June 2017
Revenue
From external customers
15 457 085 3 082 172 238 332 18 777 588
From other segments
- 239 111 813 377 1 052 488
Total segments revenue
15 457 085 3 321 283 1 051 709 19 830 076
Segment operating loss/profit
(14 783 974) (852 602) (633 329) (16 269 906)
30 June 2016
Revenue
From external customers 20 460 370 3 645 564 375 711 24 481 645
From other segments - 580 713 967 166 1 547 879
Total segments revenues 20 460 370 4 226 278 1 342 877 26 029 524
Segment operating loss (25 671 399) 676 731 (872 731) (25 867 399)
Segment assets 300 973 607 11 700 447 13 584 191 326 258 245
Segment liabilities 300 973 607 19 225 347 23 194 584 343 393 538
31 December 2016
Revenue
From external customers 32 274 013 7 075 689 561 763 39 911 465
From other segments - 729 371 1 891 206 2 620 577
Total Segment revenues 32 274 013 7 805 060 2 452 696 42 532 042
Segment operating (78 585 623) 1 208 227 (1 463 (78 840 468)
(loss)/profit 072)
Segment assets 168 286 636 6 986 314 7 345 987 182 618 937
Segment liabilities 319 148 715 16 310 785 14 903 659 350 363 159
Harare
29 September 2017
Sponsor: Sasfin Capital (a member of the Sasfin group)
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