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METMAR LIMITED - Audited abridged financial results for the year ended 28 February 2015

Release Date: 29/05/2015 07:10
Code(s): MML     PDF:  
 
Wrap Text
Audited abridged financial results for the year ended 28 February 2015

METMAR LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/007269/06)
Share code: MML 
ISIN code: ZAE000078747 
(“Metmar” or “the Company” or “the Group”)

Audited preliminary financial results for the year ended 28 February 2015

METMAR REMAINS RESILIENT DESPITE PERSISTENT CHALLENGING COMMODITIES TRADING CONDITIONS 

Highlights

• Sefateng mining operations commences 
• Sefateng signs off-take agreement with Metmar for all open cast mined chrome
• Signed a 10-year manganese off-take agreement with Kalagadi
• A firm but conditional offer to purchase 100% of Metmar shares by Traxys is announced
• Cash generated by operations remain positive at R18,7 million (2014: R41,9 million)
• 15% increase in traded volumes 

Corporate developments
On 30 April 2015, Metmar announced that it entered into an implementation agreement with Traxys Africa Proprietary
Limited (“Traxys”) in terms of which Traxys, a physical commodity trader and merchant in the metals and natural resources
sectors, offered to acquire all the issued ordinary shares of Metmar for a price of R1,10 per share by scheme of
arrangement. The offer of R1,10 per share (the “offer” or the “transaction”) represents a material premium to the traded 
market price at the time of the announcement and relative to the time when cautionary announcements in this regard were 
first published. The transaction is subject to approval of 75% of Metmar’s Shareholders present in person or by proxy and
voting at a general meeting of Metmar’s Shareholders, and Shareholders holding 52% of Metmar’s shares have already provided 
written undertakings to support the transaction. The transaction is further subject to regulatory approvals as well as Metmar
suffering no material adverse change (as defined in the implementation agreement), and is expected to be concluded before 
30 September 2015.

A circular to Shareholders with the details of the offer will be mailed on or about 1 June 2015 and a general meeting
of Shareholders to vote thereon is scheduled for 2 July 2015. 

Traxys is a physical commodity trader and merchant in the metals and natural resources sectors. Its logistics,
marketing, distribution, supply chain management and trading activities are conducted by over 300 employees, in over 
20 offices worldwide, and its annual turnover is in excess of $6 billion. Traxys is headquartered in Luxembourg. Traxys’ 
focus is primarily on the marketing and sourcing of base metals and concentrates, minor and alloying metals, industrial 
minerals and chemicals, and materials for steel mills and foundries, and the management of all parts of the supply chain, 
from producer to consumer, worldwide. It is anticipated that Traxys’ acquisition will enhance Metmar’s access to both 
committed and uncommitted facilities available in a variety of major currencies.


  Financial performance (See also divisional performance report hereunder)                                   
  Description                                            2015       2014        %    
                                                                            change   
  Volumes (tonnes)                                    841 352    731 429        15   
  Revenue (R’m)                                       1 951,3    2 097,4        (7)  
  Gross margin (%)                                        4,3        6,4       (33)  
  Trading margin (non-IFRS)^ (%)                          3,8        4,7       (19)  
  Operating expenses (excluding impairments) (R’m)     (134,8)    (126,2)       (7)  
  (LBITDA)/EBITDA (R’m)                                 (32,6)      40,4      (181)  
  Impairments (R’m)                                     (16,2)    (155,4)       90   
  Headline loss for the year (R’m)                     (174,0)     (47,0)     (270)  
  Closing net cash balance (R’m)                          2,8       53,3       (95)  
  Total assets (R’m)                                  1 219,3    1 570,3       (22)  
  Net asset value (R’m)                                 293,7      442,4       (34)  
  ^Trading margin is calculated as gross margin less contract expenses (including contract finance costs) that are 
   not cost of sales per IFRS.                                   


The trading conditions deteriorated further in FY2015 caused by a decline in commodity prices, reduced demand and
persistent low global economic growth. The sinter tolling and the growth of soft commodities provided diversification and
contribution to turnover reducing the adverse effect of commodity trading challenges. 

Volumes increased by 15% and the US dollar/rand exchange rate weakened by 10% but these were not sufficient to counter
revenue decreases of 7% to R1,95 billion (2014: R2,09 billion). Trading margins reduced to 3,8% (2014: 4,7%) due to
decline in US dollar-based commodity prices while rand based costs increased with inflation. 

Operating expenses include once-off care and maintenance costs included in the consulting expenses and increased
unrealised losses from foreign exchange differences following the weakening rand and hence increased to R134,8 million 
(2014: R126,2 million). 

LBITDA of R32,6 million (2014: EBITDA of R40,4 million) resulted from reduced turnover, 33% decrease in gross margins
from 6,4% to 4,3% and inflation equivalent increased operating expenses. 

Net impairments which include receivables write down of R42,4 million (2014: R9,9 million), inventory write down of
R2,7 million (2014: R18,1 million), PPE write down of R0,7 million (2014: R3,6 million) and reversal of impairment in
investment in associate companies of R29,6 million (2014: impairment of R64,8 million) decreased to R16,2 million 
(2014: R155,4 million). The cleanup of the investment section was completed last year and investment values have been 
resilient notwithstanding declining commodity price indexes. 

The overall financial performance was impacted by the following:
- Net finance costs of R64,1 million (2014: R50,9 million) increased due to high trade finance facility utilisation
  driven primarily by delays in the startup of the Kalagadi tolling project.
- Fair value adjustment losses of R21,0 million (2014: gain of R18,6 million) resulted from 39% decline in the share
  price of Alphamin Resources Corp.
- Loss from associate companies of R2,4 million (2014: R12,2 million) was better contained this year with care and
  maintenance costs in Sefateng Chrome Mine and FPT Mineral Terminal kept to a minimum.

As a result, the loss after tax is R147,1 million (2014: R182,8 million), attributable loss for the year is 
R145,9 million (2014: R162,7 million), whilst the headline loss increased to R174,1 million (2014: R47,0 million). 

The net asset value decreased by 34% to 109,8 cents per share (2014: 165,5 cents per share) largely due to after tax
losses attained.

Total trade finance facilities available, including both general and ring-fenced facilities, decreased to R752 million
(2014: R928 million).

Divisional performance and prospects
The Group comprises two reportable segments which are trading and investments. 

Trading
The trading activities are made up of core trading and Kalagadi tolling project.

  Key area                            2015       2014         %    
                                                          change   
  Core trading                                                     
  Revenue (R’m)                    1 580,9    2 052,6        (23)  
  Gross margin (%)                     4,7        5,9        (20)  
  EBITDA (R’m)                        19,0       81,7        (77)  
  (Loss)/profit after tax (R’m)      (15,8)      50,3       (131)  
  Discontinued operations                                          
  (Loss)/profit after tax (R’m)          -      (22,0)       100   
  Kalagadi tolling project                                         
  Revenue (R’m)                      350,5        7,2      4 768   
  Gross margin (%)                     0,8        5,6        (86)  
  (LBITDA)/EBITDA (R’m)               (9,8)       0,3     (3 367)  
  Loss after tax (R’m)               (38,0)     (15,5)       145   

Core trading
Core trading volumes were 10% down and combined with low commodity prices turnover decreased by 23% to R1,6 billion.
Gross margins reduced by 20% to 4,7% (2014: 5,9%) leading EBITDA of R19,0 million (2014: R81,7 million). As a result,
core trading made a loss after tax of R15,8 million (profit after tax of R50,3 million). 

Kalagadi tolling project
During the year 186 811 tonnes of sinter were delivered to customers both in South Africa and internationally which
yielded R350,5 million (2014: R7,2 million). The gross margin achieved of 0,8% (2014: 5,6%) was caused by reducing
manganese prices, high fines generation resulting in further discounts on the manganese price as well as inefficient and
expensive logistics solutions. These issues, other than manganese prices, have been resolved in that a rail siding at the 
mine has been completed, and successful pot tests done to improve the material strength recommended blending of the
manganese ore input. 

Operating costs are R12,5 million dominated by foreign exchange differences amounting to R5,8 million. Interest
expense is R28,2 million. All of the above contribute to a loss after tax of R38 million (2014: R15,5 million).

Investments

  Description          2015       2014        %    
                        R’m        R’m    change   
  Revenue              42,6      234,0       (82)  
  (LBITDA)/EBITDA     (59,5)      49,6      (220)  
  Loss after tax      (81,0)    (140,2)      (42)  

Revenue of R42,6 million (2014: R234,0 million) includes the sale of alumina slag sales, increased sales of recycled
plastic material and sales of carbon products. No Group sale of coke breeze took place this year as the Kalagadi sinter plant
was not operating as had originally been anticipated.

Gross margin is negative due to coke breeze credit notes that relate to coke breeze sales made in the 2014 financial
year. This anomaly is resolved at Group level through the consolidation process. The Investments division achieved LBITDA
of R59,5 million (2014: EBITDA of R49,6 million). Loss after taxation reduced to R81,0 million (2014: R140,2 million). 

Each investment was assessed in detail, and upon conclusion of this review, it was considered appropriate to reverse
FY2014 impairment of Sefateng Chrome Mine by R29,6 million following its awarded mining rights and concluded off-take
agreement. Other than this there were no other impairments of investments. The investment portfolio is currently valued at
R323,1 million (2014: R339,3 million) following disposal of non-core assets.

  Investment name                                                 2015     2015         2014     2014    
                                                                   R’m      R’m          R’m      R’m     
  Alphamin Resources Corp                                         20,6        -         37,6        -     
  Afarak Group Plc                                                   -        -         28,4        -     
  Kalahari Resources Proprietary Limited                         192,9        -        192,9        -    
  Disclosed as financial assets                                           213,5                 258,9   
  FPT Mineral Terminal Limitada                                    5,4        -          3,5        -      
  Sefateng Chrome Mine Proprietary Limited - Investment           56,2        -         28,8        -     
  Disclosed as investments in associates                                   61,6                  32,3    
  Sefateng Chrome Mine Proprietary Limited - Intangibles           5,9        -          5,9        -      
  Steelpoort Chrome Mine Proprietary Limited                      33,0        -         33,0        -     
  Disclosed as intangibles                                                 38,9                  38,9    
  Pering Base Metals Proprietary Limited                           1,0        -          1,0        -      
  Property, plant and equipment                                    0,0        -          0,1        -      
  SA Metals Equity Proprietary Limited                             8,0        -          8,0        -      
  Other                                                            0,1        -          0,1        -      
  Disclosed as non-current assets held-for-sale                             9,1                   9,2     
  Total investments                                                       323,1                 339,3   


Directorate and Company Secretary
The following changes to Metmar’s board of directors took effect during the year under review:
- Mr Greg Lotis resigned, due to ill health, from Metmar as an executive director with effect from 28 February 2015
  after serving more than 20 years with the Group.
- Adv Kgomotso Moroka resigned as an independent non-executive director with effect from 24 October 2014.
- Rob Still was appointed as an independent non-executive director and as Chairman of the board on 1 May 2014.

Outlook 
While the commodity prices were on a free fall in FY2015 demand for commodities also decreased. Chinese GDP growth
figures continue to be forecast at a 7% range which does not bode well for a global economy that has been driven by Chinese
commodities’ appetite in the last decade. The US and European economies are starting to show signs of recovery but
these economies are either self-sufficient or have optionality of securing commodities at even lower prices. 

The financial year 2015 was filled with scandals of fraud, disappearance of product in China port of discharge and
increased suspicion of presenting same invoice to more than one. These unfortunate occurrences have led to nervousness by
major local and international banks while those that remain with appetite for commodities have significantly reviewed
their pricing structures to match their risk appetite. The restriction of trade finance coupled with low commodity prices
is likely to result in a complete structural overhaul, not without further casualties, potentially reshaping commodities
trading space in the next 18 to 36 months. 

Trading companies likely to survive are those that will continue to secure unrestricted access to funding facilities,
have solid sustainable access to sources of product, return to a stable financial performance and can squeeze further
margins from oversupplied freight providers.

Given operational Sefateng Chrome Mine business as well as the sinter tolling restart, Metmar is budgeting to return to a
stable financial performance year in 2015/16. Following a bumpy 2015 that culminated in certain banks withdrawing their
facilities, Metmar has partially replaced some of these facilities and went on to secure an offer from a large
international commodities trading player, Traxys, which is likely to provide the required financial backing through its more 
than $2 billion committed facilities. The Traxys deal is subject to, among other conditions, Shareholder and regulatory
approvals which Metmar is confident that it will secure prior to the 30 September 2015 long stop date. 

Dividend 
Given that we incurred a loss in the current year, no dividend will be declared nor paid.

Annual general meeting and annual financial statements
The Company’s annual general meeting of Shareholders will be held at Metmar’s registered office at 25 Culross Road,
Corner Main and Culross Road, Bryanston, no later than 2 July 2015. A separate notice convening the meeting will be posted
to the Shareholders on Monday, 1 June 2015.

The record date for purposes of determining which Shareholders of the Company are entitled to participate in and vote at the 
annual general meeting is Friday, 26 June 2015.

The full audited financial statements will be available on the Company's website from Monday, 1 June 2015.

AUDITED CONDENSED GROUP STATEMENTS OF FINANCIAL POSITION AT

                                                               Note    28 February         28 February    
                                                                              2015                2014          
                                                                             R’000               R’000          
  Assets                                                                                                      
  Non-current assets                                                                                          
  Property, plant and equipment                                    2        83 887              82 463         
  Goodwill                                                         3         9 330               9 330         
  Intangible assets                                                3        38 892              38 892        
  Investments in associates                                        4        61 578              32 316        
  Financial assets                                                 5       213 526             230 521        
  Deferred taxation                                                         26 306              23 238         
                                                                           433 519             416 760        
  Current assets                                                                                              
  Inventories                                                              429 662             547 832        
  Trade and receivables                                                    318 288             507 973        
  Financial assets                                                 5             -              28 436        
  Current tax receivable                                                     3 484               2 314         
  Derivative financial instruments                                           1 899               4 568         
  Cash and cash equivalents                                                 23 408              53 275         
                                                                           776 741           1 144 398      
  Non-current assets held-for-sale                                 6         9 080               9 180          
  Total assets                                                           1 219 340           1 570 338      
  Equity and liabilities                                                                                      
  Share capital                                                            160 005             160 005       
  Reserves                                                                 126 135             126 888       
  Retained income                                                           82 985             222 786       
                                                                           369 125             509 679       
  Non-controlling interest                                                 (75 413)            (67 330)      
                                                                           293 712             442 349       
  Non-current liabilities                                                                                     
  Financial liabilities                                            7        47 143               2 759          
  Instalment sale agreement                                                    226                   -              
  Deferred taxation                                                         27 798              26 206         
                                                                            75 167              28 965         
  Current liabilities                                                                                         
  Financial liabilities                                            7         2 625              55 645         
  Trade and other payables                                                 232 162             176 310        
  Current tax payable                                                       11 334               5 947         
  Instalment sale agreement                                                    103                   -              
  Trade finance facilities                                         8       577 215             854 717        
  Bank overdrafts                                                           20 623                   6              
                                                                           844 062           1 092 625      
  Non-current liabilities and disposal groups held-for-sale        6         6 399               6 399          
  Total liabilities                                                        925 628           1 127 989      
  Total equity and liabilities                                           1 219 340           1 570 338      
  Net asset value per share (cents)                                         109,88              165,48         
  Net tangible asset value per share (cents)                                 91,84              147,44         
  Number of shares in issue                                            267 306 552         267 306 552    
                                                                                                           

AUDITED CONDENSED GROUP STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED

                                                                   Note   28 February        28 February    
                                                                                 2015               2014          
                                                                                R’000              R’000          
  Continuing operations                                                                                      
  Revenue                                                                   1 951 260          2 097 435      
  Cost of sales                                                            (1 866 433)        (1 962 293)    
  Gross profit                                                                 84 827            135 142        
  Other income                                                                  9 584             20 748         
  Operating expenses                                                  9      (134 815)          (126 241)      
  Fair value movements on forward exchange contracts                            1 899              4 568          
  Operating (loss)/profit                                                     (38 505)            34 217         
  Finance costs                                                      11       (74 924)           (64 337)      
  Finance income                                                     11        10 873             13 417        
  Net impairments (excluding discontinued operations)                10       (16 220)          (155 372)      
  Fair value adjustments on listed investments                                (20 995)            18 606         
  Loss from equity accounted investments                                       (2 384)           (12 245)       
  Loss before taxation                                                       (142 155)          (165 714)      
  Taxation                                                           12        (4 904)             4 936          
  Loss from continuing operations                                            (147 059)          (160 778)      
  Discontinued operations                                                                                    
  Loss before taxation                                                              -            (23 460)       
  Taxation                                                                          -              1 461          
  (Loss)/profit from discontinued operations                         13             -            (21 999)       
  Total                                                                                                      
  Loss before taxation                                                       (142 155)          (189 174)      
  Taxation                                                                     (4 904)             6 397          
  Loss for the year                                                          (147 059)          (182 777)      
  Other comprehensive (loss)/income                                                                          
  Movements on revaluations of financial assets                                     -            (31 932)       
  Movement in foreign currency reserves                                        (1 650)             6 509          
  Total comprehensive loss                                                   (148 709)          (208 200)      
  Loss for the year attributable to:                                                                         
  Equity holders of the Group                                                (145 853)          (162 729)      
  Non-controlling interests                                                    (1 206)           (20 048)       
  Total loss for the year                                                    (147 059)          (182 777)      
  Loss for the year attributable to:                                                                         
  Equity holders of the Group                                                                                
  Loss for the year from continuing operations                               (145 853)          (140 730)      
  Loss for the year from discontinued operations                                    -            (21 999)       
  Loss for the year attributable to equity holders of the Group              (145 853)          (162 729)  
  Total comprehensive loss attributable to:                                                                  
  Equity holders of the Group                                                (146 678)          (182 776)      
  Non-controlling interests                                                    (2 031)           (25 424)       
                                                                             (148 709)          (208 200)      
  Loss per share                                                                                             
  Basic and diluted (cents)                                          15         (54,6)             (60,9)  
  - Continuing operations                                                       (54,6)             (52,7)         
  - Discontinued operations                                                         -               (8,2)          
  Headline/diluted headline (cents)                                  15         (65,1)             (17,6)         
                                                                                                             

AUDITED  CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY

                                                                               Foreign          Re-   
                                                          Share      Share    currency    valuation   
                                                        capital    premium     reserve      reserve   
                                                          R’000      R’000       R’000        R’000   
                                                                                                      
  Balance at 1 March 2013                                  5319    154 686       1 191       22 055   
  Loss for the year
  Total comprehensive loss for the year                                  -       4 012      (24 059)  
  Transfer of reserves to equity                                         -           -       78 396   
  Movement in shareholders’ loans                                        -           -            -   
  Purchase of non-controlling interest in subsidiary                     -           -            -   
  Balance at 28 February 2014                             5 319    154 686       5 203       76 392   
  Loss for the year
  Total comprehensive loss for the year                                  -        (826)           -   
  Transfer of reserves to equity                                         -           -            -   
  Movement in shareholders’ loans                                        -           -            -   
  Purchase of non-controlling interest in subsidiary                     -           -            -   
  Balance at 28 February 2015                             5 319    154 686       4 377       76 392   


AUDITED CONDENSED GROUP STATEMENTS OF CHANGES IN EQUITY (continued)

                                                         Share-    Acquisition                         Non-            
                                                       holders’      of shares     Retained    controlling        Total   
                                                          loans  in subsidiary     earnings      interests       equity 
                                                          R’000          R’000        R’000          R’000                                                                                                                                  
  Balance at 1 March 2013                                72 885        (27 547)     463 911        (48 098)     644 402   
  Loss for the year                                                                (162 729)       (20 048)    (182 777)
  Total comprehensive loss for the year                       -              -            -         (5 376)     (25 423)  
  Transfer of reserves to equity                              -              -      (78 396)             -            -   
  Movement in shareholders’ loans                         6 147              -            -              -        6 147   
  Purchase of non-controlling interest in subsidiary          -         (6 192)           -          6 192            -   
  Balance at 28 February 2014                            79 032        (33 739)     222 786        (67 330)     442 349   
  Loss for the year                                                                (145 853)        (1 206)    (147 059)
  Total comprehensive loss for the year                       -              -            -           (824)      (1 650)  
  Transfer of reserves to equity                              -              -        6 052         (6 052)           -   
  Movement in shareholders’ loans                            72              -            -              -           72   
  Purchase of non-controlling interest in subsidiary          -              -            -              -            - 
  Balance at 28 February 2015                            79 104        (33 739)      82 985        (75 412)     293 712   
                                                                                               
                                                                                   
AUDITED CONDENSED GROUP CASH FLOW STATEMENTS FOR THE YEAR ENDED
                                                                             Note        28 February      28 February    
                                                                                                2015             2014          
                                                                                               R’000            R’000          
  Cash flows (used in)/generated from operating activities                                                              
  Cash generated from operations                                               16             18 700           41 883   
  Finance income                                                               11             10 873           13 417   
  Finance costs                                                                11            (74 924)         (64 337)   
  Discontinued operations                                                                          -            5 763   
  Taxation paid                                                                               (3 392)         (10 373)  
  Net cash used in operating activities                                                      (48 743)         (13 647)  
  Purchase of property, plant equipment                                                      (12 026)            (477)  
  Proceeds from sale of property, plant and equipment                                          2 919            7 298   
  Business combinations                                                        14                  -           (1 327)   
  Disposal of business                                                         13                  -           66 537   
  Sale of financial assets                                                                    14 943                -   
  Loans advanced to associates                                                                (2 010)         (19 581)
  Purchase of derivatives                                                                          -           (6 078)   
  Realisation of derivatives                                                                   2 669                -   
  Net cash flows generated from investing activities                                           8 505           65 953   

  Repayment from financial liabilities                                                        37 350                -  
  Repayment of financial liabilities                                                         (45 986)         (48 839)  
  Increase/(decrease) in instalment sale agreements                                              329           (5 937)  
  Increase in shareholders’ loans                                                                 71                -   
  Net cash used in financing activities                                                      (10 246)         (74 357)  
  Total cash outflow for the year                                                            (50 484)         (22 051)  
  Overdraft cancelled following discontinued operation                         13                  -           94 606   
  Cash flow from business combinations                                         14                  -              456   
  Cash and cash equivalents/(net overdraft) at the beginning of the year                      53 269          (19 742)  
  Cash and cash equivalents at the end of the year                                             2 785           53 269   


NOTES TO THE AUDITED CONDENSED GROUP FINANCIAL RESULTS

  1. Basis of preparation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
     The audited condensed financial results have been prepared in accordance with IAS 34 - Interim Financial 
     Reporting to comply with the International Financial Reporting Standards (IFRS), the SAICA Financial 
     Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements 
     (FRPs) as issued by the Financial Reporting Standards Council (FRSC), the 2008 South African Companies 
     Act and the JSE Listings Requirements. These audited abridged financial statements were prepared under 
     the supervision Mr SMS Nkosi, the Chief Financial Officer of Metmar Limited.                                                                                                   
     All accounting policies applied by the Group in the preparation of these abridged financial statements 
     are consistent with those applied by the Group in its consolidated financial statements for the year 
     ended 28 February 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                               
     The Group has adopted the following new standards:                                                                                                                                                                                                                 
     IAS 36 - Recoverable Amount Disclosures for Non-Financial Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
     IAS 32 - Offsetting Financial Assets and Financial Liabilities                                                                                                                                                                                                     
     IAS 39 - Novation of Derivatives and Continuation of Hedge Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
     The impact of the above amendments is not material to the Group.   
 
     1.1    Audit report  
            The directors take full responsibility for the preparation of these consolidated condensed preliminary financial statements. 
            They have been prepared under the supervision of Sizwe Nkosi CA (SA). These consolidated condensed preliminary financial 
            statements for the year ended 28 February 2015 have been audited by Ernst & Young Inc., the Group’s auditors, 
            who expressed an unmodified opinion with an emphasis of matter thereon. 

            The auditor also expressed an unmodified opinion on the annual financial statements from which these consolidated
            condensed preliminary financial statements were derived.  

            The auditor’s report contained the following Emphasis of Matter paragraph:
            Without qualifying our opinion we draw your attention to the Going Concern Note of the summary consolidated 
            financial statements which indicates that the group has incurred losses after tax of R147million (2014: R183 million), 
            for the financial year, ending the year in a net current liability position of R67 million.
            The group needs to secure replacement funding to continue the financing of its working capital and to finance future trade 
            deals as a result of certain Trade Financiers announcing their intention to reduce facilities and in some cases exit completely.
            The note also indicates that these conditions, along with other matters, indicate the existence of a material uncertainty which 
            may cast significant doubt on the company’s ability to continue as a going concern.
             
            The audit report, dated 28 May 2015, is available for inspection at the registered offices of the Group. The auditor’s 
            reports does not necessarily cover all of the information contained in this announcement. Shareholders 
            are therefore advised that in order to obtain full understanding of the nature of the auditor’s 
            work they should obtain a copy of that report together with the accompanying financial information 
            from the registered office of the Company. Any reference to the future financial performance included 
            in this announcement has not been reviewed or reported on by the Group’s independent auditors.   
                                                                                                                                                                                 
                                            28 February             28 February    
                                                   2015                    2014   
                                                  R’000                   R’000   
  2. Property, plant and equipment                                                
     Buildings                                   53 287                  55 482   
     Computer equipment and software              1 135                   1 722   
     Furniture and fixtures                       2 219                   2 252   
     Land                                        12 209                  12 209   
     Other                                        1 116                   1 210   
     Plant and machinery                         13 921                   9 588   
                                                 83 887                  82 463   
     2.1    Acquisitions during the year                                          
            Buildings                                94                  54 965   
            Computer equipment and software         395                   1 901   
            Furniture and fixtures                  449                     861   
            Land                                      -                  11 200   
            Motor vehicles                          371                       -    
            Other                                    79                     388   
            Plant and machinery                  10 638                      38  
                                                 12 026                  69 353   
     2.2    Disposals during the year                                             
            Computer equipment and software         (18)                   (286)   
            Other                                     -                    (567)   
            Plant and machinery                  (3 909)                 (1 274)   
                                                 (3 927)                 (2 127)   
            
            The Company does not have any material identifiable commitments to 
            property, plant and equipment.                                              

            Additions amounting to R12.0 million occurred during the current financial year.  This was 
            offset by disposals of R4 million, depreciation of R6 million and impairments of R0.8 million.

                                                                                                          28 February     28 February    
                                                                                                                 2015             2014   
                                                                                                                R’000            R’000   
  3.  Goodwill and intangibles                                                                                                           
      Goodwill                                                                                                  9 330            9 330   
      - SNF International - Division of Metmar Trading Proprietary Limited                                      8 137            8 137   
      - Arengo 203 Proprietary Limited                                                                          1 193            1 193   
      Intangibles - Marketing and management contracts                                                         38 892           38 892   
                                                                                                               48 222           48 222   
      In accordance with accounting standards, the Group annually tests the carrying value of goodwill for 
      impairment. In the current year the review was undertaken on a value-in-use basis, assessing whether 
      the carrying value of goodwill was supported by the net present value of future cash flows derived 
      from the relevant assets relating SNF International and Arengo 203 Proprietary Limited.               
                                                                                                                                                
      The intangibles were subjected to impairment testing performed by an independent valuer, Anoop Ninan 
      of Mazars. The impairment testing used the income approach which uses discounted cash flow techniques
      to determine the fair value.  The average pre-tax rate used was 12.54%. There was no impairment necessary.     
  
  4.  Investments in associates                                                                                                                
                                                                   Investments      Share      Loans to      Reversals/   Investments
                                                                  at beginning    of loss    associates   (Impairments)        at end
      2015 - R'000
      FPT Mineral Terminal Limitada (registered in Mozambique)           3 517       (120)        2 010              -          5 407        
      Sefateng Chrome Mine Proprietary Limited                          28 799     (2 264)            -         29 636         56 171
                                                                        32 316     (2 384)        2 010         29 636         61 578

                                                                   Investments      Share      Loans to       Reversals/  Investments
                                                                  at beginning    of loss    associates    (Impairments)       at end
      2015 - R'000
      FPT Mineral Terminal Limitada (registered in Mozambique)           1 468     (2 758)       4 807                -         3 517
      Sefateng Chrome Mine Proprietary Limited                          61 851     (1 435)       3 157          (34 774)       28 799
      Kivu Resources Limited                                            26 476     (8 052)      11 617          (30 041)            0
                                                                        89 795    (12 245)      19 581          (64 815)       32 316 
 
      The FPT Mineral Terminal project is not yet operational and therefore was valued at cost.                                                          
 
      The Sefateng Chrome Mine project was assessed for impairment and its value was calculated using the income 
      approach which used discounted cash flow techniques to determine net present value. No write-down was 
      necessary but a reversal of impairment was processed following the award of the mining right and 
      signing of the off-take agreement during the year.   
  
  5.  Financial assets                                                                                                                          
      Kalahari Resources Proprietary Limited                                                                  192 900          192 900   
      Alphamin Resources Corp (Canada)                                                                         20 626           37 621   
      Afarak Group Plc (Finland)                                                                                    -           28 436   
                                                                                                              213 526          258 957   
      Investment in Alaphmin Resources is a level 1 fair value measurement since its fair value is determined                
      from quoted prices in an active Toronto Stock Exchange.                                                               
                                                                                                                                         
      The Kalahari Resources investment is seen as a level 3 fair value measurement as its value has been 
      determined using the income approach which use discounted cash flow techniques to determine the fair value.                                                                                            
                                                                                                                                                         
      Investment in Afarak Group was disposed of during the current financial period.                                       
                                                                                                                            
  6.  Non-current assets held-for-sale                                                                                                                   
      Pering Base Metals Proprietary Limited                                                                    1 000            1 000   
      Property, plant and equipment                                                                                 -              100   
      SA Metals Equity Proprietary Limited                                                                      8 000            8 000   
      Other assets                                                                                                 80               80   
      Total assets                                                                                              9 080            9 180   
      The non-current assets held-for-sale are non-core and the Company took a decision to                                  
      dispose of them.                                                                                                      
      Non-current liabilities held-for-sale                                                                                              
      Financial liabilities                                                                                     2 707            2 707   
      Trade and other payables                                                                                  3 692            3 692   
                                                                                                                6 399            6 399     
  7.  Financial liabilities                                                                                                              
      Non-current                                                                                              47 143            2 759   
      Current                                                                                                   2 625           55 645   
                                                                                                               49 768           58 404   
  8.  Trade finance facilities                                                                                                           
      Absa Bank Limited                                                                                        17 098           19 106   
      China Construction Bank Corporation                                                                     439 995          754 956   
      Nedbank Limited                                                                                          34 266           20 510   
      Standard Bank of South Africa Limited                                                                    42 256           60 145   
      Standard Chartered Bank Limited                                                                          43 600                -   
                                                                                                              577 215          854 717   
      
      The facilities comprise of transactional trade and commodity finance facilities and are secured by certain inventories, 
      trade and other receivables and letters of credit.  These facilities are charged a variable interest rate.

  9.  Operating expenses                                                                                                                        
      Operating expenses for the year are stated after accounting for:                                                                          
      Consulting and professional fees                                                                          7 220            6 514   
      Professional fees - FPT Mineral Terminal Limitada                                                         4 131                -   
      Employee costs                                                                                           56 739           56 638   
      Legal fees                                                                                                2 666            2 721   
      Operating lease charges                                                                                   1 449            7 820   
      Repairs and maintenance                                                                                   2 291            2 011   
      Depreciation and amortisation                                                                             5 923            6 217   
      Audit fees and other consulting                                                                           2 505            2 737   
      Bank charges                                                                                              1 641            4 055   
      Computer expenses                                                                                         2 432            1 874   
      Insurance                                                                                                 2 427            2 383   
      Travel and entertainment                                                                                  3 821            4 051   
      Unrealised loss on foreign exchange                                                                      11 466            6 342   
      Other                                                                                                    30 104           22 878   
                                                                                                              134 815          126 241   
  10. Net impairments and write offs                                                                                                     
      Impairment of property, plant and equipment                                                                 752            3 574   
      Impairment of non-current assets held-for-sale                                                                -            3 900   
      Impairment of intangible assets                                                                               -           55 100   
      Reversal of impairment of investments in associates                                                     (29 636)          64 815   
                                                                                                              (28 884)         127 389   
      Write downs                                                                                                                        
      Write down of inventories                                                                                 2 726           18 097   
      Write down of other receivables                                                                          42 378            9 886   
                                                                                                               45 104           27 983   
      Net impairments and write downs                                                                          16 220          155 372   
      Reversal of impairment of investments in associates follows the award of mining right and signing of 
      off-take agreement by Sefateng Chrome Mine Proprietary Limited.  
      The property, plant and equipment impaired follows the closure of operations in Zimbabwe.
      Other receivables write down relate to a long outstanding tantalite claim as well as write 
      down of a loan receivable following liquidation of a logistics supplier who had been provided 
      with the loan to purchase open top containers used to move Metmar material.
  
      Inventory write down of R2.7 million  relates to old and unsaleable stock at the plastics recycling plant.

  
  11. Finance costs                                                                                                                                         
      Trading contracts                                                                                        18 697           22 978   
      Bank overdrafts                                                                                          11 084            7 457   
      Financing effect on purchases and trade and other payables                                               45 288           33 500   
      Other                                                                                                     (145)              402   
                                                                                                               74 924           64 337   
      Finance income                                                                                                                     
      Bank balances                                                                                             6 346            1 657   
      Financing effect on sales and trade receivables                                                           2 952           10 083   
      Interest on loan account                                                                                  1 575            1 677   
                                                                                                               10 873           13 417   
                                                                      
  12. Taxation                                                                                                                           
      Normal taxation                                                                                           7 609           19 403   
      Deferred taxation                                                                                       (2 705)          (24 339)  
                                                                                                                4 904           (4 936)  
  13. Discontinued operations                                                                                                            
      Loss/(profit) on discontinued operation                                                                                            
      Revenue                                                                                                       -          182 268   
      Expenses                                                                                                      -         (176 877)  
      Net profit before tax                                                                                         -            5 391   
      Taxation                                                                                                      -           (1 651)  
      Net profit after tax                                                                                          -            3 740   
      Profit on sale of discontinued operation                                                                      -           19 170   
      Goodwill and intangibles amortisation and impairment                                                          -          (44 909)  
      - Goodwill impairment                                                                                         -          (36 906)  
      - Intangibles impairment                                                                                      -          (10 156)  
      - Intangibles amortisation                                                                                    -             (959)  
      - Less taxation                                                                                               -            3 112   
                                                                                                                                         
                                                                                                                    -          (21 999)  
      Proceeds from discontinued operations and sale of subsidiary                                                                       
      Cash received                                                                                                 -           66 537   
      - Discontinued operation                                                                                      -           53 747   
      - Sale of a subsidiary                                                                                        -           12 790   
      Overdraft cancelled                                                                                           -           94 606   
                                                                                                                    -          161 143   
      In the previous year the West African Group Division was discontinued following a 
      management buyout for R53,7 million. 
      In addition, Metmar sold 24 Sloane Street Properties Proprietary Limited, a company which owned 
      previous Metmar headquarters property, for R12,8 million.  
  
  14. Business combinations                                                                                                              
      Property, plant and equipment                                                                                 -           68 306   
      Trade and other receivables                                                                                   -            1 404   
      Cash and cash equivalents                                                                                     -              456   
      Financial liabilities                                                                                         -          (65 348)  
      Trade and other payables                                                                                      -           (4 618)  
      Total identifiable assets                                                                                     -              200   
      Non-controlling interest                                                                                      -              (67)  
      Goodwill                                                                                                      -            1 194   
                                                                                                                    -            1 327   
      In the previous year, Metmar acquired 66,7% of issued shares and claims in Arengo 203 Proprietary Limited.                                         
                                                                                                                                                         
      Arengo owns 100% of the property where Metmar is headquartered.                                                                                    
                                                                                                                                                                                                                                           
  15. Reconciliation of headline loss                                                                                                 
      Loss for the year                                                                                        (145,853)        (162 729)  
      Adjustments for:                                                                                                                     
      Gain on disposal of 24 Sloane Street Properties Proprietary Limited (net of taxation)                           -           (7 892)   
      Gain on disposal of West African Group Division                                                                 -          (19 170)   
      Write off of goodwill following discontinued operations                                                         -           36 906   
      Write off of intangible assets (net of taxation and noncontrolling interest)                                    -           32 504   
      (Reversal of)/impairment of associates                                                                    (29 636)          64 815   
      Impairment of property, plant and equipment                                                                   752            3 574   
      Impairment of non-current assets held-for-sale                                                                  -            3 900   
      Loss on sale of property, plant and equipment                                                               1 003            1 521   
      Taxation effect on loss on sale of property, plant and equipment                                             (281)            (415)   
      Headline loss                                                                                            (174 015)         (46 986)  
      Headline loss per share (cents)                                                                             (65,1)           (17,6)  
      - Attributable loss per share (cents)                                                                       (54,6)           (60,9)  
      Weighted average number of shares in issue                                                            267 306 552      267 306 552
  
  16. Cash generated from/(utilised in) operations                                                                                         
      Loss before taxation                                                                                    (142 155)         (165 714)  
      Adjustments for:                                                                                                                     
      - Other non-cash items                                                                                      9 310           10 858   
      - Fair value adjustments on listed shares                                                                  20 995          (18 606)  
      - Realised loss on sale of Afarak Group Plc shares                                                          9 492                -   
      - Net impairments                                                                                          16 220          155 372   
      - Net finance costs                                                                                        64 051           50 920   
      Changes in working capital:                                                                                                          
      - Inventories                                                                                             115 404         (233 395)  
      - Trade and other receivables                                                                             147 033         (144 757)  
      - Trade and other payables                                                                                 55 852            1 947
      - Trade finance facilities                                                                               (277 502)         385 258 
                                                                                                                 18 700           41 883   
  17. Fair value information                                                                                                                                                     
      Fair value hierarchy                                                                                                                                                               
      The table below analyses assets and liabilities carried at fair value. The different levels are defined 
      as follows:                                                                
      Level 1: Quoted unadjusted prices in active markets for identical assets or liabilities that the Group 
      can assess at measurement date.                                             
                                                                                                                                                                                         
      Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability 
      either directly or indirectly.                                         
                                                                                                                                                                                         
      Level 3: Unobservable inputs for the asset or liability.                                                                                                                           
                                                                                                                                                                                         
      There has been no transfers between the fair value levels during the reporting period.                                                                                             
                                                                                                                                                                                         
      Categories and levels of financial instruments in the Group                                                                                                                        
                                                                                                                                                                                         
      Level 1                                                                                                                                               
      Assets                                                                                                                                                 
      Financial assets designated at fair value through profit and loss                                                                                      
      Derivative financial instruments                                                                            1 899        4 568   
      Listed shares                                                                                              20 626       66 057   
      Total                                                                                                      22 525       70 625   
      The fair values for these contracts have been estimated using relevant market data.

      Level 2
      Liabilities                                                                                                                     
      Financial liabilities at fair value through profit and loss                                                                                         
      Mortgage bonds                                                                                             47 143        2 759   
      Total                                                                                                      47 143        2 759    
      The fair value of these loans have been estimated using discounted cash flows and relevant interest rates.
      The carrying values of these financial liabilities approximates its fair value.
      All these financial liabilities are market related and are at an arms length with reputable counter parties.

      Level 3                                                                                                                         
      Investments in financial assets at fair value                                                                                        
      Investment in Kalahari Resources Proprietary Limited                                                      192 900      192 900   

      Kalahari Resources Proprietary Limited was valued using a financial model based on the establishment of the mine and
      sinter plant detailing the timing and extent of cash flows to be generated from the project. The model used was consistent
      with the expected life of the mine being 22 years and the valuation contained was on the Income Approach which is based
      on net present value("NPV") derived using discounted cash flows ("DCF") technique applied to the pre-tax pre-finance cash
      flows, using a discount rate of 18.3% after taking into account an inflation rate of 6.6%. A 10% increase in inflation rate to
      7.26% will result in a 4% increase in the value of the investment while a 10% decrease to 5.94% will result in a 3% decline
      in the value of the investment. A 10% increase in the discount rate applied to 20.13% will result in a 9% decline in the value
      of the investment while a 10% decrease to 16.47% will result in an 11% increase in the value of the investment. The most
      important driver to the DCF is the Rand-equivalent commodity price assumption while other assumptions included
      production rates and the estimated life of mine, metallurgical recoveries, operating costs and capital expenditure
      requirements. The NPV of the Kalagadi Manganese Project based on the Kalagadi model was calculated and due to this
      valuation it was subsequently revalued to its fair value as at 28 February 2015.
 
  18. Segment report                                                                                                                                                                                                                                                                                                                                    
      In identifying its operating segments, management follows the procedure of distinguishing investment 
      in resource-based operations from the trading activities of the Group.                                                                                                                                                                       
      The Group has accordingly used the following factors to identify reportable segments worldwide which 
      are Investments and Trading and their activities are:                                                                                                                                                                                        
      - Investments segment invests through taking equity and providing project loan funding in mining and 
      logistics projects in order to secure product off-take and logistics infrastructure. Investments earns 
      interest and dividends but also does limited trading especially in Zimbabwe through a company registered 
      there for trading purposes.    
      - Trading segment includes commodities trading activities of the Group through spot deals and off-take 
      agreements signed from Investments' investee companies and any other off-takes.                                                                                                                                                            
      As a commodities trader and financial and logistics facilitator, Metmar is focused on developing assets 
      and revenue related to the trading and production of a diverse range of bulk commodities.                                                                                                                                                 
      There have been no aggregation of the two segments identified as:                                                                                                                                                                                                                                                                                 
      - investments; and                                                                                                                                                                                                                                                                                                                                  
      - trading.                                                                                                                                                                                                                                                                                                                                          
      The Chief Operating Decision Maker (CODM) evaluates the performance of the Group’s segments based on 
      earnings before interest, taxation, depreciation and amortisation.                                                                                                                                                                           
      Included in the management reports reviewed by the CODM are summaries of depreciation and amortisation 
      expense related to each of the segments, even though these amounts are not allocated within the segment 
      results reported.                                                                                                                  
      No allocations of interest or taxation are made and only entity-wide amounts for these items are reported 
      to the CODM.                                                                                                                                                                                                                            
      Each of these operating segments is managed separately as each of these service lines requires different 
      processes and other resources as well as marketing approaches. All inter-segment transfers are carried out 
      at arm’s length prices.                                                                                                       
      The measurement policies the Group uses for the segment reporting under IFRS 8 are the same as those used 
      in its annual financial statements, except that:                                                                                                                                                                                        
      - post-employment benefit expenses;                                                                                                                                                                                                                                                                                                                 
      - expenses relating to share-based payments;                                                                                                                                                                                                                                                                                                        
      - research costs relating to new business activities; and                                                                                                                                                                                                                                                                                           
      - cost of sales                                                                                                                                                                                                                                                                                                                                     
      are not included in arriving at the operating profit of the operating segments in prior periods. The 
      measurement methods used to determine reported segment profit or loss included allocations of the amounts 
      described above.                                                                                                                   
      Management currently identifies the Group’s two activities as operating segments. These operating segments 
      are monitored as strategic decisions are made on the basis of segment operating results.                                                                                                                                               
                                                                                                                                                         
                                                                                                  28 February 2015                                              
      Segment report - Group                                                       Trading       Invest-       Adjust-          Total   
                                                                                activities         ment         ments           R’000   
                                                                                     R’000    activities          and                   
                                                                                                   R’000        elimi-                  
                                                                                                               nations                  
                                                                                                                 R’000                  
      Revenues - external customers                                                                                                     
      Segment revenues                                                           1 931 442        42 597       (22 779)     1 951 260   
      Net finance costs                                                            (43 200)      (12 038)       (8 813)       (64 051)   
      Depreciation and amortisation of non-financial assets                           (692)       (2 505)       (2 726)        (5 923)   
                                                                                 1 887 550        28 054       (34 318)     1 881 286   
      Segment revenues                                                                                                                  
      Total segment revenues                                                     1 931 442        42 597       (22 779)     1 951 260   
      Other income                                                                   1 900         5 615         2 069          9 584   
                                                                                 1 933 342        48 212       (20 710)     1 960 844   
      Earnings before interest, tax, depreciation and amortisation (EBITDA)                                                             
      Operating profit/(loss)                                                        8 521       (62 043)       15 017        (38 505)   
      Depreciation                                                                     692         2 505         2 726          5 923   
                                                                                     9 213       (59 538)       17 743        (32 582)   
      Segment profit or loss                                                                                                            
      Segment operating                                                                                                                 
      profit/(loss)                                                                  8 521       (62 043)       15 017        (38 505)   
      Impairments                                                                  (31 311)       15 651          (560)       (16 220)   
      Fair value adjustments                                                             -       (20 995)            -        (20 995)   
      Net finance costs                                                            (43 200)      (12 038)       (8 813)       (64 051)   
      Loss from equity accounted investment                                              -        (2 384)            -         (2 384)   
      (Loss)/profit before taxation                                                (65 990)      (81 809)        5 644       (142 155)   
      Taxation                                                                      12 208           715       (17 827)        (4 904)   
                                                                                   (53 782)      (81 094)      (12 183)      (147 059)   
      Discontinued operations                                                            -             -             -              -   
      (Loss)/profit for the year                                                   (53 782)      (81 094)      (12 183)      (147 059)   
      Segment assets                                                             1 061 147       496 449      (338 256)     1 219 340   
      Segment liabilities                                                          747 737       782 602      (604 711)       925 628   


                                                                                                    28 February 2014                                             
      Segment report - Group (continued)                                          Trading        Invest-       Adjust-         Total   
                                                                                activities         ment          ments         R’000   
                                                                                     R’000    activities          and                  
                                                                                                   R’000        elimi-                 
                                                                                                               nations                 
                                                                                                                 R’000                 
      Revenues - external customers                                                                                                    
      Segment revenues                                                           2 059 801       234 001      (196 367)    2 097 435   
      Net finance costs                                                            (31 114)      (15 025)       (4 781)      (50 920)  
      Depreciation and amortisation of non-financial assets                         (1 303)       (3 468)       (1 446)       (6 217)  
                                                                                 2 027 384       215 508      (202 594)    2 040 298   
      Segment revenues                                                                                                                 
      Total segment revenues                                                     2 059 801       234 001      (196 367)    2 097 435   
      Other income                                                                   8 212        14 318        (1 782)       20 748   
                                                                                 2 068 013       248 319      (198 149)    2 118 183   
      Earnings before interest, tax, depreciation and amortisation (EBITDA)                                                            
      Operating profit/(loss)                                                       80 737        46 172       (92 692)       34 217   
      Depreciation                                                                   1 303         3 468         1 446         6 217   
                                                                                    82 040        49 640       (91 246)       40 434   
      Segment profit or loss                                                                                                           
      Segment operating                                                                                                                
      profit/(loss)                                                                 80 737        46 172       (92 692)       34 217   
      Impairments                                                                   (7 944)     (145 486)       (1 942)     (155 372)  
      Fair value adjustments                                                         8 792       (28 918)       38 732        18 606   
      Net finance costs                                                            (31 114)      (15 025)       (4 781)      (50 920)  
      Loss from equity accounted investment                                              -       (12 245)            -       (12 245)  
      (Loss)/profit before taxation                                                 50 471      (155 502)      (60 683)     (165 714)  
      Taxation                                                                     (15 682)       15 346         5 272         4 936   
                                                                                    34 789      (140 156)      (55 411)     (160 778)  
      Discontinued operations                                                      (21 575)            -          (424)      (21 999)  
      (Loss)/profit for the year                                                    13 214      (140 156)      (55 835)     (182 777)  
      Segment assets                                                             1 346 655       488 251      (264 568)    1 570 338   
      Segment liabilities                                                          979 661       685 520      (537 192)    1 127 989   

  19. Going concern
                                                                                                                                        
      The Company continues to face tough industry and economic conditions characterised by the following: 
      reduced commodity prices, dwindling demand for commodities and, as a result, insolvency events and fraud 
      by industry peers in the past few months.                                                                 
                                                                                                                                                           
      As a result, trade financiers have responded with risk aversion towards financing new or maintaining 
      existing structured trade finance and further have reduced facilities, communicated the intention of 
      terminating finance in an orderly manner and have made drawdown terms more onerous. While their response 
      is not unexpected, given the commodities fraud at the port of discharge in China as well as the liquidation 
      of some of Metmar’s competitors in South Africa, it has left Metmar with liquidity challenges that contributed 
      to the operational losses of the 2015 financial year. In the last three financial years, the Group has made 
      the following losses and total cash outflows:                                                                 
                                                                                  28 February         28 February         28 February     
                                                                                         2015                2014                2013             
                                                                                        R’000               R’000               R’000            
      Loss for the year per the statements of profit or loss and other 
      comprehensive income                                                            147 059             182 777             111 549          
      Headline loss                                                                   174 015              46 986              80 634           
      Total cash outflow per the statements of cash flows                              50 484              22 051              59 290           
                                                                                                                                                           
      Further, the Group has a net current liability position of R67 million.                                                                              
                                                                                                                                                             
                                                                                                                             
      On the trade finance front, China Construction Bank (“CCB”) withdrew the $30 million facility it provided 
      while Nedbank Capital is in the process of restructuring its $30 million facility into a bilateral loan. 
      CCB is expecting either full repayment of outstanding balances by 30 September or conversion of the outstanding 
      balance to a corporate loan repayable through the sinter tolling cash flow proceeds within 12 months. CCB’s 
      curtailment of the facility is not the result of Metmar’s financial position. It is understood that CCB is 
      exiting structured trade finance market globally following its losses resulting from the fraud in China. Further, 
      it is understood that it is exiting its operations from the South African financial services space as a result 
      of its corporate strategy.                                                                 
                                                                                                                                                           
      The following factors are considered in potential mitigation of the above risks:                                                                     
                                                                                                                                                           
      Internal forecasts, which form the basis of the Company’s budget, as prepared and approved by management for the 
      2016 financial year, indicate that the Company will return to profitability and that the net current liability 
      position will be resolved. The major contributions to profits are expected to be from the consummation of the 
      Kalagadi tolling agreement, successful execution of the Sefateng Chrome Mine off-take agreement and coal off-take 
      agreements. These are in addition to the existing trading businesses that continue to contribute positive margins. 
      It is, however, difficult to determine with certainty the exact consummation date of the tolling activity, timing 
      of cash flows, future demand and commodity prices which may cause trading losses that currently cannot be predicted.                                                                 
                                                                                                                                                           
      Management has partially replaced the CCB facility by signing a facility with Standard Chartered Bank amounting to 
      $15 million which is fully operational. Further, the Metmar Group received final approval of a $15 million trade 
      finance facility from First Bank of Nigeria (UK) (“FBN”) to fund the Sefateng Chrome Mine off-take, subject documents 
      being accepted for the purpose of its financial intelligence compliance review. Management is positive that the CCB 
      facility will be replaced by these and other potential sources of finance and is proactively managing this process, 
      but cannot with certainty determine the successful outcome of the refinancing.                                                                 
                                                                                                                                                           
      The conditional offer made by Traxys on 30 April 2015 to acquire the entire issued share capital of Metmar 
      Limited is expected to increase the level of confidence by trade financiers to maintain and extend funding to the 
      Metmar Group for trading and financing facilities. Management is positive that the takeover transaction has a high 
      likelihood to be completed successfully. The offer, however, is subject to conditions such as Shareholder and 
      regulatory approvals, the non-occurrence of material adverse change events and fulfilling certain conditions within 
      certain deadlines. The completion of the transaction is expected at latest 30 September 2015 after which management 
      expects that Metmar will have access to financial support and facilities that are available to the Traxys Group. 
      This potential source of financial support is highly likely, but its success cannot at this time be determined with 
      certainty.                                                                 
                                                                                                                                                           
      The above conditions give rise to material uncertainties which may cast significant doubt about the Company’s 
      ability to continue as a going concern and therefore that it may be unable to realise its assets and discharge 
      its liabilities in the normal course of business. The Board remains reasonably confident that it will successfully 
      manage the material uncertainties that exist. As such, the financial statements have been prepared on the basis of 
      accounting policies applicable to a going concern. This basis presumes that funds will be available to fund future 
      operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments 
      will occur in the ordinary course of business.                                                                 

  20. Corporate governance                         
      The Metmar Group complies with the Code of Good Corporate Practice and Conduct published in the King III 
      report on Corporate Governance.  
  
  21. Post-balance sheet events                    
      On 30 April 2015, the Company announced a conditional offer by Traxys to acquire 100% of Metmar 
      shares listed on the JSE. This deal is subject to shareholder and regulatory approval expected to conclude 
      before 30 September 2015.    
  
  22. Related party transactions                   
      During the period, the Company and its subsidiaries in the ordinary course of business, entered into 
      various transactions with their associates. These transactions were subject to terms that are no less 
      favourable than those arranged with third parties.                   

R Still
Non-Executive Chairman

28 May 2015

Administration

Name and Company registration number
Metmar Limited
1998/007269/06

Directorate
RG Still# (Chairman)
L Matteucci# 
DJ Ellwood (Chief Executive Officer)
PP Boshoff
D Earp#
D Mashile-Nkosi*
SMS Nkosi (Chief Financial Officer)
TI Borman*

# Independent non-executive   
* Non-executive               

Company Secretary and registered office
Anlia Swart
25 Culross Road, Cnr Main Road
Bryanston
Sandton, 2191

PO Box 98549
Sloane Park, 2152

Share transfer secretaries
Computershare Investor Services Proprietary Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
PO Box 61051
Marshalltown, 2107

Auditors
Ernst & Young Inc.
Registered auditors
102 Rivonia Road
Sandton, 2146

Sponsor
Nedbank
135 Rivonia Campus
Rivonia Road
Sandown
Sandton, 2196

PO Box 1144
Johannesburg, 2000

www.metmar.co.za

Date: 29/05/2015 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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