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Provisional Audited Summarised Consolidated Annual Financial Results For The Year Ended 28 February 2020
Mine Restoration Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/004821/06)
Share Code: MRI
ISIN Code: ZAE000164562
("MRI", “the Company" or “the group”)
Provisional Audited Summarised Consolidated Annual Financial Results
For The Year Ended 28 February 2020
The Board of Directors of MRI (”the Board”) is pleased to announce
the audited summarised consolidated annual financial results for the
year ended 28 February 2020 with restatement of prior year results
as detailed in note 8 (“Results”).
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited 12- Audited 12-
months to months to
February February
2020 2019
(Restated)
R’000 R’000
Revenue - -
Cost of Sales - -
Other income 660 110
Operating expenses (2 900) (6 536)
Impairments - -
Operating loss (2 240) (6 426)
Investment revenue - -
Finance cost (2 932) (1 756)
Loss before taxation (5 172) (8 182)
Taxation - -
Loss for the period (5 172) (8 182)
Other comprehensive income - -
Total comprehensive loss (5 172) (8 182)
Loss attributable to:
Owners of the parent (5 173) (8 216)
Non-controlling interests 1 34
Total comprehensive loss
attributable to:
Equity holders (5 173) (8 216)
Non-controlling interests 1 34
Basic loss per share (0.60) (0.95)
Diluted loss per share (0.60) (0.95)
863 053 863 053
Weighted average number of
shares in issue (‘000)
Diluted weighted average
number of shares in issue
(‘000) 863 053 863 053
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited 28 Audited 28
February February
2020 2019
(Restated)
R’000 R’000
Assets
Current Assets
Trade and other receivables 136 -
Cash and cash equivalents 1 107
137 107
Total Assets 137 107
Equity and Liabilities
Equity
Amount attributable to equity (21 270) (16 097)
holders
Non-Controlling Interest (31) (32)
(21 301) (16 129)
Liabilities
Current Liabilities
Other financial liabilities 16 727 14 000
Trade and other payables 4 698 2 236
Bank overdraft 13 -
21 438 16 236
Total Equity and Liabilities 137 107
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital Equity due Accumulated Amount Non- Total
capital Reserve to change loss attributable Controlling equity
in to Equity Interest
ownership Holders
R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at 01
March 2018 85 020 5 000 (2 459) (95 442) (7 881) (66) (7 947)
Total
comprehensive
loss for the
period - - (8 216) (8 216) (34) (8 182)
Prior
period errors (50) (50) - (50)
Balance at 01
March 2019 85 020 5 000 (2 459) (103 658) (16 097) (32) (16 129)
Total
comprehensive
loss for the
period - - - (5 173) (5 173) 1 (5 172)
Release on Non-
Controlling
Interest on
share purchase - - - - - - -
Issue of shares - - - - - - -
Balance at 28
February 2020 85 020 5 000 (2 459) (108 831) (21 270) (31) (21 301)
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
12-months 12-months
to to
February February
2020 2019
(Restated)
R’000 R’000
Cash flows from operating
activities (23) (2 396)
Cash flows from investing
activities (96) (2 838)
Cash flows from financing
activities - 5 290
Total cash movement for the
period (119) 56
Cash and cash equivalents at the
beginning of the period 107 51
Cash and cash equivalents at end
of the period (12) 107
COMMENTARY
1. BASIS OF PREPARATION
These Results are extracted from audited consolidated annual
financial statements but no separate audit opinion is provided for
these summarised consolidated financial results. The directors take
full responsibility for the preparation of this report and confirm
that the financial information has been correctly extracted from the
underlying financial statements.
The Results have been prepared in accordance with the measurement
and recognition requirements of International Financial Reporting
Standards (IFRS) and its interpretations adopted by the Accounting
Standards Board (IASB) in issue and effective for the Group at
28 February 2020 and the SAICA financial report guides as issued by
the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council. These results are presented in accordance with IAS 34 –
Interim Financial Reporting and comply with the Listings
Requirements of the Johannesburg Stock Exchange Limited (“JSE”) and
the Company’s Act of South Africa 2008. These Results do not
include all the information required for full annual statements and
should be read in conjunction with the consolidated annual
financial statements as at and for the year ended 28 February 2020.
Notwithstanding the insolvency of the Company and the fact that it
has limited activity, the directors are satisfied that the group
will still be able to settle its obligations and realise its assets
as measured in terms of IFRS as applicable to going concern.
The audited consolidated financial statements have been prepared
using accounting policies that comply with IFRS and which are
consistent with those applied in the preparation of the audited
financial statements for the year ended 28 February 2019, except for
the adoption of IFRS 16 Leases.
These Results were prepared under the supervision of MJ Miller the
Chairman of the Company.
Shareholders are advised that the information contained in the
announcement is also available at:
https://senspdf.jse.co.za/documents/2021/jse/isse/mri/ye20.pdf
2. FINANCIAL RESULTS AND FUTURE PROSPECTS
MRI operated as a cash shell throughout the current financial year.
The Board focused on reducing all corporate costs whilst pursuing
the acquisition of Langpan Mining Co Proprietary Limited
(“Langpan”). The Board has satisfied themselves that the group is
in a position to continue as a going concern and that it has access
to sufficient borrowing facilities to meet its foreseeable cash
requirements.
On 10 October 2019, the group announced on SENS that it had entered
into a share purchase agreement with the shareholders of Langpan,
in terms of which the Vendors would dispose of their entire
shareholding (100%) in Langpan for an aggregate purchase
consideration of R550 million, to be settled through the issue by
MRI of 137 500 000 000 shares to the Vendors (“Langpan
Transaction”).
The advent of the novel coronavirus created significant uncertainty
in global capital and commodity markets. In order to protect the
group and the Langpan Transaction, the transaction stakeholders
approved a restructure of the underlying transaction to mitigate
any uncertainty. The Board reviewed the revised structure and found
the Langpan Transaction to have the same commercial merits as
before. This prompted the Board to sign a refreshed purchase
agreement, on essentially the same terms and conditions as before,
on 13 August 2020.
The Board is confident that the acquisition of Langpan will
recapitalise the Company and allow for the Company’s successful
reinstatement on the Alternative Exchange of the JSE.
3. HEADLINE LOSS PER SHARE (“HLPS”)
Reconciliation of losses to headline losses attributable to equity
holders of the parent:
Audited 12- Audited 12-
months to months to
February February
(Restated)
2020 2019
Loss per share (cents) (0.60) (0.95)
Diluted loss per share
(cents) (0.60) (0.95)
Headline loss per share
(cents) (0.60) (0.95)
Diluted headline loss per
share (0.60) (0.95)
HLPS Calculation
(Loss)/profit for the period
(R’000) (5 172) (8 182)
Impairment of intangible
assets and goodwill - -
Impairment of property, plant
and equipment - -
Deferred tax on impairments
of assets - -
Headline loss (5 172) (8 182)
Weighted average number of
shares in issue (‘000) 863 053 863 053
Actual number of shares in
issue (‘000) 863 053 863 053
4. CHANGES IN SHARE CAPITAL
Since the last reporting period there have been no changes in issued
share capital.
5. EVENTS AFTER THE END OF THE REPORTING PERIOD
Langpan Transaction:
Due to the advent effects of the coronavirus on the global markets,
the Board reviewed the revised structure and found the transaction
to have the same commercial merits as before. This prompted the
Board to sign a refreshed purchase agreement, on essentially the
same terms and conditions as before, on 13 August 2020.
Reportable Irregularity:
On 9 July 2020, the previous auditors BDO South Africa Incorporated
(“BDO”) notified the Board about a possible reportable irregularity
("RI") relating to the "possibility of trading recklessly and the
allegations made against some directors". On 20 August 2020, BDO
notified the Board that an RI had been raised on 7 August 2020 and
that the reported particulars of the irregularity had been reported
to Independent Regulatory Board for Auditors ("IRBA"). The RI
relating to the director's contraventions of the Companies Act 71
of 2008 (the "Companies Act") was found to be consistent with the
reportable irregularity continuing. In order to remedy the RI, the
Board dismissed the implicated directors and appointed new
directors to bolster the Board's governance credentials.
Directorate Changes:
• On 24 July 2020 Richard Tait and Quinton George resigned as
directors.
• On 13 August 2020, the Board appointed Mahlatsi Movundlela and
Thato Makgolane as independent non-executive directors.
• On 28 August 2020, Syd Caddy and Chris Roed resigned as
directors.
• On 31 October 2020 Ulrich Bester resigned as Financial
Director.
With effect from 1 November 2020:
• George Sebulela was appointed as the lead independent
director.
• Michael Miller changed his role from Chief Executive Officer
to non-executive Chairman.
• Mahlatsi Movundlela had been appointed as Chief Executive
Officer.
• Thato Makgolane had been appointed as Financial Director.
Additionally, Board subcommittees were also reconstituted as
follows:
- Combined Audit and Risk Committee: George Sebulela (Chair),
Alistair Collins and Michael Miller.
- Remuneration and Nomination Committee: Alistair Collins
(Chair), George Sebulela and Michael Miller.
- Social and Ethics Committee Alistair Collins (Chair), George
Sebulela and Michael Miller.
The Company is in the process of evaluating its board and
committees and following the annual general meeting (“AGM”), will
be looking to include additional independent members to strengthen
the governance structures of the Company.
Call for Shareholder Meeting:
On 16 September 2020, the Board received a demand notice from a
shareholder holding 17.38% of the Company’s issued share capital,
calling for shareholders meeting in terms of section 61(3) of the
Companies Act. The purported reason for the shareholder meeting
was, inter alia, to re-appoint the dismissed directors, to
terminate the appointments of the entire Board and to prevent the
terms of the Langpan Transaction being put to the shareholders for
their consideration in the normal course.
In order to protect the interests of the group, its shareholders,
creditors and the Langpan Transaction, the Board entered into a
commercial settlement agreement with the abovementioned shareholder
and the dismissed directors. The settlement agreement comprised the
following material outcomes:
- The Board had agreed to the insertion of a resolution in terms of
section 75(7)(b)(i) of the Companies Act to be included notice of
AGM forming part of the annual report, pertaining to the Langpan
transaction.
- The shareholder had agreed to sell its 17.38% shareholding in the
group to an independent third party.
On 28 October 2020, the call for the shareholders meeting was
unconditionally withdrawn.
Disposal of Dormant Subsidiaries:
MRI disposed of its entire interest in Western Utilities
Corporation Proprietary Limited, Octavovox Proprietary Limited and
Prodiflex Coal Proprietary Limited to an independent third party as
part of an exercise to clean up its corporate structure. These
disposals fell below the categorisation thresholds of the JSE
Listing Requirements and consequently, were not required to be
announced.
6. OTHER FINANCIAL LIABILITIES
In early 2017, an angel investor re-capitalised the Company, through
a subordinated debt facility with a balance of R9,17 million at 28
February 2019, in order to settle claims, cover working capital and
transaction related costs for the Langpan Transaction, providing
support so as to maintain the Company’s solvency and to ensure that
the Company is able to continue operating as a going concern. This
support had been maintained throughout the period under review.
The remaining increase in other financial liabilities relates to trade
payables in the ordinary course of business including interest
charges.
7. OTHER FINANCIAL ASSETS
With respect to the Langpan Transaction, as at 28 February 2020 R3,71
million has been provided on an unsecured short term debt basis to
the target to cover transactional related expenses.
8. PRIOR PERIOD RESTATEMENTS
The financial results contain a prior year adjustment and therefore,
the comparative balances differ from those previously reported. The
restatement resulted in a R50,000 increase in the period loss. Details
of the restatements are as follows:
Director fees of R297,200 were incorrectly recognised in the prior
period and were reversed. Further, a correction totaling R344,799 in
legal fees was applied as the amounts were previously recognized in
incorrect periods. Lastly, interest income amounting to R100,395 was
not accounted for in the 2019 financial period and is now included.
2019 – as 2019 Change
Previously Restated
Reported
R’000 R’000 R’000
Statement of Financial Position
Trade and other payables 2 186 2 236 (50)
Accumulated loss (103 608) (103 658) (50)
Statement of Loss and Other
Comprehensive Income
Other Operating Expenses (6 376) (6 536) (160)
Other Income (-) 110 110
(6 376) (6 426) (50)
9. AUDITOR’S OPINION
During the period under review, the Company changed its independent
auditor from BDO to Ngubane & Co (Jhb) Inc.
The group’s independent auditor has audited the consolidated
financial statements for the year ended 28 February 2020, from which
the Results have been extracted, and have issued an unqualified
opinion. The auditor’s report contained the following emphasis of
matter paragraph relating to a material uncertainty related to the
Company’s going concern:
“We draw attention to Note 22 of the consolidated financial
statements, which indicates that the group incurred a net loss of
R5.2 million during the year ended 29 February 2020 and, as of that
date, the group’s total liabilities exceeded its total assets by
R21 million. As stated in Note 22, these events, and conditions,
indicate that a material uncertainty exists that may cast
significant doubt on the group’s ability to continue
as a going concern. Our opinion is not modified in respect of this
matter.”
A copy of the auditor's report is available for inspection on the
Company’s website at www.minerestoration.co.za/sens-
announcements/and at the Company's registered office.
10. GOING CONCERN
The financial period under review reflects a challenging financial
period, with a net loss after tax of R5 million (prior year R8
million) and the group’s total liabilities exceeding its assets by
R21 million. The directors are confident that the acquisition of
Langpan will adequately recapitalise the Company ensuring the
successful reinstatement of MRI onto the JSE Alternative Exchange.
The Board remains confident that the Company retains the continued
support of its major shareholders to provide additional funding
should other sources not be forthcoming.
The Board has a reasonable expectation, having regard to the
current status and the future strategy of the Company, that the
Company will have sufficient resources to continue as a going
concern and have therefore concluded that it is appropriate to
prepare the financial statements on a going concern basis.
Accordingly, the financial statements do not include the
adjustments that would result if the Company was unable to continue
as a going concern.
11. DIVIDENDS
No dividend was declared for the year ended 28 February 2020 (2019:
Nil).
CORPORATE INFORMATION
Postal address: PO Box 866, Rivonia, 2128
Registered and Physical address: Lower Ground Floor Block F,
Pinmill, 164 Katherine Street, Sandton, Gauteng, 2196
Tel no:+27 (0) 11 036 3100
Fax no:+27 (0) 86 654 6818
Web: www.minerestoration.co.za
Board of Directors: G Sebulela*, A Collins*, MJ Miller#
(Chairman), MM Movundlela (CEO), TA Makgolane (FD).
(#Non-Executive, * Independent Non-Executive)
Company Secretary: Neil Esterhuysen & Associates Inc
Transfer Secretaries: Computershare Investor Services (Pty)
Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, PO
Box 61051, Marshalltown 2107
Auditor: Ngubane & Co (JHB) Inc.
Johannesburg
12 May 2021
Designated Adviser
Merchantec Capital
Date: 12-05-2021 07:10:00
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