TIDMCZA
RNS Number : 9206R
Coal of Africa Limited
14 March 2016
ABN 98 008 905 388
FINANCIAL REPORT
FOR THE HALF YEAR ENDED
31 DECEMBER 2015
CORPORATE DIRECTORY
REGISTERED OFFICE Suite 8, 7 The Esplanade
Mt Pleasant, Perth, WA
6153
Telephone: +61 8 9316 9100
Facsimile: +61 8 9316 5475
Email: perth@coalofafrica.com
SOUTH AFRICAN OFFICE South Block
Summercon Office Park
Cnr Rockery Lane and Sunset
Avenue
Lonehill
Telephone: +27 10 003 8000
Facsimile: +27 11 388 8333
BOARD OF DIRECTORS Non-executive
Bernard Pryor (Chairman)
Andrew Mifflin
Khomotso Mosehla
Peter Cordin
Rudolph Torlage
Thabo Mosololi
Executive
David Brown
De Wet Schutte
COMPANY SECRETARY Tony Bevan
AUSTRALIA UNITED KINGDOM SOUTH AFRICA
AUDITORS Deloitte Touche N/A Deloitte &
Tohmatsu Touche
Tower 2 Deloitte Place
Brookfield Place Building 1
123 St Georges The Woodlands
Terrace 20 Woodlands
Perth WA 6000 Drive
Australia Woodmead 2052
South Africa
BANKERS National Australia Investec Bank ABSA Bank
Bank Limited plc The Podium
Level 1, 1238 2 Gresham Street Norton Rose
Hay Street London EC2V Building
West Perth WA 7QP 15 Alice Lane
6005 United Kingdom Sandton South
Australia Africa
CORPORATE DIRECTORY (CONTINUED)
AUSTRALIA UNITED KINGDOM SOUTH AFRICA
BROKERS Euroz Securities Mirabaud N/A
Limited 21 St James'
Level 18, Alluvion Street
58 Mounts Bay London SW1Y
Road 4JP
Perth WA 6000 United Kingdom
Australia
LAWYERS Squire Patton Squire Patton Edward Nathan
Boggs (AU) Boggs (UK) Sonnenbergs
Level 21 LLP 150 West Street
300 Murray 2 Park Lane Sandton
Street Leeds Johannesburg
Perth WA 6000 LS3 1 ES 2196
Australia United Kingdom South Africa
NOMAD/ CORPORATE N/A Peel Hunt LLP Investec Bank
SPONSOR Moor House Limited
120 London 100 Grayston
Wall Drive
London EC2Y Sandown 2196
5ET Johannesburg
United Kingdom South Africa
Index
The reports and statements set out below comprise the half-year
report presented to shareholders:
Contents Page
Directors' Report 4
Condensed Consolidated Statement of Profit
or Loss and Other Comprehensive Income 8
Condensed Consolidated Statement of Financial
Position 9
Condensed Consolidated Statement of Changes
in Equity 10
Condensed Consolidated Statement of Cash
Flows 11
Notes to the Condensed Consolidated Half-year
Report 12
Directors' Declaration 25
Auditor's Independence Declaration 26
Independent Auditor's Review Report 27
COAL OF AFRICA LIMITED
DIRECTORS' REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
The Directors of Coal of Africa Limited ("CoAL" or "the
Company") submit herewith the financial report of Coal of Africa
Limited and its subsidiaries ("the Group") for the half-year ended
31 December 2015. All amounts are expressed in US Dollars unless
stated otherwise.
In order to comply with the provision of the Corporations Act
2001, the directors report as follows:
Directors
The names of the directors of the company during or since the
end of the half-year are:
Bernard Pryor* (Chairman) Thabo Mosololi*
Andrew Mifflin* David Brown**
Rudolph Torlage* De Wet Schutte**
Peter Cordin*
Khomotso Mosehla*
* - Non-executive director
** - Executive director
The above named directors held office during and since the end
of the half-year.
Review of Operations
Principal activity and nature of operations
The principal activity of the Company and its subsidiaries is
the exploration and development of coking and thermal coal
properties in South Africa.
The Company's principal coking and thermal coal assets and
projects include:
-- The Vele Colliery, on care and maintenance, a coking and thermal colliery;
-- The Makhado Project, a coking and thermal coal project;
-- Four exploration stage coking and thermal coal projects,
namely Chapudi, Generaal, Makhado extension and Mopane, in the
Soutpansberg Coalfield (the GSP project); and
-- The Mooiplaats Colliery currently on care and maintenance and
subject to a formal sale process.
The Company's focus on safety continued and no lost time
incidents ("LTIs") were recorded during the six months (FY2015 H2:
nil).
Vele Colliery - Limpopo (Tuli) Coalfield (100% owned)
The Vele coking and thermal coal colliery ("Vele Colliery")
recorded no LTIs during the period.
The original Vele Colliery Integrated Water Usage Licence
("IWUL"), valid until March 2016, has been renewed for a further 20
years, and also amended in line with the requirements for the Plant
Modification Project (PMP) at the Colliery.
During H2 2015, the Company commenced a process to obtain
approval relating to a non-perennial stream diversion. This
decision is anticipated in H2 2016. Once this regulatory approval
in respect of the Colliery has been received, the final decision to
proceed with the PMP will be placed before the board, which will
include an assessment of forecast global coal prices.
Makhado Coking Coal Project (74% owned)
As required under South African mining legislation, a minimum
26% black economic empowerment ("BEE") shareholding is required for
mining and exploration projects. CoAL previously signed a
Memorandum of Agreement to enable a Broad Based Black Economic
Empowerment consortium comprising seven local communities to
acquire a 20% interest in the Makhado Project and during the period
the Company continued the process of identifying suitable BEE
shareholders to acquire a further 6% interest in the project. These
transactions have been formalised and will ensure that the Makhado
Project has the requisite ownership structure.
Subject to the results of FEED/development funds being acquired,
Makhado's 26-month construction phase is expected to begin during
H2 CY2016, with a further four month ramp-up phase resulting in the
production of 5.5 million tonnes per annum ("Mtpa") of saleable
product. During Q2 FY2016 the optimisation study and The Front-End
Engineering Design ("FEED") was awarded to the International
engineer and project delivery group DRA. The study follows on the
original works performed by DRA during the Definitive Feasibility
Study completed in 2013 and includes the infrastructure components
of the project, and also the integration of the work of a number of
specialist consultants.
The Company has officially been granted an IWUL for a period of
20 years concluding all regulatory approvals for the Makhado
Project. The award of the IWUL for Makhado further signifies
government's commitment to the flagship project, and its potential
to foster socio economic transformation.
An interim court interdict seeking to halt any mining or
construction activity was issued against the Makhado Project during
Q2 FY2014. The matter was heard in the North Gauteng High Court on
3 December 2015 with judgement handed down on Tuesday 8 December
2015 on two matters. The first relates to the condition to compel
CoAL to conduct a Strategic Regional Impact Assessment and secondly
a review of the Environmental Authorisation. The condition
compelling CoAL to conduct a Strategic Regional Impact Assessment
has been set aside. The interim interdict against the Environmental
Authorisation remains in place pending the review of the
authorisation.
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CoAL does not anticipate at this time that the process will
affect Makhado's construction timetable.
Greater Soutpansberg Project (MbeuYashu) (74% owned)
The MbeuYashu Project recorded no LTIs during the period.
Mooiplaats Colliery - Ermelo Coalfield (74% owned)
The Mooiplaats thermal coal colliery was placed on care and
maintenance during the September 2013 quarter and recorded no LTIs
during the period (FY2016 Q1: nil).
During the quarter the Company continued discussions with
potential purchasers and is assessing options regarding a
transaction at the colliery.
Corporate
Baobab Mining and Exploration (Proprietary) Limited
("Baobab")
During the period the Company entered into a non-binding
Memorandum of Understanding ("MOU") with Qingdao Hengshun
Zhongsheng Group Co Ltd ("Hengshun") with respect to a proposed
equity investment in Baobab, a subsidiary of CoAL. Baobab is the
legal owner of the mining right for the Makhado Project. Hengshun
is an industrial conglomerate incorporated in Qingdao, Shandong
Province, China and listed on the Shenzen Stock Exchange.
The current MOU includes the following commercial
considerations:
1) Hengshun proposes to acquire up to 34% of Baobab at a
mutually agreed consideration. The preliminary terms of negotiation
between both parties are based on an indicative cash acquisition
price of approximately $113.94 million which implies a Makhado
Project value of at least $335 million. The final transaction
valuation would be subject to both parties' negotiation, a
valuation report issued by an internationally reputable accounting
firm and the conclusion of a formal subscription and sale agreement
between both parties.
2) The proposed equity investment is subject to an Engineering,
Procurement and Construction contract ("EPC") being awarded to
Hengshun. The value of the EPC contract is approximately $400
million, but will be confirmed by the completion of a FEED which
will be completed in H1 CY 2016.
3) The equity investment is subject to a formal due diligence
process as well as approval of the transaction from both the CoAL
and Hengshun boards of directors.
4) The 34% equity investment will entitle Hengshun to nominate a
to be agreed number of directors to the board of Baobab, but the
effective management of Baobab and operatorship of the Makhado
project will remain the responsibility of CoAL.
5) A debt package may also be provided by Hengshun on commercial arm's length terms.
6) Hengshun has the right to match any alternative proposals for
the provision of the mining contract.
7) The MOU is a non-binding document which is also subject to
CoAL shareholder and any other necessary regulatory approvals.
Universal Coal Plc ("Universal")
In November 2015 the Company announced the terms of a
recommended Offer to be made by CoAL for the acquisition of
Universal Coal Plc ("Universal"). The Company had previously
communicated its intention to acquire a cash generating project to
boost the Company cash flow during the construction of the Makhado
Project. The Universal transaction has been identified as a value
enhancing investment and will provide the enlarged group with
immediate coal production and cash flow as well as a diversified
portfolio of production, development and exploration projects with
expected synergies to the existing CoAL business. Successful
completion of the Offer will create a balanced and focused South
African coal miner.
CoAL has received signed statements of intent to accept the
Offer from Universal Shareholders (including the Independent
Universal Directors) in respect of 202 768 708 Universal Shares,
representing 40.1 percent of Universal's total issued share
capital, including Coal Development Holdings B.V., Universal's
second largest shareholder with an interest of approximately 28.4%
of Universal's total issued share capital. Each of these Universal
Shareholders has also stated their intention to elect for the Loan
Note Alternative in respect of their entire holding of Universal
Shares. The Company has agreed that it requires a minimum of 50.1%
acceptance of the offer in order for the acquisition to be
committed.
On 3 March 2016, at the general meeting of CoAL shareholders,
the necessary resolutions were passed approving the acquisition of
Universal.
The transaction is expected to close on 15 April 2016.
Yishun Brightrise Investment PTE Limited ("Yishun")
In September 2015, Yishun subscribed for 183, 231, 261 shares in
Coal for GBP9,436,663 ($14.5 million). The Company and Yishun have
also entered into a Loan Agreement in terms of which Yishun has
agreed to lend the Company $10 million. The loan bears no interest
and is repayable in certain circumstances.
Financial review
The loss for the six months under review was $14.3 million, or
0.76 cents per share compared to a loss of $0.8 million, or 0.07
cents per share for the prior corresponding period.
The loss for the period under review of $14.3 million (H1 2014:
$0.8 million) includes:
-- net foreign exchange loss of $9.4 million (2014: profit of
$14.3 million) arising from the translation of inter-group loan
balances, borrowings and cash due to changes in the ZAR:USD and
AUD:USD exchange rates during the period;
-- employee benefit expense of $2.0 million (2014 expense: $2.5
million) due to the issue of share options
-- other expenses of $3.2 million (2014: $10.8 million) was
lower due to exceptional expenses incurred in the prior period for
the liquidation of EVOC and Greenstone which resulted in a $3.7
million write-off of loans due to CoAL and penalties incurred of
$0.6 million for the Envi Coal legal case;
-- depreciation of $0.2 million (2014: $0.3 million) and
amortisation of $0.4 million (2014: $0.5 million).
As at 31 December 2015, the Company had cash and cash
equivalents of $30.0 million compared to cash and cash equivalents
of $17.8 million at 30 June 2015.
Authorised and issued share capital
CoAL had 1,927,001,328 fully paid ordinary shares in issue as at
31 December 2015. The holders of ordinary shares are entitled to
one vote per share and are entitled to receive dividends when
declared.
Dividends
No dividends were declared or paid during the six months.
Highlights and events after the reporting period
In January 2016, the IWUL for Vele Colliery in the Limpopo
Province was renewed for a further twenty years and the IWUL for
the Makhado Projected was granted for a period of 20 years.
In terms of the Company's recommended offer for Universal, the
terms of the offer was varied to extend the offer period to 15
April 2016. On 3 March 2016, at the general meeting of CoAL
shareholders, the necessary resolutions approving the acquisition
of Universal were passed. In addition, as at 3 March 2016,
acceptances of the offer from Universal Shareholders (including
Universal CDI Holders) representing 269,570,685 Universal Shares,
equating to approximately 53.20% of the total number of Universal
Shares in issue were received, satisfying the condition to the
offer set out in paragraph 1(a) of Part A of Appendix VI of the
Offer Document.
On 3 March 2016, CoAL and its subsidiary company MbeuYashu
Proprietary Limited ("MbeuYashu") received a notice from Rio Tinto
Minerals Development Limited ("Rio Tinto") and Kwezi Mining
Proprietary Limited, alleging that CoAL is in breach of an
obligation under the agreements pursuant to which MbeuYashu
acquired interests in Chapudi Coal Proprietary Limited and Kwezi
Mining Exploration Proprietary Limited and therefore all amounts
owed by CoAL and MbeuYashu are now due for payment.
CoAL is in the process of challenging the validity of the
notice.
The original amount owed by CoAL and MbeuYashu was $75 million.
Currently a total of $19 million is owing and CoAL and MbeuYashu
have met and are meeting all their payment obligations, with final
settlement to be made on 15 June 2017.
Rounding off of amounts
The Company is a company of the kind referred to in ASIC Class
Order 98/100, date 10 July 1998, and in accordance with that Class
Order amounts in the directors' report and the half-year financial
report are rounded off to the nearest thousand dollars, unless
otherwise indicated.
Auditor's Independence Declaration
The auditor's independence declaration is included on page 26 of
the half-year report.
The half-year report set out on pages 8 to 24, which has been
approved on the going concern basis, was approved by the board on
14 March 2016 and was signed on its behalf by:
________________________________
________________________________
Bernard Robert Pryor David Hugh Brown
Chairman Chief Executive Officer
14 March 2016 14 March 2016
Dated at Johannesburg, South Africa, this 14(th) day of March
2016.
COAL OF AFRICA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
_______________________________________________________________________________________________
Six months Six months
ended ended
31 Dec 31 Dec
2015 2014
Note $'000 $'000
---------------------------------- ----- ----------- -----------
Continuing operations
Revenue - 2
Cost of sales - -
----------- -----------
Gross profit - 2
Depreciation and amortisation (614) (790)
Foreign exchange (loss)/profit 4 (9,369) 14,292
Employee benefits expense (2,036) (2,532)
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Other expenses 4 (3,168) (10,761)
Operating lease expenses (97) (114)
Other income 335 249
Operating (loss)/profit (14,949) 346
Interest income 327 250
Finance costs (384) (716)
----------- -----------
Loss before tax (15,006) (120)
Income tax credit 1,067 -
----------- -----------
Net loss for the period
from continuing operations (13,939) (120)
Operations held for sale
Loss for the period from
operations held for sale 8 (386) (707)
----------- -----------
LOSS AFTER TAX (14,325) (827)
----------- -----------
Other comprehensive loss,
net of income tax
Items that may be reclassified
subsequently to profit or
loss
Exchange differences on
translating foreign operations (39,693) (42,665)
----------- -----------
Total comprehensive loss
for the period (54,018) (43,492)
----------- -----------
Loss for the period attributable
to:
Owners of the parent (14,325) (827)
Non-controlling interests - -
----------- -----------
(14,325) (827)
----------- -----------
Total comprehensive profit
/ (loss) attributable to:
Owners of the parent (54,018) (43,492)
Non-controlling interests - -
----------- -----------
(54,018) (43,492)
----------- -----------
Loss per share 11
From continuing operations
and operations held for
sale
Basic (cents per share) 0.77 0.07
Diluted (cents per share) 0.76 0.07
From continuing operations
Basic (cents per share) 0.75 0.01
Diluted (cents per share 0.74 0.01
The accompanying notes are an integral
part of these condensed consolidated
financial statements
COAL OF AFRICA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
31 Dec 30 June
2015 2015
Note $'000 $'000
--------------------------------- ----- ---------- ----------
ASSETS
Non-current assets
Development, exploration
and evaluation assets 7 192,121 232,813
Property, plant and equipment 12,722 16,259
Intangible assets 10,710 11,682
Other receivables 1,140 1,746
Other financial assets 5,624 3,411
Restricted cash 12 808 1,023
Deferred tax assets 4,143 2,320
---------- ----------
Total non-current assets 227,268 269,254
---------- ----------
Current assets
Inventories 192 236
Trade and other receivables 878 792
Other financial assets 380 468
Cash and cash equivalents 12 30,025 17,759
---------- ----------
31,475 19,255
Assets classified as held
for sale 8 13,917 18,118
Total current assets 45,392 37,373
---------- ----------
Total assets 272,660 306,627
---------- ----------
LIABILITIES
Non-current liabilities
Deferred consideration 9 17,013 15,422
Provisions 3,604 5,733
Total non-current liabilities 20,617 21,155
---------- ----------
Current liabilities
Deferred consideration 9 1,200 3,265
Trade and other payables 2,197 2,719
Borrowings 10 10,000 -
Provisions 314 294
Current tax liabilities 1,225 1,285
---------- ----------
14,936 7,563
Liabilities associated with
assets held for sale 8 2,435 3,354
---------- ----------
Total current liabilities 17,371 10,917
---------- ----------
Total liabilities 37,988 32,072
---------- ----------
NET ASSETS 234,672 274,555
---------- ----------
EQUITY
Issued capital 6 1,006,437 992,374
Accumulated deficit (729,958) (718,081)
Reserves (42,382) (313)
---------- ----------
Equity attributable to owners
of the parent 234,097 273,980
Non-controlling interests 575 575
---------- ----------
TOTAL EQUITY 234,672 274,55
---------- ----------
The accompanying notes are an integral part of
these condensed consolidated financial statements
COAL OF AFRICA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
Issued Accumulated Share Capital Foreign Attributable Non-controlling Total
capital deficit based profits currency to owners interests equity
payment reserve translation of the
reserve reserve parent
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------------- ---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Balance at 1
July 2015 992,374 (718,081) 7,205 91 (7,609) 273,980 575 274,555
Total
comprehensive
loss for the
period - (14,325) - - (39,693) (54,018) - (54,018)
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Loss for the
period
- continuing
operations - (13,939) - - - (13,939) - (13,939)
Loss for the
period
- operations
held for
sale - (386) - - - (386) - (386)
Other
comprehensive
loss, net of
tax - - - - (39,693) (39,693) - (39,693)
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Shares issued
for capital
raising 14,895 - - - - 14,895 - 14,895
Share issue
costs (832) - - - - (832) - (832)
Share based
payments - - 154 - - 154 - 154
Share options
cancelled
or lapsed - - (82) - - (82) - (82)
Share options
expired - 2,448 (2,448) - - - - -
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Balance at 31
December
2015 1,006,437 (729,958) 4,829 91 (47,302) 234,097 575 234,672
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Balance at 1
July 2014 935,891 (790,964) 82,464 91 52,263 279,745 575 280,320
Total
comprehensive
loss for the
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period - (827) - - (42,665) (43,492) - (43,492)
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Loss for the
period
- continuing
operations - (120) - - - (120) - (120)
Loss for the
period
- operations
held for
sale - (707) - - - (707) - (707)
Other
comprehensive
loss, net of
tax - - - - (42,665) (42,665) - (42,665)
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
935,891 (791,791) 82,464 91 9,598 236,253 575 236,828
Shares issued
for capital
raising 47,811 - - - - 47,811 - 47,811
Share issue
costs (2,307) - - - - (2,307) - (2,307)
Share based
payments - - 1,481 - - 1,481 - 1,481
Share options
expired - 79,451 (79,451) - - - - -
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
Balance at 31
December
2014 981,395 (712,340) 4,494 91 9,598 283,238 575 283,813
---------- ------------ --------- -------- ------------ ------------- ---------------- ---------
The accompanying notes are an integral part
of these condensed consolidated financial statements
COAL OF AFRICA LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
________________________________________________________________________________________________________________
Six months ended Six months ended
31 Dec 2015 31 Dec 2014
$'000 $'000
------------------------------------------------------------- --- ----------------- -----------------
Cash Flows from Operating Activities
Receipts from customers 124 883
Payments to employees and suppliers (5,565) (18,856)
----------------- -----------------
Cash used in operations (5,441) (17,973)
Interest received 327 191
Interest paid (384) (656)
Income taxes paid - -
----------------- -----------------
Net cash used in operating activities (5,498) (18,438)
----------------- -----------------
Cash Flows from Investing Activities
Purchase of property, plant and equipment (75) (20)
Proceeds on disposal of property plant and equipment 32 -
Decrease in restricted cash - 4,073
Payments for exploration and evaluation assets (143) (72)
Increase in other financial assets (3,000) (985)
Payments for development assets (14) (692)
-----------------
Net cash (used in)/generated from investing activities (3,200) 2,304
----------------- -----------------
Cash Flows from Financing Activities
Proceeds from the issue of shares and options 14,541 47,811
Share issuance costs (832) (2,307)
Repayment of borrowings - (6,124)
Repayment of deferred consideration (992) (6,590)
Proceeds from borrowings 10,000 -
Net cash generated by financing activities 22,717 32,790
----------------- -----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 14,019 16,656
Cash and cash equivalents at the beginning of the half-year 17,759 2,099
Foreign exchange differences (1,753) 1,796
----------------- -----------------
Cash and cash equivalents at the end of the half-year 12 30,025 20,551
----------------- -----------------
The accompanying notes are an integral part of these condensed
consolidated financial statements
COAL OF AFRICA LIMITED
NOTES TO THE CONDENSED CONSOLIDATED HALF-YEAR REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
______________________________________________________________________________________________________
1. significant accounting policies
Statement of compliance
The half-year financial report is a general purpose financial
report prepared in accordance with the Corporations Act 2001 and
AASB 134: 'Interim Financial Reporting'. Compliance with AASB 134
ensures compliance with International Financial Reporting Standard
IAS 34 'Interim Financial Reporting'. The half-year report does not
include notes of the type normally included in an annual financial
report and should be read in conjunction with the most recent
annual financial report.
Basis of preparation
The condensed consolidated financial statements have been
prepared on the basis of historical cost, except for the
revaluation of financial instruments. Cost is based on the fair
values of the consideration given in exchange for assets.
All amounts are presented in United States dollars, unless
otherwise noted.
The company is a company of the kind referred to in ASIC Class
Order 98/100, dated 10 July 1998, and in accordance with that Class
Order amounts in the directors' report and the half-year financial
report are rounded off to the nearest thousand dollars, unless
otherwise indicated.
The accounting policies and methods of computation adopted in
the preparation of the half-year financial report are consistent
with those adopted and disclosed in the company's 2015 annual
financial report for the financial year ended 30 June 2015, except
for the impact of the Standard and Interpretations described below.
These accounting policies are consistent with the Australian
Accounting Standards and with International Financial Reporting
Standards ("IFRS").
The Group has adopted all of the new and revised Standards and
Interpretations issued by the Australian Accounting Standards Board
("the AASB") that are relevant to their operations and effective
for the current reporting period.
New and revised Standards and amendments thereof and
Interpretations effective for the current half-year that are
relevant to the Group include:
-- AASB 2015-3 'Amendments to Australian Accounting Standards
arising from the Withdrawal of AASB 1031 Materiality'
Impact of the application of AASB 2015-3 'Amendments to
Australian Accounting Standards arising from the Withdrawal of AASB
1031 Materiality'
Completes the withdrawal of references to AASB 1031 in all
Australian Accounting Standards and Interpretations.
2. GOING CONCERN
These consolidated financial statements have been prepared on
the going concern basis, which contemplates the continuity of
normal business activities and the realisation of assets and the
settlement of liabilities in the normal course of business.
The Consolidated Entity has incurred a net loss after tax for
the half year ended 31 December 2015 of $14.3 million (31 December
2014: loss of $0.8 million), including a foreign exchange loss of
$9.4 million and depreciation and amortisation charges of $0.6
million. During the six month period ended 31 December 2015 net
cash outflows from operating activities were $5.1 million (31
December 2014 net outflow: $18.4 million) and net cash outflows
from investing activities were $3.2 million (31 December 2014 net
inflow: $2.3 million). As at 31 December 2015 the Consolidated
Entity had a net current asset position of $16.5 million (30 June
2015: net current asset of $11.7 million), excluding assets and
liabilities associated with assets held for sale.
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The Company successfully completed a capital raising with
Singapore-registered Yishun for GBP 9,436,663 ($14,540,813). A Loan
Agreement was also entered into with Yishun for $10 million which
is interest free and is only repayable under limited
circumstances.
2. GOING CONCERN (continued)
The board of directors of the Company have made an offer for the
acquisition of the entire issued and to be issued share capital of
Universal, with the acquisition expected to be completed on or
around 25 April 2016.
Under the terms of the offer, eligible Universal shareholders
will be entitled to receive, for each Universal share held:
-- AUD$0.20 in cash and 1 new Coal of Africa Limited share; or
-- Subject to eligibility under applicable securities laws, a
non-converting, secured loan note with a principal amount of
AUD$0.25 per loan note.
Restricted Universal shareholders will not be entitled to
participate in the cash and share offer but will instead be
entitled to receive, for each Universal share held:
-- AUD$0.25 in cash; or
-- Subject to eligibility under applicable securities laws, a
non-converting, secured loan note with a principal amount of
AUD$0.25 per loan note.
The cash and share offer represents a total offer consideration
comparable to AUD$0.25 per Universal share, based on AUD$0.20 in
cash and 1 new Coal of Africa Limited share valued at AUD$0.05, and
equates to an aggregate value of approximately AUD$126.4 million
($91 million) for the 505,685,447 Universal shares currently in
issue.
The Loan Notes will have a maximum 18 month term and carry
interest at a rate of 12.68% per annum for the first 12 months
after the date of issue, and 15% per annum for the remainder of the
term. The loan notes will be redeemable by the holder on the first
anniversary of the date of issue and otherwise will be redeemed in
full at the end of the 18 month term.
At the date of this report and considering the cash flows from
the capital raising and the loan from Yishun, the Directors are
confident that the Consolidated Entity will be able to continue as
a going concern. Additionally, operating cash flows associated with
Universal Coal's producing mines are expected to supplement the
consolidated entity's cash position.
Based on the above facts the Directors believe it is appropriate
that these consolidated financial statements be prepared on the
going concern basis.
3. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker in order
to allocate resources to the segment and to assess its
performance.
Information reported to the Group's Chief Executive Officer
("CEO") for the purposes of resource allocation and assessment of
performance is more specifically focused on the stage within the
mining pipeline that the operation finds itself in. During the
period, the CEO determined that it was more appropriate to review
the operating results of the identified segments and make decisions
about resources to be allocated to the segment and assess its
performance from an entity perspective rather than a consolidated
perspective. Accordingly, the presentation of the information has
changed from the prior period for total assets. The prior period
total assets have been restated to reflect the change.
The Group's reportable segments under AASB 8 are therefore as
follows:
-- Exploration;
-- Development;
-- Mining (discontinued operation)
The Exploration segment is involved in the search for resources
suitable for commercial exploitation, and the determination of the
technical feasibility and commercial viability of resources. As at
31 December 2015, projects within this reportable segment include
three exploration stage coking and thermal coal complexes,
namely:
-- the Chapudi Complex (which comprises the Chapudi Project, the
Chapudi West Project and the Wildebeesthoek Project);
-- the Soutpansberg Complex (which comprises the Voorburg
Project, the Mt Stuart Project and the Jutland Project);
-- the Makhado Complex (comprising the Makhado Project, the
Makhado Extension Project and the Generaal Project).
3. SEGMENT INFORMATION (continued)
The Development segment is engaged in establishing access to and
commissioning facilities to extract, treat and transport production
from the mineral reserve, and other preparations for commercial
production. As at 31 December 2015 projects included within this
reportable segment include the Vele Colliery, in the early
operational and development stage.
The Mining segment is involved in day to day activities of
obtaining a saleable product from the mineral reserve on a
commercial scale and consists of the Mooiplaats Colliery. As of 30
June 2014, the Mooiplaats Colliery has been classified as
operations held for sale.
The Group evaluates performance on the basis of segment
profitability, which represents net operating (loss) / profit
earned by each reportable segment.
Each reportable segment is managed separately because, amongst
other things, each reportable segment has substantially different
risks.
The Group accounts for intersegment sales and transfers as if
the sales or transfers were to third parties, i.e. at current
market prices.
The Group's reportable segments focus on the stage of project
development and the product offerings of coal mines in
production.
In order to reconcile the segment results with the consolidated
statement of profit or loss and other comprehensive income the
discontinuing operations should be deducted from the segment total
and the corporate results (as per the reconciliation later in the
note should be included).
The following is an analysis of the Group's results by
reportable operating segment for the period under review:
For the six months ended 31 December 2015
Continuing Discontinuing
operations operations
------------------- -------------------------- -------------- --------
Exploration Development Mining Total
------------------- ------------ ------------ -------------- --------
Revenue - - - -
Cost of sales - - - -
------------------- ------------ ------------ -------------- --------
Gross loss - - - -
Depreciation
and amortisation (34) (24) - (58)
Foreign exchange
profit / (loss) (4,635) - 2 (4,633)
Employee benefits
expense (53) (174) (142) (369)
Other expenses (188) (530) (271) (989)
Operating lease
expenses (8) - (8) (16)
Other income - 1 2 3
------------------- ------------ ------------ -------------- --------
Operating profit
/ (loss ) (4,918) (727) (417) (6,062)
Interest income - - 32 32
Finance costs (383) - (1) (384)
------------------- ------------ ------------ -------------- --------
Loss before
tax (5,301) (727) (386) (6,414)
------------------- ------------ ------------ -------------- --------
3. SEGMENT INFORMATION (continued)
For the six months ended 31 December 2014
Continuing Discontinuing
operations operations
------------------- -------------------------- -------------- --------
Exploration Development Mining Total
------------------- ------------ ------------ -------------- --------
Revenue 2 - - 2
Cost of sales - - (248) (248)
------------------- ------------ ------------ -------------- --------
Gross loss 2 - (248) (246)
Depreciation
and amortisation (37) (33) - (70)
Foreign exchange
profit / (loss) (3,151) - 3 (3,148)
Employee benefits
expense (63) (225) (180) (468)
Other expenses (109) (3,396) (280) (3,785)
Operating lease
expenses (4) - (9) (13)
Other income 4 - 6 10
------------------- ------------ ------------ -------------- --------
Operating profit
/ (loss ) (3,358) (3,654) (708) (7,720)
Interest income - 31 59 90
Finance costs (413) (43) (58) (514)
------------------- ------------ ------------ -------------- --------
Loss before
tax (3,771) (3,666) (707) (8,144)
------------------- ------------ ------------ -------------- --------
(MORE TO FOLLOW) Dow Jones Newswires
March 14, 2016 03:01 ET (07:01 GMT)
The following is an analysis of the Group's assets by reportable
operating segment:
Restated
31 Dec 30 June 30 June
2015 2015 2015
$'000 $'000 $'000
--------- --------- ----------
Exploration 72,846 90,085 124,715
Development 69,194 86,832 117,160
Total assets - continuing
operations 142,040 176,917 241,875
Mining - discontinued operation 12,008 15,679 18,118
--------- --------- ----------
Total segment assets 154,048 192,596 259,993
--------- --------- ----------
Reconciliation of segment information to the consolidated
financial statements:
31 Dec 31 Dec
2015 2014
$'000 $'000
--------- --------
Total loss for reportable segments (6,414) (8,144)
Depreciation and amortisation (556) (719)
Foreign exchange (loss)/profit (4,734) 17,443
Employee benefits expense (1,809) (2,244)
Other expenses (2,450) (7,258)
Operating lease expenses 29 (110)
Other income 215 245
Interest income 327 219
Finance costs - (259)
Loss for the period from operations
held for sale 386 707
--------- --------
Loss before tax (15,006) (120)
--------- --------
3. SEGMENT INFORMATION (continued)
Restated
31 Dec 30 June
2015 2015
$'000 $'000
---------- ----------
Total segment assets 154,048 192,596
Corporate assets 729,178 867,407
Consolidation adjustments:
Elimination of Investment in subsidiaries (227,353) (244,589)
Elimination of related party loans (544,117) (687,256)
Development, exploration and evaluation
adjustments 221,884 258,010
Property, plant and equipment
adjustments (73,211) (94,639)
Assets held for sale 13,917 18,118
Other (1,686) (3,020)
---------- ----------
Total assets 272,660 306,627
---------- ----------
4. RESULTS FOR THE PERIOD
Loss for the period from continuing operations has been arrived
at after charging or (crediting):
31 Dec 31 Dec
2015 2014
$'000 $'000
-------- ---------
Foreign exchange (loss)/profit
Unrealised (9,291) (16,175)
Realised (78) 1,883
-------- ---------
(9,369) (14,292)
-------- ---------
Other expenses
Other expenses for the six months ended 31 December 2015
includes $24,000 (2014: Nil) related to the revaluation of
investments, $261,000 (2014: $416,000) for environmental expenses,
$358,000 (2014: Nil) for the impairment of the Tshikunda Mining
Proprietary Limited investment, $513,000 (2014: Nil) relating to
transaction costs for the offer by CoAL for Universal Coal Plc and
social labour plan costs of $104,000 (2014: $2.7 million). In the
prior period, there were additional expenses for the liquidation of
EVOC and Greenstone which resulted in the loans being written of
for $3.7 million.
5. DIVIDENDS
No dividend has been paid or is proposed in respect of the
half-year ended 31 December 2015 (2014: Nil).
6. ISSUED CAPITAL
During the reporting period, YBI, subscribed for and were issued
183,231,261 CoAL shares for GBP 9,436,663 ($14,540,813). CoAL
shares were also issued to Ndilo Mineral Resources Proprietary
Limited ("Ndilo") and Basane Investment Holdings Proprietary
Limited ("Basane") in terms of the Sale of shares and claims
agreement entered into for Tshikunda Mining Proprietary Limited in
March 2015. This agreement was an amendment to the Sale of Shares
and claims agreement entered into in November 2007. In terms of the
agreement, 201,454 shares were issued for a consideration of
ZAR5,000,000 ($354,252). Ndilo was issued 120,872 shares and Basane
was issued 80,582 shares.
6. ISSUED CAPITAL (continued)
31 Dec 30 June
2015 2015
$'000 $'000
---------- --------
1,927,001,328 (2015: 1,743,568,613)
fully paid ordinary shares 1,006,437 992,374
---------- --------
Movements in issued capital
Opening balance 992,374 935,891
Shares issued for capital raising,
net of costs 14,063 56,483
---------- --------
1,006,437 992,374
---------- --------
Fully paid ordinary shares carry one vote per share and carry
the right to dividends.
Options
The following unlisted options to subscribe for ordinary fully
paid shares are outstanding at 31 December 2015:
Number Exercise
Issued Price Expiry Date
30 June
2,670,000 ZAR7.60 2016
30 June
3,932,928 ZAR1.75 2017
21 October
20,000,000* ZAR1.32 2018
1 February
3,525,000 ZAR1.20 2019
1 February
3,525,000 ZAR1.32 2019
1 February
3,525,000 ZAR1.40 2019
40,000,000 ZAR0.30 1 June 2016
26 November
5,000,000 GBP0.055 2018
* Issued to Investec as part of the short term bridging facility
and vest six months after granting.
On 27 November 2015, 14,174,528 Performance Rights were issued
to senior management. The Performance Right factors in a hurdle
rate based on the compound annual growth rate of total shareholder
return across the period from the grant date, 27 November 2015,
ending on 1 December 2018. The Performance Rights were valued using
a hybrid employee share option pricing model to simulate the total
shareholder return of CoAL at the expiry date using a Monte-Carlo
model.
7. DEVELOPMENT, EXPLORATION AND EVALUATION ASSETS
31 Dec 30 June
2015 2015
$'000 $'000
-------- --------
Development, exploration and evaluation
assets comprise:
Exploration and evaluation assets 99,873 118,498
Development expenditure 92,248 114,315
-------- --------
Balance at end of period 192,121 232,813
-------- --------
7. DEVELOPMENT, EXPLORATION AND EVALUATION ASSETS (continued)
A reconciliation of development, exploration and evaluation
assets is presented below:
Exploration and evaluation assets
31 Dec 30 June
2015 $'000 2015 $'000
------------ ------------
Balance at beginning of period 118,498 139,991
Additions 149 145
Adjustment to rehabilitation asset (47) -
Foreign exchange differences (18,727) (21,638)
------------ ------------
Balance at end of period 99,873 118,498
------------ ------------
Balance at beginning of period 114,315 131,720
Additions 14 2,454
Adjustment to rehabilitation asset (434) -
Foreign exchange differences (21,647) (19,859)
------------ ------------
Balance at end of period 92,248 114,315
------------ ------------
As of 31 December 2015 the net book value of the following
project assets were included in Development assets:
-- Vele Colliery: $92 million
In terms of AASB 136 - Impairment of Assets management have
identified the coal commodity price as an indicator that the Vele
assets may be impaired and have performed a formal impairment
assessment as at 31 December 2015.
(MORE TO FOLLOW) Dow Jones Newswires
March 14, 2016 03:01 ET (07:01 GMT)
Management have adopted the fair value less costs of disposal
approach to estimate the recoverable amount of the project, before
comparing this amount with the carrying value of the associated
assets and liabilities in order to assess whether an impairment of
the carrying value is required under AASB 136. As a result of the
impairment testing completed no impairment is required as at 31
December 2015.
In calculating fair value less costs of disposal, management
have forecast the cash flows associated with the project over its
expected life of 18 years until 2033. The cash flows are estimated
for the assets of the colliery in its current condition together
with capital expenditure required for the colliery to resume
operation and discounted to its present value using a post-tax
discount rate that reflects the current market assessments of the
risks specific to the Vele Colliery. The identification of
impairment indicators and the estimation of future cash flows
require management to make significant estimates and judgments.
Details of the key assumptions used in the fair value less costs of
disposal calculation at 31 December 2015 are included below.
Key assumptions
2017 2018 2019 LT
---------------------------------------- ----- ----- ----- --------
Thermal coal price (USD, nominal)[1] 62 68 74 79(2)
----------------------------------------- ----- ----- ----- --------
Hard coking coal price (USD, nominal)3 101 116 130 145(4)
----------------------------------------- ----- ----- ----- --------
Exchange rate (USD / ZAR, nominal) 16.0 16.6 17.2 17.8(5)
----------------------------------------- ----- ----- ----- --------
Discount rate4 16.1%
---------------------------------------- ------------------------------
Inflation rates USD 2.5%
ZAR 6.0%
---------------------------------------- ------------------------------
Production start date February 2018
---------------------------------------- ------------------------------
7. DEVELOPMENT, EXPLORATION AND EVALUATION ASSETS (continued)
(1) Management's assumptions reflect the Richards Bay export thermal coal (API4) price.
(2) LT thermal coal price equivalent to USD 72 per tonne in 2016 dollars
(3) Management's assumption of the hard coking coal price is
made after considering relevant broker forecasts
(4) LT hard coking coal price equivalent to USD 132 per tonne in 2016 dollars
(5) From 2020, the exchange rate is derived with reference to
the 2019 assumption, and inflated by the compounding differential
between USD and ZAR inflation rates
(4) Management prepared a nominal ZAR-denominated, post-tax
discount rate, which was calculated with reference to the Capital
Asset Pricing Model (CAPM).
Impairment Assessment
USD million
----------------------------------------------------- ------------
Carrying Value of Vele Cash Generating Unit 92
----------------------------------------------------- ------------
Value of Vele using the discounted cash flow method 120
----------------------------------------------------- ------------
Sensitivity Analysis
Changes in key assumptions in the table below would have the
following approximate impact on the recoverable amount of the Vele
Colliery as calculated using the discounted cash flow method and
excluding the effect of the value attributable to resources outside
the LOM.
Sensitivity Change in variable Effect on fair value less costs of disposal
--------------------------------- ------------------- --------------------------------------------
Long term coal prices +10.0% 24
-10.0% (25)
--------------------------------- ------------------- --------------------------------------------
Long term exchange rate +10.0% 23
-10.0% (24)
--------------------------------- ------------------- --------------------------------------------
Discount rate +1.0% (9)
-1.0% 9
--------------------------------- ------------------- --------------------------------------------
Operating costs +10.0% (14)
-10.0% 14
--------------------------------- ------------------- --------------------------------------------
Delays in production start date +12 months (17)
--------------------------------- ------------------- --------------------------------------------
Excluded from the value of the Vele Colliery derived from the
discounted cash flow model, is any value attributable to resources
remaining after the projections made in the life of mine model. In
order to assess the potential value of resources outside of the
life of mine plan, a resource valuation was undertaken by
management in January 2016 in consultation with valuations experts.
This valuation applied a weighted average multiple of ZAR 3.8/tonne
of resources, which resulted in an indicative valuation of ZAR837
million at that time.
8. DISCONTINUED OPERATIONS
31 Dec 30 June
2015 2015
$'000 $'000
------- --------
Carrying amounts of
Holfontein Investments Proprietary - -
Limited ('Holfontein')
Langcarel Proprietary Limited
('Mooiplaats') 11,482 14,764
------- --------
11,482 14,764
------- --------
Assets associated with discontinued
operations
Holfontein - -
Mooiplaats 13,917 18,118
------- --------
13,917 18,118
------- --------
Liabilities associated with discontinued
operations
Holfontein - -
Mooiplaats 2,435 3,354
------- --------
2,435 3,354
11,482 14,764
------- --------
Holfontein
The Company is in the process of finalising agreements for the
disposal of the Holfontein Thermal Coal Project near Secunda in
Mpumalanga.
Mooiplaats
The Company has announced a long term strategy to dispose of its
thermal assets in order to focus on the development of the coking
coal assets. The Company is actively seeking a buyer for this
business and expects to complete a sale during the next financial
year. A non-binding memorandum of understanding has been received
by the Company providing an indicative price for the disposal of
Mooiplaats. The Group has not recognised any impairment on the
Mooiplaats Colliery during the period.
The major classes of assets and liabilities of Mooiplaats at the
end of the reporting period are as follows:
31 Dec 30 June
2015 2015
$'000 $'000
-------------------------------------- ------- --------
Assets classified as held for
sale
Property, plant and equipment 13,487 16,770
Other financial assets 181 710
Restricted cash 208 264
Inventories 3 13
Trade and other receivables 2 238
Cash and cash equivalents 36 123
------- --------
13,917 18,118
------- --------
Liabilities classified as held
for sale
Provisions 2,160 2,855
Trade payables and accrued expenses 275 499
------- --------
2,435 3,354
------- --------
Net assets of Mooiplaats 11,482 14,764
------- --------
8. DISCONTINUED OPERATIONS (continued)
(MORE TO FOLLOW) Dow Jones Newswires
March 14, 2016 03:01 ET (07:01 GMT)
The loss for the half-year from the discontinued operations is
analysed as follows:
Six months Six months
ended ended
31 Dec 31 Dec
2015 2014
$'000 $'000
----------------- -----------
Revenue - -
Other gains - 69
----------------- -----------
- 69
Expenses (386) (776)
----------------- -----------
Loss before tax (386) (707)
Loss for the period from operations
held for sale (attributable to owners
of the parent) (386) (707)
----------------- -----------
Cash flows from discontinued
operations held for sale
Net cash outflows from operating
activities (410) (412)
Net cash outflows from investing
activities (274) 436
Net cash outflows from financing
activities 638 -
----------------- -----------
Net cash outflows (46) 24
----------------- -----------
9. DEFERRED CONSIDERATION
The deferred consideration relates to the second tranche (part
of the total acquisition price of $75 million for Chapudi and
Kwezi) of $30 million payable to Rio Tinto. The Company is required
to make a minimum payment of $100,000 plus interest per month as
well as additional committed money on the sale of non-core assets.
The interest on the arrangement is 4%. The current portion of the
deferred consideration consists of the minimum payment of $100,000
for the next 12 months.
10. BORROWINGS
During the period, a loan for $10 million was provided to the
Company by its shareholder Yishun. The loan bears no interest and
is only repayable in limited circumstances.
11. LOSS PER SHARE
Six months Six months
ended ended
31 Dec 31 Dec
2015 2014
------------ -----------
Cents Cents
per share per share
Basic loss per share
From continuing operations 0.75 0.01
From discontinued operations 0.02 0.06
------------ -----------
0.77 0.07
------------ -----------
11.1 Basic loss per share
$'000 $'000
------------ -----------
Loss for the period attributable
to owners of the parent (14,325) (827)
Loss for the period from operations
held for sale 386 707
------------ -----------
Loss used in the calculation of basic
loss per share from continuing operations (13,939) (120)
------------ -----------
11. LOSS PER SHARE (continued)
Six months Six months
ended ended
31 Dec 31 Dec
2015 2014
------------ -----------
'000 shares '000
shares
------------ -----------
Weighted number of ordinary shares
Weighted average number of ordinary
shares for the purposes of basic
loss per share 1,865,824 1,182,035
------------ -----------
11.2 Diluted loss per share
11.3 Headline loss per share (In line with JSE listing
requirements)
The calculation of headline loss per share at 31 December 2015
was based on the headline loss attributable to ordinary equity
holders of the Company of $14.0 million (2014: $0.8 million) and a
weighted average number of ordinary shares outstanding during the
period ended 31 December 2015 of 1,865,823,514 (2014:
1,182,035,280).
The adjustments made to arrive at the headline loss are as
follows:
Six months Six months
ended ended
31 Dec 31 Dec
2015 2014
$'000 $'000
----------- -----------
Loss for the period attributable
to ordinary shareholders 14,325 827
Adjust for:
Impairment losses (358) -
Headline earnings 13,967 827
----------- -----------
Headline loss per share (cents
per share) 0.75 0.07
12. CASH AND CASH EQUIVALENTS
31 Dec 30 Jun
2015 2015
$'000 $'000
-------- -------
Bank balances 30,025 17,759
Bank balances associated with discontinued
operations (refer Note 8) 36 123
-------- -------
30,061 17,882
-------- -------
Restricted cash 808 1,023
Restricted cash associated with
discontinued operations (refer
Note 8) 208 264
-------- -------
1,016 1,287
-------- -------
13. CONTINGENCIES AND COMMITTMENTS
The Group has contingent liabilities as listed below:
Ferret Mining Proprietary Limited
During the prior financial year, Ferret's 26% shareholding in
Mooiplaats Mining Limited was re-instated. Although they are not
entitled to any assets or claims in the Mooiplaats group, they are
entitled to receive ZAR15.0 million ($1.0 million) upon the
successful disposal of the Mooiplaats Colliery. This has been taken
into account in determining the fair value less costs to sell of
the Mooiplaats Colliery.
Issue of Share Options to De Wet Schutte
In terms of his appointment as Chief Financial officer, Mr
Schutte is entitled to receive 6,600,000 options in three equal
tranches over a three year period (Year 1: 2,200,000 at ZAR 1, 20,
Year 2: 2,200,000 at ZAR 1, 32, Year 3: 2,200,000 at ZAR 1, 45)
These are granted in accordance with the Company's employee share
option plan and are subject to shareholder approval.
Makhado Water Commitment
CoAL has agreed to acquire water allocation for the Makhado
Project from water users situated near the proposed colliery and
the Company has undertaken to increase supply assurance without
impacting negatively on the water available for agriculture. The
parties have in principle agreed to avoid endangering local
agriculture by creating new water, primarily by reducing losses,
improving distribution and countering leakages and evaporation. The
creation of new water will be financed either through CoAL's funds,
outside funding or a Public-Private-Partnership with one or more
organs of State or other appropriate entities.
The overall objective is the co-existence of mining and
agriculture and includes a feasibility study and the completion of
projects identified in the study which will facilitate the creation
of new water. In terms of the agreement, the Company will be
required to pay a total of $7.9 million. The first payments of $1.8
million are due 90 and 180 days after the granting of the IWUL, a
further $0.6 million is payable eight months after the IWUL is
granted and the balance within five years of the granting.
Commitments
(MORE TO FOLLOW) Dow Jones Newswires
March 14, 2016 03:01 ET (07:01 GMT)
In addition to the commitments of the parent entity, subsidiary
companies have financial commitments in terms of the NOMR granted
by the South African DMR. The commitments are based on the revenue
generated by the colliery during the financial year, and/or
quantities of coal sold by the colliery during the financial
year.
There are no other significant contingent liabilities as at 31
December 2015.
14. EVENTS SUBSEQUENT TO REPORTING DATE
In January 2016, the IWUL for Vele Colliery in the Limpopo
Province was renewed for a further twenty years and the IWUL for
the Makhado Projected was granted for a period of 20 years.
In terms of the Company's recommended offer for Universal, the
terms of the offer was varied to extend the offer period to 15
April 2016. On 3 March 2016, at the general meeting of CoAL
shareholders, the necessary resolutions approving the acquisition
of Universal were passed. In addition, as at 3 March 2016,
acceptances of the offer from Universal Shareholders (including
Universal CDI Holders) representing 269,570,685 Universal Shares,
equating to approximately 53.20% of the total number of Universal
Shares in issue were received, satisfying the condition to the
offer set out in paragraph 1(a) of Part A of Appendix VI of the
Offer Document.
14. EVENTS SUBSEQUENT TO REPORTING DATE (continued)
On 3 March 2016, CoAL and its subsidiary company MbeuYashu
received a notice from Rio Tinto and Kwezi Mining Proprietary
Limited, alleging that CoAL is in breach of an obligation under the
agreements pursuant to which MbeuYashu acquired interests in
Chapudi Coal Proprietary Limited and Kwezi Mining Exploration
Proprietary Limited and therefore all amounts owed by CoAL and
MbeuYashu are now due for payment.
CoAL is in the process of disputing the validity of the
notice.
The original amount owed by Coal and MbeuYashu was $75 million.
Currently a total of $19 million is owing and CoAL and MbeuYashu
have met and are meeting all their payment obligations, with final
settlement to be made on 15 June 2017.
15. KEY MANAGEMENT PERSONNEL
Remuneration arrangement of key management personnel are
disclosed in the annual financial report.
16. FINANCIAL INSTRUMENTS
This note provides information about how the Group determines
fair values of various financial assets and financial
liabilities.
16.1 Fair value of the Group's financial assets and financial
liabilities that are measure at fair value on a recurring basis
Some of the Group's financial assets and financial liabilities
are measured at fair value at the end of each reporting period. The
following table gives information about how the fair values of
these financial assets and financial liabilities are determined (in
particular, the valuation technique(s) and inputs used).
31 30
Dec Jun
2015 2015
--- ---------------- --------- --------- ------ ------------- ---- ----
1. Other financial Assets Assets Level Value N/A N/A
assets - $3.2m - $3.1m 2 certificate
- Unlisted obtained
Investments from
investment
institution
2. Other financial Assets Assets Level Quoted N/A N/A
assets - $0.4m - $0.5m 1 prices
- Listed in an
Investments active
market
COAL OF AFRICA LIMITED
DIRECTORS' DECLARATION
_______________________________________________________________________________________________
The Directors declare that in the directors' opinion,
1. The condensed financial statements and notes of the
consolidated entity are in accordance with the following:
a. complying with accounting standards and the Corporations Act 2001; and
b. giving a true and fair view of the consolidated entity's
financial position as at 31 December 2014 and of its performance
for the half-year ended on that date.
2. There are reasonable grounds to believe that the Company will
be able to pay its debts as and when they become due and
payable.
This declaration is made in accordance with a resolution of the
Board of Directors, made pursuant to section 303(5) of the
Corporations Act 2001.
On behalf of the Directors
________________________________ ________________________________
Bernard Robert Pryor David Hugh Brown
Chairman Chief Executive Officer
14 March 2016 14 March 2016
Dated at Johannesburg, South Africa, this 14(th) day of March
2016.
COAL OF AFRICA LIMITED
AUDITORS' INDEPENDENCE DECLARATION
_______________________________________________________________________________________________
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 (0) 9365 7001
www.deloitte.com.au
The Board of Directors
Coal of Africa Limited
Suite 8, 7 The Esplanade
Mount Pleasant WA 6153
14 March 2016
Dear Board Members
Auditor's Independence Declaration to Coal of Africa Limited
In accordance with section 307C of the Corporations Act 2001, I
am pleased to provide the following declaration of independence to
the directors of Coal of Africa Limited.
As lead audit partner for the review of the financial statements
of Coal of Africa Limited for the half year ended 31 December 2015,
I declare that to the best of my knowledge and belief, there have
been no contraventions of:
(i) the auditor independence requirements of the Corporations
Act 2001 in relation to the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
COAL OF AFRICA LIMITED
INDEPENDENT AUDITORS' REVIEW REPORT
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 (0) 9365 7001
www.deloitte.com.au
Independent Auditor's Review Report
to the members of Coal of Africa Limited
We have reviewed the accompanying half-year financial report of
Coal of Africa Limited, which comprises the condensed statement of
financial position as at 31 December 2015, and the condensed
statement of profit or loss and other comprehensive income, the
condensed statement of cash flows and the condensed statement of
changes in equity for the half-year ended on that date, selected
explanatory notes and the directors' declaration of the
consolidated entity comprising the company and the entities it
controlled at the end of the half-year or from time to time during
the half-year as set out on pages 8 to 25.
Directors' Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation
of the half-year financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the
half-year financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year
financial report based on our review. We conducted our review in
accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor
of the Entity, in order to state whether, on the basis of the
procedures described, we have become aware of any matter that makes
us believe that the half-year financial report is not in accordance
with the Corporations Act 2001 including: giving a true and fair
view of the consolidated entity's financial position as at 31
December 2015 and its performance for the half-year ended on that
date; and complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001. As the
auditor of Coal of Africa Limited, ASRE 2410 requires that we
comply with the ethical requirements relevant to the audit of the
annual financial report.
A review of a half-year financial report consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
COAL OF AFRICA LIMITED
INDEPENDENT AUDITORS' REVIEW REPORT
Auditor's Independence Declaration
In conducting our review, we have complied with the independence
requirements of the Corporations Act 2001. We confirm that the
independence declaration required by the Corporations Act 2001,
which has been given to the directors of Coal of Africa Limited
would be in the same terms if given to the directors as at the time
of this auditor's review report.
Conclusion
Based on our review, which is not an audit, we have not become
aware of any matter that makes us believe that the half-year
financial report of Coal of Africa Limited is not in accordance
with the Corporations Act 2001, including:
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