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Mine Restoration Investments Limited HY 2013 results (South Africa)

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  • 1. MINE RESTORATION INVESTMENTS LIMITED (formerly Capricorn Investment Holdings Limited) (Registration Number 1987/004821/06) ("MRI" or "the Company") Share code: MRI ISIN: ZAE000149951 UNAUDITED INTERIM RESULTS for the 6 months ended 31 August 2013 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (4 093) (4 093) 5 (2 707) (6 795) 1 550 (5 245) (5 245) 29 3 985 4 014 91 (2 023) 2 082 244 2 326 2 326 14-months to February 2013 R’000 20 021 (9 048) 10 973 177 (4 908) 6 242 (11 415) (5 173) (5 173) (4 283) (962) 2 375 (50) (5 095) (78) (4 283) (962) 2 375 (50) (5 095) (78) (0.91) 0.01 (1.74) (0.91) 0.01 (1.74) 468 413 168 734 292 106 6-months to August 2013 R’000 Other income Operating (expenses)/recoveries Operating (loss)/profit Investment revenue Interest expense (Loss)/Profit before taxation Taxation credit/(charge) (Loss)/Profit for the period Other comprehensive income Total comprehensive (loss)/income (Loss)/Profit attributable to: Equity holders Non-controlling interests Total comprehensive (loss)/income attributable to: Equity holders Non-controlling interests Basic and diluted earnings/(loss) per share Basic and diluted headline earnings/(loss) per share Weighted (‘000) average number of 8-months to August 2012 R’000 shares
  • 2. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 August 2013 R’000 Assets Non-Current Assets Property, plant and equipment Intangible assets Investment in associate Deferred tax Current Assets Trade and other receivables Cash and cash equivalents Total Assets Equity and Liabilities Equity Amount attributable to equity holders Equity loan Non-Controlling Interest Liabilities Non-Current Liabilities Deferred tax Other financial liabilities Current Liabilities Other financial liabilities Trade and other payables Current tax payable Total Equity and Liabilities 14 404 91 284 31 August 2012 R’000 28 February 2013 R’000 1 550 107 238 2 92 1 6 102 950 144 000 380 474 7 173 110 382 521 3 270 3 791 111 029 127 10 890 11 017 113 491 610 314 924 111 306 38 565 59 405 39 886 5 000 10 798 92 411 5 000 16 390 59 955 16 380 75 785 17 352 62 238 18 464 25 768 44 232 13 177 24 213 37 390 25 626 22 002 47 628 6 795 31 16 6 842 111 029 316 316 113 491 1 407 33 1 440 111 306
  • 3. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Retained Share earnings capital, Share Premium and Reverse Acquisition Reserve R’000 R’000 Group Balance at 1 January 2012 Reverse acquisition Issue of additional shares Total comprehensive profit/(loss) for the period Total changes Balance at 31 August 2012 Reverse acquisition Issue of additional shares Total comprehensive loss for the period Total changes Balance at 28 February 2013 Issue of additional shares Total comprehensive loss for the period Total changes Balance at 31 August 2013 Amount Nonattributable Controlling to Equity Interest Holders R’000 R’000 Total equity R’000 - (952) (952) 16 430 15 478 17 952 - 17 952 - 17 952 40 028 - 40 028 - 40 028 - 2 376 2 376 (50) 2 326 57 980 57 980 2 376 1 424 60 356 59 404 (50) 16 380 60 306 75 784 (49 019) - (49 019) - (49 019) 36 972 - 36 972 1 000 37 972 - (7 471) (7 471) (28) (7 499) (12 047) 45 933 (7 471) (6 047) (19 518) 39 886 972 17 352 (18 546) 57 238 2 962 - 2 962 - 2 962 - (4 283) (4 283) (962) (5 245) 2 962 48 895 (4 283) (10 330) (1 321) 38 565 (962) 16 390 (2 283) 54 955
  • 4. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 6 months to August 2013 R’000 Cash flows utilised in operating activities Cash (utilised in)/from operations Interest income Finance costs Taxation refunded / (paid) Cash (utilised in)/from operating activities Cash flows from investing activities Purchase of property, plant and equipment Net cash acquired on reverse acquisition Net cash available from/(utilised in) investing activities Cash flows from financing activities Proceeds on raising of new share capital (Repayment of)/Proceeds on advance of loans from Group companies Increase in other financial liabilities Net cash available from financing activities Total cash movement for the year Cash and cash equivalents at the beginning of the year Cash and cash equivalents at end of the period 8 months to August 2012 R’000 14 months to February 2013 R’000 (4 219) 5 (2 707) (18) (6 939) 4 910 91 (2 023) (7) 2 971 386 177 (4 908) 8 (4 337) (3 627) (2 948) (10 814) 3 694 (3 627) 746 (10 814) 2 962 40 029 38 215 - (35 295) (27 977) 10 560 13 522 1 855 6 589 4 643 14 881 2 956 314 10 306 584 (270) 584 3 270 10 890 314 COMMENTARY 1. BASIS OF PREPARATION These condensed consolidated financial statements have been prepared under the supervision of A Meyer in accordance IFRS, SAICA Financial Reporting Guides as issued by the Pronouncements as issued by Accounting Practices Committee and Financial the Financial Reporting Standards Council, the Companies Act No 71 of 2008, as amended and the JSE Limited Listings Requirements and include the disclosures required by IAS34 Interim Financial Reporting. The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent with those applied in the preparation of the financial statements for the 14 month period ended 28 February 2013.
  • 5. 2. REVERSE-ACQUISITION AND CHANGE IN FINANCIAL PERIOD During the previous financial year, MRI (formerly Capricorn Investment Holdings Limited) was, from an IFRS perspective, acquired by Western Utilities Corporation (Pty) Limited (“WUC”) by way of a reverseacquisition. The acquisition is a reverse-acquisition in terms of IFRS 3 Business Combinations. Accordingly, MRI is regarded as the legal parent and accounting acquired and WUC is regarded as the legal subsidiary company and the accounting acquirer. In accordance with this accounting treatment, the following has taken place: a) The identifiable assets and liabilities of MRI were brought into the books and measured at their fair-value; b) The condensed consolidated financial statements issued are those of MRI, the legal parent and accounting acquirer, but are described in the notes as a continuation of the financial statements of WUC, the legal subsidiary company and accounting acquirer. WUC’s results have been adjusted to retrospectively reflect the legal capital of MRI. As such, the financial statements reflect a continuation of the financial statements of WUC. c) The year-end of WUC was 31 December of every year. CIPC approved the change of the year-end of WUC to the last day of February every year, in line with the year-end of MRI. Accordingly, the prior year results for MRI are shown for a 14-month period to 28 February 2013. 3. AUDITOR REVIEW These condensed consolidated financial statements have not been reviewed by the external auditor. 4. COMMENTARY HISTORIC PERSPECTIVE MRI changed its name from Capricorn Investment Holdings Limited to reflect the new nature of its business and the new focus of the Company post the acquisition of WUC. The acquisition of WUC has created two strategic focus areas for the Company, namely Coal Fines Briquetting (“Coal Briquetting Project”) and Acid Mine Drainage (“AMD Project”). Both these projects are focused on reducing the environmental impact of mining, whilst at the same time aiming to produce a significant return on investment of shareholders. The Coal Briquetting Project was commissioned in the third quarter of the 2013 calendar year and should take three months to reach full production. This project is expected to provide a significant return on capital invested. Revenues generated from this project will be used to repay existing debt within the Group, further capitalise the Company and will be used to provide the capital to invest and grow this part of our business. With regards the AMD Project, the South African government is currently drafting its findings of a pre-feasibility study conducted by the department on the various technologies available for AMD treatment. WUC has already completed a Bankable Feasibility Study for the project, including documenting engineering and environmental authorisation processes. This project remains a strategic focus area of the Company and
  • 6. WUC intends to participate in the process should the department elect to engage in Public Private Partnerships or any other structure. The Company also intends to explore other potential applications for the Intellectual Property (“IP”) held by the company. RESULTS OF OPERATIONS The results of the operations of MRI, and its subsidiary company, WUC (“the Group”), for the 6-month period ended 31 August 2013 reflects the ongoing cost of the Group while it built and commissioned the Coal Briquetting Project’s plant. Revenue from the Coal Briquetting Project is expected during the fourth quarter of the 2013 calendar year. The value for the briquetting project is based on a discounted cash flow model of the resources that is included in the agreement with Leeuw Mining and Keaton and the plant being constructed at the Vaalkrantz Colliery site. Once this plant is operational the intention is to expand to the larger coal producers who produce significantly more fines although at lower grades. WUC intends to tender for the long term acid mine drainage solution and therefore according to the Bankable Feasibility Study the information we have generated over the past 5 years is well worth R44 million. This is not the only AMD project in the world and the technology and information generated has application in other areas like South and North America. Interest paid has been reduced and now only relates to the repayment of interest bearing loans raised pursuant to the reverse-listing of WUC into MRI. Taxation credits and charges primarily result from adjustments to deferred taxation. FUTURE PROSPECTS The Coal Briquetting Project has commenced operations in October 2013 and should contribute significantly to the overall profitability of the Group. The directors of MRI intend to continue to pursue the awarding of the water use licenses required by WUC for its AMD technology as well as for other potential applications of its IP. 5. SEGMENT INFORMATION The group is not presently managed by segment. Accordingly, no segment information is provided. As operations become established, this will likely change.
  • 7. 6. HEADLINE EARNINGS/(LOSS) PER SHARE Reconciliation of earnings to headline earnings attributable to equity holders of the parent: (0.91) (0.91) 0.01 0.01 14-months to February 2013 R’000 (1.74) (1.74) (4 283) (2 376) (5 095) - - - (4 283) (2 376) (5 095) 468 413 168 733 292 106 470 704 455 695 455 891 8-months to August 2012 R’000 6-months to August 2013 R’000 Loss per share Headline loss per share HEPS Calculation (Loss)/Profit for the year Adjustments Gain on bargain purchase price, net of tax Headline loss Weighted average number of shares in issue (‘000) Actual number of share in issue (‘000) 7. CHANGES IN SHARE CAPITAL During the year, the Company issued 14 812 520 new shares in order to raise cash for the completion of the briquetting plant. The proceeds of this issue amounted to R 2 962 504. 8. RELATED PARTY TRANSACTIONS As the largest shareholders, Trinity Asset Management Proprietary Limited and Armadale Capital have committed to jointly bridge any shortfall in the working capital of MRI to the maximum value of R11 million for the period ending 31 December 2013. Other than mentioned above, and other than loans advanced or received in the normal course of business, there have been no significant changes in the related party relationships during the year. 9. EVENTS AFTER THE END OF THE REPORTING PERIOD No significant transactions, which require disclosure, have occurred since the end of the period to the date of this announcement. 10. CHANGES TO THE COMPOSITION OF THE BOARD During the half year period, up to date of this report, the following resignations and appointments of directors occurred: Resignations: Charles Pettit – 18 April 2013; Sandile Swana – 31 July 2013;
  • 8. Steve Tredoux – 3 September 2013; James Herbst – 3 September 2013; Michelle van den Berg – 30 September 2013; and Jaco Schoeman – 15 November 2013 Appointments: Richard Tait – 18 April 2013; Justin Lewis – 18 September 2013; and Syd Caddy – 18 November 2013 Change of role: Anthon Meyer accepted the position of Financial Director as of 1 October 2013. With the resignation of J Schoeman as CEO of the Company, Mr R Tait, current non-executive director will take over as Chief Executive Officer (“CEO”) with effect from 15 November 2013 until a suitable, permanent candidate is identified. The new board now consists of the following directors: Quinton George – Non-Executive Chairman Richard Tait – CEO Anthon Meyer – Financial Director Chris Roed – Independent Non-Executive Director Justin Lewis – Non-Executive Director Syd Caddy – Independent Non-Executive Director 11. DIVIDENDS No dividend will be declared for the financial period ended 31 August 2013. (2012: Nil). 18 November 2013 Johannesburg Q George Prepared by: A Meyer CORPORATE INFORMATION Mine Restoration Investments Limited Country of incorporation and domicilium: South Africa Postal address PO Box 825, Irene, 0062, Pretoria Tel no:+27 (012) 345 4037 Fax no:+27 (012) 345 4808 Web: www.minerestoration.co.za Directors: Q George# (Chairman), A Meyer, C Roed*, J Lewis#, R Tait (CEO), S Caddy* (#Non-Executive, * Independent Non-Executives)
  • 9. Company Secretary: Neil Esterhuysen & Associates Inc Registered Office: Units 23&24 Norma Jean Square, 244 Jean Avenue, Centurion Transfer Secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Marshalltown 2001, PO Box 61051, Marshalltown 2107 Auditor: Horwath Leveton Boner Corporate Advisor: AfrAsia Corporate Finance Proprietary Limited Designated Advisor: Sasfin Capital (a division of Sasfin Bank Limited)