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CZA
CZA
CZA - Coal of Africa Limited - Half-Year financial report: 31 December 2007
Coal of Africa Limited
(previously "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
Share code on the JSE Limited: GVM
ISIN AU000000CZA6
Share code on the Australian Stock Exchange Limited: CZA
ISIN AU000000CZA6
HALF-YEAR FINANCIAL REPORT
31 DECEMBER 2007
The directors present their report together with the consolidated financial
report for the half-year ended 31 December 2007 and the auditor`s review report
thereon:
1. Directors
The directors of the Company in office during or since the end of the half-year
are:
Name Period of directorship
Mr Richard Linnell Director since 1 August 2001
Chairman
Mr Simon J Farrell Director since 21 December 2000
Managing Director
Mrs Nonkqubela Mazwai Resigned 22 January 2008
Deputy Managing Director
Mr Blair Sergeant Non-Executive Director since 30 June 2004
Financial Director Financial Director since 1 January 2008
Resigned as Company Secretary 14 December 2007
Mr Peter G Cordin Director since 1 December 1997
Non-Executive Director
Mr Steve Bywater Appointed 8 February 2007
Non-Executive Director
Mr Graham Taggart Resigned 21 December 2007
Non- Executive Director
Mr Nchakha Moloi Resigned 22 January 2008
Non- Executive Director
Mrs Shannon Coates Company Secretary since 14 December 2007
2. Results
The results of the consolidated entity for the half-year ended 31 December 2007
after income tax was a loss of A$2,237,709 (2006: profit of A$433,626) primarily
attributable to a foreign exchange adjustment of A$2.98 million on cash on hand
at the end of the period (contained within `Other expenses from ordinary
activities` in the P&L statement).
The cash balance at the end of December was A$113,587,201.
3. Review of Activities
Highlights
* Shareholder approval obtained for the change of name from GVM Metals
Limited to Coal of Africa Limited (`CoAL`).
* Issue of 80,000,000 shares raising more than A$115 million to fund
acquisitions and development of CoAL`s projects.
* Payment of an additional GBP17 million thereby increasing the Company`s
stake in the Mooiplaats Coal Project to 46.3%.
* Coal of Africa Limited granted New Order Mining Rights for portions 1 and 9
of the Mooiplaats Coal Project.
* Over 37,000 metres of drilling were completed during the six months on the
Mooiplaats Coal Project, increasing the total amount drilled on the project
to over 65,000 metres. The results of the drilling are in line with
management expectations and mine planning has commenced.
* Exploration expenditure included the payment of ZAR20 million to Exxaro
Resources Limited for drilling information on 1,200 boreholes pertaining to
the Baobab Coal Project.
* An agreement was concluded to acquire six farms comprising 7,000Ha located
in the vicinity of the Baobab Coal Project from Sekoko Coal (Pty) Ltd.
* Conclusion of an agreement to acquire 60% of the Tshikunda Coal Project.
Tshikunda is contiguous with Exxaro Limited`s Tshikondeni coal project and
consists of 32,000 hectares located in the Pafuri coal field in South
Africa.
* JORC / SAMREC compliant `Inferred` status at Thuli Coal Project expected Q2
2008.
* Finalised an agreement to explore, with the option to acquire,- an area
comprising 552Ha consisting of a remaining portion of the farm Holfontein
and portions of the neighboring farm Wildebeesfontein.
* Cash on hand at the end of the period of more than A$113 million.
Post period highlights
* Section 11(1) approval granted by the South African Department of Minerals
and Energy satisfying the last condition precedent for the acquisition of
70% of the Mooiplaats Coal Project.
* Agreement reached and payment made (save for the issue of 4.75 million CoAL
shares which is subject to shareholder approval at a Shareholder`s meeting
to be held on the 8th of April 2008) to acquire the remaining 30% interest
in the Mooiplaats Coal project.
* Signing of a Co-operation Agreement with Transnet Freight Rail (`TFR`)
whereby CoAL will be assisted by TFR to acquire coal freight rights to the
Richards Bay and Maputo ports. CoAL has indicated that it will require rail
capacity of 1 to 1.5 Mt in 2009 increasing to 10Mt by 2012.
* Motjoli Resources disposes of its shares in CoAL to Signet Mining (Pty)
Ltd, a broad based Black Economic Empowerment company linked to Mvelaphanda
Holdings Limited.
* New Order Mining Rights application for the Holfontein Coal Project lodged.
Commenting on the results, Simon Farrell, Managing Director of CoAL, said," We
are pleased to report strong development across the Company`s coal projects as
well as the acquisition of further farms in the Limpopo region. Discussions with
mining contractors and potential off take partners are near conclusion at the
Mooiplaats Coal Project with production in line to commence Q3 this year. Post
period highlights include reaching an agreement to take our stake in the project
to 100% as well as the signing of a Co-operation Agreement with Transnet Freight
Rail for coal freight rights to the Richards Bay and Maputo ports. "
Discussion of the Results
Mooiplaats Coal Project
(100% on completion of the Coal of Africa Limited transaction)
During the period, CoAL was granted Mining Rights for portions 1 and 9 in terms
of Section 23 of the Mineral and Petroleum Resources Development Act,
encompassing some 940 hectares of the 22,000 hectare project. Mining on these
portions is expected to commence in the second half of the 2008 calendar year.
The infill drilling programme at Mooiplaats was completed during the period and
over 37,000 metres were drilled, bringing the total metres drilled on the
project to over 65,000. On completion of the exploratory drilling phases,
additional holes were drilled to enable water monitoring. The independent
consultants` project reports on phases 1 and 2 of the drilling, together with a
report on mining floor and roof support requirements, is expected shortly.
A further GBP17 million was paid and 8,888,888 shares issued as purchase
consideration to acquire up to 46.3% of the Mooiplaats Coal Project. The balance
payable of GBP10 million in cash and 4,444,445 shares will deliver the remaining
23.7% of the initial 70% stake in the project which was completed subsequent to
balance sheet date. An Environmental Rehabilitation deposit of ZAR11 million was
invested in a Trust in compliance with South African Department of Minerals and
Energy requirements. The funds will be used for future rehabilitation expenses
incurred on completion of mining on the Mooiplaats Coal Project.
Discussions with mining contractors are near conclusion and those with potential
off take partners - including Eskom - continued during the period under review.
As a result of the substantial increase in the price of export thermal coal, the
Company is reviewing its earlier plans of supplying largely unwashed thermal
coal to the domestic market and is now focusing on the possibility of
concentrating on producing washed coals for the export market.
Baobab Coal Project (100%)
CoAL acquired drilling information from Exxaro Resources Limited on 1,200
boreholes for ZAR 20 million. Gemecs (Pty) Ltd completed an initial geological
evaluation of the Fripp and Tanga properties based on the Exxaro data and the
evaluation yielded potential resources of over 346 million tonnes of coal in
`Measured, `Indicated` and `Inferred` resource categories. Total resources at
Fripp and Tanga stand at 713 million tonnes.
East Coast Maritime (Pty) Ltd were appointed to assess railway, road and port
infrastructure required for CoAL`s Baobab and Thuli coal projects and their
mandate has been extended to Phase 2 of the project. Phase 1 of the study was
finalized in early 2008 and details the infrastructure in place while Phase 2
will develop the infrastructure and relationships identified in Phase 1.
A co-operation agreement was signed with Transnet Freight Rail (`TFR`) whereby
CoAL will be able to acquire coal transport capacity from TFR. The agreement
formalised the interaction between CoAL and TFR whereby TFR will assist CoAL in
acquiring the following freight tonnages for the export of coking coal through
the Richards Bay and Maputo ports:
* 2009 - 1 to 1.5 Mt pa
* 2010 - 4 to5 Mt pa
* 2011 - 4 to5 Mt pa
* 2012 - 10 Mt pa
CoAL and TFR plan to complete the pre-feasibility study on the rail capacity by
the end of May 2008.
Thuli Coal Project (Limpopo) (74%)
LudikCore (Pty) Ltd and GeoMechanics (Pty) Ltd commenced drilling on the Thuli
Coal Project and are expected to deliver a JORC / SAMREC compliant `Inferred`
status on the Prospect area by the end of April 2008. An Aeromagnetic study of
the Baobab, Thuli and Tshikunda Coal Projects has been contracted for February
2008 with results expected by the end of the first quarter of the 2008 calendar
year.
Holfontein Coal Project (100%)
During the December quarter, consultants continued to prepare the Mining Work
Programme as well as the Social and Labour Plan and Environmental Impact Study.
The application for the New Order Mining Right for the Holfontein Coal Project
was submitted to the South African Department of Minerals and Energy in early
2008. Drilling on the new portion of Holfontein and the portions of
Wildebeesfontein acquired in the previous quarter commenced in February 2008.
Nimag Group of Companies (100%)
The Nimag Group`s profit before interest and tax for the six months was ZAR5.5
million (A$913k). The nickel magnesium business continued to experience tougher
trading conditions in the form of thinner margins and increased working capital
requirements due to depressed global nickel demand combined with slow movement
of goods at Durban harbour. The smaller Ferro Silicon business operated well
ahead of expectations contributing to the Nimag Group`s profitability.
Auditor`s Independence Declaration
A copy of the auditor`s independence declaration as required under Section 307C
of the Corporations Act 2001 is set out on page 16.
Signed in accordance with a resolution of the directors:
S.J. Farrell
Director
Dated at Perth, Western Australia, this 14th day of March 2008.
CONSOLIDATED INCOME STATEMENT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
Consolidated Consolidated
Note 31.12.2007 31.12.2006
A$ A$
Sale of goods 23,874,760 26,018,773
Other 1,258,453 435,140
Total revenue 25,133,213 26,453,913
Changes in inventory, raw (20,113,062) (19,908,344)
materials and consumables used
Consulting, accounting & (285,763) (181,156)
professional expenses
Employee expenses (2,169,059) (1,779,542)
Depreciation and amortisation (83,570) (80,257)
expenses
Loss on disposal of asset held for (7,919) -
sale
Diminution in investments - (6,488)
Doubtful / Bad debt expense - (375,000)
Exploration expense - (179,355)
Office rent and outgoings (150,980) (334,504)
Borrowing costs (87,216) (266,423)
Other expenses from ordinary (4,228,877) (1,515,691)
activities
Profit / (Loss) from continuing 1,827,153
operations before income tax (1,993,233)
Income tax expense (244,476) (914,785)
912,368
Profit / (Loss) after income tax (2,237,709)
for the half year
Profit attributable to minority - (478,742)
equity interest
Net profit / (loss) attributable 433,626
to members of the parent entity (2,237,709)
0.73 cents
Basic earnings/ (loss) per share (0.75) cents
for Coal of Africa Limited
Diluted earnings/ (loss) per share 0.64 cents
(0.70) cents
0.74 cents
Headline earnings/ (loss) per (0.75) cents
share
There are no dilutive potential
ordinary shares therefore diluted
earnings or loss per share has not
been calculated or disclosed.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2007
Consolidated Consolidated
Note 31 December 30 June 2007
2007 A$
A$
CURRENT ASSETS
Cash assets 113,587,201 61,530,490
Receivables 6,231,455 8,984,168
Inventory 5,612,005 5,519,744
Total Current Assets 125,430,661 76,034,402
NON CURRENT ASSETS
Assets held for sale - 94,596
Intangibles 4,045,835 3,964,042
Mineral interests 68,907,289 67,852,973
Exploration Expenditure 13,027,279 1,123,850
Other financial assets 68,584,343 12,928,598
Property, plant and equipment 2,249,737 1,648,834
Deferred tax 242,771 239,686
Total Non Current Assets 157,057,254 87,852,579
TOTAL ASSETS 282,487,915 163,886,981
CURRENT LIABILITIES
Payables 2,419,525 9,319,361
Provisions 119,048 95,355
Current tax liability 15,077 1,711,840
Total Current Liabilities 2,553,650 11,126,555
NON CURRENT LIABILITIES
Payables 1,375,608 1,375,608
Interest bearing liabilities 414,032 506,261
TOTAL NON CURRENT LIABILITIES 1,789,640 1,881,869
TOTAL LIABILITIES 4,343,290 13,008,424
NET ASSETS 278,144,625 150,878,557
EQUITY
Contributed equity 2 304,917,749 177,189,359
Reserves 7,086,039 5,310,652
Accumulated losses (36,930,413) (34,692,704)
TOTAL PARENT EQUITY INTEREST 275,073,375 147,807,306
Minority Equity Interests 3,071,250 3,071,250
TOTAL EQUITY 278,144,625 150,878,557
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
A$ A$ A$
Ordinary Capital Foreign
Share Profit Currency
Capital Reserves Translation
Reserves
Balance at 1.7.2007 177,189,359 136,445 (2,705,466)
Shares issued during 121,763,054
the period
Options exercised 741,960
during the period
Share based payments 12,126,257
Options issued for (1,607,675)
capital raising
Share issue costs (5,295,206)
Profit/ (Loss)
attributable to
members of parent
entity
Foreign currency 438,551
translation
adjustments
attributable to
members of parent
entity
Balance at 31.12.2007 304,917,749 136,445 (2,266,915)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007 (Continued)
A$ A$ A$ A$
Share Retained Minority Total
Options profits/ Equity
Reserve (losses) Interests
Balance at 1.7.2007 7,879,673 (34,692,704) 3,071,250 150,878,557
Shares issued during 121,763,054
the period
Options exercised (270,839) 471,121
during the period
Share based payments 12,126,257
Options issued for 1,607,675 -
capital raising
Share issue costs (5,295,206)
Profit/ (Loss) (2,237,709) (2,237,709)
attributable to
members of parent
entity
Foreign currency 438,551
translation
adjustments
attributable to
members of parent
entity
Balance at 31.12.2007 9,216,509 (36,930,413) 3,071,250 278,144,625
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
A$ A$ A$
Ordinary Capital Foreign
Share Profit Currency
Capital Reserves Translation
Reserves
Balance at 1.7.2006 35,396,353 136,445 (261,124)
Shares issued during 24,460,590
the period
Profit/ (Loss)
attributable to
members of parent
entity
Profit attributable
to minority interests
Reserves attributable
to minority interests
Reversal of minority
interests following
100% acquisition of a
controlled entity
Minority interest in
a controlled entity
Share based payment
Share issue costs (288,390)
Foreign currency (454,633)
translation
adjustments
attributable to
members of parent
entity
Balance at 31.12.2006 59,568,553 136,445 (715,757)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007 (Continued)
A$ A$ A$ A$
Share Retained Minority Total
Options profits/ Equity
Reserve (losses) Interests
Balance at 1.7.2006 551,200 (30,666,656) 2,505,136 7,661,354
Shares issued during 24,460,590
the period
Profit/ (Loss) 433,626 433,626
attributable to
members of parent
entity
Profit attributable
to minority
interests 478,742 478,742
Reserves
attributable to (31,133) (31,133)
minority interests
Reversal of minority
interests following
100% acquisition of
a controlled entity (2,952,745) (2,952,745)
Minority interest in
a controlled entity 3,071,250 3,071,250
Share based payment 165,600 165,600
Share issue costs (288,390)
Foreign currency (454,633)
translation
adjustments
attributable to
members of parent
entity
Balance at 716,800 (30,233,030) 3,071,250 32,544,261
31.12.2006
CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
Consolidated Consolidated
31.12.2007 31.12.2006
A$ A$
Cash Flows used in Operating Activities
Cash receipts in the course of operations 21,280,449 22,297,704
Interest received 1,123,623 157,124
Cash payments in the course of operations (30,539,045) (20,100,088)
Interest paid (74,993) (266,423)
Tax paid (12,512) (296,993)
Net cash generated by/(used in) operating (8,222,478) 1,791,324
activities
Cash Flows used in Investing Activities
Deposits paid on investments - (2,866,364)
Proceeds from sale of equity investments 496,618 -
Exploration expenditure (10,086,067) -
Payments for investments (46,505,343) (449,555)
Payments for property, plant and equipment (667,834) (59,951)
Net cash provided by investing activities (56,762,626) (3,375,870)
Cash Flows from Financing Activities
Proceeds from issues of shares and options 116,938,970 13,582,719
Repayment of borrowings (100,152) (1,341,231)
Net cash provided by financing activities 116,838,818 12,241,488
NET INCREASE IN CASH HELD 51,853,714 10,656,942
Cash at the beginning of the half-year 61,530,490 49,764
Exchange rate adjustment 202,997 (1,903)
Cash at the end of the half-year 113,587,201 10,704,803
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
NOTE 1
(a) Basis of preparation of Half Year Report
The half-year consolidated financial statements are a general purpose financial
report prepared in accordance with the requirements of the Corporations Act
2001, Accounting Standard AASB 134: Interim Financial Reporting, and other
authoritative pronouncements of the Australian Accounting Standards Board.
This half-year financial report does not include all the notes of the type
normally included in an annual financial report. It is recommended that this
half-year financial report be read in conjunction with the 30 June 2007 annual
financial report and any public announcements made by the company and its
controlled entities during the half-year in accordance with any continuous
disclosure obligations arising under the Corporations Act 2001.
These half year consolidated financial statements were approved by the Board of
Directors on 14th March 2008.
These consolidated half-year financial statements have been prepared using the
same accounting policies as used in the annual financial statements for the year
ended 30 June 2007, except for the adoption of amending mandatory standards for
annual reporting periods beginning on or after 1 January 2007, as described in
Note 1(d).
(b) Principles of consolidation
The consolidated half year financial statements comprise the financial
statements of Coal of Africa Limited and its controlled entities.
A controlled entity is any entity controlled by Coal of Africa Limited. Control
exists where Coal of Africa Limited has the capacity to dominate the decision-
making in relation to the financial and operating policies of another entity so
that the other entity operates with Coal of Africa Limited to achieve the
objectives of Coal of Africa Limited.
All intercompany balances and transactions between entities in the economic
entity, including any unrealised profits have been eliminated on consolidation.
Where a controlled entity has entered or left the economic entity during the
year its operating results have been included from the date control was obtained
or until the date control ceases.
(c)Dividends
No dividend has been paid or is proposed in respect of the half-year ended 31
December 2007 (2006: None).
(d)Changes in accounting policies
New/revised standards and interpretations applicable for the years commencing 1
July 2007 have been reviewed and it was determined that changes were not
required to the existing accounting policies adopted by Coal of Africa Limited.
The major new standards are AASB 7 and AASB 2007-4 which will have an effect on
year end disclosures only. Certain Australian Accounting Standards have recently
been issued or amended but are not yet effective and have not been adopted by
the group for the interim reporting period. The directors have not yet assessed
the impact of these new or amended standards (to the extent relevant to the
group) and interpretations.
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
Consolidated
31 Dec 2007
A$
2. CONTRIBUTED EQUITY
Issued and Paid-Up Capital
297,429,472 (2006: 93,599,328) fully paid 304,917,749
ordinary shares
Movements in contributed equity
Opening balance at beginning of the half-year 177,189,359
- 181,818 ordinary shares issued on 6 July 2007 47,010
- 8,888,888 ordinary shares issued on 29 Oct 12,126,257
2007
- 80,000,000 ordinary shares issued on 28 Nov 121,716,044
2007
- 590,063 options exercised on 21 Dec 2007 741,960
- 2,000,000 options issued on 21 Dec 2007 in (1,607,675)
lieu of capital raising fees
Less: share issue costs (5,295,206)
Total equity at the end of the half-year 304,917,749
Options
The following options to subscribe for ordinary fully paid shares are
outstanding at balance date:
Number Number Exercise Expiry Date
Issued Quoted Price
13,500,000 - A$0.50 30 September 2011
555,575 - GBP0.54 31 May 2009
196,688 - GBP0.34 17 May 2009
7,000,000 - A$1.25 30 September 2012
1,625,000 - GBP0.65 30 November 2009
375,000 - A$1.50 30 November 2009
590,063 options at GBP0.34 each were exercised during the six months under
review.
3. SEGMENT INFORMATION
Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Unallocated items mainly comprise interest or dividend-earning assets and
revenue, interest bearing loans, borrowings and expenses, and corporate assets
and expenses.
Business segments
The consolidated entity comprises the following main business segments:
Manufacturing Mineral processing by Nimag in South Africa
Investing Equity investments in South Africa, Australia and
United Kingdom
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
31 December 2007
Primary reporting industry Manufacturing Investing Consolidated
A$ A$ A$
Revenue
Total segment revenue 23,975,437 - 23,975,437
Unallocated revenue 106,309 1,051,467 1,157,776
Total revenue 25,133,213
31 December 2007
Primary reporting industry Manufacturing Investing Consolidated
A$ A$ A$
Results
Segment results 912,940 (2,906,173) (1,993,233)
Net profit before income (1,993,233)
tax
Depreciation and 50,695 32,875 83,570
amortisation
Assets
Segment assets 13,803,524 268,684,391 282,487,915
Consolidated total assets 282,487,915
Liabilities
Segment liabilities 2,785,169 1,558,121 4,343,290
Consolidated total 4,343,290
liabilities
4. BUSINESS COMBINATION (ACQUISITION OF CONTROLLED ENTITIES)
The Company did not acquire control of any entities during the period.
5. DISPOSAL OF CONTROLLED ENTITIES
The consolidated entity did not lose control over any entities during the half
year period or the half year ended 31 December 2007.
6. CONTINGENT LIABILITIES
The Company has a potential contingent liability of GBP10 million and the issue
of 4,444,445 shares in CoAL if the remaining conditions precedent of the
Mooiplaats transaction are satisfied. The consolidated entity has an additional
potential contingent liability not exceeding A$ 9.3 million (ZAR 55 million) on
exploration if the conditions precedent to purchase the 60% shareholding in
Tshikunda Mining (Pty) Ltd are fulfilled. The purchase of 74% of Sekoko Coal
(Pty) Ltd will require exploration expenditure of up to A$ 9.3 million if the
remaining conditions precedent are satisfied. In accordance with normal industry
practice the Company has agreed to provide financial support to its 100%
controlled entities. There are no other contingent liabilities as at 31 December
2007.
7. EVENTS SUBSEQUENT TO REPORTING DATE
* On 18 February 2008, the Company announced that the Deputy Director
General: Mineral Regulation Department of Minerals and Energy granted
approval for the transaction in terms of Section 11(1) of the Minerals and
Petroleum Resources Development Act 2002, satisfying the last condition
precedent for CoAL to complete its acquisition of 70% of the issued capital
of the South African company that owns the Mooiplaats Coal Project. CoAL
made the final GBP 10 million cash payment and will seek shareholder
approval for issue the remaining 4,444,445 shares in the Company to take
its interest in the project to 70%.
* On 18 February 2008, CoAL announced that it had also reached agreement to
acquire the remaining 30% interest in the Mooiplaats Coal Project. The
consideration paid for the remaining 30% was ZAR 130 million (A$
21,905,000) together with the issue of 4.75 million shares in CoAL, the
issue of which is subject to Shareholder approval.
There are no other matters or events which have arisen since the end of the
financial period which have significantly affected or may significantly affect
the operations of the consolidated entity, the results of those operations or
the state of affairs of the consolidated entity in subsequent financial years.
In the opinion of the directors,
1. The financial statements and notes of the consolidated entity are in
accordance with the Corporations Act 2001, including:
a. complying with Accounting Standard AASB 134: Interim Financial
Reporting and the Corporations Regulations 2001; and
b. giving a true and fair view of the consolidated entity`s financial
position as at 31 December 2007 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.
S. J. Farrell
Director
Dated at Perth, Western Australia, this 14th day of March 2008.
Moore Stephens
Liability limited by a scheme approved
under Professional Standards Legislation
Independent review report to the members of COAL OF AFRICA LIMITED
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Coal of Africa
Limited and its controlled entities ("the consolidated entity"), which comprises
the balance sheet as at 31 December 2007, and the income statement, statement of
changes in equity and the cash flow statement for the half-year ended on that
date, a summary of significant accounting policies, other selected explanatory
notes and the directors` declaration of the consolidated entity comprising the
company and the entities it controlled at half year`s end or from time to time
during the half year.
Directors` Responsibility for the Half-Year Financial Report
The directors of the consolidated entity are responsible for the preparation and
fair presentation of the half-year financial report in accordance with
Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes
designing, implementing and maintaining internal control relevant to the
preparation and fair presentation of the half-year financial report that it is
free from material misstatement, whether due to fraud or error; selecting and
applying appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances.
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 an Interim 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 financial report is not in accordance with the
Corporation Act 2001 including: giving a true and fair view of the consolidated
entity`s financial position as at 31 December 2007 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 and its controlled entities, ASRE 2410
requires that we comply with the ethical requirements relevant to the audit of
the financial report.
A review of the half-year financial report consists of making enquiries,
primarily of persons responsible for the 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.
Independence
In conducting our review, we have complied with the applicable independence
requirements of the Corporations Act 2001.
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 and its controlled entities is not in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity`s financial position
as at 31 December 2007 and of its performance for the half-year ended on
that date; and
(ii) complying with Accounting Standard AASB 134: "Interim Financial Reporting"
and the Corporations Regulations 2001.
NEIL PACE MOORE STEPHENS
PARTNER CHARTERED ACCOUNTANTS
Signed at Perth this 14th day of March 2008.
Moore Stephens ABN 75 368 525 284
Level 3, 12 St Georges Terrace, Perth, Western Australia, 6000
Telephone: +61 8 9225 5355 Facsimile: +61 8 9225 6181
Email: perth@moorestephens.com.au Web: www.moorestephens.com.au
An independent member of Moore Stephens International Limited - members in
principal cities throughout the world
Partners
Syd Jenkins
Neil Pace
Suan-Lee Tan
Ray Simpson
Ennio Tavani
Dino Travaglini
Moore Stephens
Liability limited by a scheme approved
under Professional Standards Legislation
AUDITOR`S INDEPENDENCE DECLARATION UNDER SECTION 307c OF THE CORPORATIONS ACT
2001 TO THE DIRECTORS OF COAL OF AFRICA limited
As lead auditor for the review of Coal of Africa Limited and its controlled
entities for the half year ended 31 December 2007, I declare that, to the best
of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements as set out in
the Corporations Act 2001 in relation to the review, and
(b) no contraventions of any applicable code of professional conduct in
relation to the review.
This declaration is in respect of Coal of Africa Limited and its controlled
entities during the period.
NEIL PACE MOORE STEPHENS
PARTNER CHARTERED ACCOUNTANTS
Signed at Perth this 14th day of March 2008.
Moore Stephens ABN 75 368 525 284
Level 3, 12 St Georges Terrace, Perth, Western Australia, 6000
Telephone: +61 8 9225 5355 Facsimile: +61 8 9225 6181
Email: perth@moorestephens.com.au Web: www.moorestephens.com.au
An independent member of Moore Stephens International Limited - members in
principal cities throughout the world
Partners
Syd Jenkins
Neil Pace
Suan-Lee Tan
Ray Simpson
Ennio Tavani
Dino Travaglini
14 March 2007
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Limited
Date: 14/03/2008 12:46:01 Produced by the JSE SENS Department.
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