| Wed 15 Sep 2010, 7:05 | | OPT - Optimum Coal - Reviewed group financial results for the year ended 30 June |
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OPT
OPT
OPT - Optimum Coal - Reviewed group financial results for the year ended 30 June
2010
Optimum Coal Holdings Ltd
(Registration number: 2006/007799/06)
Share code: OPT & ISIN: ZAE000144663
("Optimum Coal" or the "Group" or the "Company")
Reviewed Group financial results for the year ended 30 June 2010
Group highlights for the year ended 30 June 2010
- Attributable total saleable coal production up by 17% to 10,8mt
- Attributable export coal production up by 30% to 5,3mt
- Delivery of Boschmanspoort underground and water reclamation plant projects on
time and within budget
- Pre-listing placement of shares to Mercuria Energy and Kwini Mining
Investments (Pty) Ltd raising R852,5 million
- Successful JSE listing in March 2010 raising net R804 million after listing
costs
- Statement of financial position substantially strengthened with cash on hand
of R751 million at year-end and net debt of R70 million
- Acquisition of control of Koornfontein Mines effective 1 March 2010
Mike Teke, Chief Executive for Optimum Coal said "These results indicate a
commendable performance from our operations, as the past year was challenging in
many ways. The Optimum Coal team achieved much during the year, including our
listing on the JSE which raised substantial capital, the acquisition of 100% of
Koornfontein Mines and the completion of Boschmanspoort underground section, as
well as our state of the art water treat plant at Optimum Collieries.
Furthermore, despite heavy rainfall affecting production at our opencast
sections and other operational challenges experienced during the year, we
increased production of attributable saleable coal by 17% and attributable
export coal buy 30%. We are strategically well positioned to build on a sound
platform for growth over the next few years."
Consolidated statement of financial position
Group
2010 2009
as at 30 June 2010 R`000 R`000
Assets
Property, plant and equipment 6 375 205 4 315 016
Intangible assets 938 106 929 935
Restricted rehabilitation investments 1 183 942 1 102 715
Available-for-sale financial assets 1 272 643 1 060 393
Investments in equity accounted investees 1 203 128 536
Long-term receivable 42 160 1 638
Deferred taxation 5 436 7 090
Non-current assets 9 818 695 7 545 323
391 817 245 550
Inventories
Trade and other receivables 257 054 181 411
Taxation 5 798 2 448
Cash and cash equivalents 750 536 402 432
Current assets 1 405 205 831 841
11 223 900 8 377 164
Total assets
Equity and liabilities
Equity
Share capital and premium 2 519 850 850 001
Available-for-sale fair value reserve 165 218 60 422
Share-based payment reserve 818 058 814 000
Treasury share reserve * *
Retained earnings 2 708 426 2 478 771
Discount on acquisition of non-controlling 56 045 -
interest
Non-controlling interest * *
Total equity attributable to equity holders 6 267 597 4 203 194
of the Company
90 284 -
Loans and borrowings
Finance lease liability 233 665 226 960
Share appreciation rights liability 12 384 12 578
Environmental liability provision 1 899 286 2 291 221
Post retirement medical benefit 1 941 2 550
Deferred taxation 1 287 726 826 718
Non-current liabilities 3 525 286 3 360 027
729 681 150 042
Loans and borrowings
Finance lease liability 46 804 50 153
Trade and other payables 611 026 608 951
Taxation 43 506 4 797
Current liabilities 1 431 017 813 943
11 223 900 8 377 164
Total equity and liabilities
*Nominal amount
3 137 2 840
Net asset value per share (cents)
Tangible net asset value per share (cents) 2 668 2 212
Note: A share split (200 000 shares: 1 share) took place during the current
year. Accordingly, net asset value and tangible net asset value per share for
2009 have been restated to account for the share split. The shares in issue
noted above do not include 52 million ordinary shares which are owned by The
Optimum Community Trust, The Optimum Employee Benefit Trust and the OCH
Executive Share Incentive Trust, as these entities are considered to be under
the control of the Group and are therefore consolidated into the Group.
Consolidated statement of comprehensive income
Group
2010 2009
for the year ended 30 June 2010 R`000 R`000
3 359 324 3 964 713
Revenue
Expenses (3 717 070) (2 992 377)
Employee related expenses (709 892) (512 176)
Other expenses (3 007 178) (2 480 201)
Share-based payment expense (3 863) (12 578)
Other income 773 881 59 351
Bargain purchase gain 14 734 -
Gain from business acquisition achieved in 95 359 -
stages
Operational income 575 653 59 351
Profit on disposal of shares 88 135 -
Results from operating activities 412 272 1 019 109
Net finance cost (119 350) (57 983)
Finance expenses (226 051) (231 329)
Finance income 106 701 173 346
Share of profit from associate 2 506 15 390
Profit before income tax expense 295 426 976 516
Income tax expense (65 773) (229 352)
Profit for the year 229 653 747 164
Other comprehensive income
Fair value gain on available-for-sale 208 942 70 258
financial assets
Fair value gain on available-for-sale
financial assets transferred to
profit or loss on disposal (88 135) -
Income tax on other comprehensive income (16 913) (9 836)
Other comprehensive income for the year net 103 894 60 422
of income tax
Total comprehensive income for the year 333 549 807 586
Profit attributable to:
Equity holders of the parent 215 497 747 164
Non-controlling interests 14 156 *
229 653 747 164
Total comprehensive income attributable to:
Equity holders of the parent 319 393 807 586
Non-controlling interests 14 156 *
Total comprehensive income for the year 333 549 807 586
132 505
Basic earnings per share (cents)
Diluted earnings per share 128 500
Shares in issue (000):
At end of period 199 786 148 000
Weighted average shares in issue at end of 163 566 148 000
the year
Headline earnings per share (cents)** 29 506
Diluted headline earnings per share (cents) 25 501
*Nominal amount
**Headline earnings of 29 cents per share is lower than the indicated range of
40-50 cents per share and reflects a downward revision in calculated headline
earnings for the year due the disallowance of the headline earnings tax benefit
arising from reversal of the gain on business combination and bargain purchase
(negative goodwill) which are deemed to be permanent differences for taxation
purposes.
Note: A share split (200 000 shares: 1 share) took place during the current
year. Accordingly, basic earnings per share, headline earnings per share,
diluted earnings per share and diluted headline earnings per share for 2009 have
been restated to account for the share split. The shares in issue noted above do
not include 52 million ordinary shares which are owned by The Optimum Community
Trust, The Optimum Employee Benefit Trust and the OCH Executive Share Incentive
Trust, as these entities are considered to be under the control of the Group and
are therefore consolidated into the Group.
Reconciliation of headline earnings
Group
2010 2009
for the year ended 30 June 2010 R`000 R`000
215 497 747 164
Profit attributable to equity holders of
the parent
Adjust for:
Loss on sale of plant and equipment 24 566 993
Gain from business combination achieved in (95 359) -
stages
Fair value gain on available-for-sale (88 135) -
financial assets transferred to profit
Bargain purchase gain (14 734)
Tax effects of the above adjustments 5 462 278
47 297 748 435
Business combination
As at 30 June 2010
Group
The Group acquired effective control of Koornfontein Mines (Pty) Ltd
("Koornfontein Mines") through the acquisition of Main Street 431 (Pty) Ltd, the
controlling shareholder of Koornfontein Mines, on 1 March 2010.
Koornfontein Mines was acquired to increase the Group`s operational footprint,
and provide the Group with increased exposure to export coal cash flows and RBCT
entitlement.
The fair value of the equity interest (38,27%) held in Koornfontein Mines before
controlling interest was obtained was R230,6 million.
Effective
holding in Main Street
Koornfontein 431
Mines (Pty) Ltd (Pty) Ltd
20,80% 41,59%
Holding as at 30 June 2009
Dilutionary effect of (1,66%) (3,32%)
formation of Employee Trust
Purchase of Twin Cities and 21,87% 43,73%
Dunrose - 1 March 2010
41,00% 82,00%
Purchase of Sentula Mining 50,00% 0,00%
Ltd Holding - 13 April 2010
91,00% 82,00%
Purchase of Inkwali 5,00% 10,00%
Resources Holding - 30
April 2010
Effective holding -30 June 96,00% 92,00%
2010
Pre-
acquisition Recognised
carrying Fair value values on
R`000 amounts adjustments acquisition
Acquisition of business
(2010)
Property, plant and 725 468 99 151 824 619
equipment
Mineral rights 31 752 745 047 776 799
Restricted rehabilitation 183 421 - 183 421
investment
Investments - RBCT 187 315 50 304 237 519
Inventories 97 017 - 97 017
Derivative financial asset 155 - 155
Cash and cash equivalents 107 380 - 107 380
Trade and other receivables 14 496 - 14 496
Loans and borrowings (162 152) - (162 152)
Deferred taxation (218 040) (243 418) (461 458)
Environmental provision (183 563) - (183 563)
Taxation (17 551) - (17 551)
Trade and other payables (113 553) - (113 553)
Total net identifiable 652 045 651 084 1 303 129
assets
Non-controlling interest (322 738) (325 529) (648 267)
Net asset value 329 306 325 555 654 861
Less fair value of 8% (44 235)
interest of Employee
Benefit Trust in Main
Street 431 (Pty) Ltd
Less 10% interest of (55 292)
Inkwali Resources in Main
Street 431 (Pty) Ltd
Total net asset value 555 334
attributable to the Group
Less fair value of (230 600)
previously held interest
(38,27%)
Consideration paid (310 000)
Cash purchase price (303 874)
Tax on purchase price (6 126)
Bargain purchase gain on 14 734
acquisition
Acquisition of non-controlling interest
Subsequent to the transaction detailed above, the Group acquired the direct
interest of Sentula Mining Ltd in Koornfontein Mines on 1 April 2010 for R670
million including loans of R8,5 million, and the 10% interest of Inkwali
Resources in Main Street 431 (Pty) Ltd for R30 million. The above two
transactions resulted in an amount of R56 million being transferred to discount
on purchase of non-controlling interest.
Operating segments
as at 30 June 2010
Group
The Group has three reportable segments as described below, which are the
Group`s strategic business units. The business units offer different products
and services and are managed separately because of their different business
strategies. The following summary describes the operations in each of the
Group`s reportable segments:
Coal Mining: includes the production of coal for both local and export market.
Coal exploration: includes coal exploration through several subsidiary
companies.
Logistics: involves the process to route coal to Richards Bay Coal Terminal
(RBCT).
Information regarding the results of each reportable segment is included below.
The basis of measurement of reportable segment items are in terms of IFRS.
Performance is measured based on segment profit before tax. These measures are
used as management believes that such information is the most relevant in
evaluating the results of certain segments operating within these industries and
for comparability. Inter-segment pricing is determined on an arm`s length basis.
Information about reportable segments
Coal Coal
mining Logistics exploration Total
30 June 2010 R`000 R`000 R`000 R`000
3 318 714 40 610 - 3 359 324
External revenues
Inter-segment 12 783 600 090 - 612 873
revenues
Finance income 73 153 1 364 3 266 77 783
Finance expense (227 677) (109) - (227 786)
Depreciation and (502 143) - - (502 143)
amortisation
Other operating (2 705 982) (491 992) (4 276) (3 202 250)
expense
Total profit or (31 152) 149 963 (1 010) 117 801
loss for reportable
segments
Other corporate - - - 760 063
profit
Inter-segment - - - 72 590
revenues
Share of profit - - - 2 506
from associate
Share-based payment - - - (3 863)
expense
Bargain purchase 14 734
gain
Elimination of - - - (668 405)
inter-segment
profits
Consolidated profit 295 426
before income tax
expense
Capital expenditure 881 568 - 9 604 891 172
Reportable segment 7 601 201 1 281 631 1 191 918 10 074 755
assets
Other corporate 2 984 013
assets
Elimination of (1 834 868)
inter-segment
assets
Consolidated total 11 223 900
assets
Reportable segment (4 902 958) (313 707) (1 159 283) (6 375 948)
liabilities
Other corporate - - - (415 224)
liabilities
Elimination of - - - 1 834 869
inter-segment
liabilities
Consolidated total - - - (4 956 303)
liabilities
Coal Coal
mining Logistics exploration Total
30 June 2009 R`000 R`000 R`000 R`000
3 881 251 83 462 - 3 964 713
External revenues
Inter-segment - 491 439 - 491 439
revenues
Finance income 147 302 4 165 319 151 786
Finance expense (214 694) (524) (33) (215 251)
Depreciation and (408 218) - - (408 218)
amortisation
Other operating (2 576 607) (420 461) (5 357) (3 002 425)
expense
Total profit or 829 034 158 081 (5 071) 982 044
loss for reportable
segments
Other corporate 109 316
profit
Inter-segment 46 858
revenues
Share of profit 15 390
from associate
Share based payment (12 578)
expense
Elimination of (164 514)
inter-segment
profits
Consolidated profit 976 516
before income tax
expense
Capital expenditure 805 352 - 72 946 878 298
Reportable segment 6 416 948 998 920 129 772 7 545 640
assets
Other corporate 1 825 268
assets
Elimination of (993 744)
inter-segment
assets
Consolidated total 8 377 164
assets
Reportable segment (3 904 765) (251 497) (96 738) (4 253 000)
liabilities
Other corporate (914 714)
liabilities
Elimination of 993 744
inter-segment
liabilities
Consolidated total (4 173 970)
liabilities
Consolidated statement of cash flow
Group
2010 2009
for the year ended 30 June 2010 R`000 R`000
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash flows from operating activities (136 595) 1 596 169
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (881 568) (805 352)
Proceeds from sale of property, plant and 2 595 7 021
equipment
Acquisition of capitalised exploration costs (9 604) (72 946)
Acquisition of subsidiary, net of cash (196 494) -
acquired
Acquisition of other investments - (245 051)
Disposal of available-for-sale financial 227 776 -
assets
Long term loan provided (42 160) -
Net cash outflows from investing activities (899 455) (1 116 328)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 1 669 850 -
Acquisition of non-controlling interest (691 751) -
Borrowings raised 688 307 150 042
Repayment of borrowings (180 535) (206 902)
Finance lease liability repayment (101 717) (20 739)
Net cash inflows/(outflows) from financing 1 384 154 (77 599)
activities
Net increase in cash and cash equivalents 348 104 402 242
Cash and cash equivalents at the beginning of 402 432 190
the year
Cash and cash equivalents at the end of the 750 536 402 432
year
Consolidated statement of changes in equity
for the year ended 30 June 2010 (R`000)
Available- Share
for-
Share Share sale fair based Treasury
value payment share
Group capital premium reserve reserve reserve
1 850 000 60 422 814 000 *
Balance at
beginning
of the
year
Profit for
the year
Net change 103 894
in fair
value of
available-
for-sale
financial
assets
1 850 000 164 316 814 000 -
Issue of - 1 669 850 4 058
shares
Trans-
actions
with
owners
recorded
directly
in equity
Non-
controllin
g interest
as a
result of
business
combinatio
n
Acquisitio 902
n of non-
controllin
g interest
Dividend - - - - -
Balance at 1 2 519 850 165 218 818 058 *
end of the
year
*Nominal amount
Consolidated statement of changes in equity
for the year ended 30 June 2010 (R`000) (continued)
Discount on
acquisition of
Retained non-controlling
Group earnings interest Total
Balance at beginning of the 2 478 771 - 4 203 194
year
Profit for the year 215 497 215 497
Net change in fair value of - 103 894
available-for-sale
financial assets
2 694 268 4 522 585
Issue of shares - 1 673 908
Transactions with owners
recorded directly in equity
Non-controlling interest as -
a result of business
combination
Acquisition of non- 14 156 56 045 71 103
controlling interest
Dividend - - -
Balance at end of the year 2 708 426 56 045 6 267 597
*Nominal amount
Consolidated statement of changes in equity
for the year ended 30 June 2010 (R`000) (continued)
Non-con- Total equity Total equity
trolling
Group interest 2010 2009
Balance at beginning of the * 4 203 194 3 484 408
year
Profit for the year 14 156 229 653 747 164
Net change in fair value of 103 894 60 422
available-for-sale
financial assets
14 156 4 536 741 4 291 994
Issue of shares 1 673 908 -
Transactions with owners
recorded directly in equity
Non-controlling interest as 733 640 733 640 -
a result of business
combination
Acquisition of non- (747 796) (676 693) -
controlling interest
Dividend - - (88 800)
Balance at end of the year * 6 267 597 4 203 194
*Nominal amount
Commentary
Group Financial Highlights
During 2010 the Group produced 10,8 million tons of saleable coal with Optimum
Collieries contributing 9,8 million tons and the balance being produced at
Koornfontein Mines during the 4 months since acquisition on the 1st March 2010.
The Group achieved attributable export saleable production of 5,3 million tons
for the year with Optimum Collieries increasing its export saleable contribution
by 15% to 4,7 million tons. The Group railed 5,1 million tons to RBCT (FY2009 -
4,2 million tons) which, although substantially more than last year, resulted in
lower revenues due to a combination of lower USD export prices, a stronger R:$
exchange rate and an inability by Transnet to rail all our export coal
production due to strike activity in May 2010. On average, the Group received
revenue of R558,3 per export ton sold compared to R813,5 in the previous year,
an average decrease of 31%. This resulted in operating profit of R412,2 million,
which is R607 million lower than last year.
The Group operational EBITDA consequently also reduced to R144,4 million from
R1,4 billion in the previous year. We define operational EBITDA as results from
operating activities, excluding other income, share based payment expense, and
depreciation and amortisation and releases from environmental provisions of
R575,6 million in the current year (2009: R59,3 million).
During the year, the Group raised R1,726 billion before costs from the
collective issuance of shares to Mercuria Energy, Kwini Mining Investments (Pty)
Ltd and to subscribers for new shares on listing of the Company in March 2010.
Additionally, the Group disposed of its investment in Metorex Ltd for a capital
gain of R88,1 million.
The Group increased its borrowings from R150 million as at 30 June 2009 to R820
million as at 30 June 2010. This increase included the acquisition of R162
million debt with the acquisition of a controlling stake in Koornfontein Mines,
effective from 1 March 2010.
The previously announced dispute between Optimum Coal Mine (Pty) Ltd and Eskom
has been referred to arbitration and has been postponed until March 2011 at
which time a definitive ruling is expected. During the interim period to March
2011, the Company has agreed to continue to supply coal to Eskom`s Hendrina
power station in terms of the existing agreement.
After year-end the Company acquired the outstanding effective 4% in Koornfontein
Mines from the Koornfontein Employee Trust for R24 million net of tax effects.
Pursuant to the acquisition, the Company will own 100% of Koornfontein Mines and
Koornfontein employees will become beneficiaries of the Optimum Employee Benefit
Trust.
Strategic outlook
Our vision is to become the country`s benchmark South African owned and
controlled coal mining and exploration Group. Our mission is to be a
commercially prosperous mining and exploration Group supplying the needs of both
local and international coal consumers.
The Company is strategically well positioned to benefit from increased demand
for thermal coal, both locally and internationally. As the 4th largest
shareholder at Richards Bay Coal Terminal with 8mt of export entitlement per
year, the Group has direct access to the international sea-borne thermal coal
market. RBCT continues to be a critical export location for the sea-borne
thermal coal market providing producers with the option of supplying both
European and Asian customers. This market has recently benefitted from strong
Asian buying, especially out of India and China, which collectively account for
43% of RBCT`s exports since January 2010. Additionally, Eskom`s return-to
service program and near term growth requirements provide an ideal supply
opportunity for coal miners, like ourselves, who are located near to or adjacent
to strategic power stations.
Safety
We are committed to Zero Harm and will continue to work diligently to ensure
that our operations are safe at all times. We unfortunately had two fatalities
during our 2010 financial year when Mr Moses Simelane lost his life in a
conveyor belt accident and Mr Fanie Mahlangu in a blasting accident.
Operational review
The Group recorded 10,8 million attributable tons of saleable coal during the
financial year (FY2009 - 9,2 million tons). The Group recorded 5,3 million
attributable export tons, an increase of 30% on the 4,1 million tons of export
saleable coal produced in the prior year, whilst the Group recorded 5,5 million
attributable Eskom saleable tons during the year, an increase of 7% on the 5,1
million tons produced in the prior year.
In the 4 month period to 30 June 2010, post the acquisition of the Group`s
controlling stake, Koornfontein Mines contributed 1,0 million tons to the
saleable Group coal volume, comprising 0,6 million tons of export saleable coal
and 0,4 million tons of Eskom saleable coal.
Both operations were adversely affected by the Transnet Freight Rail strike
during May 2010, which substantially prevented export railings for a 21 day
period. This resulted in consequent build up of aggregate export stock toward
the end of the financial year. At year-end the Group had 303k tons of export
stock at operations available for railing to RBCT.
Optimum Collieries
Optimum Collieries is the 3rd largest opencast coal mine in South Africa and it
now incorporates an operating underground section. In total, Optimum Collieries
has 4 mining sections: the Kwagga, Pullenshope, Eikeboom and Boschmanspoort
(underground) sections.
As at 30 June 2010, Optimum Collieries has a coal resource base of 719 million
tons, a reserve base of 257 million tons of run-of-mine coal of which 181
million tons are classified as saleable.
Optimum Collieries produced 9,8 million tons of saleable coal during the
financial year (FY2009 - 9,2 million tons), split between 4,7 million export
saleable tons (FY2009 - 4,1 million tons) and 5,1 million tons of Eskom saleable
tons (FY2009 - 5,1 million tons).
The 15% increase in export tonnage produced at Optimum Collieries was lower than
anticipated primarily due to excessive rainfall affecting opencast exposure and
extraction and other operational issues on mine.
Koornfontein Mines
Koornfontein Mines is a large underground mine adjacent to Eskom`s Komati power
station (which is being re-commissioned as part of the Eskom return-to-service
programme) and was owned by BHP Billiton Energy Coal South Africa Ltd prior to
its 2007 sale to a BEE consortium.
Koornfontein Mines, as at 30 June 2010, had resources of 199,1 million tons and
a reserve base of 70,3 million tons of run-of-mine coal, of which 45,7 million
tons were classified as saleable.
In the 12 month period to 30 June 2010, Koornfontein Mines produced 3,0 million
tons of saleable coal (12 month period to 30 June 2009 - 4,4 million tons),
split between 1,8 million export saleable tons (12 month period to 30 June 2009
- 2,2 million tons) and 1,2 million tons of Eskom & inland saleable tons (12
month period to June 2009 - 2,2 million tons).
Koornfontein Mines produced consistently during the financial year and achieved
operational expectations.
Capital expenditure, Development and Exploration
In July 2008, we made a commitment to spend R1,9 billion on critical life of
mine extension and environmental projects at Optimum Collieries. We have
completed both the Boschmanspoort underground project at a cost of R558,1
million and water treatment plant at a cost of R550 million, both on time and
within budget. The Boschmanspoort underground section has started to deliver
substantial incremental run-of-mine volumes for beneficiation and is in the
process of ramping up to a run-rate of 4mt per annum of run-of-mine coal
tonnage. The water treatment plant has been commissioned and we are in the
process of finalising the terms of a commercial off-take agreement for the
supply of potable water to the Steve Tshwete Local Municipality. The water plant
enables Optimum Collieries to adequately treat excess affected water on site for
the benefit of both the surrounding environment and community. Additionally, the
Kwagga North opencast extension project is progressing well and an estimated
R600 million will be spent on the project in the next 18 months to complete
phases 2 and 3. The impact of the Boschmanspoort and Kwagga North project
sections coming on stream will see Optimum Collieries` annual run-of-mine
tonnage volume increase from 13mtpa to 16mtpa.
In addition, the Group has two brown-fields projects at various stages of
development. The Koornfonteinn Mines 4-seam project and the Schoonoord project
at Optimum Collieries will leverage off current infrastructure at each operation
for capital efficiency and cost benefit. The Group also has three green-fields
projects - Vlakfontein, Overvaal and Mpefu - on which substantial additional
geological work has been performed to improve resource confidence. A mining
rights application for the Vlakfontein project has been submitted to the
Department of Mineral Resources. We continue to monitor and assess the project
pipeline with a view to approving projects which provide incremental volume and
margin growth at efficient capital cost.
Broad-based black economic empowerment (BBBEE)
Optimum Coal has excellent empowerment credentials, probably some of the best in
the industry. As a 60% black-owned, controlled and managed Company, our BBBEE
credentials position us favourably to be a natural South African coal
consolidator in realising our vision to be the benchmark South African owned and
controlled coal mining and exploration Group.
We have a commitment to remain at least 50,1% black controlled until 1 May 2014
and 90 million shares issued are subject to lock-ups until 1 May 2014.
Our Employee Benefit Trust and Community Trust collectively own 50 000 000 black
controlled shares in the Company. These shareholdings are totally unencumbered
and allow the beneficiaries to enjoy immediate benefits as and when dividends
are declared by the Company. Our trusts are precluded from selling their shares
in the Company.
Optimum Coal is the single largest BBBEE shareholder in RBCT and owns 8,44mtpa
of export entitlement of which 8mtpa is available for Group use. The balance is
currently committed to the Quattro program.
We continue to identify transformation improvement opportunities across the
Group, especially in the areas of human resources development, preferential
procurement and enterprise development initiatives as well as employment equity.
We are confident of achieving a level 4 Group DTI code status within the coming
year.
Governance
The directors are satisfied that the Board is compliant with King Code
recommendations in all material aspects save in respect of the following three
matters. Firstly, the Chairman is not an independent non-executive director.
This has been addressed by the Board with the appointment of Mr. Bobby Godsell
as a lead independent non-executive director and deputy Chairman. Secondly, the
Board`s non-executive director representation does not comprise a majority of
independent directors but currently comprises 5 non-executive directors and 5
independent non-executive directors. The Board will review this composition in
the coming year. Lastly, Mr. Tom Borman, a member of the Audit and Risk
Management Committee, is not an independent non-executive director. Mr. Borman
is a qualified chartered accountant and has vast mining experience. As such, the
Board believes that he is suitably qualified to make a valuable contribution to
this sub-committee without compromising the independence of the committee.
Basis of presentation
These provisional condensed consolidated financial statements are prepared in
accordance with the recognition and measurement requirements of IFRS and the AC
500 series and have been presented in accordance with presentation and
disclosure requirements of IAS 34 and the Listings Requirements of the JSE Ltd.
The same accounting policies and methods of computation were followed in these
financial statements as compared with the consolidated annual financial
statements for the year ended 30 June 2009, except for the following:
- IFRS 3 Business Combinations (effective 1 July 2009) has been applied to the
business combination transaction during the year;
- IFRS 8 Operating Segments (effective 1 January 2009) has been applied to the
Group`s segment reporting;
- IAS 1 Presentation of Financial Statements (effective 1 January 2009) has been
applied to the interim period ended 30 June 2010.
- IAS 27 Consolidated and Separate Financial Statements (effective 1 July 2009)
has been applied to the purchase of the Group`s non-controlling interest.
Change of Company secretary
As announced on 1 September 2010, Mrs Anlia Swart Larmigny has been appointed as
Optimum`s Company secretary replacing Mr Michael Boyd Scott.
Review opinion
This press release has been reviewed by the Company`s auditors, KPMG Inc. Their
unqualified review report is available for inspection at the Company`s
registered office.
Forward-looking information
Certain statements in this press release may constitute forward-looking
information within the meaning of securities laws. In some cases, forward-
looking information can be identified by the use of such terms such as "may",
"will", "should", "expect", "believe", "plan", "scheduled", "intend",
"estimate", "forecast", "predict", "potential", "continue", "anticipate" or
other similar expressions concerning matters that are not historical facts.
Forward looking information may relate to managements future outlook and
anticipated events or results, and may include statements or information
regarding the future plans or prospects of the Company.
You should not place undue importance on forward looking information and should
not rely upon this information as of any other date.
The Company undertakes no obligation to update publicly or release any revisions
of these forward-looking statements to reflect events or circumstances after the
date of this document or to reflect the occurrence of unanticipated events
except where required by applicable laws.
On behalf of the board
Dr. Sivi Gounden Mike Teke
Chairman Chief Executive Officer
First Floor, Marlborough Gate, Hyde Park Lane, Hyde Park, Sandton 2196. PO Box
411333 Craighall 2024
Tel: +27 (0) 11 325 0403 Fax: +27 (0) 11 325 0392
Directors
Non-Executive Chairman: Dr Sivi Gounden
Executive Directors: Mike Teke, Douglas Gain, Henry White
Non-Executive Directors: Tom Borman, Peter Gain, Eliphus Monkoe, Dr Mlungisi
Kwini
Non-Executive Independent Directors: Bobby Godsell, Nomavuso Mnxasana, Loutjie
Smit, Lulu Letlape, Deon Dhlomo
www.optimumcoal.com
15 September 2010
Johannesburg
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Financial Communications Advisers
COLLEGE HILL
Date: 15/09/2010 07:05:01 Produced by the JSE SENS Department.
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