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SIM
SIIF
SIM - Simmer and Jack Mines, Limited - Reviewed abridged consolidated second
interim results for the twelve months ended 31 March 2011
Simmer and Jack Mines, Limited
Incorporated in the Republic of South Africa
(Simmers or the Company or the Group)
Registration number 1924/007778/06
Share Code SIM ISIN ZAE000006722
REVIEWED ABRIDGED CONSOLIDATED SECOND INTERIM RESULTS FOR THE TWELVE
MONTHS ENDED 31 MARCH 2011
SALIENT FEATURES
- Simmer and Jack Mines, Limited (Simmers or the Company) and Village Main
Reef Limited (Village) shareholders approve merger by the requisite
majority
- In anticipation of the completion of the merger with Village, Simmers is
required to account for its activities for the year to date on a
liquidation basis. This requires Simmers to account for assets and
liabilities at fair value less costs to sell
- Simmers impairs the investment in First Uranium Corporation (FIU) to market
value (a divergence from using the value in use methodology), resulting in
a R1,25 billion adjustment to the carrying value
- In terms of IFRS 5 (Non-current Assets Held-for-Sale and Discontinued
Operations) all assets and liabilities which form the subject matter of the
transaction with Village is required to be disclosed as assets and
liabilities held-for-sale, with the loss recognised through the Statement
of Comprehensive Income
- In compliance with the requirements of IFRS 5 the comprehensive income
statement reflects reviewed information with the relevant comparative prior
year numbers for the quarter, six months and twelve months ended 31 March
2011, applying the liquidation basis of accounting
- Detailed quarterly information in relation to the quarter ended 31 March
2011, has been published separately on 20 June 2011. This information is
available on the Simmers website, www.simmers.co.za
POST PERIOD-END
- Simmers announces that all conditions to the transaction with Village are
fulfilled and that unbundling will be completed by 27 June 2011. Each
Simmers shareholder will receive 47,38933 Village shares per 100 Simmers
shares held at 24 June 2011
- Simmers changes year-end from 31 March to 30 June. Accordingly Simmers will
have a 15-month reporting period for this financial year and a fifth
production quarter ending 30 June 2011
- Simmers enters into a second gold forward purchase agreement with Deutsche
Bank, raising some USD25 million, which were used to settle the full R155
million, outstanding under the Absa domestic medium term high yield notes
(Absa notes)
ACCOUNTING IMPLICATIONS OF THE VILLAGE TRANSACTION
The results for this reporting period have been prepared on a liquidation
basis pending the conclusion of the merger between Simmers and Village. This
basis of reporting requires the assets, liabilities, income and expenditures
of those entities forming part of the transaction, to be disclosed as assets
available for sale and losses on non-current assets held-for-sale, respectively.
This basis of accounting requires that all assets and liabilities are accounted
for at fair value less costs to sell. This is a departure from the valuation
methodology applied in the previous quarters in relation to the investment
in FIU, which were accounted for on the value in use basis. As a result of
the change in the valuation basis and to give effect to the impact of the
transaction with Village, a total fair value adjustment amounting to R1,564
billion was processed for the period, consisting mainly of a R1,251 billion
adjustment of the carrying value of FIU to the market value thereof as at
31 March 2011. In addition to the FIU adjustment, a loss on disposal of
non-current assets held-for-sale of R307 million was accounted for in the
Statement of Comprehensive Income.
The change in the basis of preparation required Simmers to reclassify all
information in the Statement of Comprehensive Income into profit and loss from
continuing and discontinued operations.
The financial statements have been prepared in accordance with International
Accounting Standard (IAS 34) Interim Financial Reporting.
Johannesburg
27 June 2011
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 March 2011
Reviewed Audited
twelve twelve
months months
ended ended
31 March 31 March
Figures in Rand thousand Notes 2011 2010
ASSETS
Non-current assets
Property, plant and equipment - 583 803
Investment property - 37 376
Investment in associate - 2 001 030
Financial assets - 21 852
Environmental rehabilitation trust fund - 123 424
- 2 767 485
Current assets
Loans to group companies and associate 50 110 594
Current tax receivable - 18
Inventories - 26 565
Trade and other receivables - 71 436
Reimbursive asset - 71 227
Cash and cash equivalents 20 000 632 798
20 050 912 638
Assets of disposal groups classified
as held-for-sale 2 2 163 438 4 903
Total Assets 2 183 488 3 685 026
EQUITY AND LIABILITIES
Equity
Equity attributable to owners of the
parent
Share capital and premium 1 262 927 1 231 913
Reserves 322 049 420 185
Retained income (216 029) 1 464 136
Equity attributable to owners of the
parent 1 368 947 3 116 234
Non-controlling interest 1 1
1 368 948 3 116 235
Liabilities
Non-current liabilities
Finance lease obligation - 4 024
Environmental rehabilitation provision - 219 316
Financial liabilities - 210 044
- 433 384
Current liabilities
Finance lease obligation - 2 933
Financial liabilities - 13 657
Trade and other payables - 118 817
- 135 407
Liabilities of disposal groups classified
as held-for-sale 2 814 540 -
814 540 135 407
Total liabilities 814 540 568 791
Total Equity and Liabilities 2 183 488 3 685 026
STATEMENT OF COMPREHENSIVE INCOME for the period ended 31 March 2011
Reviewed Unaudited Reviewed
six six twelve
months months months
ended ended ended
31 March 31 March 31 March
Figures in Rand thousand Notes 2011 2010 2011
Continuing operations
Revenue - - -
Cost of production - - -
Gross (loss)/profit - - -
Other income 12 9 13
General administrative and
overhead expenditure (38 452) (22 936) (106 276)
Share option costs (1 299) (6 897) (2 774)
Operating loss (39 739) (29 823) (109 037)
Finance income 23 762 37 326 57 355
Restructuring costs (828) - (828)
Finance charges (30 291) - (46 221)
(Loss)/profit before taxation (47 096) 7 503 (98 731)
Taxation - - -
(Loss)/profit for the period
from continuing operations (47 096) 7 503 (98 731)
Loss for the period from
discontinuing operations 2 (1 183 768) (617 556) (1 581 435)
Loss for the period (1 230 864) (610 053) (1 680 165)
Other comprehensive income
Share of other comprehensive
income of discontinued
operations (63 957) 89 765 (89 765)
Movement in available-for-sale
financial instruments - 7 658 -
Other comprehensive (loss)/
income for the period, net
of taxation (63 957) 97 423 (89 765)
Total comprehensive loss for
the period (1 294 821) (512 630) (1 769 930)
Total comprehensive
(loss)/income for the period
from continuing operations (47 096) 7 503 (98 731)
Total comprehensive loss for
the period from discontinued
operations (1 247 725) (520 133) (1 671 200)
Total comprehensive income
less attributable to:
Owners of the parent (1 294 821) (512 630) (1 769 930)
Non-controlling interest - - -
(1 294 821) (512 630) (1 769 930)
Earnings per share from
continuing operations
Basic (loss)/earnings per share
(cents) (3,86) 0,61 (8,08)
Diluted (loss)/earnings per
share (cents) (3,83) 0,61 (8,03)
Earnings per share from
discontinuing operations
Basic loss per share (cents) (96,93) (50,56) (129,49)
Diluted loss per share (cents)
(96,33) (50,56) (128,69)
Earnings per share
Basic loss per share (cents) (100,78) (49,95) (137,57)
Diluted loss per share (cents)
(100,16) (49,95) (136,72)
Audited Unaudited Unaudited
twelve three three
months months months
ended ended ended
31 March 31 March 31 March
2010 2011 2010
Figures in Rand thousand
Continuing operations
Revenue - - -
Cost of production - - -
Gross (loss)/profit - - -
Other income 10 9 9
General administrative and overhead
expenditure (65 552) (16 282) (11 089)
Share option costs (14 572) (433) (3 843)
Operating loss (80 114) (16 706) (14 922)
Finance income 72 866 12 456 18 526
Restructuring costs - - -
Finance charges - (5 684) -
(Loss)/profit before taxation (7 248) (9 935) 3 604
Taxation - - -
(Loss)/profit for the period from
continuing operations (7 248) (9 935) 3 604
Loss for the period from
discontinuing operations (729 115) (1 336 124) (505 854)
Loss for the period (736 363) (1 346 058) (502 250)
Other comprehensive income
Share of other comprehensive
income of discontinued operations
89 765 (77 700) 89 765
Movement in available-for-sale
financial instruments 7 658 - -
Other comprehensive (loss)/income
for the period, net of taxation
97 423 (77 700) 89 765
Total comprehensive loss for the
period (638 940) (1 423 758) (412 485)
Total comprehensive (loss)/income
for the period from continuing
operations (7 248) (9 935) 3 604
Total comprehensive loss for the
period from discontinued operations
(631 692) (1 413 824) (416 089)
Total comprehensive income
less attributable to:
Owners of the parent (638 940) (1 423 758) (412 485)
Non-controlling interest - - -
(638 940) (1 423 758) (412 485)
Earnings per share from continuing
operations
Basic (loss)/earnings per share
(cents) (0,61) (0,81) 0,30
Diluted (loss)/earnings per share
(cents) (0,61) (0,81) 0,32
Earnings per share from
discontinuing operations
Basic loss per share (cents) (60,90) (108,73) (42,25)
Diluted loss per share (cents)
(61,63) (108,73) (44,50)
Earnings per share
Basic loss per share (cents) (61,51) (109,54) (41,95)
Diluted loss per share (cents)
(62,25) (109,54) (44,19)
STATEMENT OF CASH FLOWS for the period ended 31 March 2011
Reviewed Audited
twelve twelve
months months
ended ended
31 March 31 March
Figures in Rand thousand 2011 2010
Net cash from operating activities 48 760 (131 567)
Cash flows from investing activities (748 135) (341 881)
Cash flows from financing activities 86 576 263 568
Net decrease in cash and cash equivalents (612 798) (209 880)
Cash and cash equivalents at the beginning
of the period 632 798 842 678
Total cash and cash equivalents at end
of the period 20 000 632 798
STATEMENT OF CHANGES IN EQUITY for the period ended 31 March 2011
Attributable to owners of the parent
Figures in Rand thousand
Share- Avail-
based able-
Share Share payment for-sale Other
capital premium reserve valuation reserves
Balance at 1 April 2009 21 757 930 090 264 782 4 080 -
Total changes for the year
2 199 277 867 53 900 7 658 89 765
Balance at 1 April 2010 23 956 1 207 957 318 682 11 738 89 765
Total changes for the period
613 30 401 3 367 (11 738) (89 765)
Balance at 31 March 2011 24 569 1 238 358 322 049 - -
Attributable to owners of the parent
Figures in Rand thousand
Accumu- Total
lated attribu- Non-
(loss)/ table to con-
Retained owners of trolling Total
income the parent interest equity
Balance at 1 April 2009 2 200 499 3 421 208 1 3 421 209
Total changes for the year
(736 363) (304 974) - (304 974)
Balance at 1 April 2010 1 464 136 3 116 234 1 3 116 235
Total changes for the period
(1 680 165) (1 747 287) - (1 747 287)
Balance at 31 March 2011 (216 029) 1 368 947 1 1 368 948
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
for the period ended 31 March 2011
1 SIGNIFICANT ACCOUNTING POLICIES
1.1 General information
Simmer and Jack Mines, Limited (`the Company`) and its subsidiaries
(together `the Group`) are engaged in exploration, extraction and
processing of gold. The group has mining operations in the North West and
Free State Provinces in South Africa.
1.2 Presentation of financial statements
The condensed interim consolidated financial statements are for the 12
months ended 31 March 2011 and have been prepared in accordance with IAS 34
Interim Financial Reporting as well as the AC 500 standards as issued by
the Accounting Practices Board, the JSE Listings Requirements and the
requirements of the Companies Act of South Africa, 1973 as amended. They do
not include all of the information required in annual financial statements
in accordance with International Financial Reporting Standards, and should
be read in conjunction with the consolidated financial statements of the
Group for the year ended 31 March 2010.
These accounting policies are consistent with the previous annual financial
statements except for exploration expenditure as indicated below.
The condensed interim financial statements have been reviewed by Grant
Thornton whose modified review report is available for inspection at the
Group`s registered office. The modification relates to the fact that
condensed financial statements have been prepared on the liquidation basis.
Extracts from their report states the following: "Without qualifying our
conclusion, we draw attention to the fact that the condensed interim
financial information has been prepared on the liquidation basis."
1.3 Change in accounting policy
During the period the Group changed its policy regarding exploration
expenditure. Expenditure on exploration is capitalised until the viability
of the mining venture has been proven. If the mining venture is
subsequently considered non-viable the expenditure is charged against
income as and when that fact becomes known.
This change in accounting policy does not affect prior period information
presented.
2 DISPOSAL GROUPS CLASSIFIED AS HELD-FOR-SALE AND DISCONTINUED OPERATIONS
Transvaal Gold Mining Estates Limited disposal
On 9 September 2010 Simmers agreed to sell its wholly-owned subsidiary,
Transvaal Gold Mining Estates Limited (TGME) to Stonewall Mining
(Proprietary) Limited (Stonewall) for R25 million. The sale is subject to a
number of conditions, which must be fulfilled by no later than 28 February
2012.
In terms of the agreement, Stonewall has assumed all care and
maintenance costs as from 1 September 2010.
Reviewed Unaudited Reviewed
six six twelve
months months months
ended ended ended
31 March 31 March 31 March
2011 2010 2011
Revenue 1 902 29 884 5 559
Expenses (13 137) (61 028) (22 714)
Taxation - - -
Loss on measurement to fair value
less cost to sell - (253 600) -
Loss for the period from
discontinuing operations (11 235) (284 743) (17 155)
Liabilities of disposal groups - - (38 177)
Assets of disposal groups - - 39 066
Audited Unaudited Unaudited
twelve three three
months months months
ended ended ended
31 March 31 March 31 March
2010 2011 2010
Revenue 73 372 753 12 639
Expenses (137 677) (6 793) (70 388)
Taxation - - -
Loss on measurement to fair value
less cost to sell (253 600) - (253 600)
Loss for the period from
discontinuing operations (317 905) (6 041) (311 349)
Liabilities of disposal groups - - -
Assets of disposal groups 4 903 - -
Merger between Simmer and Jack and Village Main Reef
A merger transaction between Simmers and Village was approved by the Simmers and
Village shareholders on 25 March 2011. In terms of the merger Simmers and
Village had entered into an agreement in terms of which Village would acquire
the majority of the Simmers assets in exchange for Village sharers, which
Village shares would be unbundled to Simmers` shareholders.
On completion of the disposal and the unbundling, the Simmers group will
comprise of all the shares in and claims on loan account against Bobsat
Investments, all the shares in and claims on loan account against Caledonian
Mining (both of these entities are dormant holding companies) cash of R25
million (or the right to cash of R25 million) arising from the sale of all
Simmers` shares in and claims on loan account against TGME and Sabie Mines to
Stonewall (this sale remains subject to certain conditions and if they are not
fulfilled or the sale falls away for any other reason, Simmers will continue to
hold such shares and claims on loan account); and an additional R20 million in
cash.
As the transaction was not yet finalised at the end of March 2011, all the sale
assets have been classified as non-current assets and held as part of a disposal
group and disclosed as assets and liabilities held-for-sale.
The DB, Aberdeen and DMTN financial liabilities have been included as part of
the disposal assets being acquired by Village.
Reviewed Unaudited Reviewed
six six twelve
months months months
ended ended ended
31 March 31 March 31 March
2011 2010 2011
Revenue 868 681 412 355 1 354 001
Expenses (550 493) (745 168) (1 427 560)
Taxation - - -
Loss on measurement to fair
value less cost to sell (1 490 721) - (1 490 721)
Loss for the period from
non-current assets held-for-sale (1 172 533) (332 813) (1 564 280)
Liabilities of non-current assets -
held-for-sale - (776 364)
Assets of non-current assets
held-for-sale - - 2 124 372
Audited Unaudited Unaudited
twelve three three
months months months
ended ended ended
31 March 31 March 31 March
2010 2011 2010
Revenue 867 395 405 641 191 361
Expenses (1 278 605) (245 003) (385 866)
Taxation - - -
Loss on measurement to fair
value less cost to sell - (1 490 721) -
Loss for the period from non-current
assets held-for-sale (411 210) (1 330 083) (194 505)
Liabilities of non-current assets held-
for-sale - - -
Assets of non-current assets held-for-
sale - - -
3 HEADLINE LOSS
Reviewed Unaudited Reviewed
six six twelve
months months months
ended ended ended
31 March 31 March 31 March
Unaudited 2011 2010 2011
Reconciliation between earnings/(loss)
and headline loss:
Net (loss)/profit from continuing
operations (47 096) 7 503 (98 731)
Net loss from discontinuing operations
(1 183 768) (617 556) (1 581 435)
Basic loss for the year (1 230 864) (610 053) (1 680 165)
Impairment of property, plant and
equipment - - 68
Gain and disposal of property, plant
and equipment (13) (12) -
Loss on sale of non-current assets
held-for-sale (1 172 533) (332 813) (1 564 280)
Foreign currency translation reserve
realised (42 259) (89 765) (106 216)
Fair value adjustments - - -
Fair value adjustment on
held-for-sale assets - - -
Headline loss for the year (2 445 670) (1 032 642) (3 350 593)
Basic (loss)/profit per share (cents)
from continuing operations* (3,86) 0,61 (8,08)
Basic loss per share (cents) from
discontinuing operations* (96,93) (50,56) (129,49)
Total basic loss per share (cents)* (1,01) (0,50) (1,38)
Diluted (loss)/profit per share (cents)
from continuing operations* (3,83) 0,61 (8,03)
Diluted loss per share (cents) from
discontinuing operations* (96,33) (50,56) (128,69)
Total diluted loss per share (cents)*
(100,16) (49,95) (136,72)
Headline loss per share (cents)* (200,25) (84,55) (274,34)
Diluted headline loss per share
(cents)* (199,02) (84,55) (272,66)
Net asset value per share (cents) 109,35 208,82 295,66
*Based on weighted average number of shares in issue
Reconciliation of number
of shares issued `000 `000 `000
Reported at 1 April 1 221 318 1 221 318 1 111 368
Shares issued for cash 30 612 - 30 612
Shares issued at the end of the period
1 251 930 1 221 318 1 141 980
Weighted average number of ordinary
shares in issue 1 221 318 1 221 318 1 221 318
Adjusted for:
- Settlement of Tau Lekoa OCF with the
issuance of shares 7 548 - 7 548
- Share options - - -
Weighted average number of ordinary
shares for diluted earnings per share
1 228 866 1 221 318 1 228 866
Audited Unaudited Unaudited
twelve three three
months months months
ended ended ended
31 March 31 March 31 March
Unaudited 2010 2011 2010
Reconciliation between earnings/(loss)
and headline loss:
Net (loss)/profit from continuing
operations (7 248) (9 935) 3 604
Net loss from discontinuing operations
(729 115) (1 336 124) (505 854)
Basic loss for the year (736 363) (1 346 058) (502 250)
Impairment of property, plant
and equipment 253 667 - 253 667
Gain and disposal of property, plant and
equipment (10) - -
Loss on sale of non-current assets held-
for-sale (411 210) (1 330 083) (194 505)
Foreign currency translation reserve
realised (89 765) (28 516) (89 765)
Fair value adjustments (8 201) - (8 201)
Fair value adjustment on held-for-sale
assets 960 - 960
Headline loss for the year (990 922) (2 704 657) (540 094)
Basic (loss)/profit per share (cents)
from continuing operations* (0,61) (0,81) 0,30
Basic loss per share (cents) from
discontinuing operations* (60,90) (108,73) (42,25)
Total basic loss per share (cents)* (0,62) (1,10) (0,42)
Diluted (loss)/profit per share (cents)
from continuing operations* (0,61) (0,81) 0,32
Diluted loss per share (cents) from
discontinuing operations* (61,63) (108,73) (44,50)
Total diluted loss per share (cents)*
(62,25) (109,54) (44,19)
Headline loss per share (cents)* (82,77) (220,09) (45,11)
Diluted headline loss per share (cents)*
(83,77) (220,09) (47,52)
Net asset value per share (cents) 255,15 - -
*Based on weighted average number of shares in issue
Reconciliation of number of shares `000 `000 `000
issued
Reported at 1 April 1 111 368 1 251 930 1 221 318
Shares issued for cash 109 950 - -
Shares issued at the end of the period
1 221 318 1 251 930 1 221 318
Weighted average number of ordinary
shares in issue 1 197 219 1 228 866 1 197 219
Adjusted for:
- Settlement of Tau Lekoa OCF with the
issuance of shares - - -
- Share options (14 259) - (60 595)
Weighted average number of ordinary
shares for diluted earnings per share
1 182 960 1 228 866 1 136 625
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary shares
in issue during the year.
4 EVENTS AFTER REPORTING PERIOD
Deutsche Bank AG Gold Loan
The Group concluded a second US$25 million Gold Loan with Deutsche Bank AG. The
Gold Loan will be amortised through physical gold delivery to Deutsche Bank AG
over an eighteen months period after the end of the first Gold Loan in October
2010. The loan will be used to settle the R155 million that is due to the DMTN
Note Holders.
Changes to Board Date
Resignations
V Khanyile 9 October 2010
S Mabaso-Koyana 24 November 2010
N Schoeman 31 December 2010
Appointments
J Faircliff 12 April 2011
G Moretti 12 April 2011
Company Secretary
Resignation
iThemba Governance and Statutory Solutions (Pty) Ltd 31 April 2011
Appointment
S Singh 1 May 2011
5 SEGMENT INFORMATION
Resulting from the upcoming merger between Village and Simmers, the majority of
the assets, liabilities, profits and losses have been disclosed as non-current
assets available for sale. As a consequence no segment report was included into
the second interim financial statement as only the corporate office remain to be
disclosed in the results for the period ending 31 March 2011.
ADMINISTRATION
Transfer secretaries
South Africa
Computershare Investor Services (Pty) Ltd
Ground Floor 70 Marshall Street Johannesburg 2001
Republic of South Africa
United Kingdom
Capita Registrars
The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
United Kingdom
Auditors
Grant Thornton 137 Daisy Street Sandown 2196 Republic of South Africa
Registered Office
Isle of Houghton Harrow Court 3 13 Boundary Road Houghton Estate
Johannesburg 2198 Republic of South Africa
Sponsor
Rand Merchant Bank The Place 1 Sandton Drive South Wing Sandown 2146
Republic of South Africa
www.simmers.co.za
Date: 27/06/2011 07:05:09 Produced by the JSE SENS Department.
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