08 Sep - 9 min read

Provisional Summarised Consolidated Annual Financial Results for the Year Ended 28 February 2021

Provisional Summarised Consolidated Annual Financial Results for the Year Ended 28 February 2021

Mine Restoration Investments Limited
Incorporated in the Republic of South Africa
(Registration number 1987/004821/06)
Share Code: MRI
ISIN Code: ZAE000164562
("MRI", “the Company" or “the group”)


PROVISIONAL SUMMARISED CONSOLIDATED ANNUAL FINANCIAL RESULTS FOR THE
YEAR ENDED 28 FEBRUARY 2021


The Board of Directors of MRI (”the Board”) is pleased to announce
the summarised consolidated annual financial results for the year
ended 28 February 2021(“Results”).

SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                        Audited 12-       Audited 12-
                                          months to         months to
                                      February 2021     February 2020
                                              R’000             R’000
Revenue                                           -                 -
Other income                                    956               660
Impairment reversal                           3 705                 -
Directors’ remuneration                     (2 321)           (1 560)
Administration and other
                                            (1 199)           (1 340)
operating expenses
Operating Profit/(Loss)                       1 141           (2 240)
Finance costs                               (2 635)           (2 932)
Gain on disposal of subsidiaries                429                 -
Loss before Taxation                        (1 065)           (5 172)
Taxation                                          -                 -
Loss for the Year                           (1 065)           (5 172)
Other Comprehensive Income:
Reversal of capital reserve                   5 000                 -
Total Comprehensive Income/(Loss)
for the Year                                  3 935           (5 172)


Total Comprehensive Income
Attributable to:
Owners of the parent                          3 935           (5 173)
Non-controlling interest                          -                 1

Basic Earnings/(Loss) per Share                0.45            (0.60)
Diluted Earnings/(Loss) per Share              0.45            (0.60)
Headline Loss per Share                      (0.17)            (0.60)
Weighted average number of shares
in issue (‘000)                             863 053           863 053

Diluted weighted average number
of shares in issue (‘000)                     863 053         863 053


SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                     Audited     Audited
                                    As At 28    As At 28
                                    February    February
                                        2021        2020
                                       R’000       R’000
Assets
Current Assets
Short-term loan                        1 085           -
Trade and other receivables              316         136
Cash and cash equivalents                  4           1
                                       1 405         137
Total Assets                           1 405         137

Equity and Liabilities
Equity
Amount attributable to equity       (22 366)    (21 270)
holders
Non-controlling interest                   -        (31)
                                    (22 366)    (21 301)

Liabilities
Current Liabilities
Other financial liabilities           18 404      16 727
Trade and other payables               5 367       4 698
Bank overdraft                             -          13
                                      23 771      21 438
Total Equity and Liabilities           1 405         137


SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                      Share   Capital   Equity due   Accumulated           Amount          Non-      Total
                    capital   reserve    to change      earnings     attributable   controlling     equity
                                                in        (loss)        to Equity      interest
                                         ownership                        Holders
                      R’000     R’000        R’000         R’000            R’000         R’000      R’000
Balance at
01 March 2019        85 020     5 000      (2 459)     (103 658)         (16 097)          (32)   (16 129)

Total
comprehensive             -         -            -       (5 173)          (5 173)             1    (5 172)
loss for the
period
Release on non-
controlling
                          -         -            -             -               -              -          -
interest on share
purchase
Issue of shares           -         -            -             -               -              -          -
Balance at
29 February 2020     85 020     5 000      (2 459)     (108 831)        (21 270)           (31)   (21 301)

Total
comprehensive
earnings/(loss)           -   (5 000)            -         3 935         (1 065)              -    (1 065)
for the period
Disposal of
subsidiaries
recognized                -         -      (2 459)       (2 490)            (31)            31           -
directly in
equity
Balance at
28 February 2021     85 020         -            -     (107 386)        (22 366)             -    (22 366)


SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS

                                       Audited      Audited
                                     12-months    12-months
                                         to 28        to 28
                                      February     February
                                          2021         2020
                                         R’000        R’000
Cash flows from operating
activities                             (2 602)         (23)
Cash flows from investing
activities                               3 233         (96)
Cash flows from financing
activities                               (615)            -

Total cash movement for the
period                                      16        (119)
Cash and cash equivalents at the
beginning of the period                   (12)          107
Cash and cash equivalents at end
of the period                                4         (12)


COMMENTARY

1.   BASIS OF PREPARATION

     These Results are extracted from audited consolidated annual
     financial statements but is not itself audited. The directors take
     full responsibility for the preparation of this report and confirm
     that the financial information has been correctly extracted from the
     underlying financial statements.

     The audited consolidated annual financial statements for the year
     ended 28 February 2021 are available at:
     http://minerestoration.co.za/media/sens-announcements/

     The Results have been prepared in accordance with IAS 34 – Interim
     Financial Reporting, the South African Institute of Chartered
     Accountants (“SAICA”) Financial Reporting Guides, as issued by the
     Accounting Practices Committee and Financial Reporting Pronouncements
     as issued by Financial Reporting Standards Council, International
     Financial Reporting Interpretations Committee (“IFRIC”) and the
     requirements of the South African Companies Act, as amended, and the
     Listings Requirements of the JSE Limited (“JSE”).

     Notwithstanding the insolvency of the Company and the fact that it
     has limited activity, the directors are satisfied that the group will
     still be able to settle its obligations and realise its assets as
     measured in terms of IFRS as applicable to going concern.
     
     The audited consolidated financial statements have been prepared
     using accounting policies that comply with International Financial
     Reporting Standards (“IFRS”) and which are consistent with those
     applied in the preparation of the audited financial statements for
     the year ended 28 February 2020.

     These Results were prepared under the supervision of T Makgolane the
     Financial Director of the Company.

     Shareholders are advised that the information contained in the
     announcement is also available at:
     https://senspdf.jse.co.za/documents/2021/jse/isse/mri/ye21.pdf

2.   FINANCIAL RESULTS AND FUTURE PROSPECTS

     MRI operated as a cash shell throughout the current financial year.
     The Board focused on reducing all corporate costs whilst pursuing the
     acquisition of Langpan Mining Co Proprietary Limited (“Langpan”). The
     Board has satisfied themselves that the group is in a position to
     continue as a going concern and that it has access to sufficient
     borrowing facilities to meet its foreseeable cash requirements.

     On 10 October 2019, the group announced on SENS that it had entered
     into a share purchase agreement with the shareholders of Langpan, in
     terms of which the Vendors would dispose of their entire shareholding
     (100%) in Langpan for an aggregate purchase consideration of R550
     million, to be settled through the issue by MRI of 137 500 000 000
     shares to the Vendors (“Langpan Transaction”).

     The advent of the novel coronavirus created significant uncertainty
     in global capital and commodity markets. In order to protect the group
     and the Langpan Transaction, the transaction stakeholders approved a
     restructure   of   the  underlying   transaction   to   mitigate   any
     uncertainty. The Board reviewed the revised structure and found the
     Langpan Transaction to have the same commercial merits as before.
     This prompted the Board to sign a refreshed purchase agreement, on
     essentially the same terms and conditions as before, on 13 August
     2020.

     The Board is confident that the acquisition of Langpan will
     recapitalise the Company and allow for the Company’s successful
     reinstatement on the Alternative Exchange of the JSE.

3.   HEADLINE LOSS PER SHARE (“HLPS”)

     Reconciliation of losses to headline losses attributable to equity
     holders of the parent:



                                         Audited 12-  Audited 12-
                                        months to 28 months to 28
                                            February     February
                                                2021         2020
     Earnings/(loss) per share
     (cents)                                   0.45        (0.60)
     Diluted earnings/(loss) per
     share (cents)                             0.45        (0.60)
     Headline loss per share
     (cents)                                 (0.17)        (0.60)
     Diluted headline loss per
     share                                   (0.17)        (0.60)

     HLPS Calculation
     Earnings/(Loss) for the
     period (R’000)                           3 935       (5 172)

     Reversal of capital reserve            (5 000)             -
     Gain on disposal of
     subsidiaries                             (429)             -
     Deferred tax on impairments
     of assets                                    -             -

     Headline loss                          (1 494)       (5 172)

     Weighted average number of
     shares in issue (‘000)                 863 053       863 053
     Actual number of shares in
     issue (‘000)                           863 053       863 053

4.   CHANGES IN SHARE CAPITAL

     Since the last reporting period there have been no changes in issued
     share capital.

5.   EVENTS AFTER THE END OF THE REPORTING PERIOD

     Directorate Changes:
     • On 14 June 2021 George Sebulela resigned as a director of the
       Company.
     • On 23 July 2021, the Board appointed Vincent Madlela as a lead
       independent non-executive director.

     Additionally, Board subcommittees were also reconstituted as
     follows:
       - Combined Audit and Risk Committee: Alistair Collins (Chair),
         Michael Miller and Vincent Madlela.
       - Remuneration and Nomination Committee: Michael Miller
         (Chair), Alistair Collins and Vincent Madlela.
       - Social and Ethics Committee: Vincent Madlela (Chair), Alistair
         Collins and Michael Miller.

     The Company continues to evaluate the Board and committees and
     following the AGM and the conclusion of the Langpan Transaction, will
     be looking to include additional independent members to strengthen
     the governance structures of the Company.

6.   OTHER FINANCIAL LIABILITIES

     In early 2017, an angel investor re-capitalised the Company through
     a subordinated debt facility in order to settle claims, cover working
     capital and transaction related costs for the Langpan Transaction,
     providing support so as to maintain the Company’s solvency and to
     ensure that the Company is able to continue operating as a going
     concern. This support had been maintained throughout the period under
     review.

     The remaining increase in other financial liabilities relates to trade
     payables in the ordinary course of business including interest
     charges.

7.   OTHER FINANCIAL ASSETS

     With respect to supporting the Langpan Transaction, on 1 September
     2018, R3,71 million was provided on an unsecured short term debt basis
     to Langpan to cover transactional related expenses. As at 28 February
     2021, of this total loan amount, the outstanding balance was R1,09
     million.

8.   AUDITOR’S OPINION

     During the period under review, the Company changed its independent
     auditor from BDO to Ngubane & Co (Jhb) Inc. Ngubane & Co (Jhb) Inc.
     was appointed on 11 December 2020 and commenced with the audit of the
     financial year 2020, which they signed off and issued an unqualified
     opinion thereon, on 30 April 2021.

     The group’s independent auditor has audited the consolidated
     financial statements for the year ended 28 February 2021, from which
     the Results have been extracted, and have issued an unqualified
     opinion. The auditor’s report contained the following two emphasis
     of matter paragraphs relating to a material uncertainty related to
     the Company’s going concern as well as the disposal of subsidiaries:

     Emphasis of Matter – Material Uncertainty Related to Going Concern
     “We draw attention to Note 25 of the consolidated financial
     statements, which indicates that the group had accumulated losses of
     R107 million for the year ended 28 February 2021 and, as of that date,
     the group’s total liabilities exceeded its total assets by
     R22 million. As stated in Note 25, these events, and conditions,
     indicate that a material uncertainty exists that may cast significant
     doubt on the group’s ability to continue as a going concern. Our
     opinion is not modified in respect of this matter.”

     Emphasis of Matter – Disposal of Subsidiaries
     “We draw attention to Note 15 of the consolidated financial
     statements, which indicates that the company disposed of all its
     subsidiaries during the year ended 28 February 2021. Our opinion is
     not modified in respect of this matter.”

     A copy of the auditor's report is available for inspection on the
     Company’s website at www.minerestoration.co.za/sens-announcements/
     and at the Company's registered office.

9.   GOING CONCERN

     The financial period under review reflects a challenging financial
     period, with a net loss after tax of R1.1 million (2020: R5.1 million)
     and the group’s total liabilities exceeding its assets by R22 million.
     The directors are confident that the acquisition of Langpan will
     adequately recapitalise the Company and ensure the successful
     reinstatement of MRI’s listing on the JSE Alternative Exchange. The
     Board remains confident that the Company retains the continued support
     of its major shareholders to provide additional funding should other
     sources not be forthcoming.

     The Board has a reasonable expectation, having regard to the current
     status and the future strategy of the Company, that the Company will
     have sufficient resources to continue as a going concern and have
     therefore concluded that it is appropriate to prepare the financial
     statements on a going concern basis.

     Accordingly, the financial statements do not include the adjustments
     that would result if the Company was unable to continue as a going
     concern.

11. DIVIDENDS

     No dividend was declared for the year ended 28 February 2021 (2020:
     Nil).


CORPORATE INFORMATION

Postal address: PO Box 866, Rivonia, 2128

Registered and Physical address: Lower Ground Floor Block F,
Pinmill, 164 Katherine Street, Sandton, Gauteng, 2196

Tel no:+27 (0) 11 036 3100
Fax no:+27 (0) 86 654 6818
Web: www.minerestoration.co.za

Board of Directors: V Madlela*, A Collins*, MJ Miller#
(Chairman), MM Movundlela (CEO), TA Makgolane (FD).
(#Non-Executive, * Independent Non-Executive)

Company Secretary: Neil Esterhuysen & Associates Inc

Transfer    Secretaries:   Computershare    Investor Services
Proprietary) Limited, Rosebank Towers, 15 Biermann Avenue,
Rosebank, 2196, PO Box 61763, Marshalltown 2107

Auditor: Ngubane & Co (JHB) Inc.

Designated Advisor: Merchantec Capital


Johannesburg
8 September 2021

Designated Adviser
Merchantec Capital

Date: 08-09-2021 05:30:00
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