integrated annual report ended 31 march for the year 2017 · 2 wescoal integrated annual report for...

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INTEGRATED ANNUAL REPORT

2017

DELIVERING DYNAMIC GROWTH WITH PURPOSE

for the year ended 31 March

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119SHAREHOLDERS120 Analysis of shareholders

121 Non-public breakdown

121 Wescoal stakeholder engagements

02GROUP OVERVIEW2 Wescoal at a Glance

3 Highlights of 2017

4 Chairman’s Message

6 Wescoal business model

8 Geographic Footprint

9 Operations

• Mining

• Trading

10 Leadership• Board of directors

• Executives

INDEX

24GROUP PERFORMANCE26 Chief Financial Officer’s Review

27 Resources summary

39CORPORATE GOVERNANCE40 Corporate governance and Board

Committees

43 Remuneration Governance and Policy

48 Nominations Committee

51 Social and Ethics Committee

53 Risk Management

55ANNUAL FINANCIAL STATEMENTS57 Audit and Risk Committee report

60 Directors’ responsibilities and approval

61 Directors’ report

66 Independent auditor’s report

72 Financial statements

1 Scope of report

1 Board responsibility statement

The design of the Wescoal FY2017 report is formatted on the molecular structure of coal.

13OPERATING PERFORMANCE 14 Chief Executive Officer’s Report

16 Stakeholders

19 Sustainability

• Sustainable Development

• Safety, Health and Environment

22 Corporate Social Investment• Black Economic Empowerment

39CORPORATE GOVERNANCE40 Corporate governance and Board

Committees

43 Remuneration Governance and Policy

48 Nominations Committee

51 Social and Ethics Committee

53 Risk Management

WESCOAL Integrated Annual Report for the year ended 31 March 2017

SCOPE OF REPORTThe Wescoal Holdings Limited Integrated Annual Report for FY2017 presents to stakeholders comprehensive information enabling them to assess the Group’s economic, social and environmental performance.The report has been prepared in compliance with the South African Companies Act, No 71 of 2008, the Listings Requirements of the Johannesburg Securities Exchange (JSE), the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) and in line with the recommendations of the King Code and Report on Governance Principles for South Africa 2009 (King III).

The financial statements of the group and company have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), International Financial Reporting Interpretations Committee (IFRIC), the Companies Act of South Africa and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting pronouncements as issued by the Financial Reporting Council.

The Group's key stakeholders include: investors, shareholders, mining analysts and media; customers; employees; regulatory authorities and bodies; business partners; the community; and government.

The report covers the Group’s activities and operations from 1 April 2016 to 31 March 2017. Comparative historical information is presented where relevant as an insight into future plans. This report outlines Wescoal’s performance in the year under review in terms of the company’s strategy and business model, the impact of the external environment in which it operates, future plans and how they will be achieved.

The report is aimed primarily at shareholders and investors but also addresses the interests and concerns of other stakeholders wherever possible. Forward-looking statements, including, Wescoal’s future business prospects, revenues and income, in the IAR2017 are necessarily estimates in the best judgment of the senior management and directors of Wescoal and may not reflect the actual outcome of performance or achievements of the Group. The Group undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

Any queries regarding this Integrated Annual Report or its contents should be directed to:

Izak van der WaltChief Financial Officer

Tel: +27 11 049 8611 I Fax: +27 11 570 5848

Email: [email protected]

Head Office: 1st Floor Cypress Place, 142 Western Service Road, Woodmead.

Board responsibility statementThe Wescoal Board of directors confirms its responsibility for the integrity of the Integrated Annual Report, the content of which has been collectively assessed by the directors who believe that all material issues have been addressed and are fairly presented.

Robinson RamaiteNon-executive Chairperson


WESCOAL AT A GLANCEWescoal Holdings Limited mines, processes, supplies, sells and distributes coal and coal-related products through its two divisions – Mining and Trading.

Wescoal Holdings Limited GROUP OWNERSHIP

The Mining Division consists of three mines and a processing plant located in the Mpumalanga province and the Trading Division is made up of three depots countrywide and a logistics network covering southern Africa. The JSE-listed Group’s FY17 revenues were R2.11 billion with total coal sales approaching four million tons on an annualised basis.

100%Wescoal Mining

(Pty) Ltd

100%Proudafrique

(Pty) Ltd

Wescoal Exploration (Pty) Ltd

As at 31 March 2017

100%Wescoal Trading

(Pty) Ltd

100%Blanford 006

(Pty) Ltd

JJP companies(JJP) Portion 16 (of portion 2)

of Vlakvarkfontein 213 (Pty) Limited

(JJP) Portion 6 (of portion 2) of Vlakvarkfontein 213

(Pty) Limited(JJP) RES Portion 2 of farm

Vlakvarkfontein 213 (Pty) Ltd

100%Wescoal Mineral

Recoveries (Pty) Ltd

VISIONWescoal’s vision is to be the

leading junior coal miner with a sustainable resource base and a coal trading operation

that strives for wealth creation for all stakeholders and the

country as a whole.

WESCOAL Integrated Annual Report for the year ended 31 March 2017 3

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HIGHLIGHTS OF 2017

FINANCIAL HIGHLIGHTS

MULTIPLE COAL SUPPLY CONTRACTS CONCLUDED:

KEATON ACQUISITION unconditional from 31 March 2017 – Enlarged Group will benefit from:

DIVERSE ASSET AND SHAREHOLDER BASE

ECONOMIES OF SCALE AND SYNERGIES

SCALE OF PRODUCTION AND RESOURCE SIZE

BALANCE SHEET AND FREE CASH GENERATION

ESKOM7.8 MILLION

TONS OF COAL

over a five-year period

EXPORTS3 MILLION TONS OF

COALover a three-year period

Increased sales to other domestic coal consumers and business initiatives

as we continue to DIVERSIFY REVENUE STREAMS

MINING PRODUCTION

increased 82% to

3.371KT(FY16: 1.851kt)

OPERATIONAL EBITDA

increased by 34% to

R203.5m (FY16: R152.1m)

REVENUE increased 33% to

R2 118m(FY16: R1 590m)

NORMALISED HEPS

up 97% to

53.4CPS (FY16: 27.1cps)

TRANSFORMATION AGENDA SPEARHEADED BY BEE TRANSACTION CONCLUDED:

GUARANTEED BLACK

SHAREHOLDING in excess of 50% for the

next five years

R178m EQUITY

injected into the business

Excludes impact of non-cash BEE discount (32c), BEE share dilution (7c) and once-off Keaton transaction cost (3c).


“ Wescoal has taken the first step towards realising the sector’s consolidation imperative by concluding the acquisition of Keaton Energy Holdings. ”Robinson RamaiteNon-Executive Chairperson

CHAIRMAN’S MESSAGE

‘Transformation key in Wescoal’s ambitions’

The year has seen Wescoal make gains across the Board compared to FY16. The key target has been to fully and truly transform the company and become a significant player in the South African coal mining space.

True EmpowermentThe most significant commitment was to ensure that Wescoal becomes a fully empowered and transformed company with a targeted black shareholding of over 50%. To this end, the Group concluded a Black Economic Empowerment investment initiative that secured 59% shareholding by historically disadvantaged black South Africans. The proceeds of this empowerment transaction were used for funding business and growth opportunities. This transaction was fundamental to ensuring that Wescoal achieves its medium and long-term production and growth targets.

The transformation objective adopted by the Group is also reflected in the re-energised and expanded programmes of enterprise development, corporate social investment and employment equity policies. Increased funds and attention have accelerated Wescoal initiatives in human resource developments, employee housing and living conditions, mine and host community development and procurement and enterprise development. (pages 22 to 23).

The view that we have taken is that transformation is not only a regulatory requirement and in keeping with socio-political guidelines, it is also a massive contributor to business on all levels, from a stable and productive workforce to stakeholder rewards, the latter being evident in two dividends declared during the period as a reward for shareholder confidence and support.

Consolidating the junior coal mining spaceThe South African coal market requires substantial investment and recapitalisation to meet both domestic and export requirements. As part of its growth strategy, Wescoal has ambitions to play a significant role in consolidating the junior coal mining sector.

Wescoal has taken the first step towards realising the consolidation imperative by concluding the acquisition of Keaton Energy Holdings. Over and above the enlarged group benefiting from an increased resource base, diverse asset and shareholder base, economies of scale, synergies and enhanced production and cash generation, the transaction creates an entity with enough scale to realistically take aim at becoming a major player in the sector.


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Doing the basics rightOur transformation and consolidation ambitions have not detracted the Group from focusing on the basics of ensuring the Group continues to operate from a solid platform built around operational discipline and excellence. This is evidenced by the solid underlying operational and financial performance achieved in the year under review.

In closingThe past year has been a meaningful step towards achieving Wescoal’s key objectives and I compliment the executive team on a job well done with a heartfelt thanks to the Board of Directors who have guided the process while maintaining the highest levels of good governance.


SWAZILAND

LESOTHO

WESCOAL BUSINESS MODEL

WESCOALWESCOAL MINING

Mining operations concentrated in

Mpumalanga

Elandspruit Colliery

SUPPLY ROUTE

Intibane Colliery

Khanyisa Colliery

Wescoal’s customers include

• Eskom

• Export

• Domestic customers


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WESCOAL TRADINGWESCOAL HOLDINGSInvolved in the mining, processing, supply, sales and distribution of coal and coal-related products.

The Trading division is a leading coal distributor in South Africa. It is a strategic distribution company that specialises in the supply of coal by road and rail to the point of consumption throughout South Africa.A nationally recognised brand with executives having a wealth of experience in the coal supply and logistics business

SUPPLY ROUTE

Distributed through depots operational in Gauteng and the

Western Cape to a host of long standing customers,

some of whom are blue chip and operating in a range of industries,

from power generation, food and dairy producers, beverage

sector, mining and other manufacturing

industries.


GEOGRAPHIC FOOTPRINT

Wescoal Trading areas of activity

Wescoal Trading depots(Pretoria, Bellville and Benoni)

Wescoal Mining(Elandspruit)

Processing Plant

SWAZILAND

LESOTHO

WESTERN CAPE

EASTERN CAPE

KWAZULU-NATALFREE STATE

NORTH WESTMPUMALANGA

LIMPOPO

GAUTENG

NORTHERN CAPE

BELLVILLE

PRETORIA

KHANYISA

ELANDSPRUIT

INTIBANE

As at 31 March 2017


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Mining The Mining Division consists of three mines and a processing plant located in the Mpumalanga province – Elandspruit, Khanyisa and Intibane.

ElandspruitThe Elandspruit Mine is located eight kilometers (“km”) west of the town Middelburg with location 25.80982°S latitude and 29.38474°E longitude. The site is approximately 200km from Johannesburg. It comprises of portions of the farm Elandspruit 291 JS. The Department of Water and Sanitation (DWS) awarded a Water Use License (WUL) to Elandspruit in March 2015 allowing for development of the mine under all the necessary compliance requirements. As previously reported mining commenced during July 2015 and full planned production was achieved in October 2015. Since then, additional box-cuts were opened and the mine currently produces more than 210 000 tonnes per month from the opencast area.

Safety improvements were realised through relocation of the D20 road which also reduced their risk to communities by separating the mine and civilian traffic. The new road has an upgraded intersection in an open area for improved visibility and safety. During the year Wescoal maintained the D20 to ensure the safety of the public road. The new road was tarred for a distance in excess of 4 kilometers.

During the last period the pollution control and water management systems for the current operations were completed, this included completion of the Pollution Control Dam and associated trenches with silt traps.

Processing

The Wescoal Processing Plant is located approximately 19km south of the town Middelburg with location 25.89178°S latitude and 29.43034°E longitude. The processing facility is currently the primary coal processing facility for the Elandspruit Mine, but can be utilised for the upgrading of ROM in the vicinity if needed. The plant was purchased during 2014 and since then Wescoal has carried out various upgrades and made changes to accommodate its customers’ product quality and quantity requirements.

A WUL for the processing plant was transferred to Wescoal in February 2017 and is valid for 10 years. Additionally, Wescoal purchased the property adjacent to the plant in order to accommodate the discard for the Elandspruit LOM. During the past year modifications were made to the processing plant. An additional modular plant was commissioned to maintain and increase the processing capacity. The combined processing capacity now exceeds 200 000 tonnes per month.

Long-term coal supply agreements were concluded with Eskom during August 2016, and 3 year off take agreements were concluded to supply into the export market.

Wescoal’s market includes Eskom, exports and domestic, as well as end-users of small nuts, peas, grains and duff.

Intibane ComplexThe Intibane Complex is located approximately 14km west of Ogies in Mpumalanga. It comprises portions of the farm Vlakvarkfontein 213 IR, and covers an area of 167.78ha.

The Intibane 2 area is located adjacent and immediately to the north of the mined out Intibane Colliery (Intibane 1). The R555 road passes to the north of the property and the Kendal Power Station is situated 13km east of the property. The location of the Colliery is 26.0592670S latitude and 28.888322oE longitude.

Production on Intibane 2 commenced during FY16, with the existing infrastructure on Intibane 1 being utilised. The crushed ROM produced, is partially upgraded through an XRT plant, and is supplied to various local domestic clients and to contracted export markets.

Khanyisa ComplexThe Khanyisa Complex comprises the historical Khanyisa mining area (mined-out), the Catwalk and the Triangle Areas, all of which have been consolidated into one mining right.

The complex is located 10km west of Ogies in Mpumalanga. It comprises portions of the farm Heuvelfontein 215 IR. The location of the complex is 26.042950°S latitude and 28.973325°E longitude.

The process to consolidate the Khanyisa Mining Complex into one mining right has been completed, with the mining right underpinned by a joint venture in respect to the Triangle Area (Wescoal own an effective 35% of the Triangle Area and manages the complex). The EMP for the integrated mining area was approved in October 2016 and the amended Mining Right was granted in May 2017.

A WUL for the total integrated area was awarded in May 2016.

Whilst the Khanyisa Complex was on care and maintenance during FY17, the focus of the care and maintenance activities were on rehabilitation and preparing the area for full production to commence during FY18.

Trading Trading is a leading coal distributor in South Africa. It is a strategic distribution company that specialises in the supply of coal by road and rail to the point of consumption, to diverse customers and industries throughout South Africa, including blue chip companies ranging from power generation to manufacturing sectors.

The company offers a complete range of coal products, including small nuts, industrial peas and duff countrywide. Its products and services include:• Sourcing suitable coal product for clients• Securing the delivery of product as and when required• Technical support for steam generation• Securing markets for new producers such as other junior

coal miners

During the year under review a decision was taken to close Port Elizabeth and Worcester facilities. A termination of services in Stanger will reduce involvement in depot structures and shift to a more procurement and logistics based business with the effect of reducing business risk and operational gearing.

OPERATIONS


The Board

LEADERSHIPDIRECTORS

Back row l-to-r: Jacobus Gustavus ‘Kosie’ Pansegrouw, Non-executive Director; Kabela Maroga, Independent Non-executive Director; Muthanyi Robinson Ramaite, Non-executive Chairman of the Board; Teresita van Gaalen, Lead Independent Director; Humphrey Mathe, Independent Non-executive Director.

Front row l-to-r: Bothwell Mazarura, Chief Financial Officer, Group Finance Director; Waheed Sulaiman, Chief Executive Officer; Thivha Tshithavhane, CEO Mining (post FY17 appointment).

Waheed Sulaiman (43)Chief Executive Officer

BSc Chemical Engineering University of Cape Town and BCom University of South Africa

Years with the Group: 2

Waheed is the Chief Executive Officer of Wescoal Holdings Limited. Prior to this he filled the role of Wescoal Commercial and Strategy Director. Before joining Wescoal he worked in various roles at BHP Billiton’s South African operations.

Robinson Ramaite (48)Non-executive Chairman

Master of Management (Public and Development Management) – University of the Witwatersrand, BJuris – University of the North


Robinson is a former Director-General of the Department of Public Service and Administration and a former advisor to various ministers of parliament. He has been involved in the mining sector for more than 10 years and sits on the Boards of various listed and non-listed companies.


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Teresita van Gaalen (59) Lead Independent Non-executive Director

Her qualifications and studies include Sociology; Strategic Marketing (Unisa); N Dip PR and Communications (Damelin); Admistración y Dirección de Empresas (ESADE), LED, IEDP (GIBS). She is a member of the Audit Committee and Chairperson of the Remuneration and Nominations Committee. Chairman of the Independent Board. CPRP and Fellow of the Institute of Directors of Southern Africa.


Teresita is the principal consultant at tvg&associates specialising in strategic development, business expansion and transformation across a number of industries throughout the Southern Africa region including logistics, financial services and automotive. Skills and competencies developed from tenures as chief executive for various companies including Changan Southern Africa, Commercial Motors Botswana, managing director of Subaru Southern Africa for the Barloworld Group, member of the Barloworld Automotive Executive Management Board as well as her role in the positioning and production of Hyundai and Volvo.

Kabela Maroga (37) Non-executive Director

(BCom (Financial Accounting) – University of Pretoria, BCompt Hons/Certificate in the Theory of Accounting – University of KwaZulu-Natal, Graduate Diploma in Mining Engineering – University of the Witwatersrand). She is an Independent Director and Chairperson of the Audit and Risk Committee.

Kabela is a qualified chartered accountant with more than 13 years’ experience in the corporate financial environment. She has held Management positions in various sectors and was the Chairman of Interactive Intelligence South Africa. She is Chairman of KEW ICT Outsourcing and serves on several other boards including Limpopo Economic Development Agency (LEDA) and Corridor Mining Resources.

Bothwell Mazarura (44) Chief Financial Officer(Post FY16 appointment) Executive Director – Chief Financial Officer Chartered Accountant (B.Acc.Sci)


Position: Executive Director – Chief Financial Officer

Bothwell previously held various senior financial roles at Lonmin Plc from 2010, including Head of Group Finance, Head of Treasury and Acting Chief Financial Officer. Prior to joining Lonmin, he was a Partner at Deloitte, a position he had held since 2002. Bothwell also spent some time in the United Kingdom working for Deloitte. He also serves the Cancer Association of South Africa (CANSA) as a non-executive director chairing the Audit and Risk Committee.

Dr Humphrey Mathe (66) Independent Non-executive Director

MSc – Rhodes University, PhD – University of Natal


He is a member of the Board and Chairperson of the Social and Ethics Committee.

Humphrey is a qualified geologist who is currently the CEO of Tranter Resources (Pty) Ltd. Previously he was the CEO of Scinta South Africa (Pty) Ltd, a coal resources company; the Executive General Manager: Corporate Services at Exxaro Resources Limited; and, prior to that, COO and Executive Director of Eyesizwe Coal (Pty) Ltd, where he was in charge of the Eyesizwe coal mines and growth opportunities.

He has worked in the mining industry all his life, and has in excess of 36 years’ experience. Among others, he worked as a Senior Geologist for Shell South Africa Minerals Division in southern Africa. While at Shell, he was part of the team that discovered the Goldridge gold deposit in the North West province of South Africa. He was the Project Manager and Chief Geologist for West Rand Consolidated Mines Limited where he was involved in the development and mining of the Kalahari Goldridge Mine. He was also the Chief Exploration Geologist for Harmony Gold Exploration involved in the exploration of various greenstone belts in southern Africa and Peru, South America. He had a stint as lecturer at the Geology Department of the University of Zululand, and was a finalist of Boss of the Year in 2008.

Thivha Tshithavhane (39) CEO Mining and Executive Director

BSC Chemical Engineering (UCT) and MDP (Unisa)


Thivha previously headed up Business Development for the company. As a Chemical Engineer with operational, process design and project management experience in the mineral processing industry spanning over 12 years. He has proven ability to manage multi-disciplinary projects and mining production operations while holding senior manager with Xstrata Alloys (Glencore Alloys). He has extensive experience in minerals projects development, mineral processing, and plant design and plant construction. He was General Manager of United Manganese of Kalahari (UMK); an operation consisting of opencast mine with a processing plant.

Kosie Pansegrouw (56) Non-independent Director

(BCom Accounting – RAU)


Kosie is a member of the Board, Audit and Remuneration and Nominations committees. He is the Managing Director of Guvon Investments (Pty) Ltd, a diversified company with direct and indirect investment in property management and development, tourism, laundry, dry cleaning and transport. He has vast business experience and serves on the Boards of various companies.


Dutch Botes Head of Wescoal Mining

Dutch is a qualified mining, electrical and mechanical engineer who has over 34 years experience in the mining sector. He was the Chief Executive Officer at Umcebo Mining, a significant junior coal mining house. While in his position at Umcebo Mining, Dutch successfully brought six new coal mines into production, including an underground operation at Klippan Colliery. Prior to joining Umcebo Mining, he was General Manager at various BHP Billiton Energy Coal South Africa operations, including Middelburg Mines, Khutala Colliery, Optimum Colliery, Koornfontein Mines and Delmas Colliery. He was also General Manager of Hotazel Manganese Mines, an operation consisting of underground and opencast mines with various processing plants, including a sinter operation.

Izak van der Walt General Manager Operations FinanceIzak is a Chartered Accountant (SA),

holding BCompt, BCompt Honours and CTA qualifications. He completed articles with Price Waterhouse Coopers. He has 14 years of experience in the mining industry with BHP Billiton in various finance, capital investment, project management and procurement roles spanning across Africa, Australia and Singapore. Recently he served as divisional Financial Director to the manufacturing business of Dawn Ltd.

Bongani Hlope He heads up Group Human Resources. He has

15 years Human Resources experience in mining, banking, petroleum and civils projects. Bongani has pioneered the role of Group Human Resources creating a platform for transformation and human capital strategy. Bongani holds a degree in law, a postgraduate degree in human resource management, a diploma in directorship and has completed a business strategy programme with INSEAD in France.

Mike BerryHe heads up Wescoal Trading. He is a Chartered Accountant by profession with experience

in Corporate Finance, Mergers and Acquisitions and Corporate Recovery. For the past 19 years Mike has been involved in the Coal Merchant and Distribution industry.

Vikesh DhanooklalHe is Group Legal Adviser and Company

Secretary. He holds BA and LLB degrees from the University of KwaZulu-Natal, a certificate in Mining and Prospecting Law from the University of the Witwatersrand and is a graduate of the fundamental management programme from UNISA’s Graduate School of Business Leadership. He is an admitted Attorney of the High Court of South Africa with over 16 years of post-admission experience. Vikesh has held various positions in the field of Mining and Property Law with two major mining houses.

EXECUTIVES

LEADERSHIP continued

The Board continued


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HUMAN CAPITALWescoal realises competencies, capabilities and experience aligned with the organisation’s governance framework, risk management and ethical values. The leadership understands, develops and implements the organisation’s strategy through management and collaboration.

OPERATING PERFORMANCE

Elandspruitaveraged

200ktpm

OPERATIONAL EBITDA

UP 34%


“ Our transformation agenda was spearheaded by the implementation of a BEE transaction which not only guaranteed black shareholding of more than 50% for the next five years, but also injected about R178m new equity. ”Waheed SulaimanChief Executive Officer

CHIEF EXECUTIVE OFFICER’S REPORT

Milestone achievements realised on a solid platformIntibane is averaging 75ktpm in line with expectations. All regulatory consents are now in place for mining at the Khanyisa complex. Production is expected to ramp up to approximately 290kt during the first half of FY18.

The Trading division has benefited from a concerted optimisation and well-executed right sizing exercise. Operational improvements, coupled with a stronger debtors book have helped the business to become more robust, allowing it to better weather adverse economic conditions and increase shareholder returns.

The company’s growth and corporate activities preclude specific cost comparisons to previous years, however, significant overhead cost reductions have been embedded and optimisation projects have been operationalised.

We achieved significant successes in securing multiple coal supply contracts during FY17, including a much anticipated coal supply agreement with Eskom which will see the delivery of some 7.8 million tons of coal over a five-year period. New business development ventures have seen us secure increased revenues from other domestic and export customers. Our business is no longer focused on a single commodity and single client – we have grown into

Initiatives over the past two years have enabled the company to achieve a series of significant milestones. The company continues to go from strength-to-strength and has emerged more robust and sustainable from a challenging FY17. Business risks have been well managed, operations are stable and predictable, our balance sheet is healthier, cash flows are more certain, transformation initiatives are starting to gain traction and we have unlocked exciting growth prospects. This against the backdrop of embedding the management team, difficulties in the commodities markets and the unsettled economic climate.

The results of our capital allocation program are evident at the Elandspruit operations which have matured into the stable, predictable flagship operation originally contemplated. Production from the Elandspruit mine has consistently averaged more than 200ktpm during FY17.

Innovative improvements and expansions at the Wescoal Processing Plant resulted in us surpassing original expectations of beneficiating around 165ktpm of ROM feed. This facility is now capable of consistently treating more than 200ktpm of ROM feed.


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a multifaceted Group with a presence in the domestic and international thermal coal markets, as well as coal logistics infrastructure. We see opportunities to further diversify and grow revenue streams in FY18.

Two years ago, Wescoal announced its ambitions to play a significant role in the consolidation of the local coal sector. The move to acquire Keaton Energy Holdings Limited initiated during FY17 marked the first step in these ambitions. The transaction closed in July 2017. The Keaton business offers the benefits of consolidation, alignment of infrastructure, regional synergies and also offers opportunities to expand existing markets and enter new ones. It will result in an enlarged business with coal resources in excess of 230mt, four operating mines and three processing plants. Combined ROM production from the Group is expected to exceed 6mtpa and revenues should exceed R3 billion.

During May 2017 regulatory approvals were obtained allowing Wescoal to consummate a joint venture at the Khanyisa complex. The joint venture company, which is 35% owned by Wescoal, owns resources contiguous to existing wholly owned Wescoal resources. The transaction secures additional resources next to Wescoal’s Khanyisa mine and also unlocks operational synergies in the area.

We will focus on embedding the Keaton operations and extract synergies between the two companies to increase our resource base and achieve our near-term objective of 8mtpa ROM.

Our transformation agenda was spearheaded by the implementation of a BEE transaction which not only guaranteed black shareholding of more than 50% for the next five years, but also injected about R178 million new equity. This had a galvanising effect on the business as it was instrumental in securing the Eskom coal supply contracts which allowed for the raising of long-term debt. The careful allocation of new equity enabled us to invest in value enhancing growth and other de-risking projects.

We continue to make progress on realising our employment equity plans and have been successful in recruiting two senior managers from designated groups as well as appointing a black Chief Executive Officer for the Mining business.

Some R1.9 million has been allocated to enterprise development. We intend translating entrepreneurial potential into sustainable businesses capable of fitting into the Wescoal

supply chain or be positioned to operate independently in a sustainable manner. The company has also made an investment of approximately R5.6 million in local economic development initiatives aligned with the needs of our host communities. In the period under review the company undertook Corporate Social Investment initiatives ranging from community upliftment projects to renovation of primary school facilities within host communities.

I am excited and optimistic about Wescoal’s future. We have a solid operational platform, blossoming track record of repeatable financial outcomes, de-risked business model and excellent growth options, all overseen by a highly skilled and motivated management team.

My thanks go to all who contributed to the big strides the Group has made – fellow Board members; the executive team and managers, and all our stakeholders. Most importantly heartfelt thanks go to employees throughout the company who have been a vital part of the growing Wescoal.

HDSA OWNERSHIP

OVER 51%

ANNUAL ROMproduction

3.371kt

8 milliontonnes

COAL SUPPLY CONTRACTS OVER

NEXT 5 YEARS


STAKEHOLDERS

Stakeholder engagements

We view communication and relationship management with our stakeholders as integral to our sustainability and a critical part of business strategy. Our stakeholder engagement informs our key strategic discussions and is critical in identifying our material issues and the steps needed to address these.

Wescoal therefore promotes and engages in open and timeous communication with shareholders and other stakeholders at all times.

As a listed company we are particularly focused on our investor relations activities to build our relationships with current and future shareholders. We include the media in shareholder communications as the regulatory framework permits.

We identified stakeholders in terms of our business model, which include strategic partners and Black Economic Empowerment (BEE) shareholders who offer the benefit of in-depth experience, regulators, funders, local communities close to operations, contractors, employees and customers.

We also communicate with stakeholders through our website, stakeholder presentations, this integrated annual report, the Annual General Meeting (AGM), SENS, site visits, proactive and reactive interactions with the media, one-on-one investor meetings and ongoing informal and formal discussions with stakeholders.

A stakeholder evaluation is constantly under review at Group level as well as in the Mining and Trading divisions. This report addresses the high-level stakeholder initiatives.

STAKEHOLDERS ENGAGEMENT MATERIAL ISSUES RAISED ACTION

Shareholders • Interim and final results presentations and teleconferences

• An active website is in place• Dissemination of information

through a defined contact list• Calls with strategic shareholders if

and when required• Regular site visits and investor open

days to mining facilities• Regular engagements with

key shareholders

• Long-term life of mines• Earnings and sustainability of

the company• Dividend payments• Succession planning• Mergers and acquisitions• Black Economic Empowerment

• A concerted effort to change the focus of the business from predominantly a coal trading company to a coal mining company is in progress

• Asset base is being increased• Additional executive management

has been added to support succession planning and corporate activity initiatives

Communities and civil society

• Mining Future Forum• Scheduled meetings with Local

Economic Development forums• Social and Labour Plan initiatives• Corporate Social Responsibility

initiatives (Enterprise Development Community projects-school renovations and road maintenance works)

• Sustainability of ESD initiatives beyond life of operations

• Local Economic Development LED projects and SLP implementation

• Financial support

• Implementation of community bakery initiative

• Implementation of community sewing cooperative initiative

• Corporate Social Responsibility (CSR) Strategy signed off and ready for implementation.

• Engagement of local contractors to refurbish lavatory facilities for the school.

• Engagement of local contractors for mine-site road maintenance

• Contracting of Raizcorp to manage ESD work package

Government and municipalities

• Conference participation• Formal meetings• Participation in public engagement

with Chapter 9 institutions – i.e. Human Rights Commission

• Engagement with municipalities for endorsement of compliance submissions

• Municipal endorsement of SLPs• Company track record

in respect of human rights and environmental management performance

• Wescoal is Historically Disadvantaged South Africans (HDSA) controlled as at the end of March 2017

• Wescoal has implemented a human rights code, the scope of which is adherence to the ILO convention on human rights, collective bargaining rights, abolition of child labour, and prohibition of unfair discrimination and slavery


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Regulators • Annual reporting to the DMR and the Mining Qualifications Authority (MQA)/ Wholesale and Retail SETA(W&RSETA) and with Department of Mineral Resources (DMR)

• Department of Water Affairs• Department of Labour (DoL)• Department of Land Affairs• Department of Trade and

Industry

• Regulatory compliance• MQA facilitation of in-house

workshopping to ensure compliance capacity

• Regular communication is maintained with the DMR

• Implementation of a compliance dashBoard

• Regular update to Board committees (Audit and Risk Committee / Social and Ethics Committee)

• Submission of annual reports to the DMR and DoL

• DMR visits and audits ensure constant communication with the DMR

• DoL visits and audits ensure constant communication with the DoL.

• Whenever necessary, remedial action and rectification measures are implemented

• In-house workshop conducted by the MQA for the skills and Employment Equity Committee.

Employees • Training and development• Quarterly staff

communication sessions• Performance management

programme (PMP)• Written staff communications

and memos• Staff communications sessions• Periodic Policies and Practices audit

• Staff development and career planning

• Setting and monitoring of performance goals in line with the PMP

• Market related and equitable reward and employee benefits

• Employment Equity (EE) and diversity management initiatives

• Review of employee benefits

• Sign-off of Employment Equity Plan to eliminate unfair discrimination

• Fair and consistent implementation of disciplinary and grievance codes

• Consultation of employee representatives Annual Department of Labour submissions on EE

• Activation of the Group EE Forum• Consulting employee representatives

on the submission of Annual Training Reports and Workplace Skills plans

• Display of key labour legislation at the workplace

• Employee engagement survey conducted in 2016

• Implementation of new employee group life and retirement fund options in March 2017

• Implementation of Change Management Policy

Trade unions • Advancing matters of mutual interest

• Change management programmes• Partnering to effect

workplace transformation

• Consultation on reward • Consultation on transformation• Consultation on local

economic development and CSI

• Black Economic Empowerment• Skills development

• Formation of Group EE Forum on transformation

• Co-option of NUMSA to Mining Future Forum to engage skills and Local Economic Development initiatives planned for post life of mine community

• Establishment of mining EE committee• Employment equity consultation with

NUMSA via the Group EE forum and mining EE Committee

Media • Media are invited to interim and final results presentations

• One-on-one engagement with financial and trade editors

• Regular site visits

• Communications with all Wescoal publics on the latest company developments

• One-on-one engagement with financial and trade editors and journalists to ensure that Wescoal’s strategy is well received and accurately reported

• Circulation of press releases• Media alerts through SENS

announcements• Monitoring of media exposure



Contractors • Service Level Agreements (SLAs), outsourced contract agreements

• Discrepancies in outcomes – good relationships and production according to planning

• Continual monitoring takes place to ensure SLAs and outsourced contracts are adhered to and followed – daily reports, weekly production monitoring meetings and monthly reporting against plan

Customers • Formalised business dealings, meetings, telephone conversations, credit checks and reviews

• Competitive pricing structures• Product quality

• Conscious effort to meet expectations where applicable

• Product quality from both the Mining and Trading divisions is continually monitored. On the Trading side, the vast knowledge of the quality of coal for various applications is applied to continually monitor, record, and to improve service deliveries

Suppliers • One-on-one business dealings, presentations on product features and correspondence

• Database of suppliers kept and maintained

• Delivery of products

• Overseen across the Group and updated accordingly

• On time delivery is strived for across both divisions

Financiers • Formal meetings, updated status meetings and feedback sessions

• Loan agreements and financing facilities to Wescoal

• Wescoal has kept its providers of finance informed of relevant developments


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Sustainable DevelopmentWescoal is committed to the rehabilitation of mining activity on an ongoing basis, mines rehabilitate plans in accordance with mine rehabilitation plan. To date, Wescoal has met all rehabilitation requirements. With the aim of conserving the environment and protecting employees and communities, the company is proud to detail its record as follows.

Wescoal sustainability is underpinned by its growth strategy from a junior miner with one opencast mine to the owner and operator of multiple mines. The flagship Elandspruit Colliery which realised steady state production of 2mtpa in the second half of 2015 joining the Khanyisa and Intibane collieries in the fold.

The Wescoal processing plant provides significant operational flexibility to the mining division and has been operating since the second half of FY15.

Distribution centre

The Wescoal Distribution Centre assists in reducing the Group’s carbon footprint by switching coal transportation from road to rail. It also reduces the impact on the national road structure and ensures that the product does not go to ground during transportation, trans-shipment or bulk storage.

The facility allows 10 000 tons, or the loads of 300 road vehicles, of coal per month to be taken off the long haul road network and transported by rail. The approach enhances the company’s environmental protection policies which together with aggressive safety audits and social responsibility programmes form the backbone of our ongoing sustainability for the Group.

Water licences issued by the Department of Water and Sanitation

DWS issued water use licences to Wescoal for operational activities.

The licences are governed by strict adherence and compliance measures, which include a series of specific management guidelines, internal audits and submissions to DWS.

Biological monitoring of the potable water is conducted regularly. During the period under review, Wescoal has had no water or liquid spills or contamination of water sources.

Mine rehabilitation

The process of mining coal disturbs the land. Wescoal is committed to the rehabilitation of mining activity. To date, Wescoal has met all rehabilitation requirements.

Rehabilitation plans are actively executed in accordance with planned and audited schedules across all its mining operations.

SUSTAINABILITY

The Intibane 1 rehabilitation was completed to the planned levels prior to the commencement of the mining of the Intibane 2 area. The Intibane 1 and 2 areas are now managed as one integrated mining area.

At the Intibane Colliery, Wescoal mines alongside farming activity in partnership with a farmer. This means that once Wescoal has rehabilitated the land after mining for coal, the farmer will have the first right of refusal to buy back the land for farming purposes. This is just one of the ways in which Wescoal is striving to ensure the sustainability of land usage in South Africa, as well as acting as a responsible corporate citizen.

Waste management

Wescoal has receptacles in place for hazardous waste which is then professionally removed.

Dust control

Dust levels are monitored and measured regularly by environmental consultants. In accordance with management processes, all abnormal variations are managed within regulatory guidelines. In compliance with DMR regulatory requirements, Wescoal established a system of monthly occupational hygiene measurements. The results show a steady decline in the personal noise and dust exposure levels for high risk activities and job categories according to the independent assessments.

Economic indicators

Wescoal has not received any financial assistance from government or quasi-government organisations.

Cash flow required to run the operation and to pay for capital expenditure is generated from current operations and facilities arranged with bankers. The introduction of cost-saving strategies and careful cash flow management contributed to reducing overall debt and freeing up working capital enabling the group to fund growth from internal sources.

Wescoal, being involved in coal mining and trading, understands that in order to extract product, it will impact the environment. Its cause, effect and rehabilitation initiatives are discussed in the section covering environmental indicators.


Safety, Health and Environment Safety

Wescoal monitors and manages the total safety performance, a key focus area of management, to ensure its employees work in a safe environment.

LTIs – Elandspruit – 3 (FY16 1)

• No LTIs at Khanyisa and Intibane for the last two financial years.

• Corrective controls put in place following Elandspruit and Processing LTIs.

• The Trading Division reported one injury, sustained from a road accident.

Health

Wescoal follows a comprehensive management programme to ensure a healthy environment for employees. All management programmes are designed to incorporate the Mine Health and Safety, Air Quality and other relevant regulations and compulsory codes of practices. An Occupational Hygiene measuring and monitoring system forms part of this programme to ensure that Wescoal operations comply with legislation.

Health and safety initiatives

Wescoal complies with the Mine Health and Safety Act, No 29 of 1996, the purpose of which is to provide for the health and safety of employees and other persons at mines and to:

• Promote a culture of health and safety;

• Provide for the enforcement of health and safety measures;

• Provide for appropriate systems of employee, employer and State participation in health and safety matters;

• Establish representative tripartite systems and conduct inspections, investigations and inquiries to improve health and safety;

• Promote training and human resources development;

• Regulate the employer’s and employees’ duties to identify hazards and eliminate, control and minimise the risk to health and safety; and

• Entrench the right to refuse to work in dangerous conditions.

Employee Wellness Days facilitate HIV/Aids, TB, blood pressure and sugar levels awareness and testing. Counselors are at hand to provide advice and support to employees.

Wescoal Mining appointed four entities to assist with managing compliance with the Safety, Health and Environment (SHE) Management System. A number of external consultants have also been appointed to assist with managing compliance to the Group SHE Management System.

EnvironmentWescoal adheres to an intensive and fully compliant environmental management system as prescribed by the approved environmental management programmes for each operational area.

At Elandspruit Coal Mine, the original Mining Right, Environmental Authorisation and Water Use Licence permits are in place. Construction of a road at the mine necessitated additional permitting, – an environmental authorisation was granted in January 2017, and a Water Use Licence was issued in April 2017. The licensing provisions are integrated in our management systems.

At Wescoal Processing, a Water Use Licence application for the processing plant was issued in February 2017.

At Khanyisa, a new WUL was issued by the DWS in May 2016 for the inclusion of Catwalk and the Triangle project. The Section 102 revision of the Khanyisa EMP for the inclusion of the Triangle Project was approved by the DMR in January 2017.

Intibane had no changes to the EMP or WUL during the year in review.

A section 24 G has been imposed at Wescoal Elandspruit for the construction of the D20 road. The 24 G Application was approved and an Environmental Authorisation was granted. No findings or limitations have been imposed on any of our operations in the reported financial year.

SUSTAINABILITY


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Labour practices and good working environment

Wescoal has a relatively small labour force. The total Wescoal staff component is split between Wescoal Mining, Wescoal Trading and the corporate office.

Unions (March 2017)

NUMSA AMCU NUM

25 0 0

Group employees (March 2017)

MALE FEMALE

African Indian Coloured White African Indian Coloured White Total

80 4 7 13 38 0 7 21 170

Labour relations

Wescoal believes that our employees should be treated with respect and dignity and work in an environment that is free from harassment and unlawful discrimination. We are guided by principles such as those in the ILO Declaration.

Wescoal Holdings (Including its operating subsidiaries, Wescoal Mining and Wescoal Trading) believes that being a responsible employer means being socially and morally responsible to our stakeholders which also include the Constitution of the Republic of South Africa and international conventions to which the Republic is bound and in so far as they apply to us and we can advance their objectives.

Wescoal supports the protection and elevation of human rights and is guided by fundamental principles of human rights, such as those in the United Nations Universal Declaration of Human Rights and the South African Constitution. Our support for these fundamental principles is reflected in our policies and corporate social responsibility strategic actions towards our employees, suppliers, clients, communities where we do business. To this end Wescoal has signed off and implemented a robust Human Rights Code that has been published to all staff and suppliers.


Social and labour plans

As required in terms of Regulation 42(1)(a) of the Mineral and Petroleum Resources Development Act, No 28 of 2002, Wescoal has social and labour plans in place at its mining operations. As part of its social and labour plans and in support of education, the Group sponsored four students, two of whom have completed their studies.

Community’s social and labour plans

Wescoal Mining in conjunction with the DMR, local community forums, local and regional councils create, manage and monitor all the commitments of the social and labour plans to the benefit of the local communities where its operations are located.

Key elements covered are: basic skills development; educational support for tertiary studies; learnerships; internships and Small, Medium and Micro-size Enterprises (SMMEs) development. Specific focus is placed in the skills development of local communities that is tied into Wescoal’s local economic development programmes.

Enterprise development

Raizcorp has been appointed to functionally and administratively oversee Wescoal enterprise development initiatives for both mining and trading subsidiaries. The material aspects of the engagement include:

Identifying entrepreneurs and businesses within our areas of operation for inclusion in a development incubator to be trained in running and growing their businesses in a sustainable manner. Raizcorp have a national and continental reputation in this area. The key intent for Wescoal is to be able to translate entrepreneurial potential into a business that can migrate into the Wescoal supply chain or be positioned to operate independently within the areas we are located.

To date the investment quantum is approximately R1.9 million which is expected to grow in line with our further initiatives that we may undertake in the next financial year.

LED projects

The company is actively engaged on driving Local Economic Development (LED) projects as part of its social commitments. This is being achieved through a focus on supporting and developing SMMEs around its various mining areas.

A major focus for Wescoal Mining, as part of the SLP and LED focus is to develop housing for the immediate communities that are affected by mining activities. The housing development project, associated with Intibane involves the building of 18 houses. Nine of these have been completed while there is steady progress on the rest. In this process local people are trained with the necessary skills, within the vision that the last houses will be entirely built by local trained contractors.

Wescoal Mining actively pursues opportunities to develop local SMMEs to provide services to the mining operations. One such initiative at the Elandspruit Mine entails the total outsourcing of the laundry services.

Wescoal ensures that the local communities around the mining areas reap the benefits of a safer and more accessible road access by maintaining road infrastructure to a safe standard. Where the risk of civilian roadways intersecting with mining activities, communities, local and regional councils as well as provincial authorities embark on projects to move road infrastructure.

Corporate Social Investment

CSI programme

The company remains committed to its CSI programme. In the period under review the company undertook CSI initiatives ranging from community upliftment projects in the mining space including ad hoc construction projects to renovate primary school facilities in the area and financing upgrades to local mobile clinic infrastructure using local contractors.

Wescoal has responded to social calls to play a role in early childhood development with donations to Gauteng-based children’s homes with some R100 000 provided to assist in these initiatives.

An area that remains of critical concern to Wescoal is responsible water use, and we aim at partnering with the appropriate stakeholders to engage community education on responsible water use. We have in the past, assisted by constructing boreholes and providing water tanks in the Mpumalanga area and we are of the view that embedding responsible water use is a further intervention that may impact responsible water use.

Charity initiatives

Wescoal, as for the previous four years, hosted a very successful Annual Charity Golf Day. All the proceeds from the day are dedicated to charity and Wescoal doubles the monies collected. The 4th Annual Charity Golf Day raised some R250 000 which Wescoal matched.

The charities that have benefited include:• Kabod House;• Elkana School;• Hlanganani Centre;• Pottebakkershuis;• Balmoral Primary School; and• Waenhuiskrans kinderhawe.

Surplus funds raised are allocated to needy institutions, upgrading of schools, general infrastructure maintenance and upgrading. Employees and contractors participate directly by volunteering their time working in communities, painting and visiting schools.

Train race

For the third year, Wescoal participated in the race which took place between EMalahleni and Middleburg during August 2015. All arrangements ran smoothly and there was massive spirit from all staff involved on the day.

The race dates back to 1987 when the Rotary Club of Coalfields launched the first relay event which set runners against a steam train along the private Amcoal railway line between Wolvekrans and EMalahleni (eMalahleni). The event took place annually for the next five years. In 1992 the race route was relocated to run along the railway line and road between Middelburg and EMalahleni incorporating two of Mpumalanga’s larger cities in the event.

The aim of the race is to raise funds for community investment projects. Community members are given the opportunity to experience the Greatest Train Race through a train ride.


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Black Economic EmpowermentThe Wescoal Group complies with the BEE parameters as set out in the Mining Charter. Wescoal’s black ownership now exceeds 51% after a BEE special purpose vehicle (SPV), whose shareholders comprise a consortium of existing Wescoal shareholders – Robinson Ramaite, Simeka Capital and Eric Nthuthuko Mzimela – subscribed for nearly 125 million Wescoal shares for R211.41 million.

The SPV consortium signed a five-year agreement which restricts its ability to dispose of the shares.

This transaction is a transformational milestone, it injected R178 million worth of equity into the company primarily for growth and expansion initiatives. It also de-risked the five-year Eskom coal supply contract and made it bankable.

Employment equity initiatives

Wescoal has developed and approved a five-year Employment Equity Plan. The Group has also remained compliant with the Department of Labour’s reporting requirements. The company has been successful in recruiting two senior managers from the designated group within its mining company as well as appointing a Black Chief Executive Officer for the mining company. The subsidiary Boards of directors established in the year under review have a majority Black participation.

Some R1.9 million has been allotted to enterprise development. We intend to translate entrepreneurial potential into sustainable businesses for the Wescoal supply chain or be positioned to operate independently within the areas we are located.

In the period under review the company undertook Corporate Social Investment initiatives ranging from community infrastructure upliftment projects to education based initiatives.

Local Economic Development

The total spend on local economic development (LED) initiatives is approximately R5.6 million for the year in scope. Corporate Social Investment (CSI) spend has also been a key focus of the company’s social responsibility programme with the total spend in the period amounting to approximately R1.4 million for the period ended March 2017. The community upliftment investment for the period is R6.8 million. It is the company’s intent to maintain or improve the percentage in relation to our profitability or revenue growth in time.


GROUP PERFORMANCE

GROSS PROFITincreased to

R367.5m (FY16: R251.7m)

BEE OWNERSHIPover 50%

R178m new equity from BEE transaction

OPERATIONAL EBITDA

UP 34%

ROMproductionup 82% to

3 371kt(FY16: 1 851kt)

REVENUE GROWTH

up 33% to

R2 118m(FY16: R1 590m)


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Key indicators (non-financial) • Five-year agreement for some 7.8 million tons of coal

• Five-year 51% BEE deal

• Export contracts for more than one million tons a year for three years

• Acquisition programme launched

• Processing Plant operation upgraded

• Diversified revenue from domestic non-Eskom customers

• Transformation agenda spearheaded by BEE transaction, with R178m equity injected into the business

Operational performance Run of Mine (ROM) production increased from 1 851mt [FY16] to 3 371mt [FY17] mainly due to the contribution from Elandspruit mine. During the third quarter of FY17 an underground operation was introduced at Elandspruit to increase output from the complex. It should be noted that Khanyisa was on Care and Maintenance for most of FY17. All regulatory authorisations are now in place at Khanyisa and the complex is on track to produce in excess of 80ktpm ROM. Intibane reached steady state production towards the end of the second quarter of FY17 with the successful conclusion of two export contracts. Planned production for FY18 is 80ktpm.

ElandspruitThe Department of Water and Sanitation awarded a WUL to Elandspruit in May 2015. This enabled mining to start in July 2015. Since then, additional box cuts were opened and the mine currently produces more than 200ktpm.

A new tarred road,the D20, was constructed in order to improve safety and to improve local infrastructure in the Elandspruit area. This work was completed in May 2017. A state-of-art pollution control system was put in place as part of the mine’s water management infrastructure. New offices were also constructed for management and contractors working on site.

Khanyisa ComplexA Water Use Licence (WUL) for the total integrated area was awarded in May 2016.

The Khanyisa Complex was on care and maintenance for the majority of the FY17. During this time, we focused on rehabilitation related activities and preparing the area for full scale mining operations.

Commercial agreements with third parties were also successfully concluded, enabling a production capacity from the complex of some 80ktpm.

All regulatory consents have now been secured and the Khanyisa complex has ramped up to full production capacity.

Intibane ComplexROM production increased from 561kt in FY16 to 855kt in the year under review. Sales increased 522kt to 853kt. The LOM export sales agreements will ensure that steady state production of 80kt will be maintained and sold.

Processing

The Wescoal Processing Plant is located approximately 19km south of the town Middelburg. The processing facility is currently the primary coal processing facility for the Elandspruit Mine, but can be utilised for upgrading of ROM in the vicinity if ever needed. The plant was purchased during 2014 and since then Wescoal has carried out various upgrades and improvements. The combined processing capacity now exceeds 200 000 tons per month.

A WUL for the processing plant was transferred to Wescoal (February 2017) and is valid for 10 years. Wescoal bought adjacent property to accommodate discard for the LOM of Elandspruit.

Trading Division

The success from right sizing of the trading business saw improved operational efficiencies, stable margins and improved working capital efficiency.

Keaton acquisition

With the acquisition of Keaton Energy Holdings Ltd during FY18 the enlarged group benefits include:

• Diverse asset and shareholder base

• Economies of scale and related synergies

• Increased production scale with resource to sustain

• Strengthened cash generation and balance sheet

GROUP PERFORMANCE


IntroductionThe year under review has seen the Company achieve milestones which are significant from a financial point of view.

• The successful ramp up of Elandspruit Colliery in the previous financial year has meant that the year to 31 March 2017 is the first full year with this flagship colliery operating at steady state resulting in a solid operational performance.

• The execution of key long-term supply contracts allowed us to translate this operational performance into consistent and predictable financial performance.

• Our BEE transaction secured our supply contract with Eskom while providing fresh equity funding into the business.

• The predictable financial performance and the equity injection provide a platform for us to further strengthen our balance sheet by advancing discussions to secure long-term debt funding for the business.

• All the above allows us to now focus on our strategic growth path starting with the close out of the Keaton acquisition transaction and the successful integration of the two businesses.

ProfitabilityThe strong operational performance in our mining division underpinned by our flagship Elandspruit Colliery at steady state and the consistent performance from our trading division has seen group revenue increase by 33% from R1.59 billion in 2016 to R2.12 billion in 2017.

Gross profit margins for the group have improved from 16% in 2016 to 17% in 2017 as the mining division benefited from improved unit costs on the back of increased production while the trading division’s rationalisation resulted in increased profits.

EBITDA of the group was impacted by non-recurring costs relating to a non-cash BEE discount of R82 million as a result of our BEE transaction (being the difference between the market value of the BEE subscription shares and the BEE proceeds) as well as Keaton acquisition transaction expenses of R8.5 million incurred in the year under review. Excluding the impact of these non-recurring costs the group contained the increase in operating expenses to only 4% despite the ramp up in mining production and cost inflation pressures. Notwithstanding the impact of non-recurring costs above, net operating profit at R123 million in 2017, was 23% above net operating profit achieved in 2016 of R101 million.

However, the increase in finance costs resulting from relatively higher drawn debt facilities and the taxation impact of the non-recurring costs above (which are not deductible for tax purposes) have resulted in net profit for the group of R30 million. Earnings per ordinary share of 12c for year ended 31 March 2017 reflect the impact on earnings of the non-cash BEE discount of 32c, the dilution impact of the BEE transaction’s increase in the number of issues shares of 7c as well the once off Keaton acquisition transaction costs of 3c. Therefore earnings per ordinary share before the impact of non-recurring costs and the BEE share dilution amounted to 54c for the year.

CHIEF FINANCIAL OFFICER’S REVIEW

Cash generationCash generated from operations increased from R240 million in 2016 to R253 million in 2017 on the back of improved profitability. The cash generated from operations was largely applied to fund capital expenditure (R99 million), towards higher tax payments on increasing profits (R46 million), to reward shareholders with dividends (R19 million) and alongside drawn debt facilities and BEE transaction proceeds to fund the cash portion of the Keaton acquisition. At 31 March 2017, R350 million had been set aside for this acquisition.

Total cash at 31 March 2017 (including an amount of R350 million set aside for the cash portion of the Keaton acquisition) amounted to R435 million while net cash after deducting bank overdraft and drawn debt facilities amounted to R103 million compared to a net debt position of R148 million at 31 March 2016.

Capital expenditureCapital expenditure for the year amounted to R113 million. At Elandspruit the main components of spend were the construction of the D20 road and pollution control dam. While at Intibane we purchased an XRT machine for improved processing.

Capital structureThe group improved its balance sheet strength through the BEE transaction which was completed in December 2016 injecting R178 million fresh equity into the business and locking in BEE equity ownership of 58.93%.

The predictable financial performance and the equity injection provide a platform for us to advance our discussions with long term debt providers, culminating in the group securing long term debt funding for the business post year end.

DividendsWescoal in considering the Company’s financial position and strong annual performance, has agreed to distribute R12 million to shareholders as a dividend for the period.


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RESOURCES SUMMARYWescoal Coal Resource and Reserve SummaryCoal Resources and Coal Reserves for the period ending 31 March 2017 are included below. The estimates for FY2017 are compared to the FY2016 estimates and reconciliation provided in each of the asset sections.

All details regarding the geology, topography, climate, rainfall, drainage, veld-land type and land use are contained in the full resources statement at: http://www.wescoal.co.za/downloads/Wescoal Resource_and Reserve Statement March 2017.pdf

Abridged Coal Resource and Reserve StatementMiptec (Pty) Ltd (“MIPTEC”) was commissioned by Wescoal Mining (Pty) Ltd, (“Wescoal”), a wholly owned subsidiary of Wescoal Holdings Ltd, to produce a report for their Elandspruit, Intibane and Khanyisa Collieries’ resources and reserves to reflect the 31 March 2017 status (“effective date”).

Work conductedThe coal resources for all of the Wescoal Assets were remodeled for the 2017 update, by Katherine Black (BSc. (Hons.), Pr. Sci. Nat), of KJB GeoServices (“KJB”). Work related to the modelling of resources and reserves was done in accordance with the guidelines provided for in the SAMREC and SANS codes. All physical and quality grids produced in the geological model, were supplied to MIPTEC. The transfer of information was reconciled back to a borehole level from the grids received by MIPTEC, to confirm the accuracy of the geological information. An integrated process followed during which both modeling and exploration geologists, the chief surveyor, environmental consultants, short-term mine planner, consulting mining engineer and the contracted specialist on valuation were tasked with providing required information, verifying assumptions and parameters to enable both Miptec and KJB to estimate the resources and reserves for the assets of Wescoal. This process provided assurance of compliance to all aspects relating to permitting and licensing, legal boundaries, environmental sensitive zones, infrastructure to be protected as well as the final test on

economical extraction. Life of mine (“LOM”) plans for the individual complexes were then finalised. On completion of the LOM plans, cash flow models were developed based on economical parameters supplied by Wescoal for the coal assets under review. Information was derived from current financial statistics, contracts, Wescoal averages as well as applicable industry averages. Both Miptec and KJB were satisfied that the resources and reserves are economically extractable as at the effective date of the resource and reserve statement.

Resource and Reserve SummaryReserves for the assets are publicly reported for the first time, with emphasis, regarding Resource and Reserve (“R&R”) estimates being on the likely prospect for eventual economic extraction.

At the end of March 2017 Wescoal held a total managed resource of 31.59Mt (27.18Mt attributable) and an inclusive managed reserve of 28.93Mt (25.87Mt attributable) net of 3.1Mt depleted for the reporting period.

Coal Resources and Coal Reserves for the period ending 31 March 2017 are included below. The Estimates for FY17 are compared to the FY16 estimates with reconciliation provided in each of the asset sections.

Legal, Licensing and Permitting Wescoal, on behalf of the Directors provided a statement confirming that there are no legal proceedings or material conditions that may have an impact on their ability to continue mining and exploration activities. Miptec compiled a summary on critical Licensing and Permitting aspects of all the mining areas covered in this report. Based on this information Miptec has concluded that Wescoal has the legal entitlement to coal resources and reserves as reported in this report.

http://www.wescoal.co.za/downloads/Wescoal Resource_and Reserve Statement March 2017.pdf

http://www.wescoal.co.za/downloads/Wescoal Resource_and Reserve Statement March 2017.pdf


AS AT 31 MARCH 2017

COAL RESOURCE (MTIS) (AD) ROM COAL RESERVE (AR)

Inferred Mt

Indicated Mt

Measured Mt

Total Coal Resource

MtProbable

MtProved

Mt

Total ROM Coal

Reserve Mt

ELANDSPRUIT COLLIERY 21.50 21.50 0.59 20.70 21.29

ELANDSPRUIT OPENCAST

19.12 19.12 0.59 19.17 19.76

4 Seam 1.42 1.42 - 1.19 1.19

3 Seam 0.51 0.51 0.01 0.58 0.59

2 Seam

2U Seam 2.97 2.97 0.19 2.98 3.17

2L Seam 5.95 5.95 0.20 5.84 6.04

1 Seam 8.27 8.27 0.19 8.57 8.76

ELANDSPRUIT UNDERGROUND

2.38 2.38 - 1.53 1.53

4 Seam

3 Seam

2U Seam

2L Seam

1 Seam 2.38 2.38 1.53 1.53

INTIBANE COLLIERY 2.13 2.13 1.89 1.89

4 Seam 0.27 0.27 0.18 0.18

2 Seam 1.86 1.86 1.71 1.71

KHANYISA COLLIERY 0.15 0.42 7.39 7.96 0.65 5.10 5.75

TRIANGLE TOTAL

(WESCOAL OWNS 35%) 0.15 0.42 6.22 6.79 0.65 4.06 4.71

TRIANGLE OPENCAST 0.13 4.18 4.31 4.06 4.06

4U Seam 0.03 0.54 0.57 0.51 0.51

4L Seam 0.04 1.34 1.38 1.30 1.30

2 Seam 0.06 2.30 2.36 2.25 2.25

TRIANGLE UNDERGROUND

0.15 0.29 2.04 2.48 0.65 0.65

4L Seam 0.06 0.12 0.86 1.04

2 Seam 0.09 0.17 1.18 1.44 0.65 0.65

CATWALK TOTAL 1.17 1.17 1.04 1.04

2 Seam 1.17 1.17 1.04 1.04

TOTAL 0.15 0.42 31.02 31.59 1.24 27.69 28.93

WESCOAL ATTRIBUTABLE

0.05 0.15 26.98 27.18 0.82 25.05 25.87

Table 1: Summarised Resource and Reserve statement of all managed assets as at 31 March 2017


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The attributable resources and reserves were based on Elandspruit 100%, Intibane 100%, Catwalk (Khanyisa) 100% and Triangle (Khanyisa) 35%.

It is important to note that coal resources estimates are inclusive of coal reserves, net of mining depletion and are compliant with the SAMREC 2016 guidelines and the JSE section 12.11. Estimations were rounded and subsequent additions could result in minor discrepancies which are not considered material. The coal resources and reserves will be affected by factors such as changes in coal pricing, currency fluctuations, permitting, legislation and operating parameters.

ComplianceThe respective Coal Resource and Coal Reserve Estimates are classified and signed off by suitably qualified CPs. Each CP has sufficient, relevant experience in the style of mineralisation, type of deposit, mining method and activity for which they have taken responsibility, to qualify as a CP as defined in section 9 of the SAMREC Code. All CPs consent to the inclusion of information in this report in the form and context they appear. Each CP is independent of the issuer and does not have a material interest capable of affecting their ability to give an unbiased opinion in the projects for which they take responsibility, and have not received, and will not receive, any pecuniary or other benefits in connection with the estimates presented, other than normal consulting fees.

Competent Persons (CP)The CP responsible for the resource estimations contained in this report is Ms Katherine Black (BSc. (Hons.), Pr. Sci. Nat). Ms Black has 10 years’ experience in the mining industry as a coal geologist. Over the last 10 years, Katherine has primarily been involved in the compilation and management of coal databases, the construction of geological models, and the estimation of coal resources for various greenfield operations in South Africa, Botswana and Mozambique, as well as a number of operating coal mines in South Africa. Ms Black is currently the owner of KJB GeoServices (60 Curvy Road, Johannesburg, 2194). She is registered with the South African Council for Natural Scientific Professions (SACNASP Reg. No. 400295/12), and is a member in good standing with the Geological Society of South Africa.

In accordance with the SAMREC Code, the resource and reserve update has been prepared under the direct supervision of a Lead Competent Person, Mr. Leonardt Raaths, who assumes overall responsibility for this report. Mr Raaths holds a BTech Mining degree from UJ, a BSc. in Operations Research from Unisa and an MBL from Unisa SBL. Mr Raaths is registered with the SAIMM (registration number 702015). Mr Raaths has 26 years’ experience in coal mining, the largest portion of which was on technical and project disciplines, where the determination of Coal Reserves was part of his responsibility. This was largely for BHP’s South African collieries, Xstrata South Africa, CIC Energy and now as an independent consultant at Miptec Consulting Proprietary Limited 19 Jan Frederik street Witbank, (PO Box 40084, Reyno Ridge, 1049).

Geological setting and modelAll resources were remodeled from base borehole logs, analysis and survey information in Ventex StratModel™ Software. All assets under review formed part of the Witbank coal field where coal seams from 5, 4, 3, 2 and 1 seam horizons constitute the resource ether in part of in full depending on the coal deposit.

Exploration activities and expenditure Of the total resources estimated at 31.59Mt, only 0.59Mt is not in the measured category. Wescoal manages an ongoing drilling programme as part of their short-term technical control processes to validate the mining and coal quality parameters. The expenditure of the said programme is reflected as part of the operating costs of the organisation.

Elandspruit ComplexThe Elandspruit Complex comprises both opencast and underground operations, and is 100% owned by Wescoal. It is located approximately 8km west of the town of Middelburg on the farm Elandspruit 291 JS, and encompasses an area of 538 hectares.

Wescoal hold the Mining Right that was granted in October 2010 for 16 years. A WUL was granted in May 2015.

The LOM plan for Elandspruit is in line with the current mining strategy regarding both opencast and underground operations.

Coal resourcesCurrently all seams present within the delineated opencast areas are scheduled for mining, namely the No. 4 Lower Coal Seam, No. 3 Coal Seam, No. 2 Upper and Lower Coal Seams and the No. 1 Coal Seam. Within the underground mining area, only the No. 1 Coal Seam is targeted for mining. As such, all other seams have been excluded from the UG estimations. This decision was made based on the principle that all seams should have the potential for economic extraction.

GTIS coal resources were estimated from the geological model by applying 0.5m seam thickness cut-off on opencast and 1.2m minimum on underground, with coal below the Limit of Weathering to ensure fresh coal only. All coal included into resources had Volatile matter greater than 18% and Ash content less than 50%. A 10% geological loss was applied to calculate MTIS. All coal resources were within the Mining Right boundaries, exclusive of the 9m boundary pillar, environmental sensitive zones, grave sites and applicable servitudes with protection zones.

Figure 1: Elandspruit Locality Map


(Table 3) reflects the March 2016 and March 2017 resource estimates as well as the actual surveyed ROM tonnes (AR). The total change in resources is 11.6Mt, less depletion of 2.4Mt equating to a reduction of 9.2Mt.

The approximation of areas excluded from the March 2016 resource areas are quoted in the table and amounts to 9.2Mt. In conclusion, the 9.2Mt was moved out of resources to coal occurrence.

Coal reservesReserves for Elandspruit are based on the current mining strategy with regard to both opencast and underground operations.

Elandspruit commenced mining in June 2015, total ROM extracted for FY16 was 1.26Mt. FY17 accounts for a full year of production during which 2.5Mt of ROM was extracted.

Reserves are based on coal resources, for opencast 14% total losses with 4% contamination were applied to the resource for estimation purposes. Underground reserves were based on coal resources and the specific methodology to determine coal in bords and pillars. Primary mining reserves were finalised by applying a 10cm contamination in conjunction with a 10% geological loss. In all cases the As Received conversion was done by adding 4% surface moisture to the Air Dried tonnage.

RECONCILIATION MARCH 2016 TO MARCH 2017 COAL RESOURCE (MTIS) (AD) FY17 ACTUAL MINING

Mar 16 Mt

Mar 17 Mt

Variance Mt MTIS (AD) ROM (AR)

ELANDSPRUIT COLLIERY 33.08 21.50 11.58 2.40 2.50

ELANDSPRUIT OPENCAST 24.57 19.12 5.45 2.37 2.47

4L Seam 1.36 1.42 (0.06) 0.06 0.07

3 Seam 0.69 0.51 0.18 0.04 0.04

2L Seam 12.61 8.92 3.69 1.30 1.36

1 Seam 9.91 8.27 1.64 0.97 1.01

TOTAL UNDERGROUND

8.51 2.38 6.13 0.03 0.03

4L Seam 0.21 0.21

2U Seam 3.09 3.09

2L Seam 2.07 2.07

1 Seam 3.14 2.38 0.76 0.03 0.03

Table 3: Elandspruit comparison on resource estimates 2016 and 2017

RESOURCE RECONCILIATION31 MARCH 16

MTIS (AD) MIL.31 MARCH 17

MTIS (AD) MIL. VARIANCE

Declared 33.1 21.5 (11.6)

Depletion 2.4 2.4

Wetlands 3.5 3.5

UG removed 3.2 3.2

Servitudes, boundaries and environmental areas 2.7 2.7

TOTAL 33.1 33.3 0.2

Table 4: Reconciliation from March 2016 to March 2017 estimate on resources

At 31 March 2017 (100% attributable)

Coal Resource (MTIS) (AD) Raw Coal Quality (AD)

Inferred Indicated Measured Total CV (AD) ASH (AD) VM (AD) TS (AD)Mt Mt Mt Mt MJ/kg % % %

Elandspruit – – 21.50 21.50 21.42 29.41 21.70 1.12

Opencast total 19.12 19.12 21.43 29.23 21.54 0.97

4L Seam 1.42 1.42 25.29 17.79 21.17 1.02

3 Seam 0.51 0.51 27.32 15.98 30.54 2.97

2U Seam 2.97 2.97 18.57 35.42 20.57 1.03

2L Seam 5.95 5.95 21.46 28.74 20.59 0.88

1 Seam 8.27 8.27 21.40 30.14 22.08 0.89

Underground total 2.38 2.38 21.39 30.91 23.02 2.29

1 Seam 2.38 2.38 21.39 30.91 23.02 2.29

Table 2: Elandspruit Coal Resource Summary At 31 March 2017


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PROJECTRESERVE

CATEGORY SEAMRESERVE BLOCK

MTIS (AD) Mt

ROM (AR) Mt

SALEABLE (AR) Mt

YIELD (%)

CV (MJ/kg)

(AD)ÀSH (%)

(AD)VOL (%)

(AD)TS (%)

AD)

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4L Seam

Pit1 0.10 0.11 0.11 98% 26.15 17.45 21.56 1.14

Pit2 0.05 0.05 0.05 98% 25.81 17.42 21.77 0.89

Yoc. N 0.20 0.21 0.21 98% 25.21 17.66 21.82 1.00

Yoc. E 0.63 0.68 0.67 98% 25.48 17.36 21.87 1.13

GrasP S 0.13 0.14 0.13 98% 27.42 15.00 31.10 1.91

TOTAL 4L Seam 1.10 1.19 1.17 98% 25.73 17.16 22.88 1.18

3 Seam

Pit1 0.06 0.07 0.07 98% 26.90 16.03 29.44 3.55

Pit2 0.08 0.08 0.08 98% 27.35 14.79 29.63 3.34

Yoc. N 0.11 0.12 0.12 98% 27.80 14.16 31.32 2.61

Yoc. E 0.25 0.27 0.26 98% 27.59 16.76 31.02 3.05

GrasP S 0.05 0.05 0.05 98% 26.76 16.92 30.82 2.62

TOTAL 3 Seam 0.54 0.58 0.57 98% 27.45 15.88 30.68 3.02

2U Seam

IPP 0.22 0.23 0.20 84% 21.00 26.14 19.36 1.02

Pit1 0.62 0.67 0.48 72% 21.00 28.76 19.82 0.45

Pit2 0.41 0.44 0.24 54% 21.00 28.95 19.86 0.36

Yoc. N 0.18 0.20 0.12 60% 21.00 29.25 20.79 0.34

Yoc. E 1.08 1.17 0.66 56% 21.00 29.67 22.30 0.59

GrasP S 0.24 0.26 0.21 79% 22.74 25.61 24.00 1.66

TOTAL 2U Seam 2.75 2.98 1.90 64% 21.19 28.52 21.15 0.67

2L Seam

IPP 0.14 0.15 0.13 86% 22.51 25.27 19.33 0.62

Pit1 0.78 0.84 0.63 75% 22.36 26.00 20.54 0.54

Pit2 1.43 1.55 1.25 81% 22.45 25.99 20.71 0.67

Yoc. N 1.01 1.09 0.88 81% 22.62 26.00 20.65 0.60

Yoc. E 1.73 1.87 1.46 78% 22.64 25.98 20.94 0.62

GrasP S 0.31 0.34 0.26 78% 22.99 25.92 22.02 0.90

TOTAL 2L Seam 5.40 5.84 4.61 79% 22.56 25.97 20.78 0.63

1 Seam

IPP 0.35 0.38 0.33 86% 22.87 25.521 21.90 0.80

Pit1 0.78 0.85 0.68 80% 22.85 26.00 22.16 0.57

Pit2 2.21 2.40 1.88 79% 22.84 25.97 22.71 0.70

Yoc. N 1.98 2.14 1.73 81% 22.93 25.98 22.36 0.64

Yoc. E 2.27 2.46 1.81 73% 23.12 26.00 22.85 0.54

GrasP S 0.32 0.35 0.23 66% 23.82 26.00 26.81 0.42

TOTAL 1 Seam 7.92 8.57 6.66 78% 22.98 25.96 22.70 0.62TOTAL PROVED 17.72 19.16 14.91 78% 23.01 25.21 22.23 0.77

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BLE 3 Seam GrasP N 0.01 0.01 0.01 98% 26.95 16.57 30.92 9.07

2U Seam GrasP N 0.18 0.19 0.15 79% 22.41 25.92 22.87 1.26

2L Seam GrasP N 0.18 0.20 0.16 80% 22.94 25.83 22.25 1.13

1 Seam GrasP N 0.18 0.19 0.13 69% 23.44 26.00 25.86 0.49

TOTAL PROBABLE 0.55 0.59 0.45 77% 22.99 25.73 23.68 1.14

TOTAL/AVG ELANDSPRUIT OPENCAST 18.26 19.75 15.36 78% 23.01 25.23 22.27 0.78

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1 SeamPrimary Mining

1.41 1.53 1.12 73% 23.39 25.86 24.13 0.57

TOTAL/AVG ELANDSPRUIT UNDERGROUND

1.41 1.53 1.12 73% 23.39 25.86 24.13 0.57

TOTAL/AVG ELANDSPRUIT COLLIERY RESERVES

19.67 21.28 16.48 77% 23.03 25.27 22.40 0.77

Table 5: Elandspruit reserves estimates at 31 March 2017


Environmental management and fundingEnvironmental management, compliance monitoring and reporting are contracted out to third party experts. These activities are conducted on a monthly, quarterly and bi-annual basis and reported to the relevant department as required.

The Elandspruit Mine Environmental Liability was assessed as at 31 March 2017. The report is entitled “2017-04-26 Elandspruit Env Liability 2017 Final”, dated April 2017. The report reflects the DMR guideline assessment of R38.6 million (excluding VAT). At the time of this report the required guarantees were aligned with the liability assessment value.

Intibane ComplexThe Intibane Complex comprises opencast operations and is 100% owned by Wescoal. It is located some 14km west of Ogies in Mpumalanga. It comprises portions of the farm Vlakvarkfontein 213 IR, and covers an area of 167.78ha.

Wescoal own the Mining Right for Intibane 1 which was granted in August 2012 for 10 years, Intibane 2 is covered by a Mining Right purchased by Wescoal and granted to Minthiro Mining (Pty) Ltd in June 2010. A Section 102 process is in progress to consolidate the two Mining Rights under the Wescoal’s Mining Right. This submission was made in June 2015. Wescoal currently manages the Intibane 2 reserves as per contract with the owners of the Mining Right. A WUL exist for both mining rights. All necessary permits and licenses are in place to conduct mining activities at Intibane.

Intibane 2 is a continuation from Intibane 1. The mining strategy remained unchanged. Both the No. 4 Lower and No. 2 Coal Seams are currently being mined within the Intibane 2 area. A portion of the No. 4 Lower Coal Seam has been previously mined, and in this area, the remaining pillar coal will be mined. The No. 2 Coal Seam has not been previously mined. Both the No. 4 Lower and No. 2 Coal Seams are currently being mined via opencast methods.

Coal resources GTIS coal resources were estimated from the geological model by applying 0.5m seam thickness cut-off, with coal below the Limit of Weathering to ensure fresh coal only. Pillar coal estimates were based on a 65% previous extraction and all coal included into resources had Volatile matter greater than 18% and Ash content less than 50%. A 10% geological loss was applied to calculate MTIS. All coal resources were within the Mining Right boundaries, exclusive of the 9m boundary pillar and grave sites.

Material risks

TYPE OF RISK RISK MITIGATION LEVEL OF RISK

Environmental/Legal Operating outside the approved EMP regarding precedent set by Yoctolux.

Wescoal to confirm the impact from Yoctolux on the defined wetlands, with the relevant authorities as soon as possible and amend the EMP accordingly.

Low

Social and Labour Community forum unhappy with lack of participation with Contractors Training Initiatives and LED Projects

Mediate conversation between forums and contractors to follow through on any commitments. Manage community expectations

Low

Figure 2: Intibane Locality Map

Future work• Completion of the Environmental applications relating to the relaxation of the pan buffer and exclusion zones. On approval, the

resources and reserves could potentially increase.

• As an additional option, permission to undermine the wetlands within the licence area will be applied for.

• Confirm and update the EMP changes to enable opencast mining on the south-eastern area as well as the mining of the previously defined wetlands and buffers from the Yoctolux void.

• Conduct geotechnical and associated work to evaluate the feasibility of including additional seams for underground mining, which could potentially result in an increase in the resource and reserve estimations.


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At 31 March 2017 (100% attributable)

Coal Resource (MTIS) (AD) Raw Coal Quality (AD)

Inferred Indicated Measured Total CV (AD) ASH (AD) VM (AD) TS (AD)Mt Mt Mt Mt MJ/kg % % %

Intibane Colliery – – 2.13 2.13 19.55 31.50 21.60 1.03

4L Seam Total 0.27 0.27 22.81 21.59 23.06 1.21

In-situ 0.18 0.18 22.85 21.35 23.17 1.07

Pillars 0.09 0.09 22.73 22.11 22.81 1.51

2 Seam Total 1.86 1.86 19.09 32.92 21.39 1.01

Table 6: Intibane Complex Resource Summary at 31 March 2017

AS AT 31 MARCH 2017 (rounding errors from addition not deemed material)

RAW RESOURCES (MTIS) (AD) FY17 ACTUAL MINING

Mar 16 Mt

Mar 17 Mt

Variance Mt

MTIS (MJ/kg) (AD) ROM (AR)

INTIBANE COLLIERY 2.57 2.13 0.44 0.81 0.84

TOTAL 4L Seam 0.31 0.27 0.04 0.28 0.29

TOTAL 2 Seam 2.26 1.86 0.40 0.53 0.55

Table 7: Intibane resource comparison between the 2016 and 2017 estimate

A total of 0.84Mt (ROM AR) was mined from Intibane 2 for FY17. Detailed in Table 7 is a decrease in resources of 0.44Mt (MTIS AD) compared to a depletion of 0.84Mt (ROM AR) surveyed. This relates then to a gain on the No. 4 and No. 2 Coal Seam. The No. 4 Coal Seam was previously mined underground; the estimations reflect the risk associated with the available information with regard to the previous mining.

Coal reservesReserves for the Intibane Complex were based on the existing proven mining strategy. Infrastructure from the Intibane 1 is still in place currently and is utilised by Intibane 2.

Mining is contracted out to an opencast mining contractor, the crushing, screening and XRT plants are operated on contract by Wescoal appointed contractors.

Actual ROM production for Intibane increased from 0.56Mt in FY16 to 0.85Mt in FY17.

Coal resources formed the basis for the reserves, reserve estimate was based on a total loss of 14%, contamination of 4% and the As Received tonnages based on additional 4% moisture.

INTIBANE COLLIERY ESTIMATE 31 MARCH 2017 (100% Wescoal attributable)

SALEABLE QUALITIES (4L 100% raw crush and screen, 2 seam 80% on a crush and screen basis, with 20% beneficiated in the XRT plant)

PROJECTRESERVE


MTIS (AD) Mt

ROM (AR) Mt

SALEABLE (AR) Mt

YIELD (%)

CV (MJ/kg)

(AD)ÀSH (%)

(AD)VOL (%)

(AD)TS (%)

AD)

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4L SeamWest 0.02 0.02 0.02 100% 23.01 20.39 24.23 1.08

East 0.16 0.16 0.16 100% 22.85 21.41 23.01 1.11

TOTAL 4L Seam 0.18 0.19 0.19 100% 22.87 21.28 23.16 1.11

2 SeamWest 0.76 0.79 0.75 94% 19.08 33.44 21.17 0.81

East 0.88 0.92 0.86 94% 19.49 31.69 21.95 1.10

TOTAL 2 Seam 1.65 1.71 1.61 94% 19.30 32.50 21.59 0.97

TOTAL PROVED 1.82 1.90 1.79 95% 19.67 31.34 21.75 0.98

TOTAL/AVG INTIBANE COLLIERY 1.82 1.90 1.79 95% 19.67 31.34 21.75 0.98

Table 8: Intibane reserve summary at 31 March 2017


Future work• Ramp up of the XRT plant to designed capacity

• Pending approval of the Section 102 application for the consolidation of the Wescoal Intibane Mining Right and the mining right for Intibane 2. Wescoal to follow up on progress.

• Buy-in or use of other sources.

Risks

Environmental management and fundingEnvironmental management, compliance monitoring and reporting are contracted out to third party experts. These activities are conducted on a monthly, quarterly and bi-annual basis and reported to the relevant department as required.

The Intibane Mine Environmental Liability was assessed as at 31 March 2017 and it amounts to R14.7 million excluding 14% VAT. Guarantees are in place which cover the assessed liability.

KHANYISA COMPLEXThe Khanyisa Complex comprises the Triangle Resource Area, of which Wescoal owns a 35% share, and the Catwalk Resource Area, of which Wescoal owns 100%.

This complex comprises both opencast and underground operations and is located some 10km west of Ogies in Mpumalanga.

A WUL for the total integrated mining area was awarded in May 2016. The consolidated mining right was awarded 4 May 2017.

In line with the mining strategy, the Triangle Area has been divided into both an opencast and underground area.

Coal resourcesThe underground coal resources were delineated by the presence of two pipelines, one of which transects the property, and the second of which forms the eastern extent of the Mining Licence in the Triangle area.

A 100m buffer zone on either side of the pipeline was applied, and it is under this zone that the underground resources were delineated. The coal beneath the pipeline was included in the coal resource estimates as precedent has been set to mine coal underground, as permission was granted in the now mined out adjacent Khanyisa Colliery. The coal resources underneath the pipeline have however been excluded from the Reserve Estimations.

The Catwalk area to the south of the Triangle Resource Area has been divided into opencast areas where the coal has not been previously mined, as well as opencast resources comprising roof and pillar coal in the previously underground mined out areas.

Neither area was mined during FY17 as the area was under care and maintenance while the necessary permits and licenses were being processed.

GTIS coal resources for opencast, were estimated from the geological model by applying 0.5m seam thickness cut-off, with coal below the Limit of Weathering to ensure fresh coal only. Sterilised areas were identified from existing practices, a minimum of 50m remained next to the national road measured from opencast workings, and this was applied to the remaining resources where applicable. Pillar coal estimates were based on a 65% previous extraction and all coal included into resources had Volatile matter greater than 18% and Ash content less than 50%. A 10% geological loss was applied to calculate MTIS. All coal resources were within the Mining Right boundaries, exclusive of the 9m boundary pillar.

For underground the minimum seam thickness of 1.2m and a maximum of 4.8m was applied.

TYPE OF RISK RISK MITIGATION

LEVEL OF RISK

Contract/ Legal

Not meeting the contractual obligations in terms of product tonnages and quality resulting in possible rejections and penalties

Starting up of Khanyisa Catwalk to supplement tonnage and qualities

Low

Social and Labour

Strikes/ community unrest

Keep communication constant, ongoing and transparent

Medium

Social and Labour

Community distressed about lack of visible participation from contractors in LED and procurement

Mediate conversations between forums and contractors. Assist contractors

Low

Figure 3: Khanyisa Locality Map


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The previous resource statements for both the Triangle and Catwalk Resource Area were presented in the report entitled “Wescoal Resource Statement, May 2016”. The Competent Person responsible for signing off on the resource estimate was consulting geologist, Prof. D.S. Coetzee, PhD Geology; Pr. Sci. Nat. 400136/00.

As per the current 2016 version of the SAMREC Code, the FY2017 Resource Statement does not contain GTIS or TTIS figures, and therefore the reconciliation will be based on the MTIS estimations.

For the Triangle resource, there is an approximate 3.3Mt difference between the FY16 and FY17 MTIS estimations.

AS AT 31 MARCH 2017

COAL RESOURCE (MTIS) (AD) RAW COAL QUALITY (AD)

Infered Mt

Indicated Mt

Measured Mt

Total Mt

CV (MJ/kg) (AD)

ÀSH (%) (AD)

VOL (%) (AD)

TS (%) AD)

KHANYISA COLLIERY 0.15 0.42 7.39 7.96 20.97 28.12 21.72 1.09

TRIANGLE TOTAL 0.15 0.42 6.22 6.79 20.71 28.47 21.86 1.07

TRIANGLE OPENCAST 0.13 4.18 4.31 20.46 29.21 21.64 1.04

4U Seam 0.03 0.54 0.57 17.04 38.34 18.51 1.05

4L Seam 0.04 1.34 1.38 22.37 23.75 23.65 1.29

2 Seam 0.06 2.30 2.36 20.15 30.23 21.21 0.90


0.15 0.29 2.04 2.48 21.15 27.20 22.23 1.11

4L Seam 0.06 0.12 0.86 1.04 22.56 23.30 24.03 1.33

2 Seam 0.09 0.17 1.18 1.44 20.14 30.01 20.93 0.94

CATWALK TOTAL 1.17 1.17 22.45 26.09 20.95 1.25

2 Seam 1.17 1.17 22.45 26.09 20.95 1.25

Table 9: Khanyisa Resource Summary at 31 March 2017

AS AT 31 MARCH 2016

COAL RESOURCE (MTIS) (AD) RAW COAL QUALITY (AD)

Infered Mt

Indicated Mt

Measured Mt

Total Mt

CV (MJ/kg) (AD)

ÀSH (%) (AD)

VOL (%) (AD)

TS (%) AD)

KHANYISA COLLIERY – – 11.34 11.34 20.62 29.34 20.85 1.13

TRIANGLE TOTAL – – 10.05 10.05 20.22 30.31 20.68 1.14

TRIANGLE OPENCAST – 10.05 10.05 20.22 30.31 20.68 1.14

4U Seam 2.88 2.88 17.27 38.50 17.20 0.90

4L Seam 2.52 2.52 22.77 23.20 23.50 1.50

2 Seam 4.65 4.65 20.66 29.10 21.30 1.10


– – – –

4L Seam –

2 Seam –

CATWALK TOTAL 1.29 1.29 22.96 23.70 21.88 1.05

2 Seam 1.29 1.29 22.96 23.70 21.88 1.05

Table 10: Khanyisa Resource Summary at 31 March 2016


Table 11 should be read together with Table 9 and Table 10. Total estimated Resource at 31 March 2016 amounted to 10.1Mt. As far as the CP could establish the resource did not include the legal boundary pillars. The current model (“March 2017”) provides an approximate equivalent of 10.3Mt. This is based on the total areas exclusive of boundary pillars and quality cut-offs and a 0.5m seam thickness cut-off. Table 11 provides a breakdown of approximate changes to the Triangle resource estimates.

Resources reported as of March 2016 were all classified in the measured category, whereas the March 2017 report indicated that there was a small area to the north of the Triangle in the inferred category. This area was included in reserves with no risk to the reserves reported. The resource directly north of the Triangle has boreholes and modelled resources continuing north from the boundary.

TRIANGLE RESOURCE RECONCILIATION31 MARCH 16

MTIS (AD) MIL.31 MARCH 17

MTIS (AD) MIL. VARIANCE

Declared 10.1 6.8 (3.3)

Depletion - -

Road exclusion 1.1 1.1

S4U excluded from UG 1.2 1.2

S4U excluded from OC (<18% VM) 1.2 1.2

TOTAL 10.1 10.3 0.3

Table 11: Khanyisa Triangle Resource reconciliation

Coal reservesCoal resources formed the basis for the reserves, the reserve estimate was based on a total loss of 14%, contamination of 4% and the As Received tonnages based on additional 4% moisture. On underground in addition to the barrier pillars between sections, barrier pillars were left between the underground and opencast workings as well as the Transnet Pipeline.

Reserves for the Khanyisa complex were based on the proven mining strategy that was executed by Wescoal before the complex was placed under care and maintenance whilst the granting of the integrated Mining Right was pending.

On the Catwalk Area a double boxcut exists where pillar mining took place – underground bords were visible on both north and south highwalls. The Catwalk North and South areas are immediately accessible with no construction required.

On the northern side of the Catwalk Area, a partially filled open void exists along the southern boundary of the Triangle Area, providing access to the Triangle Reserve.

Due east of the most northern Catwalk reserve, the 100m buffer zone on either side of the Transnet pipeline was previously mined underground on the 2 seam. The underground design for Triangle was based on similar design parameters.

Considering the previous mining conducted, the CP is of the opinion that the reserves declared for the Khanyisa Complex are based on methodologies already well proven at Khanyisa.

Fixed infrastructure exists that was utilised during the previous mining operations. As the major mining activities are all contracted out, successful contractors will re-establish the crushing and screening plants together with the required mining contractor infrastructure.


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KHANYISA TRIANGLE RESERVE ESTIMATE 31 MARCH 2017 (35% Wescoal attributable)

SALEABLE QUALITIES (All seams based on a raw crushed and screened product)

PROJECTRESERVE


MTIS (AD) Mt

ROM (AR) Mt

SALEABLE (AR) Mt

YIELD (%)

CV (MJ/kg)

(AD)ÀSH (%)

(AD)VOL (%)

(AD)TS (%)

AD)

TRIA

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4U SeamPit1 OC 0.15 0.15 0.15 98% 17.10 39.72 17.79 0.86

Pit2 OC 0.35 0.36 0.35 98% 15.87 41.69 17.71 1.17

TOTAL 4U Seam 0.50 0.51 0.50 98% 16.23 41.11 17.74 1.08

4L SeamPit1 OC 0.74 0.77 0.75 98% 22.27 25.50 22.89 1.20

Pit2 OC 0.52 0.53 0.52 98% 20.43 28.40 22.42 1.27

TOTAL 4L Seam 1.26 1.30 1.27 98% 21.52 26.69 22.70 1.23

2 SeamPit1 OC 1.32 1.36 1.34 98% 20.17 31.30 20.12 1.04

Pit2 OC 0.86 0.89 0.87 98% 18.21 35.35 20.84 0.59

TOTAL 2 Seam 2.18 2.25 2.21 98% 19.40 32.90 20.40 0.87

TOTAL PROVED 3.93 4.06 3.98 98% 19.68 31.95 20.80 1.01

TRIA

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PRO

VED

2 SeamPipeline UG

0.60 0.65 0.64 98% 19.34 31.27 20.08 0.90

TOTAL PROBABLE 0.60 0.65 0.64 98% 19.34 31.27 20.08 0.90

TOTAL/AVG KHANYISA TRIANGLE RESERVES (TOTAL)

4.53 4.71 4.62 98% 19.63 31.86 20.70 0.99

TOTAL/AVG KHANYISA TRIANGLE RESERVES (WESCOAL ATTRIBUTABLE)

1.59 1.65 1.62 98% 19.63 31.86 20.70 0.99

Table 12: Khanyisa Triangle reserve summary at 31 March 2017

KHANYISA CATWALK RESERVE ESTIMATE 31 MARCH 2017 (100% Wescoal attributable)

SALEABLE QUALITIES (Raw basis, crushed and screened)

PROJECTRESERVE


MTIS (AD) Mt

ROM (AR) Mt

SALEABLE (AR) Mt

YIELD (%)

CV (MJ/kg)

(AD)ÀSH (%)

(AD)VOL (%)

(AD)TS (%)

AD)

CA

TWA

LK O

PEN

CA

ST

PRO

VED 2 Seam

Peripheral 0.10 0.10 0.10 98% 20.35 31.34 20.07 1.18

North Insitu

0.12 0.12 0.12 98% 21.48 28.63 20.11 1.35

North Pillar

0.15 0.16 0.15 98% 21.39 28.92 20.16 1.25

South Insitu

0.08 0.08 0.08 98% 21.55 28.15 19.89 0.84

South Pillar

0.56 0.58 0.57 98% 21.19 29.61 19.63 1.14

TOTAL 2 Seam 1.01 1.04 1.02 98% 21.20 29.44 19.83 1.16

TOTAL PROVED 1.01 1.04 1.02 98% 21.20 29.44 19.83 1.16

TOTAL/AVG KHANYISA CATWALK RESERVES 1.01 1.04 1.02 98% 21.20 29.44 19.83 1.16

Table 13: Khanyisa Catwalk reserve summary at 31 March 2017

Triangle ROM reserves of 4.06Mt opencast and 0.65Mt underground as at 31 March 2017, will be crushed, screened and blended to achieve the average product quality of 20.5 CV. The yield for raw products is based on a 98% recovery. Losses incurred are due to oversize and stockpile floor losses in terms of contamination.

The shareholding agreement on the Triangle Area necessitates that the mining of ROM coal, crushing, screening and marketing be done independently from the Catwalk reserve.

The last ROM production from the Catwalk area was July 2015. Khanyisa, due to the expiry of water licenses and


Environmental management, compliance monitoring and reporting are contracted out to Ferret Mining. These activities are conducted on a monthly, quarterly and bi-annual basis and reported to the relevant department as required.

The Khanyisa Mine Environmental Liability was assessed by Jaco Kleynhans (Jaco-K Consulting) as at 31 March 2017 and it amounts to R21.4 million excluding 14% VAT. Guarantees are in place that covers the assessed liability.

mining permits for the Catwalk area, was placed under care and maintenance the Section 102 application approval was pending. The Mining Right variation together with the associated EMP, SLP and WUL was approved.

Future work• Sourcing the required permissions from Transnet and the

DMR to mine underground beneath the Transnet Pipelines in the Triangle Area.

• Costing of the option to move the Transnet pipeline, thereby increasing the current reserve.

• Ramp up to planned production rates in both the Catwalk and the Triangle Areas.

• Triangle has resources in both the inferred and indicated categories, and as such, future drilling should focus in these areas. Wescoal could also request data sharing from neighbours to the north and east of the Triangle Area.

Risks

Environmental management and funding

TYPE OF RISK RISK MITIGATION

LEVEL OF RISK

Economic (Catwalk)

Economic viability of Catwalk on its own

Catwalk and Intibane must be treated as a unit based on contractual commitments in terms of source, tonnage and quality

Low

Permitting (Triangle)

Not getting permission from DMR and Transnet to undermine the pipeline

Engage with the relevant authorities

Move the pipeline

Low

Social and Labour

Business people using community to ‘force’ transactions with Wescoal resulting in community stopping the mine

Reduce forum to community in the immediate footprint as they are legitimate

Work with LED office to engage with communities

Medium


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SOCIAL AND RELATIONSHIP CAPITALWescoal strives for established connectivity with all stakeholders and communities to build trust within all these groups.

CORPORATE GOVERNANCE

MANUFACTURED CAPITALCapital spend in FY17 amounts to R113 million on land, buildings,plant, machinery and mining propertiesincluding construction of the D20 road,a pollution control dam and an XRTmachine for Intibane.


CORPORATE GOVERNANCE

IntroductionWescoal’s Board of directors supports the principles of the Code of Corporate Practices and Conduct (the Code) contained in the King Code of Governance Principles and King report on Governance (King III). Wescoal acknowledges the importance of sound corporate governance and the guidelines set out in the Code.

Statement of complianceThe Listings Requirements of the JSE require that companies report on the extent to which they comply with the principles incorporated in the Code. The Code recommends that the Chairperson be an independent non-executive director. It is the Board’s opinion that as the Chief Executive Officer and the non-executive Chairperson’s roles are separate; there is a clear division of responsibilities at the head of the company, which ensures a balance of power and authority, such that no one individual has unfettered powers of decision-making.

A detailed internal assessment of the application of King III principles and current levels of compliance is available on Wescoal’s website http://www.wescoal.com, http://www.wescoal.com/downloads/2017/KING-III-COMPLIANCE.pdf. Wescoal will engage a similar process in respect of king IV compliance by the close of the FY18 period.

Board of directorsThe Board retains full and effective control over the company. Apart from regular meetings, additional meetings are arranged, when necessary, to review strategy, planning, operations, financial performance, risk and capital expenditure human resources and environmental management. The Board is also responsible for monitoring the activities of executive management.

Appointments to the BoardThe Board has adopted a policy setting out the procedures for appointments to the Board. Such appointments are formal and transparent and a matter for the Board as a whole, assisted by the Remuneration and Nominations Committee.

ChairpersonThe non-executive Chairperson, who is not independent, is Robinson Ramaite. The Board delegates its responsibility for ensuring the effectiveness of governance practices to the Chairperson. He leads the Board and is responsible for representing the Board to shareholders. As required in terms of the Listings Requirements of the JSE, the role of the Chairperson is separate from that of the Chief Executive Officer.

To further strengthen the Board, Teresita van Gaalen is the lead independent non-executive director (“LID”).

Composition of the BoardThe Board comprised three executive directors and five non- executive directors in the period under report. The non- executive directors are free to make their own decisions and judgements. They enjoy no benefits from the company for their services as directors other than their fees, potential capital gains and dividends on their interests in ordinary shares and options. The non-executive directors are high-calibre professionals and sufficient in number for their views to carry significant weight in the Board’s deliberations and decisions. The guidelines contained in the Listings Requirements of the JSE were used to test the category most applicable to each Director. The names and biographical details of each of the directors are set out on page 10 of this Integrated Annual Report.

Company secretaryVikesh Dhanooklal is the appointed Company Secretary since 23 of November 2015. The Board is satisfied that the Company Secretary is suitably qualified, competent and experienced to provide guidance in matters relating to governance and that all directors have access to the Company Secretary. The Company Secretary is not a director of the Company or any of its subsidiaries and the Board is satisfied that an arm’s length relationship exists.

Board meetingsNine Board meetings were held during the financial year ended March 2017. Board meetings are convened by formal notices incorporating a detailed agenda.

Board committeesWhile the Board remains accountable and responsible for the performance and affairs of the Group, it is assisted in the discharge of its duties by a number of sub-committees as follows:

• Audit and Risk Committee;

• Remuneration and Nominations Committee;

• Social and Ethics Committee; and

• Project and Investments Committee.

http://www.wescoal.com

http://www.wescoal.com/downloads/2017/KING-III-COMPLIANCE.pdf

http://www.wescoal.com/downloads/2017/KING-III-COMPLIANCE.pdf


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Board meetings held during the financial year ended 31 March 2017

17 May2016

Special23 Jun2016

10 Aug 2016

Special23 Aug 2016

Special20 Sep2016

Special 05 Oct2016

Special09 Nov2016

17 Nov 2016

Special24 Jan 2017

Robinson Ramaite(Chairman)

Teresita van Gaalen(Non-Executive Director)

Kosie Pansegrouw(Non-Executive Director)

Humphrey Mathe(Non-Executive Director)

Kabela Maroga(Non-Executive Director)

Waheed Sulaiman(Executive Director)

Bothwell Mazarura(Executive Director)

Thivhafuni Tshithavhane(Executive Director)

Izak van der Walt(GM: Operations Finance) (Invitee)

Vikesh Dhanooklal(Company Secretary)

Mike BerryCEO-Wescoal Trading (Invitee)

Dutch Botes CEO-Wescoal Mining (Invitee)


The Independent BoardThe Independent Board (“IB”) is positioned by the Board of Directors to preside over corporate activities for good governance and where necessary to preside when any possible conflict of interest may exist and regulations call for an independent governing body. It comprises independent non-executive directors who are not active shareholders and who are not affiliated with the executives of the firm, directors who have no business dealings with the company.

The Independent Board is expected to provide vigilant oversight to mitigate risk and to promote shareholder value. In the period under review the IB provided oversight of the BEE Transaction that saw the Group progress to a level in excess of 58% black ownership. The Independent Board also oversees Board responsibilities in areas such as M&A when independence is required.

The Independent Board is comprised of independent non-executive directors; Teresita van Gaalen (LID), Kabela Maroga (CA)SA and Dr Humphrey Mathe (PhD) FGSSA.

Remuneration and Nominations Committee Remuneration reportFY17 marks Year II of the Wescoal transformation, driven by the Board’s vision for a new Wescoal. This was a year of focus on fundamental change and organisational renewal.

The Board and the executive team continued to drive the strategic objectives of business growth and transformation and this defined the priorities and principal objectives for the committees, in support of a young, carefully selected, dynamic and well-qualified management team.

Critical platforms built in the prior year came to the fore in FY17 to have a positive impact and contributed to the excellent results posted by the operations;

The Performance Management Programme (PMP) implemented to appraise group results and individual performance provides the blueprint for continuous evaluation of the outcomes – taking Wescoal towards best practice in Human Capital management and to a leadership position in the Coal sub-sector.

A culture of high performance throughout the entire organisation was driven by contractual Key Performance Indicators (KPIs). The PMP-based approach was introduced in FY17 through a scorecard system; the KPIs are defined annually enabling executives and senior managers to focus on strategic imperatives.

Progress achieved makes alignment with the principles of King IV a natural step forward. The Remuneration and Nominations Committee remains steadfast to ensuring the approach to remuneration is fair, responsible and transparent throughout the organisation.

Together, the Board and the executive team are committed to stakeholder value creation – value creation that is underpinned by continuous business improvement methods, by continuous business improvement methods, leading to increased overall efficiencies.

Leadership direction An important feature of executive development in this period has been an emphasis on self-actualisation of a younger executive, through focused coaching by external professional interventions. This process, guided by new energy and a fresh outlook set to redefine the Company’s mission, vision and values, to fall in line with the long-term vision and in the short to medium terms to support planned acquisition activities already in process.

Key outcomes of the Committee’s engagement with the executive are:

• To oversee and monitor organisation-wide management of remuneration practices in support of business objectives and policies;

• To facilitate the retention of a competent and capable executive and senior management team;

• To lay a strong foundation for fair and responsible remuneration and suitable reward to effectively serve the short, medium and long-term strategies;

• To ensure integrated thinking, transparency and good corporate governance prevail through appropriate remuneration principles, policies and practices; and

• Creating alignment to a value-based leadership philosophy.

As the revitalised companies in the group progress through organisational maturity cycles the broader vision of substantial organic and inorganic growth is expected to lengthen this period of organisational change and transformation beyond FY18.

The long-term relevance of the direction that is given today by the Remuneration and Nominations committee to the Board on matters of its oversight responsibilities demands a steady hand approach while also being sufficiently robust and fit-for-purpose to responsibly balance short-term challenges, long-term sustainability imperatives, retention plans and strategic talent acquisition.

The changing world in which we trade and the rapidly growing organisation that is Wescoal make up a challenging environment, demanding ever increasing focus from the members of the Remuneration and Nominations Committee and generous support from the executive team. The good progress is directly linked to the unquestionable commitment of every one of the role players who work and collaborate with the committee and whose sterling efforts are fully recognised here.

Teresita van GaalenChairperson of the Remuneration and Nominations Committee


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The Remuneration and Nominations Committee (REMCO)Committee’s role The Remuneration and Nomination Committee (“the Committee”) is constituted as a committee of the Board of Directors (“the Board”) of Wescoal Holdings Limited (“the company”). The duties and responsibilities of the Committee are in addition to those duties and responsibilities that the Committee members have as members of the Board. The Committee has an independent role with accountability to the Board and shareholders.

The Committee provides reasonable assurance to the Board that the remuneration of executives and prescribed officers is market referenced and competitive, the disclosure is accurate and transparent, and that the Company’s remuneration is comparable to sector comparators. The broader terms of reference of the Remuneration and Nominations Committee are outlined in the Committee’s Charter.

From the perspective of good governance the Board determines the remuneration of directors and executives based on recommendations made by the remuneration committee, taking into consideration market conditions, expert advice from remuneration specialists and in accordance with a remuneration structure and policy approved by the Board which has been disseminated to shareholders.

Members of the CommitteeThe Committee consists of at least three members of the Board, with a quorum being two members. The Remuneration and Nominations Committee are independent non-executive directors being more than the required majority recommended by King III. The Committee held five special meetings and three ordinary meetings in the period as reported as shown on page 45. The Group Chief Executive and the Head of Human Resources attend meetings by invitation to provide the relevant assistance, insights and consultation in line with the Committee’s mandate.

Main focus areas of the committee have been the following:• Annual self-assessment of the Committee’s performance

and efficacy in its mandate.

• Cross-committee collaboration for alignment and ethical leadership with the Audit, Risk and Compliance Committee and the Social and Ethics Committee on an on-going basis.

• Judicious management to ensure optimum functioning while planning Board size and composition which necessarily must also take into consideration the medium-term view and post-acquisition period at this time of expansion post acquisition period.

• Progressing of the NED candidate recruitment plan.

Remuneration governance and policy

• Performance Management evaluation processes (PMP) for the Chief Executive and the Company Secretary executive through a cross-committee review panel.

• Review of the Long-Term Incentive Scheme and applicable performance measures.

• Executive and senior management independent remuneration benchmarking.

• Succession planning and executive recruitment.

• Engaging governance compatibilities in the role of the Social and Ethics Committee regarding executive reward.

• Review and implementation of an updated Committee Terms of Reference.

• Approval and recommendation of the Remuneration Report.

Remuneration policyWescoal’s remuneration approach reinforces our belief in efficiently mining, processing and selling coal and related products, safely and responsibly. The remuneration approach of the Company is informed by effective benchmarking and takes into consideration, inter alia, studies and reports on the executive and non-executive remuneration, within South Africa.

The company engaged external remuneration specialists to conduct executive pay benchmarking and to gather in this process an up-to-date, comprehensive picture of the market from across South Africa. The Company considers its profile as a listed entity, first and foremost, then as both a coal mining company and a coal trading company in its market benchmarking approach via the coal mining market and the national (all industries) market as comparators.

Key principles of the remuneration policy• To attract and retain the best available talent

• To encourage a “peak-to-peak” performance culture to drive shareholder value

• To be market competitive

• The premise that employees must share in the sustainable good fortunes of the Company

• Takes into account sector benchmarking

• Sustainable remuneration practices

Remuneration of executive directors and prescribed officersThe remuneration mix of executive directors and prescribed officers in support of the business strategic objectives is a combination of fixed remuneration and variable remuneration based on performance. In April 2016, the Board approved the introduction of a new robust short-term executive incentive scheme and agreed that for FY18 there will be a process to develop a long and short term incentive programme.


Total guaranteed pay (TGP)The Company endeavours to pay fixed remuneration at the median or the fiftieth percentile (P50) of its relevant benchmark circle of companies. Although it may not pay on target at all material times, the company conducts an annual benchmarking to assess the relative positioning of salaries against the median applicable to each job grade of level, especially at the level of executive directors, prescribed officers and senior management. The information from the benchmarking conducted in the period under review will inform the amendment of the Company’s medium-term remuneration strategy.

TGP benefitsThe table below illustrates the benefits portion of the TGP.

The profile below illustrates the remuneration mix of executive directors and prescribed officers, including the senior management cohort who are mostly at and above Patterson level D4.

RETIREMENT FUND

(Alexander Forbes Umbrella Fund)

ADDITIONAL BENEFITS

REMUNERATION

Basic salary + retirement fund + group life + Medical Aid

TOTAL GUARANTEED

PACKAGEFIXED

Performance-basedAnnual STI for PattersonD4, E and F Patterson bands to pay out in cash based on financial KPIs.

SHORT-TERM INCENTIVE SCHEME

VARIABLE

EMPLOYER: 7.5% contribution

EMPLOYEE CONTRIBUTION:between 0%, 2.5%, and 7.5%

Group Life Cover-1-4 times annual salary

Universal education protector benefit (university book & residence assistance)

• Income disability cover of 75% of monthly salary

• Trauma & HIV assistance• Trauma insurance benefit

Family Funeral Plan Burial repatriation benefit to neighbouring countries


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Key activitiesPerformance management

The vigorous Performance Management Programme (PMP), with standard KPAs and KPIs for the executive and senior management (Patterson Bands D4 to F2), was implemented in April 2016. The first mid-year review conducted in September 2016 made way for the final performance appraisals read with business performance as per the annual external audit.

An embedded culture of robust performance and performance measurement is essential to sustainability alongside the forging and implementation of innovative growth strategies already in play.

Annual salary adjustment

The company awarded a 7% increase pool for the salary increases in the 2016 period and a similar increase was implemented for the 2017 year. The company believes in closing the wage gap between the highest and lowest jobs

4 Apr 2016

Special 18 Jul 2016

Special 15 Aug 2016

19 Oct 2016

2 Nov 2016

Special 18 Jan 2017

14 Mar 2017

Special 22 Mar 2017

Teresita van GaalenP P P P P P P P(Chairperson)

Kosie PansegrouwP P P P P P P P(Member)

Humphrey MatheP P P P P P P(Member)

Waheed SulaimanP P P P P P P P(Invitee)

Bongani HlopheP P P P P P P P(Invitee)

Vikesh DhanooklalP P P P P P P P(Company Secretary)

Bothwell Mazarura P P P(Invitee)

Kabela Maroga P(Invitee)

in the company, which is why in 2016 the 7% increase pool was allocated on a sliding scale with the lowest (Patterson A and B-Band) level staff receiving the highest allocation, and the highest ranking employees (Patterson E&F) receiving the lowest, single digit increase. Our resident trade union stakeholder, approved this approach in the process of consultation with Wescoal. The union is yet to have collective bargaining rights.

The company has officially adopted a remuneration approach that places value on internal equity (payment within the salary ranges) and market benchmarks (comparison to the fiftieth percentile) as points of reference for all salary adjustments, which was done for the 2017 increase.

KEY HIGHLIGHTS

ENSURING EFFICIENT SUCCESSION PLANNING

EFFECTIVE ROLL-OUT OF PMP

ETHICAL & BENCHMARKED REMUNERATION

MANAGING CONTINUITY

STRATEGY ALIGNMENT

GOVERNANCE

EFFECTIVE TRANSITIONING OF MINING CEO, 1ST APRIL 2017

TRANSFORMING LEADERSHIP TEAM

EFFECTIVE DELEGATION OF AUTHORITY

=+


The Group’s short term incentive scheme (STI) is illustrated below:

Contracts, severance and terminationExecutive directors and prescribed officers have employment contracts which include a minimum 30 days notice period. There are no balloon payments on termination, automatic entitlement to bonuses or automatic entitlement to share-based payments other than in terms of the Company’s approved share options incentive trust rules.

Appointment of non-executive directorsNon-executive directors appointed in the year are subject to election by shareholders at the Annual General Meeting following their appointment after which they retire in accordance with the Memorandum of Incorporation (MOI).

Non-executive director feesAs recommended by King III Board fees include both a base retainer fee, and an attendance fee which are sufficient to attract and retain suitably qualified individuals to complement the skills mix requirements of the Board and its sub-committees. The fees are reconciled by the Human Resources Head and Chief Financial Officer and approved for payment by the Group Chief Executive Officer on a monthly basis.

An annual review for shareholder approval is conducted, driven by an independent benchmarking exercise.

SHORT-TERMINCENTIVE

SCHEME (STI)

PARTICIPATION is a performance-based senior management STI in which senior managers (Patterson D4 to E2) and executives (Patterson E4 to F) are eligible to participate. Junior employees below Patterson D band are eligible for a discretionary annual incentive based on group financial performance.

OPERATION is based on the group’s performance as at the end of the financial year in March. The formula is:

– Performance rating 3 = 50% of annual salary opportunity

– Performance rating 4 =75% of annual salary opportunity

– Performance rating 5 = 100% of annual salary opportunity

LIMIT & MEASURES– Limit of the STI payment as a

percentage of TGP is 100%– The current STI is driven by

triple bottom line performance.

CHANGES FOR 2017The Board has approved the group scorecard and executive KPIs for FY18. The Board is in the process of the final design and approval of an FY18 STI and longer-term LTI, specific to the executive and senior management

PURPOSEThe fundamental aim is to improve organisational performance


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Implementation of policies for the review period

Summary of remuneration activities/decisions for the year

The main issues considered and approved by the Remuneration and Nominations Committee in the period under review:

• Approval of the Remuneration and Nominations Committee work plan for 2017

• Review of remuneration policy

• Approval of remuneration report

• Review of shareholder feedback following the Annual General Meeting

• Annual salary review for employees and executives

• Approval of short-term incentive targets for executives

• Appointment of a Group Head of Information Technology, the transitioning of the Chief Executive Officer designate of the Mining Company into the role effective April 2017

• Implementation of a performance management programme

April 2017 total guaranteed pay (TGP) Annual Salary AdjustmentAll staff in the Company received an average 7% increase to TGP. Executives and senior management received an average of 5% increase.

Increase in non-executive director fees

Non-executive director fees are as approved at the Annual General Meeting and valid from that date until the next AGM.

Incentive Share Scheme

The Wescoal employee share incentive scheme remains an area of focus, specifically to increase its reach and to concentrate on its support function of the Group’s talent retention and performance reward for the medium and long-term incentive strategies.

The existing share incentive scheme has been subject of detailed scrutiny, the result of which is to pursue new methods, while it naturally matures in normal course of business over the vesting period. The importance of employee share ownership to Wescoal is highlighted by the opportunity it presents from a BEE perspective.


Functions alongside the Remuneration CommitteeThe consolidation of the Nominations Committee with the Remuneration Committee under one banner secures higher frequency and processing efficiencies through greater, interactive consultation on the matters of the Nomination Committee and its areas of focus which adds expediency.

The Board has identified and communicated the need to increase its size through new appointments. The requirement for additional technical mining skills in particular and legal expertise among other specialties is on record in the annual Board analysis. To this end the committee has positioned a line-up of suitably qualified, strong prospective candidates, recruited via a variety of channels including shareholder referrals, talent scouting and third party specialist agents among other.

Prudence in the approach to ensure sustainability, stability and continuity and also in consideration of major corporate activity over the period as well as acquisition processes in progress have, together defined the timeline for the appointments which are on the agenda as priorities for FY18.

The main purpose during FY17 was to extensively review the pipeline of executive talent below Board level, future executive succession plans at that level and to bolster this, the committee worked hand-in-hand with the Social and Ethics Committee in the review and development of the Group’s provision of appropriate training and development programme and to measure outcomes.

The role of the committeeThe Committee exists to assist the Board in the effective discharge of its responsibility to ensure that the Board has the right composition, size, skills set and experience and represents the appropriate diversity of people in gender, age, experience. It therefore comprises of people with knowledge and a range of independent, varied and informed views are provided, the directors have appropriate backgrounds for the task as well as the level of commitment that is required.

The responsibilities of the committee extend to the election and installation of new directors, director re-election and the recruitment of key members of the executive management team to ensure the necessary skills and experience to direct the company in the successful execution of its strategy.

Election of DirectorsA rigorous selection process leads to the appointment of all directors by the Board and their recommendation by the Nominations Committee:

• Identification of a vacancy and profiling of the requirements

• Recruitment of candidates

• Selection process and fit of candidates to a short list based on a predetermined matrix in an open and transparent process

• Interviews

• Final recommendation to the Board

The performance of the Board and each committee is reviewed annually as part of the Board evaluation process. The findings lead to the recommendation of election and re-election of all directors who are standing for re-election at the group’s AGM.

The Nominations Committee plays the role of facilitator in delivering the transformation objectives of the organisation.

Focus on gender and race diversity that is representative throughout all levels of the business, operations and including the Board has been set as the short to medium-term imperative while ensuring transparency in the process. Diversity targets set reflect as KPIs in the contracted outcomes for FY18, underpinned by policy.

The Board has adopted a policy on tghe promotion of gender diversity to support its objectives to maintain the current 25% female representation at Board level.

Key activitiesThe Nominations Policy calls for a bi-annual Board self-assessment process which is guided by an independent, JSE accredited body to ensure it measures effectiveness across key areas such as good corporate governance, the discharging of the Board’s responsibilities and strategy in Human Capital management and the specific work of the committee as is measuring the balance of the composition and skills set of the Board against strategic imperatives.

In the context of the management and operational leadership of the organisation, we spoke last year of changes made then which represented milestones in support of medium-term objectives and of the Board’s long-term vision. Significant progress since then is evidenced now in this next period (FY17) of the effectiveness of the transformation programme which has secured short-term targets in age and the racial profile of both the Board and the management team.

Gender diversity as an imperative alongside women leadership development reflects in appointments and initiatives put into action through the installation and development of the subsidiary boards and the composition of an in-house legal department. The Board has adopted a policy on the promotion of gender diversity to support its objectives to maintain the current 25% female representation at Board level. In line with regulation 38(K) of the JSE Listings Requirements, the Board has adopted a policy position to promote gender diversity.

This process of fundamental transformation has impacted across to the composition and profile of Wescoal equity holders to meet national imperatives and the requirements of major customers. This is reflected in the award of the long-term coal supply contract from Eskom for Elandspruit.

Nominations Committee


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Wescoal continues to strive towards positioning itself as an employer of choice for mid-level and senior professionals across relevant disciplines including technical and non-technical careers. We aim to position ourselves as an environment that refines individual stature of technical and leadership professionals who invest their career with the company.

To better inform the company’s succession strategy for the medium-term, succession planning is a key initiative that is currently focusing on the senior management level and the executive team. Strategy is focused on a behavioural competency framework that underlines delivery par excellence. The long-term benefits from this process are designed to ensure the organisation has the right people operating in the right manner and that vacancies can be ostensibly filled from within.

The pie charts show the representation, by race, of the executive team and the group senior management team, including executive members (Patterson level E4 and F2) and senior staff between Patterson grades D4 and E2.

BOARD COMPOSITION

Independent non-executive directors (3)Non-independent non-executive directors (2)Executives (3)

37.5%25%

37.5%

DIRECTOR AGE PROFILE

>50 years40 − 50 years30 − 40 years

37.5%37.5%

25%

GROUP EXECUTIVE RACIAL PROFILE

AfricanWhiteIndian

42%29%29%

GROUP SENIOR MANAGEMENT RACIAL PROFILE

AfricanWhite

40%60%

BOARD GENDER DIVERSITY

Male (6)Female (2)

75%25%

BOARD RACE DIVERSITY

HDSA (5)Other (3)

63%37%


Introduction of subsidiary BoardsSubsidiary Boards for the Trading and Mining companies have been formed. This is an important step in compliance with the Group’s governance code and Listings Requirements.

Directors are duly appointed in terms of the Companies Act and have been inducted to their role, fiduciary responsibilities and duties through formal training workshops. Most are members of the Institute of Directors in Southern Africa (IoDSA). The directors are listed below.

Mining Board of Directors:

• Mrs Nthabiseng Mbekeni-Head of Finance, Wescoal Mining

• Mr Bonani Siko-General Manager, Wescoal Mining

• Mr Izak van der Walt, General Manager, Group Finance Operations

• Mr Bongani Hlophe, Group Human Resources Executive

• Mr Waheed Sulaiman, Group Chief Executive Officer

• Mr Dutch Botes, Former CEO, Wescoal Mining

• Mr Thivha Tshithavhane, CEO Wescoal Mining

• Mr Ettienne Strydom, Director Wescoal Mining (resigned March 2017)

The Wescoal Trading Board of directors:

• Mr Waheed Sulaiman, Group Chief Executive Officer

• Mr Bongani Hlophe, Group Human Resources Executive

• Mr Mike Berry, CEO Wescoal Trading.

It is important to note that leadership development and succession planning has become an all-important feature on the agenda of the Nominations Committee, more in respect of ensuring that leadership and technical skills are developed in line with Wescoal’s model of success and retained within the business. A further facilitated career pathing and succession planning development within the year was the deployment of Thivha Tshithavhane into the role of CEO for the mining company, effective 1 April 2017. The deployment is for a period of three years, to allow for a migration from business development to leadership. This process has seen the former CEO, Dutch Botes, join the Wescoal Holdings team to play a key leadership role in group expansion projects as the group grows its resource base. Dutch will continue to serve on the Wescoal Mining Board of directors as well as to lead current joint ventures for the mining company.

The Committee must ensure:

• It has adequate plans for the succession of its members, including the Group Chief Executive Officer and the executive team.

• It has appropriate selection criteria and the necessary processes for the identification of a diverse range of suitable candidates to become members of the Board in keeping with strategy.

Analysis of the work completed and in progress during FY17:

Permanent appointment Chief Executive Officer

Waheed Sulaiman – appointed April 2016

Appointment

Group Executive Director for Business Development and Projects

Thivha Tshithavhane – appointed April 2016

Appointment

Chief Financial Officer

Bothwell Mazarura – appointed July 2016

(Resigned August 2017)

Appointment

General Manager Operations Finance

Izak Van Der Walt – appointed July 2016

Chief Financial Officer

Izak Van Der Walt – appointed September 2017


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Social and Ethics CommitteeThe Wescoal Social and Ethics Committee was established in 2014 and it operates under a mandate from the Board, with formal terms of reference (charter) approved by the Board. It is chaired by an independent non-executive director and its membership includes other non-executive directors, executive directors and invited attendees from senior management. The committee strives to meet at least twice a year. Wescoal is committed to high ethical standards, responsible extraction of the mineral resources, safety of its employees, high standards of environmental care and responsible engagement with all stakeholders.

Social and economic development and corporate citizenshipA key component of the Wescoal business strategy is to be a responsible and accountable corporate citizen that contributes to the economic development of the country. Through its community investment strategy, Wescoal remains committed to the empowerment, development and growth of the communities that are impacted by its activities. Wescoal’s programmes of shared objectives of corporate social investment include:

• To develop and empower disadvantaged communities in the areas where Wescoal operates or has material influence;

• To create and enhance the company’s reputation as a responsible corporate citizen;

• To strengthen relationships with customers;

• To build and improve relationships with the company’s existing and potential stakeholders through forming mutually beneficial partnerships; and

• To attract quality, socially responsible staff to the company as well as retain and enhance the loyalty and pride in the company for existing staff.

The company has approved and implemented its Corporate Social Responsibility strategy, which will inform the triple-bottom-line performance of its management. Wescoal management and employees are committed to maintaining a safe and healthy working environment.

Wescoal is committed to sustainable development as outlined in the King codes.

Ethics management and code of conductWescoal has an approved code of conduct policy. This code has been distributed to all suppliers of the company. The company has a zero-tolerance approach to unethical behaviour and is committed to ensuring that its employees uphold the company’s good reputation. The company strives to operate in accordance with the highest ethical standards and in compliance with all applicable laws. The code of conduct covers, amongst others, the following areas:

• Honesty and ethical conduct;

• Conflicts of interest;

• Safety, health and environmental protection;

• Compliance with laws, rules and regulations;

• Competition and fair dealing;

• Unfair competition/anti-trust;

• Health and safety of employees;

• Legal compliance and business practices; and

• Respect for the basic rights of employees.

The company has approved and implemented a Human Rights Code, which was approved by the Board in February 2017. The code is aligned to the International Labour Organisation (ILO) Declaration of Human Rights in as far as collective bargaining and freedom of association rights, prohibition of forced and child labour and elimination of discrimination is concerned. The code has also been distributed to all suppliers and it is expected that in the FY18 period, it will be a requirement for all suppliers to commit to same.

Implementation of Wescoal’s ethics policiesAll Wescoal managers are responsible for compliance with and enforcement of Wescoal’s Social Responsibility, Ethics, and Human Rights Codes in their areas of operation.

Health, safety and environmentWescoal’s safety, health and environmental performance are covered on page 20 in this annual report.

Legal and statutory licencesWescoal’s business units comply with applicable legal and statutory requirements of the relevant regulatory authorities.

Wescoal Holdings has put in place a Regulatory Compliance reference group comprising of company executives and senior management from both trading and mining businesses, to engage on the compliance landscape of Wescoal in a coordinated manner.

EmploymentWescoal recognises the importance of its employees whose commitment, skills and energy are central to the business goals. Wescoal remains committed to the development of its employees in a manner that positions their future contribution within the company or the relevant economic spaces in which we operate nationally. This is a deliberate effort to focus on building capabilities that translate into delivery of company objectives as well as position employees to have marketable skills that can be deployed outside the company where appropriate, benefiting themselves and their society. With regards to employment, Wescoal endeavours to meet all applicable laws, rules and regulations.

Special attention is paid to legislation dealing with working conditions, wages, hours, remuneration and benefits and minimum age for employment.


Enterprise and skills developmentWescoal has taken the opportunity to review its enterprise supplier development (ESD). The company has made an investment of approximately R5.6 million in local economic development (LED) within the period, with projects ranging from residential construction projects to benefit the community and ad hoc social investment projects. Our enterprise development initiative is underscored by our relational and economic investment which is intended to identify entrepreneurial potential and shepherding its development to translate into sustainable businesses that may migrate into either the Wescoal or industry supply chain. We anticipate that the next few years will manifest the results of our investment. Wescoal remains committed to its skills development initiatives and we have invested approximately R1.9 million in the period for advancing planned skills development. Wescoal has successfully submitted both its skills development plans for 2017 and the annual training reports for 2016.

Supplier developmentThe company remains committed to transforming its supplier profile. The emphasis underlying our commitment is Black Economic Empowerment that changes the profile of our core or top tier suppliers in our mining and logistics operations space by continuously decreasing the proximity between Black participants and potential participants and our value chain. Our BEE approach includes reviewing our supplier needs and standards regularly to ensure that these are well known and attainable by suitably qualified and resourced potentials and participants.

Committee assuranceWescoal’s Social and Ethics Committee is satisfied that it complied with its legal, regulatory, and other responsibilities during the current financial year.


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RISK MANAGEMENTWescoal management has implemented an ongoing process, endorsed by the Board, to identify risk, measure its potential impact and implement the necessary proactive steps to manage these risks. This is in line with the recommendations of the King Code on Corporate Governance for South Africa (which is commonly referred to as King III), as well as international best practice.

The Chief Executive Officer and executive management team ensure the realisation of the Risk Management Policy as approved by the Board by implementing a common and integrated Risk Management Framework. This requires a team-based approach across the group, as coordinated by the Audit and Risk Committee.

Areas of focus

The effective management of risk remains an area of focus and is central to the continued growth and efficient management of Wescoal. We identify our strategic business objectives, and our material focus areas, through our structured internal risk management process, and with consideration of the views and interests of our stakeholders. The concept of risk appetite guides our risk management activities and the approach focuses on managing uncertainty (or risk) to ensure that controls required manage risks within pre-stated tolerances, remain effective and efficient.

HDSA STATUS OF WESCOAL

FUNDING AND CAPITAL STRUCTURE

LONG TERM OFF-TAKE

AGREEMENTS

• Key for Eskom and other off take agreements

• Renewed focus area for DMR

• Wescoal’s key objective of HDSA control was achieved in December 2016

• Initiatives implemented during the year increased HDSA ownership to 51% and the overall significance of this risk dissipated, It remains an area of focus though.

• Key to implementing organic growth projects

• Key to pursue inorganic growth options

• Wescoal funding model is an area of focus, to secure long-term funding.

• Stable operations, improved financial performance and balance sheet gearing created opportunities for beneficial funding options being advanced at present.

• The expansion of banking arrangements and the BEE cash transaction has significantly improved the funding position.

• Most of Wescoal’s coal is suitable for Eskom

• Eskom contract brings consistent demand and volumes, beneficial to operations and cost

• Wescoal’ strategy is for long-term offtake agreements and the securing of a five-year Eskom contract during August 2016 contributed to the lowering of the overall risk exposure.


Structural risks have the potential of significantly affecting business sustainability or derailing business plans. These types of risks include data protection and information security, social license to operate, development and growth of alternative energy sources, climate change concerns, access to water and power. Wescoal will continue to develop its responses and actions to these risk categories.

Keaton TransactionThe Boards of directors of Wescoal and Keaton Energy announced that Wescoal made an offer to Keaton Energy to acquire 100% of the issued ordinary share capital of Keaton Energy.

The Wescoal Board and management team believe the transaction will result in significant benefits for the business and is a significant step towards realising their vision of creating a truly South African significant coal producer that

The company is ever mindful of risks to the overall operation affecting the sustainability of the business. These include:

ONE MAIN CUSTOMER

PRIMARY PRODUCERS

COMPETING WITHTRADING DIVISION

CRIMINALITY LIFE OF MINE (KEY RISK

ELIMINATED)

• Wescoal Mining’s primary product is Eskom grade coal and there is a natural tendency to have a large part of the business exposed to one client.

• The Trading Division assists to diversify the client base.

• The Group made significant progress in diversifying revenue streams by broadening the customer base and revenue generation activities in both local and export markets, as well as formally strengthening the supply chain and customer relationships.

• Wescoal’s trading and mining divisions work closely together to ensure potential synergies are exploited.

• Wescoal is exposed to crimes related to theft of assets and potential acts of fraud. The business implemented a whistle blowing hotline and improved the security measures, inventory controls and policies to address these exposures. This risk has largely been contained during the year under review and remains a focus area for management.

• Wescoal made significant progress during the year, securing extended life of operations.

• Contribution of the flagship Elandspruit mine continues to exceed expectations.

• Wescoal Competent Persons Report indicates additional resources at Intibane mine.

• Progress to secure the resource contiguous to the Khanyisa mine includes finalization of the commercial agreements and preparation for start-up of operations shortly after year end.

• The Keaton transaction also significantly increases the resource base of the Group.

is majority black-owned. Wescoal will continue to set its sights on being a key player in the consolidation of the South African junior coal mining sector as a means to grow the company significantly.

As part of the due diligence exercise, the company evaluated the relative risks associated with the transaction, the related parties, collieries and projects and the South African and global coal sectors. The prevailing market and industry conditions were also analysed in assessing the forecast risk profile of the business.

In anticipation and preparation for the transaction, management undertook a thorough risk management exercise to address the risk-related circumstances related to the merged entity. This will ensure that a detailed programme is in place to facilitate a smooth transition whereby the significant business risks are mitigated to an acceptable level.


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ANNUAL FINANCIAL STATEMENTS

INDEX56 General information

56 Declaration by the Company Secretary

57 Audit and Risk Committee Report

60 Directors’ Responsibilities and Approval

61 Directors’ Report

66 Independent Auditor’s Report

72 Statement of Financial Position (Group)

73 Statement of Financial Position (Company)

74 Statements of Profit or Loss and Other Comprehensive Income

75 Statements of Changes in Equity

76 Statements of Cash Flows

77 Accounting Policies

87 Notes to the Annual Financial Statements

WESCOAL Integrated report for the year ended 31 March 201756

GENERAL INFORMATION

Country of incorporation and domicile South Africa

Nature of business and principal activities The mining, processing, sale and distribution of thermal coal

Directors MR Ramaite (Chairman)JG PansegrouwDMT van GaalenKM MarogaHLM MatheW SulaimanIJ van der Walt (Resigned 30 June 2016)T Tshithavhane (Appointed 5 April 2016)B Mazarura (Appointed 1 July 2016)

Registered office First Floor Building 10, Woodmead Business Park142 Western Service Road, Woodmead

Business address First Floor Building 10, Woodmead Business Park142 Western Service Road, Woodmead

Postal address PO Box 1962, Edenvale, 1610

Ultimate holding company Wescoal Holdings Limited

Bankers Investec and ABSA Bank

Auditors PricewaterhouseCoopers Inc.Registered Auditor

Company secretary V Dhanooklal

Transfer secretary Computershare Investor Services Proprietary Limited

Level of assurance These consolidated annual financial statements have been audited in compliance with the applicable requirements of the Companies Act, No. 71 of 2008.

Preparer The consolidated annual financial statements were independently compiled under the supervision of IJ van der Walt CA(SA).

Published 27 June 2017

DECLARATION BY THE COMPANY SECRETARY

In terms of section 88(2) (e) of the South African Companies Act, No 71 of 2008, as amended (the Act), I hereby certify that, to the best of my knowledge and belief, Wescoal Holdings Limited has lodged with the Companies and Intellectual Property Commission, for the financial year ended 31 March 2017, all such returns and notices as required in terms of the Act, and that all such returns and notices are true, correct and up to date.

Vikesh DhanooklalCompany Secretary

27 June 2017

WESCOAL Integrated report for the year ended 31 March 2017 57

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AUDIT AND RISK COMMITTEE REPORT

The report from the Audit and Risk Committee is presented below in terms of requirements of the Companies act, the JSE Listings Requirements and the committee’ charter as approved by the Board of Directors. The Audit and Risk Committee is appointed at each Annual General Meeting as required by the Companies Act, No 71 of 2008 (the Act), part D, section 94.

The Audit and Risk Committee is responsible for the functions and duties as required in terms of section 74 and Regulation 43(5) of the Companies Act, No 71 of 2008. In assisting the Board to discharge its duties, the committee also advises on safeguarding of assets, appropriate systems, controls and processes for oversight and reporting. The committee also oversees matters relating to internal controls, accounting policies and practices, internal and external audit, integrated reporting, risk management, IT governance, corruption and fraud risks.

Constitution of the committeeThe Committee consists of three non-executive directors who are recommended by the Board and confirmed by shareholders at the Annual General Meeting. Each member has the adequate relevant knowledge, expertise and experience for the committee to execute its duties and responsibilities. Biographical details of the members of the Committee can be found on page 10 to 12 of this report. The CEO, the CFO, representatives of the external and internal auditors, other assurance providers, and other professional advisors attend meetings as invitees. Biographical details of the CEO and CFO can be found on page 10 and 11 of this report.

ResponsibilitiesIn addition to the duties required of it by the Companies Act, the JSE Listings Requirements and King III, the main responsibility of the committee is to assist the Board in discharging its duties relating to the monitoring and review of:• The effectiveness of the Group’s information systems and other systems of internal control;• The effectiveness of the internal audit function;• The reports of both the external and internal auditors;• The integrated annual report and specifically the annual financial statements included therein;• The accounting policies of the Group and any proposed revisions thereto;• The combined assurance plan, external audit findings, reports and fees and the approval thereof;• The safeguarding of assets and the operation of adequate systems, accounting practices and control processes;• Promoting the overall effectiveness of good corporate governance in the Group, including the governance of risk;• Compliance with applicable legislation and requirements of regulatory authorities; and• The principles for recommending the use of external auditors for non-audit services.

Committee meetingsAudit and Risk Committee meetings held during the financial year ended 31 March 2017

4 Apr 2016

1 Jun 2016

(Special) 12 Jul 2016

15 Aug 2016

26 Oct 2016

(Special) 17 Jan 2017

(Special) 25 Jan 2017

2 Mar 2017

Kabela Maroga(Chairperson – Non-Executive Director) ü ü ü ü ü ü ü ü

Teresita van Gaalen (Member – Non-Executive Director) ü ü ü ü ü ü ü ü

Kosie Pansegrouw (Member – Non-Executive Director) ü ü ü ü ü ü ü ü

Vikesh Dhanooklal (Company Secretary) ü ü ü ü ü ü ü ü

Izak Van der Walt (GM: Operations Finance) ü ü ü ü ü x ü

Bothwell Mazarura (Chief Financial Officer) ü ü ü ü ü

Waheed Sulaiman (Chief Executive Officer) ü ü ü ü ü ü ü

Andries Smit (Internal Auditor) ü ü ü ü ü ü

G.Bhunu (Internal Auditor) ü ü ü

JP van Staden (PWC – External Auditor) ü ü ü ü ü

Paul Cruywagen (PWC – External Auditor) ü ü ü ü


AUDIT AND RISK COMMITTEE REPORT CONTINUED

Discharge of duties during the year under reviewThe Committee has effectively discharged the following of its duties during the year under review:

Financial statements and accounting practicesThe Committee reviewed the accounting policies and the annual financial statements of the Company for the year ended 31 March 2017, and ensured that these were compliant with the provisions of the Companies Act, IFRS and the JSE Listings Requirements. This review culminated in a recommendation to the Board for the adoption of the financial statements.

The Committee reviewed the group’s significant accounting matters and recommended the approval thereof to the Board which includes:• The BEE transaction• Impairment review of the cash-generating units as well as individual items of property, plant and equipment• Provision for environmental rehabilitation and decommissioning• Taxation matters

External auditorsThe Committee has considered and satisfied itself with the independence and objectivity of PricewaterhouseCoopers Inc and JP van Staden in their respective capacities as the appointed external audit firm and lead audit partner. The Committee also ensured that the scope of non-audit services rendered did not impair their independence.

The Committee also satisfied itself that the external auditor and lead audit partner are both accredited on the JSE’s list of auditors and advisers. The Committee also approved the non-audit-related services performed by the external auditor during the year under review and determined the external auditor’s terms of engagement and fees for 2017.

Internal auditThe group’s internal audit function is fulfilled by Barish & Associates Incorporated and provides the Board with assurance on the key areas of the group’s internal financial controls. Internal audit provides assurance that the Company operates in a responsibly governed manner by performing the following functions:• Objectively evaluating effectiveness of the risk process to ensure adequate risk identification and mitigation.• Assurance and the internal control frameworks• Analysing and assessing business processes and associated controls• Reporting audit findings and recommendations to management and the Committee• Providing a written report on the assessment of the internal controls and control environment

The Committee considered the effectiveness of the internal audit function and monitored adherence to the annual internal audit plan. Both the internal and external auditors have unrestricted access to the Audit Committee, the Audit Committee Chairman and the Chairman of the Board, ensuring that auditors are able to maintain their independence.

Internal controlsThe Committee reviewed the reports of both the internal and external auditors, in respect of audits conducted on the internal control environment. The Committee also took note of any concerns arising from these audits and considered the appropriateness of the responses from management.

Based on the extent of the audit work carried out by both the internal and external auditors, nothing was brought to the Committee’s attention which would suggest a material breakdown of any internal control system. The Committee was therefore satisfied that the internal financial control environment continued to function effectively.

Risk managementThe Committee has satisfied itself that the level of unmitigated risks, both individually and in totality, are within the risk appetite of the Company, and that there is sufficient assurance provided to manage risks and the control environment through both internal and external assurance providers.

Legal and regulatory mattersUpdates on the legal matters are provided to the Committee at each meeting and the Committee considers the implications of these matters on fair presentation.

During the year under review, the Committee• Reviewed legal matters that could have a material impact on the company.• Considered reports provided by management, internal and external auditors regarding compliance with legal and regulatory

requirements.• Monitored complaints received through the ethics hotline and other sources, including reports on internal controls, fraud and violation of

laws and regulations.


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IT governanceThe committee is responsible for IT Governance on behalf of the Board and reviews the reports from management and external assurance providers to ensure that an adequate and effective IT system is maintained.

Integrated reportingThe Committee evaluated the integrated annual report for the year under review and assessed its consistency with operational and other information known to the Committee. The report was prepared using appropriate reporting standards, which conform to the requirements of King III and the JSE Listings Requirements.

The Committee therefore recommended the integrated report for 2017 for approval to the Board.

Solvency and liquidity reviewThe Committee is satisfied that the Board has adequately performed solvency and liquidity tests on the Company in terms of section 46 of the Companies Act, as and when required during the year under review.

Going concern statusThe Committee considered the going concern status of the Company on the basis of the review of the annual financial statements and other relevant information available to it and recommended such going concern status for adoption by the Board.

Finance director and finance functionThe Committee reviewed the performance of the Chief financial officer, B A Mazarura, and was satisfied that he has the necessary expertise and experience to fulfil the role and that he had performed appropriately during the year under review.

The Committee also considered, and has satisfied itself of the appropriateness of the expertise and experience of the finance function and adequacy of resources employed in this function.

The Committee is satisfied that, in respect of the period under review, it has conducted its affairs and discharged its duties and responsibilities in accordance with its terms of reference, the JSE Listings Requirements, the Companies Act and the King Code on Corporate Governance.

Kabela MarogaChairperson of the Audit and Risk Committee


DIRECTORS’ RESPONSIBILITIES AND APPROVAL

The Directors are required in terms of the Companies Act, No. 71 of 2008, to maintain adequate accounting records and are responsible for the content and integrity of the consolidated annual financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated annual financial statements fairly present the state of affairs of the Group as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the consolidated annual financial statements.

The consolidated annual financial statements are prepared in accordance with International Financial Reporting Standards and are based on appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The Directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Group and place considerable importance on maintaining a strong control environment. To enable the Directors to meet these responsibilities, the Board sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring that the Group’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group endeavors to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The Directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the consolidated annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The Directors have reviewed the Group’s cash flow forecast for the year to 31 March 2018 and, in light of this review and the current financial position, they are satisfied that the Group has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently auditing and reporting on the Group’s consolidated annual financial statements. The consolidated annual financial statements have been examined by the Group’s external auditors and their report is presented on pages 66 to 71.

The consolidated annual financial statements, set out on pages 61 to 119, which have been prepared on the going-concern basis, were approved by the Board on 27 June 2017 and were signed on its behalf by:

Waheed Sulaiman Bothwell MazaruraChief Executive Officer Chief Financial Officer

27 June 2017 27 June 2017


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DIRECTORS’ REPORT

The Directors submit their report for the year ended 31 March 2017.

Major shareholders of the Company:31 March 2017 31 March 2016

ShareholderNumber

of shares % of sharesNumber

of shares % of shares

K2016316243 (SA) (Pty) Ltd 213 628 122 58.93 – –Peregrine Group 17 504 143 4.83 – –Wescoal Share Incentive Trust 12 504 000 3.45 12 774 000 5.38 ET Mzimela – – 13 782 269 5.80MR Ramaite – – 44 547 450 18.75Simeka Capital Holdings (Pty) Ltd – – 30 303 030 12.76

The percentage of share calculation is based on the issued share capital of 362 528 951.

There were no changes to the shareholding of the major shareholders between year-end and the date of the financial statements.

Review of activitiesMain business and operationsThe main business of the Company is that of an investment and management company with operating subsidiaries engaged in the mining, processing and trading of coal. The Group operates principally in South Africa. The operating results and state of affairs of the Group and Company are fully set out in the annual financial statements and do not, in our opinion, require any further comment.

The Group made a net profit after tax of R30.20 million (2016: R51.8 million).

Detail of operating segments in terms of IFRS 8 is disclosed in note 41.

Going concernThe annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

Post-financial year-end eventsOn 3 February 2017 the Company announced its firm intention offer to acquire all of the issued ordinary share capital of Keaton Energy Holdings Limited (“Keaton Energy”). All conditions precedent to the acquisition were not met by the end of the financial year. Refer to note 40 for further disclosure of the transaction and status of conditions precedent.

Additional rehabilitation guarantees to the value of R38 million were issued to the DMR during June 2017.

The Board of Directors in considering the Group’s financial position and strong annual performance, has agreed to distribute R12 million to shareholders as a final dividend for the year.

The Directors are not aware of any other matters or circumstances arising since the end of the financial year relevant to an assessment of the consolidated annual financial statements at 31 March 2017, except as mentioned above.

Directors’ interest in contractsDuring the year ended 31 March 2017, none of the Directors had any interest in any contract or arrangement entered into by the Company or its subsidiaries.

Compliance with financial reporting standardsThe Wescoal Group and Company consolidated annual financial statements comply with IFRS, the South African Companies Act and the JSE Listings Requirements.

Share Incentive SchemeThe Directors are authorised to issue, allot and grant options to acquire up to a maximum of 29 186 272 ordinary shares of the issued share capital of the Company in terms of the Share Incentive Scheme. By 31 March 2017 a cumulative total of 19 150 000 (2016: 17 540 000) share options (net of forfeited options), had been allotted to employees of the Group, of which 9 410 000 (2016: 9 140 000) had been exercised. At 31 March 2017, unexercised share options under the scheme amounted to 9 740 000 (2016: 8 400 000), representing 2.69% (2016: 3.54%) of the issued shares of the Group.

Options are exercisable in five equal tranches, annually on the anniversary date of the options. The market value of shares relating to share options outstanding at year-end amounts to R22 207 200 (2016: R12 852 000). Options granted to employees have a five year contractual life and are forfeited if not exercised on termination of employment.

The Wescoal Share Incentive Trust is consolidated into the Group and Company. The shares held by the Trust are treated as Treasury shares in the Group and Company. Please refer to note 17 for more information.


DIRECTORS’ REPORT CONTINUED

Borrowing limitationsIn terms of the Memorandum of Incorporation of the Company, the Directors may exercise all the powers of the Company to borrow money, as they consider appropriate.

Share capitalAuthorisedThere was no change in the authorised share capital of the Company during the year. The authorised share capital of the Company is 500 000 000 ordinary no par value shares.

IssuedThe movement of shares during the year was as follows:

2017

Reported as at 1 April 2016 237 533 578 Issue of shares (BEE transaction) 124 995 373

Total shares as at 31 March 2017 362 528 951 Less: Treasury shares in Share Trust (12 504 000)

Net shares in issue at 31 March 2017 350 024 951

In terms of the authority granted by shareholders at the last Annual General Meeting held, all of the authorised but unissued share capital is placed under the control of the Directors as a general authority to them in order to allot and issue the same at their discretion in terms of the Company’s Memorandum of Incorporation and the JSE Listings Requirements. This authority expires at the next Annual General Meeting where shareholders will be asked to renew this authority.

Shareholders also granted the Directors authority at the last Annual General Meeting held to allot and issue for cash, without restriction, authorised but unissued ordinary shares in the capital of the Company placed under their control as they in their discretion may deem fit, subject to the following:• Issue shall be to public shareholders and not related parties• Paid press release be published at the time detailing certain financial effects• That issues in the aggregate not exceed 15% of number of shares of the Company’s issued share capital• Equity securities must be of a class already in use• Maximum discount permitted is 10% of weighted average traded price of shares over 30 business days prior to issue• Authority expires 15 months from last Annual General Meeting or next Annual General Meeting, whichever is the earlier date.

BEE ownershipDuring FY17 the Group’s BEE ownership increased from 37% to 59%. A consortium of Wescoal BEE shareholders consolidated their pre-existing shareholding in Wescoal under a BEE Structured Entity, (K2016316243 (South Africa) Proprietary Limited), and then subscribed for an additional 124 995 373 Wescoal shares.

In order to give effect to the transaction, the BEE Consortium, through the BEE Structured Entity, procured R178 121 292 of funding from the Industrial Development Corporation SOC Limited (the “IDC”) and Wescoal provided funding to the BEE Structured Entity for the balance of the Subscription Amount and other related capitalised BEE Structured Entity costs, in terms of which Wescoal subscribed for class B cumulative redeemable, preference shares in BEE Structured Entity for an aggregate amount of R35.5 million (“Class B Preference Share Subscription Agreement”) (refer note 12).

The BEE Structured Entity subscribed for the shares as a specific issue of shares for cash at a subscription price of R1.69 per Wescoal share, being a 10% discount to the 30-day volume weighted average price (“VWAP”) of Wescoal shares calculated as at close of trade on Wednesday, 21 September 2016. The ruling price on date of listing was R2.35 per share, exceeding the subscription price of R1.69 per Wescoal share. The discount accordingly reported as a BEE discount of R82.28 million in the statement of profit or loss (refer note 29).

Corporate governanceThe Directors acknowledge the importance of sound corporate governance and the guidelines set out in the report of the King Commission on Corporate Governance for South Africa (the Code). The Directors therefore embrace the Code as far as it is appropriate, having regard for the size and nature of the various companies making up the Group. The Board will continue to take such measures as are practicable to comply with the Code.

DividendDuring the year ended 2017, the Board resolved to declare R9.108 million interim dividend to shareholders. This interim dividend, as well as the 2016 final dividend of R10 million, was paid out during the 2017 financial year.


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ListingThe abbreviated name under which the Company is listed on the Main Board of the JSE Limited is ‘Wescoal’ and the short code is WSL.

DirectorsThe Directors of the Company during the reporting period were as follows:

Name Nationality

MR Ramaite (Chairman) South AfricanJG Pansegrouw South AfricanDMT van Gaalen Costa RicanKM Maroga South AfricanHLM Mathe South AfricanW Sulaiman (Chief Executive Officer) South AfricanIJ van der Walt (resigned 30 June 2016) South AfricanT Tshithavhane (appointed 5 April 2016) South AfricanB Mazarura (appointed 1 July 2016) Zimbabwean

Company SecretaryVikesh Dhanooklal is the appointed Company Secretary. The Company’s Transfer Secretary is Computershare Investor Services Proprietary Limited.

Litigation statementsOn 31 March 2016, the Group received a Statement of Claim, which commenced the pleadings in the Arbitration Proceedings pertaining to a dispute of certain provisions of a Coal Transportation Agreement concluded on 8 October 2014.

The Group disclaimed the liability and the arbitration claim was dismissed with costs on 21 October 2016.

On 1 December 2016, the Group received a notice of motion commencing review proceedings in the High Court, Gauteng Local Division, Johannesburg to set the arbitration award aside. The Review Proceedings are being opposed. The potential undiscounted amount of payments that the Group could be required to make, in addition to amounts already provided for, if there was an adverse decision related to the Review Proceedings, is estimated to be approximately R 11 million.

Refer to note 38 for further detail regarding pending litigation.

The Directors are not aware of any other major litigation or intended litigation against the Company.

ResolutionsThe following resolutions were approved by shareholders at an Annual General Meeting of the Company held on 9 November 2016:

Ordinary resolutions• Re-elect Mr RM Ramaite and Dr MH Mathe as Directors;• Appointment of Mr T Tshithavhane and Mr B Mazarura as Directors;• Appointment of Audit Committee members Ms KM Maroga, Mr JG Pansegrouw and Ms DMT van Gaalen;• The re-appointment of PricewaterhouseCoopers Inc as independent external auditors of the Company;• To place the authorised and unissued ordinary share capital under the control of the Directors of the Company to allot and issue at their

discretion in terms of the Company MOI and JSE Listings Requirements;• To authorise the Directors of the Company to issue unissued, but authorised shares for cash, subject to conditions; and• The endorsement, through a non-binding advisory note, and to ascertain the shareholders’ view on the remuneration policy and its

implementation.• The general issue of shares for cash.

Special resolutions• The authorisation of financial assistance to all related or inter-related companies; • Non-executive Directors remuneration;• General approval to re-purchase company shares; and• Adoption of the New Memorandum of Incorporation (MOI).


DIRECTORS’ REPORT CONTINUED

Interest in subsidiaries

Percentage holding

Net income/(loss)

after tax)

Name of subsidiary % R’000

Wescoal Trading Proprietary Limited 100 13 672Wescoal Mining Proprietary Limited 100 107 703Wescoal Mineral Recoveries Proprietary Limited 100 (2)Blanford 006 Proprietary Limited 100 1 641Wescoal Exploration Proprietary Limited 100 –Proudafrique Trading 147 Proprietary Limited 100 (1)(JJP) Res Ged 2 Van Plaas Vlakvarkfontein 213 Proprietary Limited 100 (2)(JJP) Ged 6 (Van Ged 2) Van Plaas Vlakvarkfontein 213 Proprietary Limited 100 (5)(JJP) Ged 16 (Van Ged 2) Van Plaas Vlakvarkfontein 213 Proprietary Limited 100 (2)

Details of the Company’s investment in subsidiaries are set out in note 8.

Independent auditorsPricewaterhouseCoopers Inc. (Johannesburg) will continue in office as Wescoal’s independent auditors for the ensuing year following their appointment in accordance with the Companies Act of South Africa.

Directors’ interest in the issued share capitalDirect

beneficialIndirect

beneficial

(thousands) (thousands)

31 March 2017MR Ramaite – 134 385JG Pansegrouw – 2 040W Sulaiman 1 110 – IJ van der Walt* 170 – T Tshithavhane 20 –

1 300 136 425

31 March 2016MR Ramaite 44 547 – JG Pansegrouw – 2 040 W Sulaiman 1 020 – IJ van der Walt 170 –

45 737 2 040

* IJ van der Walt was appointed as the acting Chief Financial Officer effective from 2 September 2015 to 30 June 2016.

There were no changes to the interests of the directors between year-end and the date of the financial statements.

Directors’ remunerationDetails of Director’s remuneration are set out below:

Executive Directors

Remuneration

Medical and provident fund

contributions Annual bonusFringe and

other benefits Cash total

IFRS 2: Expense

relating to share options

granted

R’000 R’000 R’000 R’000 R’000 R’000

31 March 2017W Sulaiman 3 683 120 1 100 215 5 118 241IJ van der Walt* 2 368 65 320 102 2 855 10T Tshithavhane 2 783 83 – 154 3 020 74B Mazarura** 2 096 53 – 101 2 250 87

10 930 321 1 420 572 13 243 412

* Izak van der Walt resigned as Director of the holding company with effect from 30 June 2016; he remains a director of subsidiary companies.** Bothwell Mazarura was appointed as Chief Financial Officer on 1 July 2016.


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Remuneration

Medical and provident fund

contributions Annual bonusFringe and

other benefits Cash total

IFRS 2: Expense

relating to share options

granted

R’000 R’000 R’000 R’000 R’000 R’000

31 March 2016M. du Plessis* 1 203 90 – 279 1 572 76W. Sulaiman 3 000 225 36 – 3 261 227I. van der Walt 939 – 6 – 945 3

5 142 315 42 279 5 778 306

* Morne du Plessis resigned as Director and Chief Financial Officer of the Group with effect from 30 September 2015

Non-executive Directors

31 March 2017

31 March 2016

Fees for services as a Director R’000 R’000

MR Ramaite 468 546JG Pangegrouw 485 482DMT van Gaalen 867 695HLM Mathe 574 434KM Maroga 574 387

2 968 2 544

Share options in the Company held by Directors

Financial year granted

Option grant (strike price)

Balance held at

31 March 2017

Available for take-up at 31 March 2017

Balance held at

31 March 2016

cents (thousands) (thousands) (thousands)

W Sulaiman 2015 185 1 000 400 1 000 2016 111 250 50 250

IJ van der Walt 2016 111 75 15 75 T Tshithavhane 2017 246 850 – – B Mazarura 2017 246 1 000 – –


INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF WESCOAL HOLDINGS LIMITEDReport on the audit of the consolidated and separate financial statementsOur opinionIn our opinion, the group and company financial statements present fairly, in all material respects, the consolidated and separate financial position of Wescoal Holdings Limited (the Company) and its subsidiaries (together the Group) as at 31 March 2017, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa.

What we have auditedWescoal Holdings Limited’s group and company financial statements set out on pages 72 to 119 which comprise:• the group and company statements of financial position as at 31 March 2017;• the group and company statements of profit or loss and other comprehensive income for the year then ended;• the group and company statements of changes in equity for the year then ended;• the group and company statements of cash flows for the year then ended; and• the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated and separate financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

IndependenceWe are independent of the Group in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B).

Our audit approachOverview

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Overall group materiality• Overall group materiality: R8.6 million, which represents 4.5% of profit before tax

(adjusted for once off items).

Group audit scope• We performed a full scope audit over all statutory entities of the Group.

Key audit matters• Impairment consideration of non-current assets in the mining operations.• Goodwill impairment assessment• Accounting for provisions: environmental rehabilitation• Black Economic Empowerment transaction


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MaterialityThe scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Overall group materiality R8.6 million

How we determined it 4.5% of the Group’s consolidated profit before tax (adjusted for once-off items including the BEE Charge that was recognised due to the specific issue of shares to the BEE Structured Entity and transaction cost incurred in respect of the Keaton acquisition).

Rationale for the materiality benchmark applied

We chose an adjusted profit before tax benchmark because, in our view, it is an appropriate measure of underlying performance and it is the benchmark against which the performance of the Group is most commonly measured by users. We chose 4.5% based on our professional judgement, after consideration of the range of qualitative materiality thresholds that we would typically apply when using profit before tax to compute materiality, and taking into account the level of debt within the Group.

How we tailored our group audit scopeWe tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

The Group consists of 10 companies (referred to as “components”). We performed full scope audits on all components.

In establishing the overall approach to the group audit, we determined the extent of the work that needed to be performed by us, as the group engagement team to issue our audit opinion on the consolidated financial statements of the Group.


Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters listed below are applicable to the consolidated financial statements. The Black Economic Empowerment Transaction is the only key audit matter that is applicable to both the consolidated and separate financial statements.

Key audit matter How our audit addressed the key audit matter

Impairment consideration of non-current assets in the mining operations.

Refer to note 5

The Group has an existing production asset base which is material in value. At 31 March 2017 the consolidated statement of financial position includes property, plant and equipment (PPE) amounting to R641 million, of which R563 million relates to the assets of the mining operations. Mining assets therefore constitute 88% of the Group’s PPE asset base.

The Group’s mining operations have evolved significantly over the past two years, with significant amounts being capitalised to Mining Properties. The Elandspruit mining operation had its first full year of production in the March 2017 financial year and its mining plans have continuously been revised and updated, resulting in planned increases in the rate of mining when compared to original plans (thereby reducing the expected life of the mine). Additional asset acquisitions to extend the lives of Khanyisa and Intibane mining operations were also capitalised.

In order to confirm that sufficient headroom still existed, management performed impairment assessments for the operations within the Group’s mining segment, based on future estimated cash flows discounted to net present value.

The assessments performed by management required judgement in the determination of key assumptions and future market conditions, particularly in relation to:• the discount rate,• reserves and resources (in determination of Life of mine (LoM)),

and• future cash flow forecasts taking into account the, working

capital, operating costs and capital expenditure.

Based on the results of the impairment assessment performed by management no impairment was noted and therefore no impairment charge was recognised.

Management’s impairment assessments of the Group’s non-current assets in the mining operations were of most significance to our audit because of the magnitude of these assets combined with the inherent risk associated with the application of judgement and estimates applied on projected future cash flows. A potential impairment charge could have had a significant impact on the Group’s financial performance.

We obtained management’s discounted cash flow impairment test model, verified the mathematical accuracy of the calculations derived from the model, which included recalculating the recoverable amount for each respective cash-generating unit (CGU), and comparing this to the respective net carrying values.

We obtained audit evidence in relation to management’s key assumptions used in the impairment model. The most significant assumptions used in the valuations included management’s best estimates of LoM, forecast coal prices, operating cash flow forecasts and discount rates.

We used our internal valuations expertise to independently re-calculate the discount rate applied by management. In re-calculating the discount rate, the key inputs used were independently sourced from market data and comparable companies. We also assessed the methodology applied in management’s calculation of the discount rate. We compared the discount rate used by management to our independently calculated rate and found it to be within an acceptable range.

LoM for the various mining operations is determined by considering the resources and the reserves of the mine and by considering the planned production output of the mine. We agreed the LoM as used by management in the respective impairment models to the respective LoM plans. We agreed the reserve and resource estimates used in the impairment models to management’s estimates. We considered the work of external experts engaged by management to assist with the estimation process and assessed their professional competence, objectivity, capabilities and adequacy of the work they performed. Based on the work performed, we accepted the reasonableness of the process followed by management to determine the assumptions in relation to LoM.

We assessed the reasonableness of management’s future forecasts of capital expenditure, coal prices and operating costs included in the cash flow forecasts by comparing them to historical forecasts, current operational results, and existing contracts in place. Based on the work performed, we accepted these forecasts for the purpose of our audit.

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF WESCOAL HOLDINGS LIMITED CONTINUED


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Goodwill Impairment Assessment

Refer to note 6

The consolidated statement of financial position as at 31 March 2017 includes a goodwill balance amounting to R74 million, which has been allocated to the Trading Segment.

IAS 36 requires an annual goodwill impairment assessment to be conducted and also when impairment indicators exist. Such an assessment incorporates judgement based on assumptions about future profitability and net cash flows from the related cash generating units (“CGU’s”), against which an appropriate discount rate must be applied. These assumptions are disclosed in note 6 to the consolidated financial statements.

Management did not identify any impairment indicators during the year, therefore only an annual impairment assessment was performed.

The complexity, level of judgement and estimation, and inherent uncertainty involved in forecasting and discounting future cash flows resulted in the goodwill impairment assessment being considered a matter of most significance to our audit.

We obtained the discounted cash flow valuation model used by management to determine the recoverable amount of the Trading Segment.

We obtained an understanding of the underlying basis and assumptions used to prepare the discounted cash flow valuation model through detailed discussions with management. We assessed the valuation methodology, assumptions and process against our understanding of the business. We tested the mathematical accuracy of the discounted cash flow valuation model without exception.

As indicated in note 6 to the consolidated financial statements, the discounted cash flow valuation model is most sensitive to the following key assumptions:• Gross margin;• Discount rates; and• Growth rate used to extrapolate cash flows beyond the budget

period.

The gross margin applied was assessed against the historic margins of the preceding four years, including the approved budget for the new financial year.

We made use of our internal valuation expertise to independently calculate a nominal discount rate, using independently obtained data. We found that the discount rate used by management fell within our acceptable range.

The growth rate used was compared to historic growth in the Trading Segment over the past four years as well as future growth trends in the coal mining sector and was accepted as falling within a reasonable range.

Accounting for provisions: environmental rehabilitation

Refer to note 20

The Group has provisions for environmental obligations of R158 million at 31 March 2017.

Management reviews the site closure, restoration and environment obligations using experts to provide support in its assessment. This review incorporates the effects of any changes in local laws and regulations and management’s expected approach to restoration and rehabilitation, in accordance with the Environmental Management Plan of each site.

This was considered to be a matter of most significance to the current year audit for the following reasons:• The calculation of these provisions requires management

judgement in estimating these future costs;• These calculations also require management to determine an

appropriate rate to discount future costs to their net present value; and

• The judgement required to estimate such costs is further compounded by the fact that the restoration and rehabilitation of each site is relatively unique.

We assessed management’s process for their review and estimation of environmental rehabilitation provisions. We also tested mathematical accuracy of management’s calculations.

We made use of our internal environmental expertise to assess the appropriateness of the data used in the cost estimates and the extent of rehabilitation activities that would need to be undertaken to comply with applicable laws and regulations.

As part of our testing, we evaluated the Group’s obligations with respect to restoration and rehabilitation against the respective accounting framework to assess the appropriateness of the obligation and associated cost estimate.

We considered the work of external experts engaged by management involved in the estimation process and assessed their professional competence, objectivity, capabilities and adequacy of the work they performed.

We independently calculated and assessed the appropriateness of the discount rate used in the estimation of the present value of the future closure costs. In calculating the discount rate, the inputs used in the determination of the discount rate were independently sourced from market data. We found the discount rate used by management to be within an acceptable range.


INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF WESCOAL HOLDINGS LIMITED CONTINUED


Black Economic Empowerment transaction

Refer to note 17

During the March 2017 financial year the Company entered into a transaction regarding the specific issue of 124 995 373 of the Company’s shares to the BEE Structured Entity (the shareholders of which comprise a consortium of pre-existing Wescoal BEE Shareholders).

The shares were issued to the BEE Structured Entity at a discount and the transaction resulted in the Company’s BEE shareholding increasing to 59%.

The Company assisted the BEE Structured Entity financially by subscribing for B Preference Shares issued by the BEE Structured Entity (refer note 12).

The principles of IFRS 2 were applied in accounting for this transaction, resulting in the discount given by the Company on the shares issued (calculated as the difference between the share price on the effective date and the actual cash received) being accounted for as a BEE discount in the consolidated and separate statements of profit or loss and other comprehensive income.

This was considered to be a matter of most significance to the current year audit due to the fact that this transaction did not form part of the normal operating activities of the Group, required judgement in determining the appropriate accounting implications of the subscription for the B Preference Shares issued by the BEE Structured Entity and resulted in a significant impact on the Group’s financial results for the year.

We obtained the relevant legal agreements associated with this transaction and considered the accounting implications thereof.

We agreed the proceeds received from the issue of the shares to bank statements and re-calculated the BEE discount based on the difference between cash received and the market price of the shares on the effective date of the transaction.

We considered the accounting for the related subscription by the Company for B Preference Shares issued by the BEE Structured Entity by inspecting the relevant legal agreements, assessing the significance of the subscription amount in relation to the BEE transaction as a whole and agreeing cash outflows to bank statements.

Based on the results of our work performed, we accepted management’s conclusion that the subscription for the B Preference Shares in BEE Structured Entity should be accounted for as a loan receivable, with no consequential impact on the accounting treatment of the shares issued to the BEE Structured Entity.

Other informationThe directors are responsible for the other information. The other information comprises the Declaration by the Company Secretary, the Audit and Risk Committee Report and Directors’ Report as required by the Companies Act of South Africa, and the General information and the Directors’ Responsibilities and Approval Statement, which we obtained prior to the date of this auditor’s report, and the other information included in the Integrated Report, which is expected to be made available to us after that date. Other information does not include the consolidated and separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not and will not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated and separate financial statementsThe directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with IFRS and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or the Company or to cease operations, or have no realistic alternative but to do so.


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Auditor’s responsibilities for the audit of the consolidated and separate financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or

error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and/or Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirementsIn terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that PricewaterhouseCoopers Inc. has been the auditor of Wescoal Holdings Limited for 6 years.

PricewaterhouseCoopers Inc. Director: J-P van Staden Registered Auditor

Johannesburg

27 June 2017


STATEMENT OF FINANCIAL POSITION (GROUP)As at 31 March 2017

Figures in Rands (Thousands) (R’000) Note 2017 2016

ASSETS Non-current assets Investment property 4 709 709Property, plant and equipment 5 641 198 496 350Goodwill 6 73 637 73 637Intangible assets 7 22 352 22 664Prepaid royalty 9 9 542 11 366Deferred tax 11 9 533 4 372Other receivable 12 36 654 – Investments 13 17 909 22 023Prepayment 15 6 739 –

818 273 631 121Current assetsPrepaid royalty 9 1 272 874Inventories 14 56 861 57 668Trade and other receivables 15 280 647 224 727Cash and cash equivalents 16 84 411 101 179Restricted cash 16 350 393 –

773 584 384 448Non-current assets held-for-sale 5 – 4 400

773 584 388 848

Total assets 1 591 857 1 019 969

EQUITY AND LIABILITIESEquity Equity attributable to equity holders of parentShare capital 17 500 222 213 156Share-based payment reserve 8 676 7 263Retained income 175 734 164 642

Total equity 684 632 385 061

LiabilitiesNon-current liabilities Instalment sale agreements 18 552 2 907Other financial liabilities 19 6 494 – Deferred tax 11 62 113 19 306Provisions 20 148 206 46 186Interest-bearing borrowings 21 60 553 18 533

277 918 86 932Current liabilities Current tax payable 35 13 486 27 585Instalment sale agreements 18 2 355 2 856Other financial liabilities 19 1 019 – Provisions 20 9 365 13 890Trade and other payables 22 331 863 272 578Interest-bearing borrowings 21 254 121 215 286Bank overdraft 16 17 098 15 781

629 307 547 976

Total liabilities 907 225 634 908

Total equity and liabilities 1 591 857 1 019 969


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STATEMENT OF FINANCIAL POSITION (COMPANY)As at 31 March 2017

Figures in Rands (Thousands) (R’000) Note 2017 2016

ASSETS Non-current assets Property, plant and equipment 5 1 310 108Interests in subsidiaries 8 130 956 125 875Loans to Group companies 10 31 672 174 399Deferred tax 11 3 640 4 100Other receivable 12 36 654 –

204 232 304 482Current assetsLoans to Group companies 10 168 809 76 148Trade and other receivables 15 18 210 362Cash and cash equivalents 16 2 344 22Restricted cash 16 350 393 – Current tax receivable 35 326 787

540 082 77 319

Total assets 744 314 381 801

EQUITY AND LIABILITIESEquity Equity attributable to equity holders of parentShare capital 17 500 222 213 156Share-based payment reserve 8 676 7 263Retained income 16 086 99 915

Total equity 524 984 320 334

LiabilitiesNon-current liabilities Interest-bearing borrowings 21 50 763 –

50 763 – Current liabilities Loans from Group companies 10 99 608 6 187Trade and other payables 22 27 166 9 628Interest-bearing borrowings 21 24 746 29 883Bank overdraft 16 17 047 15 769

168 567 61 467

Total liabilities 219 330 61 467

Total equity and liabilities 744 314 381 801


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 31 March 2017

GROUP COMPANY

Figures in Rands (Thousands) (R’000) Notes 2017 2016 2017 2016(restated)

Revenue 26 2 118 020 1 589 870 75 153 114 007 Cost of sales 27 (1 750 562) (1 338 150) – –

Gross profit 367 458 251 720 75 153 114 007 Other income 28 3 845 1 358 – – Operating expenses (166 279) (152 155) (50 446) (30 796)BEE discount 17 (82 280) – (82 280) –

Operating profit/(loss) 29 122 744 100 923 (57 573) 83 211 Interest received 30 6 775 1 004 – – Finance costs 31 (29 625) (21 923) (5 925) (6 873)

Profit/(loss) before taxation 99 894 80 004 (63 498) 76 338 Taxation 32 (69 694) (28 239) (1 223) 3 161

Profit/(loss) for the year 30 200 51 765 (64 721) 79 499 Other comprehensive income – – – –

Total comprehensive income/(loss) for the year 30 200 51 765 (64 721) 79 499

Profit/(loss) attributable to:Owners of the parent – Continuing operations 30 200 51 765 (64 721) 79 499

Profit/(loss) for the year 30 200 51 765 (64 721) 79 499

Total comprehensive income/(loss) attributable to:Owners of the parent – Continuing operations 30 200 51 765 (64 721) 79 499

Total comprehensive income/(loss) for the year 30 200 51 765 (64 721) 79 499

Earnings per shareFrom continuing operations – Basic 33 11.64 26.23 – Diluted 33 11.61 26.22


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STATEMENTS OF CHANGES IN EQUITY For the year ended 31 March 2017

Figures in Rands (Thousands) (R’000) Share capital(Note 17)

Share-based payment

reserve(Note 23)

Retained income Total equity

GROUPBalance at 1 April 2015 161 465 5 479 112 877 279 821 Profit for the year – – 51 765 51 765 Rights share issue net of transaction cost 39 254 – – 39 254 General issue of shares 12 437 – – 12 437 Employee share option scheme – 1 784 – 1 784

Balance at 31 March 2016 213 156 7 263 164 642 385 061

Profit for the year – – 30 200 30 200 Dividend* – – (19 108) (19 108)General issue of shares 286 781 – – 286 781 Employee share option scheme 285 1 413 – 1 698

Balance at 31 March 2017 500 222 8 676 175 734 684 632

COMPANYBalance at 1 April 2015 161 465 5 479 20 416 187 360 Profit for the year – – 79 499 79 499 Rights share issue net of transaction cost 39 254 – – 39 254 General issue of shares 12 437 – – 12 437 Employee share option scheme – 1 784 – 1 784

Balance at 31 March 2016 213 156 7 263 99 915 320 334

Loss for the year – – (64 721) (64 721)Dividend* – – (19 108) (19 108)General issue of shares 286 781 – – 286 781 Employee share option scheme 285 1 413 – 1 698

Balance at 31 March 2017 500 222 8 676 16 086 524 984

* Dividend declared for financial year ended 2016 and 2017; accounted for and paid in the 2017 financial year.


STATEMENTS OF CASH FLOWS For the year ended 31 March 2017

GROUP COMPANY

Figures in Rands (Thousands) (R’000) Notes 2017 2016 2017 2016

Cash flows from operating activitiesCash generated from/(utilised in) operations 34 253 515 239 590 (10 233) (12 675)Interest income 5 621 1 004 4 982 23 200 Dividends received – – – 64 917 Finance costs (25 948) (19 701) (5 925) (6 873)Tax paid 35 (46 147) (13 162) (302) (1 194)

Net cash from operating activities 187 041 207 731 (11 478) 67 375

Cash flows from investing activitiesPurchase of property, plant and equipment (98 924) (169 644) (1 331) (64)Proceeds on sale of property, plant and equipment 7 243 1 023 8 – Repayment of loans to Group companies – – 70 561 900 Loans advanced to Group companies – – – (82 631)Proceeds from loans from Group companies – – 93 421 – Purchase of rehabilitation investment (7 440) (7 440) – – Transfer to restricted cash 16 (350 393) – (350 393) – Divestment of rehabilitation investment 11 759 – – –

Net cash from investing activities (437 755) (176 061) (187 734) (81 795)

Cash flows from financing activitiesProceeds of rights share issue – 39 254 – 39 254 Proceeds of general issue of shares 175 959 15 097 175 959 15 097 Share issue expenses (2 506) (2 660) (2 506) (2 660)Proceeds on share options exercised 285 – 285 – Dividends paid (19 108) – (19 108) – Proceeds from long-term borrowings 125 140 65 292 68 381 – Repayment of long-term borrowings (44 285) (69 102) (22 754) (36 212)Repayment of instalment sale agreements (2 856) (4 303) – –

Net cash from financing activities 232 629 43 578 200 256 15 479

Total cash and cash equivalent movement for the year (18 085) 75 248 1 044 1 059 Cash and cash equivalent at beginning of year 85 398 10 150 (15 747) (16 806)

Total cash and cash equivalent at end of year 16 67 313 85 398 (14 703) (15 747)


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ACCOUNTING POLICIES

1. Presentation of consolidated annual financial statementsThe annual financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), the Companies Act 71 of 2008 and JSE Listings Requirements. The principal accounting policies adopted and the methods of computation used in the preparation of these financial statements are set out below and are consistent in all material respects with those applied during the previous year, except for those changes which have occurred as a result of the adoption of new and amended International Financial Reporting Standards (IFRS), interpretations and circulars as disclosed in note 2.

The annual financial statements have been prepared on the historical cost basis and incorporate the principal accounting policies set out below. They are presented in South African Rands and are prepared in accordance with the recognition and measurement criteria of IFRS and its interpretations adopted by the International Accounting Standards Board (IASB) in issue and effective for the entity at 31 March 2017 and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council.

These accounting policies are consistent with the previous period.

1.1 ConsolidationBasis of consolidationThe consolidated annual financial statements incorporate the consolidated annual financial statements of the Group and all entities, including structured entities, which are controlled by the Group.

Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal.

Adjustments are made when necessary to the consolidated annual financial statements of subsidiaries to bring their accounting policies in line with those of the Group.

All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation.

Transactions which result in changes in ownership levels, where the Group has control of the subsidiary both before and after the transaction are regarded as equity transactions and are recognised directly in the statement of changes in equity.

The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest.

Business combinationsThe Group accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity.

Contingent consideration is included in the cost of the combination at fair value as at the date of acquisition. Subsequent changes to the assets, liability or equity which arise as a result of the contingent consideration are not affected against goodwill, unless they are valid measurement period adjustments.

The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3: Business Combinations are recognised at their fair values at acquisition date, except for non-current assets (or disposal group) that are classified as held-for-sale in accordance with IFRS 5: Non-current Assets Held-for-sale and Discontinued Operations, which are recognised at fair value less costs to sell.

On acquisition, the Group assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification is inappropriate for Group purposes. This excludes lease agreements and insurance contracts, whose classification remains as per their inception date.

Non-controlling interests arising from a business combination, which are present ownership interests, and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation, are measured either at the present ownership interests’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets, or at fair value. The treatment is not an accounting policy choice, but is selected for each individual business combination and disclosed in the note for business combinations.

In cases where the Group held a non-controlling shareholding in the acquiree prior to obtaining control, that interest is measured to fair value as at acquisition date. The measurement to fair value is included in profit or loss for the year. Where the existing shareholding was classified as an available-for-sale financial asset, the cumulative fair value adjustments recognised previously to other comprehensive income and accumulated in equity are recognised in profit or loss as a reclassification adjustment.


ACCOUNTING POLICIES CONTINUED

1. Presentation of consolidated annual financial statements (continued)1.2 Significant judgements and sources of estimation uncertainty

In preparing the consolidated annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the consolidated annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

The following judgements have been made by the Group in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the annual financial statements.

Share-based paymentsIn applying IFRS 2, Share-based Payment, the Group has made certain judgements in respect of the fair value option pricing models to be used in determining the various share-based arrangements in respect of employees, as well as the variable elements used in these models.

For share-based payments, estimates are made in determining the fair value of the equity instruments granted. Assumptions are used in the valuation model and include assumptions regarding future dividend yield, risk-free rate, expected employee attrition rate, expected share volatility and expected option life (refer note 23).

Impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on the higher value-in-use calculations and fair values less cost of disposal. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumptions may change which may then impact the Group’s estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets (refer note 5, 6 and 7).

The Group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Management assesses possible impairment indicators which include movements in commodity prices, exchange rates and the economic environment of the coal mining industry. Estimates are made in determining the recoverable amount of assets which includes the estimation of cash flows and discount rates used. In estimating cash flows, the Group base cash flow projections on reasonable and supportable assumptions that represent the Group’s best estimate of the range of economic conditions that will exist over the remaining useful life of the assets. The discount rates used are pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the assets for which the future cash flow estimates have not been adjusted.

Mine rehabilitation provisionIn applying IAS 37, Provisions, Contingent Liabilities and Contingent Assets, estimates of determining the present obligation of environmental and decommissioning provisions is required.

Environmental and decommissioning costs are provided for, where either a legal or constructive obligation is recognised as a result of the Group’s coal mining operations (refer note 20).

Significant estimates and assumptions are made in determining the present obligation of environmental and decommissioning provisions, which include the actual estimate, the inflation rate, the discount rate used and the expected date of closure of mining activities. Estimates are based on costs that are annually determined by independent environmental specialists in accordance with environmental regulations, and adjusted as appropriate for new circumstances.

Numerous factors will affect the ultimate liability payable. These factors include estimates of the extent and cost of rehabilitation activities, technological changes and environmental legislation changes.

Unwinding of discount due to the passage of time is included as an element of finance costs in arriving at profit or loss for the year in terms of IAS 37, Provisions, Contingent Liabilities and Contingent Assets (refer note 20 and 31).

The present value of environmental disturbances created as well as changes to estimates are capitalised to mining assets against an increase in the rehabilitation provision. Change in estimates for operations in the development and production phase is capitalised and amortised over the life of mine on the units of production method. Rehabilitation costs incurred that are included in the estimates are charged to the provision. The cost of ongoing current rehabilitation is charged against income as incurred.

1.3 Investment propertyInvestment property is recognised as an asset when, and only when, it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise, and the cost of the investment property can be measured reliably.

Investment property is initially recognised at cost. Transaction costs are included in the initial measurement.


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Cost modelInvestment property is carried at cost less depreciation less any accumulated impairment losses.

Depreciation is provided to write down to cost, less estimated residual value by equal instalments over the useful life of the property, which is as follows:

Item Useful life

Property – land Indefinite

Investment property consists of land and is not depreciated.

1.4 Property, plant and equipmentThe cost of an item of property, plant and equipment is recognised as an asset when:• it is probable that future economic benefits associated with the item will flow to the Group; and• the cost of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently, which meet the recognition criteria, to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred.

The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using if for purposes other than the production of inventories.

Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

Land is not depreciated. Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.

Assets under construction include costs incurred with regards to mine development and are transferred to relevant asset classes when ready for their intended use. Mine development assets are initially measured at cost.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Buildings 50 yearsPlant and machinery 5 yearsFurniture and fixtures 5 – 10 yearsMotor vehicles 5 yearsOffice equipment 10 yearsIT equipment 3 yearsMining properties Estimated ROM tonnesMineral assets Estimated ROM tonnes

Mining Properties and Mineral Assets are depreciated on a unit-of-production basis, in proportion to the ROM tonnes of coal extracted in the year compared with total proven and probable reserves at the beginning of the year, once in the form intended for use by management.

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.



1. Presentation of consolidated annual financial statements (continued)1.4 Property, plant and equipment (continued)

Stripping activitiesThe removal of overburden and other mine waste materials is often necessary during the initial development of a mine site, in order to access the mineral ore deposit. The directly attributable cost of this activity is capitalised in full within mining assets under construction, until the point at which the mine is considered to be capable of commercial production.

All amounts capitalised in respect of waste removal are depreciated using the units-of-production method based on proved and probable ore reserves of the component of the orebody to which they relate.

The effects of changes to the life-of-mine plan on the expected cost of waste removal or remaining reserves for a component are accounted for prospectively as a change in estimate.

1.5 Non-current assets held-for-saleNon-current assets are classified as held-for-sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for sale in its immediate condition. Management must be committed to the sale, which should be expected within one year from the date of classification as held-for-sale.

1.6 GoodwillGoodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the statement of profit or loss and other comprehensive income.

Goodwill is tested annually for impairment and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.

Goodwill is determined, as the consideration paid, plus the fair value of any shareholding held prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable assets and liabilities of the acquiree.

1.7 Intangible assetsAn intangible asset is recognised when:• it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and • the cost of the asset can be measured reliably.

Intangible assets – brands and trademarks, customer lists and underground access right are carried at cost less any accumulated amortisation and any impairment losses. There are no intangible assets that have an indefinite useful life. For intangible assets – brands and trademarks, customer lists and underground access right amortisation is provided on a straight-line basis over their useful life.

The amortisation period and the amortisation method for intangible assets are reviewed every period end.

The useful lives of items of intangible assets have been assessed as follows:

Item Useful life

Intangible assets – brands and trademarks 5 yearsCustomer lists 5 yearsUnderground access right Life of Mine

1.8 Interests in subsidiariesIn the Group’s separate annual financial statements, interests in subsidiaries are carried at cost less any accumulated impairment.The cost of an investment in a subsidiary is the aggregate of:• the fair value, at the date of exchange, of assets given, liabilities occurred or assumed, and equity instruments issued by

the Group; plus• any costs directly attributable to the purchase of the subsidiary.


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1.9 Financial instrumentsClassificationThe Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Classification depends on the purpose for which the financial instruments were obtained/incurred.

The Group classifies financial assets into the following categories:• at fair value through profit or loss (rehabilitation investment); and• loans and receivables (loans receivable, trade and other receivables, cash and cash equivalents).

The Group classifies financial liabilities into the following categories:

• Financial liabilities at amortised cost (borrowings and trade and other payables).

Initial recognition and measurementFinancial instruments are recognised initially when the Group becomes a party to the contractual provisions of the instruments.

Financial instruments are measured initially at fair value.

Purchases and sales of financial assets are accounted for at trade date, the date on which the Group commits to purchase or sell the asset.

Subsequent measurementFinancial assets at fair value through profit or loss are subsequently measured at fair value, with movements recognised in profit or loss.

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Financial liabilities are subsequently measured at amortised cost, using the effective interest method.

DerecognitionFinancial assets are derecognised when the rights to receive cash flows from the investment have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Impairment of financial assetsAt each reporting date the Group assesses financial assets measured at amortised cost to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired.

For loans and receivable, the impairment is measured at the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The asset’s carrying amount is reduced and the amount of the impairment loss is recognised in the statement of profit or loss and other comprehensive income.

A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss on trade and other receivables includes significant difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments.

Impairment losses are recognised in profit or loss.

Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised.

Loans to/(from) Group companiesLoans to Group companies are classified as loans and receivables, initially recognised at fair value and subsequently measured at amortised cost. Loans from Group companies that are repayable on demand are included in current liabilities. Loans to Group companies with no fixed repayment terms are included in current and non-current assets based on expected repayments.



1. Presentation of consolidated annual financial statements (continued)1.9 Financial instruments (continued)

Trade and other receivablesTrade and other receivables are classified as loans and receivables and are amounts due from customers for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value, and bank overdrafts.

Restricted cashRestricted cash is cash not available for immediate use. Such cash cannot be used by the company until a certain point or event in the future. If the restriced cash balance is material, then this balance is shown separately from cash and cash equivalents on the statement of financial position. Depending on when cash is expected to be used, restricted cash can be classified as a current (expected to be used within one year) or non-current asset (expected not to be used within one year).

Rehabilitation investmentThe rehabilitation investment with Old Mutual is designated as a financial asset at fair value through profit or loss as this investment is managed on a fair value basis. This investment is measured at fair value, with fair value movements accounted for in profit or loss.

Trade and other payablesTrade and other payables are financial instruments classified as financial liabilities measured at amortised cost and are therefore subsequently measured at amortised cost.

1.10 TaxCurrent tax assets and liabilitiesCurrent tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax assets and liabilitiesA deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit/(loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit/(loss).

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expensesCurrent and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:• a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or• equity

Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.


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1.11 LeasesA lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership.

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases – lesseeFinance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the agreement or if impracticable the incremental borrowing rate.

The lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability. The corresponding rental obligation, net of finance charges, is included in payables.

The property, plant and equipment acquired under a finance lease is depreciated over the shorter of the useful life of the asset and the lease term.

Operating leases – lessorOperating lease income is recognised as an income on a straight-line basis over the lease term. The difference between the amounts recognised as an income and the contractual receipts are recognised as an operating lease liability. The liability is not discounted.

Initial direct cost incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income.

Income for leases is disclosed under revenue in profit or loss.

Operating leases – lesseeOperating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset which is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.12 InventoriesInventories, which include coal run-of-mine and product stockpiles and consumables are measured at the lower of cost and net realisable value on the first-in-first-out basis.

The cost of inventories is determined by reference to all costs of purchase, direct mining expenditure and an appropriate portion of overhead expenditure, including directly related depreciation, transport and other costs incurred in bringing the inventories to their present location and condition. Borrowing cost is not capitalised to inventory.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised.

A write-down to net realisable value is required when the carrying amount of inventories exceed the net realisable value. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

No portion of inventory is non-current. Run of mine stockpiles are utilised by the Processing Plant in the ongoing production process. Inventory stockpiles consist of saleable coal processed by the plant.

1.13 Impairment of non-financial assetsThe Group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset.

Irrespective of whether there is any indication of impairment, the Group also tests goodwill acquired in a business combination for impairment annually.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.



1. Presentation of consolidated annual financial statements (continued)1.13 Impairment of non-financial assets (continued)

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less cost of disposal and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination.

An impairment loss is recognised for cash-generating units if the recoverable amount of the unit is less than the carrying amount of the units.

The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order:• first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit and• then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.

The Group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated.

The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss.

1.14 Share capital and equityAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

If the Group reacquires its own equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) on those instruments are deducted from equity attributable to the Group’s equity holders until the shares are cancelled or reissued.

Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Group’s equity holders.

1.15 Provisions and contingenciesProvisions are recognised when:• the Group has a present obligation as a result of a past event;• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and• a reliable estimate can be made of the obligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

Contingent assets and contingent liabilities are not recognised.

Provisions for environmental restoration, restructuring costs and legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments.

Provisions are measured at the present value of the expected economic benefits to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.


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The increase in the provision due to the passage of time is recognised as an interest expense.

Changes in the provision due to changes in estimates is recognised against the rehabilitation assets, which is measured at cost.

Changes in estimates include:• a change in the estimated outflow of resources embodying economic benefits required to settle the obiligation;• a change in the current market-based discount rate, this includes changes in the time value of money and the risks

specific to the liability;• an increase that reflects the passage of time (Life of Mine).

1.16 RevenueRevenue is recognised to the extent that significant risk and rewards of ownership of the goods has transferred, there is no continuing managerial involvement, it is probable that the economic benefits will flow to the Group and the revenue and costs incurred, or to be incurred, in respect of the transaction can be measured reliably.

The following specific recognition criteria must be met before revenue is recognised:

Sale of coalThe Group enters into contracts for the sale of coal. Revenue arising from coal sales under these contracts is recognised when the price is determinable, the product has been delivered in accordance with the terms of the contract, the significant risks and rewards of ownership have been transferred to the customer, collection of the sales price is probable and associated costs can be readily estimated.

Income earned from the transport of coal to third parties is recognised as revenue in profit or loss as and when the coal exits the mine premises (over the weigh-bridge).

Administration feesThe Company has entered into a service agreement with its subsidiaries, whereby its directors and employees provide management services to operating subsidiaries in the Group. These services are on-charged on a monthly basis based on actual time spent managing the operating subsidiaries and is recognised in the accounting period in which the services were rendered.

Interest is recognised, in profit or loss, using the effective interest rate method.

Dividends are recognised, in profit or loss, when the Group’s right to receive payment has been established.

1.17 Cost of salesWhen inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

Royalty expenses are recognised on an accruals basis in accordance with the substance of the relevant agreements.

The prepaid royalty (refer to note 9) is amortised on a units of production basis, based on Elandspruit run of mine tonnes. Operational royalties are based on a rate per saleable ton.

1.18 Borrowing costsBorrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use.

The amount of borrowing costs eligible for capitalisation is determined as follows:• Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any temporary

investment of those borrowings• Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of

obtaining a qualifying asset.

The borrowing costs capitalised do not exceed the total borrowing costs incurred.

The capitalisation of borrowing costs commences when:• expenditures for the asset have occurred; • borrowing costs have been incurred, and• activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

Capitalised borrowing costs are presented under property, plant and equipment additions on the cash flow statement.


1. Presentation of consolidated annual financial statements (continued)1.19 Share based payments

The Group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted.

At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the statement of profit or loss and other comprehensive income, with a corresponding adjustment to equity.

When the options are exercised, the Group issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital.

The grant by the Group of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.

1.20 Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group Executive Committee that makes strategic decisions.



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NOTES TO THE ANNUAL FINANCIAL STATEMENTS Figures in Rands (Thousands) R’000

2. New standards and interpretations2.1 Standards and interpretations effective and adopted in the current year

For the 2017 annual financial year beginning on or after 31 March 2016 the Group did not adopt any new standards for the first time.

The following amendments to standards as a result of the Annual Improvement process became effective for the first time for the 2017 annual financial year beginning on or after 31 March 2016. These amendments have been adopted by the Group and did not have a significant effect on the Group’s financial statements:

Amendment to IFRS 11, “Joint arrangements”This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments specify the appropriate accounting treatment for such acquisitions.

Amendment to IAS 16, “Property, plant and equipment” and IAS 38, “Intangible assets”In this amendment the IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The IASB has also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset.

Amendment to IAS 27, “Separate financial statements”These amendments allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.

Amendment to IAS 1, “Presentation of financial statements”These amendments are as part of the IASB initiative to improve presentation and disclosure in financial reports.

2.2 New standards, amendments and interpretations not yet effectiveA number of new standards and amendments to standards and interpresentions are effective for annual periods beginning after 1 April 2017, and have not been applied in preparing these consolidated financial statement. Management considered these new standards and amendments and the effect it will have on the consolidated financial statements of the Group. The new standards and amendments will be adopted in the financial years they become effective.

Amendment to IAS 7, “Statement of cash flows on disclosure initiative”These amendments to IAS 7 introduce an additional disclosure that will enable users of financial statements to evaluate changes of the IASB’s Disclosure Initiative, which continues to explore how financial statement disclosure can be improved.

Adoption of this amendment will not have a significant effect on the Company’s financial statements.

Amendments to IAS 12, “Income taxes”These amendments on the recognition of deferred tax assets for unrealised losses clarify how to account for deferred tax assets related to debt instruments measured at fair value.

Adoption of thess amendments will not have a significant effect on the Company’s financial statements.

Amendment to IFRS 2, “Share based payments”The amendment clarifies the measurement basis for cash-settled, share based payments and the accounting for modifications that change an award from cash-settled to equity-settled.

It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obligated to withhold an amount for the employee’s tax obligation associated with a share-based payment and pay that amount to the tax authority.

Adoption of these amendments will have no significant effect on the Company’s financial statements.

IFRS 9, “Financial Instruments”This standard replaces the guidance in IAS 39. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that replaces the current incurred loss impairment model.

Adoption of this amendment will have no significant effect on the Company’s financial statements.

IFRS 15, “Revenue from contracts with customers”This standard is a converged standard from the IASB and FASB on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally.

These amendments comprise clarifications of the guidance on identifying performance obligations, accounting for licences of intellectual property and the principal versus agent assessment (gross versus net revenue presentation). New and amended illustrative examples have been added for each of those areas of guidance. The IASB has also included additional practical expedients related to transition to the new revenue standard.

Management is still in the process of determining what the effect of this new amendment will be on the consolidated financial statements of the Group.


NOTES TO THE ANNUAL FINANCIAL STATEMENTS CONTINUED Figures in Rands (Thousands) R’000

2. New standards and interpretations (continued)2.2 New standards, amendments and interpretations not yet effective (continued)

IFRS 16, “Leases”This standard replaces the current guidance in IAS 17 and is a far-reaching change in accounting by lessees in particular. Under IAS 17, lessees were required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet). IFRS 16 now requires lessees to recognise a lease liability reflecting future lease payments and a “right-of-use asset” for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases of low-value assets; however, this exemption can only be applied by lessees.

For lessors, the accounting stays almost the same. However, as the IASB has updated the guidance on the definition of a lease (as well as the guidance on the combination and separation of contracts), lessors will also be affected by the new standard. As the very least, the new accounting model for lessees is expected to impact negotiations between lessors and lessees.

Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Management is still in the process of determining what the effect of this new amendment will be on the consolidated financial statements of the Group.

Amendment to IAS 40, Investment propertyThese amendments clarify that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition. This change must be supported by evidence. Adoption of this amendment will have no significant effect on the Company’s financial statements.

Annual improvements 2014 – 2016These amendments impact 2 standards:

IFRS 12, “Disclosure of interest in other entities” regarding clarification of the scope of the standard. These amendments should be applied retrospectively for annual periods beginning on or after 1 January 2017.

IAS 28, “Investments in associates and joint ventures” regarding measuring an associate or joint venture at fair value effective 1 January 2018.

Adoption of these amendments will have no significant effect on the Company’s financial statements.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

3. Risk managementCapital risk managementThe Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for its shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

The approach and capital policies remained consistent with previous year. Optimising the capital structure remains a key priority and the Group may issue new shares, raise long term debt or sell assets to optimise appropriate capital structure and return on equity.

The Group monitors capital on the basis of the gearing ratio, calculated as net debt divided by total capital. Net debt is calculated as total interest-bearing borrowings (including ‘current and non-current borrowings’ as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the statement of financial position plus net debt.

The Group’s long-term target gearing ratio is to remain below 50%. Debt covenants include measurement of EBITDA against net debt and debt service ratios amongst others. The facilities (refer Liquidity Risk) with Investec Bank Limited represents a concentration risk. Concentration risk is managed by actively monitoring compliance with debt covenants. The Group’s gearing ratio reduced during the year, even after allocating R350 million towards the acquisition of Keaton Energy Holdings Limited, as a result of improved financial performance and of raising new share capital during December 2016.

Share capitalDuring December 2016 the Group raised R178 million through issue of shares to the BEE Structured Entity. The capital will be utilised to fund capital expenditure and take advantage of growth opportunities such as the acquisition of Keaton Energy Holdings Limited (refer note 40).


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The gearing ratio at 2017 and 2016 respectively were as follows:

Group Company

Note 2017 2016 2017 2016

Total borrowingsLoans from Group companies 10 – – (99 608) (6 187)Instalment sale agreements 18 (2 907) (5 763) – – Other financial liabilities 19 (7 513) – – – Interest-bearing borrowings 21 (314 674) (233 819) (75 509) (29 883)

(325 094) (239 582) (175 117) (36 070)Less: Cash and cash equivalents 16 67 313 85 398 (14 703) (15 747)

Net debt (257 781) (154 184) (189 820) (51 817)Total equity (684 632) (385 061) (524 984) (320 334)

Total capital (942 413) (539 245) (714 804) (372 151)

Gearing ratio 27% 29% 27% 14%

Restricted cash (excluded from above) 16 350 393 – 350 393 –

Financial risk managementThe Group’s activities expose it to a variety of financial risks: market risk, cash flow interest rate risk, credit risk and liquidity risk.

The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

Risk management is carried out by the head office function under policies approved by the Board. The head office function identifies, evaluates and manages financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk and investment of excess liquidity.

The Group is not currently exposed to foreign currency exchange risk.

Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group treasury maintains flexibility in funding by maintaining availability under committed credit lines.

The following tables analyse the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

GroupLess than one year

Between one and two years

Between two and five years Total

As at 31 March 2017Trade and other payables 280 497 – – 280 497 Instalment sale agreements 2 544 567 – 3 111 Other financial liabilities 2 534 9 091 – 11 625 Interest-bearing borrowings 265 589 49 590 23 682 338 861 Bank overdraft 17 098 – – 17 098

568 262 59 248 23 682 651 192

As at 31 March 2016Trade and other payables 254 308 – – 254 308Instalment sale agreements 3 336 2 549 561 6 445Interest-bearing borrowings 219 086 10 316 10 526 239 928Bank overdraft 15 781 – – 15 781

492 511 12 865 11 087 516 463



3. Risk management (continued)Liquidity risk (continued)

CompanyLess than one year

Between one and two years

Between two and five years Total

As at 31 March 2017Trade and other payables 15 000 – – 15 000 Loans from Group companies 99 608 – – 99 608 Interest-bearing borrowings 31 568 31 568 23 682 86 818 Bank overdraft 17 047 – – 17 047

163 223 31 568 23 682 218 473

As at 31 March 2016Trade and other payables 4 410 – – 4 410Loans from Group companies 6 187 – – 6 187Interest-bearing borrowings 31 492 – – 31 492Bank overdraft 15 769 – – 15 769

57 858 – – 57 858

The Group’s liquidity was impacted by cash commitment for acquisition activities. The Group manages liquidity risk through an ongoing review of credit facilities to ensure funds available to cover future commitments.

Cash flow forecasts are prepared in the operating entities of the Group and aggregated by Group treasury, monitoring rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance and compliance with internal balance sheet ratio targets.

Where debt covenants were under pressure during the year the financing institutions confirmed acceptance and continued support on financing.

The group funded significant investment to development cost of Elandspruit mine from operating cash flows and ongoing utilisation of working capital facilities with Reichmans (refer to note 21). As at 31 March 2017, the amounts due in less than one year exceed the current assets by R206.1 million.

The liquidity position is addressed through:• having secured the R200 million working capital facility for more than 12 months going forward. Due to revolving nature of the

facility, appropriately reported as current liability (refer note 21).• arranging term finance to recapitalise the business is well advanced and the Group is confident to secure a minimum of

R300 million.• recent operational performance and cash flow forecast demonstrating strong cash generation and consistent improvement of

liquidity. Elandspruit mine being fully operational and producing at full capacity, the operational cash flow generation exceed operational requirements.

Concentration risk is limited due to the fact that the group generates its mining revenue mainly from sales to parastatal institutions whilst the trading segment generates revenue from sales to a variety of customers that include private sector, government institutions, mining entities and various small and medium enterprises. The Group supplies coal to Eskom on long-term coal supply agreement.

Cash-flow interest rate riskAs the Group has no significant nett interest-bearing assets, its income and operating cash flows are substantially independent of changes in market interest rates.

The Group and Company’s interest rate risk arises mainly from variable rate instalment sale agreements and borrowings. These borrowings carry variable rates that are linked to the prime lending rate in South Africa. No interest rate hedges or swaps are entered into.

The Company has no significant cash flow interest rate risk arising from its interest-bearing loans to and from group companies as these loans are interest free, instead the Company is exposed to fair value interest rate risk. The Company’s income and operating cash flows are substantially independent of changes in market interest rates.


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3. Risk management (continued)Sensitivity analysis

A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit before tax by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2016.

Group Company

2017 2016 2017 2016

Increase by 100 basis points (3 309) (2 554) 83 1 987Decrease by 100 basis points 3 309 2 554 (83) (1 987)

Credit riskCredit risk consists mainly of cash deposits, cash equivalents and trade debtors. The Group only deposits cash with major banks with high quality credit standing and limits exposure to any one counterparty.

Trade receivables consist mainly of Eskom, government institutions, private sector and mining entities. Eskom has a history of no defaults and a credit rating of Ba2.

The Group only trades with recognised creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms be subject to credit verification procedures, which include an assessment of credit rating, short term liquidity and financial position.

4. Investment property2017 2016

Group CostAccumulated depreciation

Carrying value Cost

Accumulated depreciation

Carrying value

Investment property 709 – 709 709 – 709

Investment property was valued by an independent property evaluator during 2014. The fair value was assessed at a level 3 on the fair value hierarchy and was based on then recent comparable transactions in the area. The fair value of the property was valued at R1 million.

A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company.

Investment property is encumbered as stated in note 21.

5. Property, plant and equipment2017 2016

CostAccumulated depreciation

Carrying value Cost

Accumulated depreciation

Carrying value

GroupLand and buildings 69 989 (143) 69 846 71 814 (411) 71 403 Plant and machinery 123 023 (37 301) 85 722 110 679 (22 536) 88 143 Furniture and fixtures 2 777 (1 165) 1 612 1 712 (986) 726 Motor vehicles 17 067 (10 540) 6 527 18 024 (9 093) 8 931 Office equipment 259 (259) – 259 (259) – IT equipment 13 093 (9 054) 4 039 12 672 (6 695) 5 977 Mining properties 664 777 (191 325) 473 452 459 028 (137 858) 321 170

Total 890 985 (249 787) 641 198 674 188 (177 838) 496 350

CompanyFurniture and fixtures 1 134 (77) 1 057 62 – 62 IT equipment 329 (76) 253 77 (31) 46

Total 1 463 (153) 1 310 139 (31) 108



5. Property, plant and equipment (continued)Reconciliation of property, plant and equipment – 2017

GroupOpening balance Additions Disposals Depreciation Total

Land and buildings 71 403 – (1 540) (17) 69 846 Plant and machinery 88 143 12 469 – (14 890) 85 722 Furniture and fixtures 726 1 215 (38) (291) 1 612 Motor vehicles 8 931 752 (326) (2 830) 6 527 IT equipment 5 977 455 (5) (2 388) 4 039 Mining properties 321 170 205 749 – (53 467) 473 452

Total 496 350 220 640 (1 909) (73 883) 641 198

Additions to Plant and Machinery include the purchase of a X-ray transmission machine for the Intibane mine.

The Group paid R15.63 million (2016: R53.76 million) to extend the life of Intibane mine through the acquisition of the Mintirho mineral rights. These additions are included under Mining Properties. Other Mining Properties additions include the construction of the D20 road (R20.5 million) and pollution control dam (R11.3 million), and the change in rehabilitation estimate of R107.36 million (2016: R23.4 million) that was capitalised to the rehabilitation asset.

The Group concluded an agreement whereby it will utilise the mining void on the Yoctolux Reserve, adjacent to Elandspruit reserve at a total cost of R14.3 million; included under Mining Properties (refer note 22).

During the year, the Group disposed of Erf 325 Witbank with a net book value of R1.54 million for proceeds of R1.46 million.

The Group did not capitalise any borrowing costs to assets under construction (2016: R5.57 million)(refer note 31). Borrowing costs were capitalised at the weighted average rate of its general borrowings at 10%. Capitalisation ceased upon Elandspruit commencing commercial production in 2016.

The Group’s mining operations have evolved significantly over the past two years, with significant amounts being capitalised to Mining Properties. Mining plans have continuously been revised and updated. In order to confirm that sufficient head-room still existed, management performed impairment assessments for the operations within the Group’s mining segment, based on future estimated cash flows discounted to net present value at a real post-tax discount rate of 10% over the projected life of the mine (which is determined from the mine plans, supported by declared resource and reserve estimates). Sufficient head-room was noted and hence no impairment charge required.

Reconciliation of property, plant and equipment – 2016

GroupOpening balance Additions Disposals Transfers Impairment Depreciation Total

Land and buildings 72 521 5 519 (440) (4 400) (1 728) (69) 71 403 Plant and machinery 66 914 35 507 (75) (4 271) – (9 932) 88 143 Furniture and fixtures 720 221 (28) (24) – (163) 726 Motor vehicles 7 565 3 771 (496) 1 677 – (3 586) 8 931 Office equipment 165 – (9) (125) – (31) – IT equipment 7 800 443 (10) 140 – (2 396) 5 977 Assets under construction 31 964 5 574 – (37 538) – – – Mining properties 137 091 168 275 (119) 40 141 – (24 218) 321 170

Total 323 740 219 310 (1 177) (4 400)* (1 728) (40 395) 496 350

* The Group transferred Land and Buildings of R4.4 million to Assets classified as held-for-sale during the year.


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5. Property, plant and equipment (continued)Reconciliation of property, plant and equipment – 2017

CompanyOpening balance Additions Disposals Depreciation Total

Furniture and fixtures 62 1 080 (7) (78) 1 057 IT equipment 46 251 – (44) 253

Total 108 1 331 (7) (122) 1 310

Reconciliation of property, plant and equipment – 2016

CompanyOpening balance Additions Depreciation Total

Mineral assets – 62 – 62 IT equipment 72 2 (28) 46

Total 72 64 (28) 108

Non-current Assets classified as held-for-sale Group Company

2017 2016 2017 2016

Land and Buildings – 4 400 – –

Farm 1183 Atlantis Industrial and Erf 7556 George were valued by an independent property evaluator during the prior year using the sale comparison approach. This was a level 3 measurement as per the fair value hierarchy. The fair values were estimated to be lower than the properties’ carrying values and the Group recognised an impairment charge of R1.7 million. These properties were disposed of during the current year for proceeds of R3.84 million, realising a net loss of R0.56 million. The Group had no non-current assets held-for-sale at year-end.

Group Company

2017 2016 2017 2016

Pledged as securityCarrying value of assets pledged as security:Portion 24 of Farm Rietfontein 286 5 107 5 107 – – Plant, machinery, mineral assets and mining properties 93 260 95 926 – – Motor vehicles, property, plant and equipment 4 641 7 851 – – Land and buildings 11 637 16 053 – –

114 645 124 937 – –

Plant and machinery, motor vehicles and IT equipment are encumbered as stated in notes 18 and 21.

A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company.

6. Goodwill2017 2016

Group CostAccumulated

impairmentCarrying

value CostAccumulated

impairmentCarrying

value

Goodwill 73 637 – 73 637 73 637 – 73 637

GroupOpening balance

Additions through business

combination Total

Reconciliation of goodwill – 2017Goodwill 73 637 – 73 637

Reconciliation of goodwill – 2016Goodwill 73 637 – 73 637



6. Goodwill (continued)Impairment of goodwill and intangible assetsGoodwill and certain intangible assets (Brands and trademarks and customer lists) (refer note 7) are allocated to the Group’s trading segment. The Group’s enlarged coal trading business operates as one fully integrated segment.

The Group performed its annual impairment test of its goodwill and intangible assets on 31 March 2017. No impairment charge was recognised in the current or prior year.

The recoverable amount of the relevant cash-generating unit is determined using cash flow projections from financial budgets approved by the Directors, covering a two year period (2016: two year period), and applying an expected inflation and growth rate thereafter. This methodology is consistent with the prior year. The pre-tax discount rate applied to cash flow projections is 21.6% (2016: 21.6%).

The calculation of value in use is most sensitive to the following assumptions:• Gross margin;• Discount rates; and• Growth rate used to extrapolate cash flows beyond the budget period.

Gross margins – Gross margins are from the financial budget approved by the Board of Directors during March 2017 which correlates with recent historic rates. Gross margins are expected to remain in a range of between 10% and 11% (2016: 11% and 12%).

Discount rates – Discount rates represent the current market assessment of the risks specific to the industry, regarding the time value of money and individual risks of the underlying assets which have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Company and its operating segments. Segment-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data.

Growth rate estimates – Rates are based on management’s estimates and expectations of future operations. An assumed growth rate of 0.5% (2016: 0.5%) was used for the next five years (2016: five years), with no growth thereafter.

The recoverable amount calculated based on value in use exceeded carrying value by R63 million (2016: R69 million). An annual sales growth rate of 0.2% below inflation, a gross margin of 9.08% or a discount rate of 33% would, all changes taken in isolation, result in the recoverable amount being equal to the carrying amount.

A sensitivity analysis was performed by changing the above input assumptions as follows:• Gross margin down by 1%;• Discount rates up by 1%; and• Growth rate down by 1%.

None of the above sensitivity changes resulted in an impairment of goodwill or intangible assets.


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7. Intangible assets2017 2016

Group CostAccumulated amortisation

Carrying value Cost

Accumulated amortisation

Carrying value

Brands and trademarks 9 975 (5 844) 4 131 9 975 (3 849) 6 126 Customer lists 30 068 (19 360) 10 708 30 068 (13 530) 16 538 Underground access right 7 513 – 7 513 – – –

47 556 (25 204) 22 352 40 043 (17 379) 22 664

Reconciliation of intangible assets – 2017

GroupOpening balance Additions Amortisation Total

Brands and trademarks 6 126 – (1 995) 4 131 Customer lists 16 538 – (5 830) 10 708 Underground access right – 7 513 – 7 513

22 664 7 513 (7 825) 22 352

Reconciliation of intangible assets – 2016

GroupOpening balance Amortisation Total

Brands and trademarks 8 121 (1 995) 6 126 Customer lists 22 781 (6 243) 16 538

30 902 (8 238) 22 664

During the year, the Group entered into an agreement with Nungu Trading 341 Proprietary Limited obtaining the use of their access point for underground mining and stockpile area to access the underground section of the Elandspruit mine and dispose of the coal from the area. The Group may use the stockpile yard for the temporary storage of the coal mined, prior to it being transported to the processing plant.

The use of the access point and stockpile area is granted on a non exclusive basis and will be used by both Nungu and the Group for an estimated period of four years. The right of use has been recognised as an intangible asset and the payment terms of the agreement are set-out in note 19, Other financial liabilities.



8. Interests in subsidiariesThe Company had the following subsidiaries as at 31 March 2017, which form part of the Wescoal Holdings Limited Group:

2017 2016

Name of subsidiary Held by%

holdingCarrying amount

% holding

Carrying amount

Wescoal Trading Proprietary Limited

Wescoal Holdings Limited 100 68 758 100 65 626

Wescoal Mining Proprietary Limited

Wescoal Holdings Limited 100 62 198 100 60 249

Wescoal Mineral Recoveries Proprietary Limited

Wescoal Holdings Limited 100 – 100 –

Wescoal Exploration Proprietary Limited


100 100

Blanford 006 Proprietary Limited Wescoal Trading Proprietary Limited

100 100

Proudafrique Trading 147 Proprietary Limited


100 100

(JJP) Gedeelte 16 (van Gedeelte 2) Vlakvarkfontein Proprietary Limited

Blanford 006 Proprietary Limited

100 100



100 100

(JJP) Res van Gedeelte 2 Vlakvarkfontein Proprietary Limited


100 100

Wescoal Share Incentive Trust Wescoal Holdings Limited 100 100

130 956 125 875

The proportion of ordinary shares held by the Group equals that of the proportion of ordinary shares held by each individual parent company. At year end no proportion of ordinary shares were held by non-controlling interests.

Name of company Nature of business Segment

Wescoal Trading Proprietary Limited Buying, transport and selling of coal

Trading

Wescoal Mining Proprietary Limited Mining, processing and selling of coal

Mining

Wescoal Mineral Recoveries Proprietary Limited Sourcing and processing of low grade coal

Mining

Wescoal Exploration Proprietary Limited Coal exploration Property rental and other

Blanford 006 Proprietary Limited Property Investment Property rental and other

Proudafrique Trading 147 Proprietary Limited Investment in coal exploration activities

Property rental and other


Property Investment Property rental and other


Property Investment Property rental and other

(JJP) Res van Gedeelte 2 Vlakvarkfontein Proprietary Limited Property Investment Property rental and other

Wescoal Share Incentive Trust Share Incentive Trust Other

All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.

The country of incorporation and place of business of the parent company and all subsidiaries is South Africa.

There are no significant restrictions on cash and cash equivalents.

The Company’s shares in subsidiaries have been pledged to Investec Bank Limited as security for loans granted (refer to note 21).


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9. Prepaid royaltyWescoal prepaid R1.50 per ton of the royalty that was due to Proudafrique before the 100% acquisition of Elandspruit in 2015. This prepayment amounted to R12.9 million and is amortised on a units-of-production method over the life of the Elandspruit mine.

Group Company

2017 2016 2017 2016

Prepaid royalty 10 814 12 240 – –

10 814 12 240 – –

Non-current assets 9 542 11 366 – – Current assets 1 272 874 – –

10 814 12 240 – –

Reconciliation of prepaid royaltyOpening balance 12 240 12 909 – – Amortisation (1 426) (669) – –

10 814 12 240 – –

10 Loans to/(from) Group companiesCompany

2017 2016

SubsidiariesWescoal Trading Proprietary Limited (93 424) – Blanford 006 Proprietary Limited 31 672 40 505 Wescoal Mineral Recoveries Proprietary Limited (816) (818)Wescoal Exploration Proprietary Limited (1 337) (1 337)Wescoal Mining Proprietary Limited 168 809 210 042 Proudafrique Trading 147 Proprietary Limited (4 031) (4 032)

100 873 244 360

Non-current assets 31 672 174 399 Current assets 168 809 76 148 Current liabilities (99 608) (6 187)

100 873 244 360

The contractual loan terms were amended on 1 April 2016. All Group loans are interest free (2016: nil%). Notional interest is calculated at 10%, based on debit loans’ estimated terms of repayment. Loans from group companies have no fixed terms of repayment.

Fair values are determined based on discounted cash flow valuations, and therefore fall within level 3 of the IFRS fair value hierarchy.

The inputs into the valuations are determined in accordance with estimated payment terms and market related interest rates at the reporting date.

The fair value of loans receivable balances in the aggregate approximates R199 million which is not substantially different from the carrying value.

The directors consider that the loans from group companies’ carrying values approximate their fair values.

Credit riskThe risk that loans to subsidiaries will not perform as expected, which results in a loss to the Company, can be defined as a credit risk.

Loans to subsidiaries are provided by the Company as a general borrowing to fund ongoing operating activities. The maximum exposure to credit risk at the reporting date is the carrying amount of the loans to subsidiaries.

The Company does not hold any collateral as security.



10 Loans to/(from) Group companies (continued)Credit quality of loans to subsidiariesThe credit quality of loans to subsidiaries that are neither past due nor impaired can be assessed by reference to historical information about counter-party default rates.

None of the loans to subsidiaries is past due but not impaired.

Intercompany loans payable are subordinated in favour of Investec Bank Limited (refer note 21).

Intercompany loans receivable have been pledged as security for financing provided by Investec Bank Limited (refer note 21).

11. Deferred taxGroup Company

2017 2016 2017 2016

Deferred tax assets 9 533 4 372 3 640 4 100 Deferred tax liabilities (62 113) (19 306) – –

(52 580) (14 934) 3 640 4 100

Deferred tax (liability)/assetAccelerated capital allowances for tax purposes (106 908) (43 990) – – Rehabilitation provision 44 120 18 431 – – Intangible assets (4 155) (5 910) – – Tax losses available for set off against future taxable income – 5 693 – 2 374 Payroll-related accruals 8 472 4 041 2 866 968 Prepayments (541) (298) (180) (33)Provision for bad debts 3 787 2 657 – – Income received in advance – 1 002 – – Provisions 2 645 3 440 954 791

Total deferred tax (liability)/asset (52 580) (14 934) 3 640 4 100

Reconciliation of deferred tax (liability)/assetAt beginning of year (14 934) 12 457 4 100 939 Charge to statement of profit or loss and other comprehensive income (37 646) (27 391) (460) 3 161

(52 580) (14 934) 3 640 4 100

Unrecognised deferred tax assetUnused tax losses not recognised as deferred tax assets 175 172 – –

12. Other receivableGroup Company

2017 2016 2017 2016

Class B preference shares 35 500 – 35 500 – Interest 1 154 – 1 154 –

36 654 – 36 654 –

On 20 December 2016, the Company provided funding to K2016316243 (South Africa) Proprietary Limited (“BEE structured entity”) by subscribing for class B cumulative redeemable, preference shares in the BEE Structured Entity for an aggregate amount of R35.5 million (refer note 17).

A cumulative preferential cash dividend shall be payable in respect of each Class B Preference Share and shall be deemed to accrue daily at the prime interest rate plus 1% and be compounded monthly.

The scheduled redemption date for the Class B Preference Shares is the fifth anniversary of the date on which the Class B Preference Shares were issued to the Company.

The BEE Structured Entity provided certain security in connection with the Class B Preference Share Subscription Agreement to Wescoal, which security will rank behind the IDC´s security.


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13. InvestmentsGroup Company

2017 2016 2017 2016

Old Mutual Rehabilitation Investment 17 909 22 023 – –

Group

Opening balance

Additional investments Divestment*

Investment return

Closing balance

Reconciliation of investments – 2017Old Mutual Rehabilitation Investment 22 023 7 440 (11 759) 205 17 909

Reconciliation of investments – 2016Old Mutual Rehabilitation Investment 14 218 7 440 – 365 22 023

The investment is administered by Old Mutual Investment Services (Pty) Ltd. This is an investment product referred to as a focused investment plan, which requires monthly premiums to be paid until August 2022 and where money is invested in a combination of underlying unit trusts. Old Mutual has a Ba1 credit rating.

Fair value is determined based on the published unit prices of the underlying unit trust and therefore falls within level 3 of the IFRS fair value hierarchy.

* The Group obtained approval from the issuer of the rehabilitation guarantees to partially divest from the rehabilitation investment during the year based on the confirmation that they did not require the extent of collateral that was held at the stage.

Market riskThe Group’s exposure to equity securities price risk arises from the underlying unit trust investments held by the Group.

14. InventoriesGroup Company

2017 2016 2017 2016

Finished goods 55 253 56 577 – – Consumable stores 1 608 1 091 – –

56 861 57 668 – –

Inventory is carried at cost in 2017 (2016: Inventory was carried at cost except for lower grade run-of-mine sweepings of R3.44 million and export product of R0.23 million which were carried at net realisable value).

The Group did not carry any inventory at net realisable value in 2017 and therefore no write-downs were recognised as in expense and included in “Cost of Sales” in profit or loss during the current year (2016: write-downs of lower grade run-of-mine sweepings and export product to net realisable value amounted to R2.4 million and R0.19 million respectively).

No inventory is pledged as security or collateral.



15. Trade and other receivablesGroup Company

2017 2016 2017 2016

Trade receivables 238 864 211 313 – – Provision for impairment (18 034) (12 650) – –

220 830 198 663 – – Prepayments 22 082 1 797 4 723 118 Deposits 4 586 4 118 62 – VAT 3 226 223 – – Other debtors 36 662 19 926 13 425 244

287 386 224 727 18 210 362

Non-current prepayments 6 739 – – – Current assets 280 647 224 727 18 210 362

287 386 224 727 18 210 362

Trade receivablesCurrent 180 113 155 492 – – Past due not impaired 40 717 43 171 – – Impaired 18 034 12 650 – –

238 864 211 313 – –

All classes of financial assets, with the exception of trade receivables, are not past due nor impaired.

At year-end, Wescoal Mining was in the process of setting up a joint venture. The purpose of the joint venture is to acquire additional mining rights adjacent to the Triangle Operations of Khanyisa, conduct mining operations and the selling and distribution of coal. All conditions precendent for the arrangement had not been met at year-end and initial start-up cost was accounted for as a prepayment of R6.7 million

Credit riskThe risk that counterparties or customers will not perform as expected, which results in a loss to the Group, can be defined as a credit risk.

Trade receivables are divided into two classes, being those relating to Wescoal Mining and those relating to Wescoal Trading. Wescoal Mining’s trade receivables amounted to R103 million (2016: R92 million) at year-end and Wescoal Trading made up the balance at R118 million (2016: R107 million).

Wescoal Mining sells mainly to Eskom, who made up 54% (2016: 81%) of the Wescoal Mining Division’s trade receivables balance at year-end. Eskom has a history of no defaults and a credit rating of Ba2.

Trade receivables in Wescoal Trading consist of a large number of customers from widespread and diverse industries. Customers include government institutions, private sector and mining entities with no history of default.

The Group evaluates customers prior to the granting of credit. Each entity has a unique customer base that contributes to different levels of credit exposure. Entities manage credit exposure by applying prudent credit limits and constant evaluation of credit behaviour. If customers are independently rated, these ratings are used (see above). Otherwise if there is no independent rating, management assesses the credit quality of the customer, taking into account its financial position and past experience. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The compliance with credit limits are monitored monthly in conjunction with the analysis of the receivables’ aging report.

The Group’s variety of customers across all industries mitigates the exposure of concentration risk resulting from credit risk.

The balance of trade debtors relate to a variety of customers who mostly have a good payment history.

The maximum exposure to credit risk is the carrying value of financial assets.

Based on the nature of the risk against the credit risk exposure, no additional collateral is generally taken against the credit risk exposures.

Receivables that are impaired were individually assessed regarding recoverability. The provision for bad debt is based on an aggregation of long outstanding customer balances. A receivable is considered to be impaired when the customer has a history of default, is experiencing financial difficulties and/or has been handed over for litigation.


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15. Trade and other receivables (continued)Trade and other receivables past due but not impaired At 31 March 2017, R30.05 million (2016: R40.2 million) and R10.67 million (2016: R2.99 million) were past due but not impaired, and related to Wescoal Trading and Mining respectively.

The ageing of amounts past due but not impaired is as follows:

Trading Mining

Past due 2017 2016 2017 2016

30 – 60 days 22 922 35 867 10 665 2 634 60 – 90 days 1 751 2 402 – 358 > 90 days 5 379 1 910 – –

30 052 40 179 10 665 2 992

83% (2016: 88%) of the balance per the ageing consists of entities within the private sector, while the remaining 17% (2016: 12%) relates to government institutions.

As of 31 March 2017, none of the Company’s trade and other receivables were past due but not impaired (2016: Rnil).

Trade and other receivables impairedAs of 31 March 2017, trade and other receivables of R18.03 million (2016: R12.65 million) were impaired and provided for. The movement in the allowance for impairment of receivables were as follows:

Group Company

2017 2016 2017 2016

Opening balance 12 650 10 764 – – Provisions for impairment 5 537 2 377 – – Amounts written off as uncollectable (153) (491) – –

18 034 12 650 – –

83% (2016: 100%) of the provision for impairment relates to trade receivables in Wecoal Trading and 17% to trade receivables in Wescoal Mining (2016: nil%).

Pledged as security Trade receivables with a contractual value of R179.12 million (2016: R193.9 million) have been pledged as security for the Reichmans (Pty) Ltd loans (refer to note 21).

16. Cash and cash equivalentsGroup Company

2017 2016 2017 2016

Cash on hand 29 32 – – Bank balances 84 382 101 147 2 344 22 Bank overdraft (17 098) (15 781) (17 047) (15 769)

67 313 85 398 (14 703) (15 747)

Current assets 84 411 101 179 2 344 22 Current liabilities (17 098) (15 781) (17 047) (15 769)

67 313 85 398 (14 703) (15 747)

The average interest rate on bank balances approximates 0.1% (2016: 0.1%) per annum.



16. Cash and cash equivalents (continued)The average interest rate on bank overdrafts approximates 10.5% (2016: 10.5%) per annum and is determined based on the prime overdraft lending rate. The Group deals with reputable banks in South Africa with current national long term ratings of Baa2.

Group Company

2017 2016 2017 2016

Total amount of approved overdraft facilities 17 000 17 000 17 000 17 000

The total amount of undrawn facilities available for future operating activities and commitments – 1 231 – 1 231

The above overdraft facilties are secured through unlimited cross suretyships and cessions of loan accounts by all Group companies.

Restricted cashInvestec Bank Limited 350 393 – 350 393 –

The Company obtained a cash confirmation in the form of a bank guarantee from Investec Bank Limited in accordance with Regulation 111(4) and Regulation 111(5) of the Companies Regulations and in connection with the Keaton acquisition (refer note 40).

The guarantee is secured by a cash investment equal to the value of the guarantee, is non-negotiable and not transferable and expires on 30 June 2017.

17. Share capitalGroup Company

Number 2017 2016 2017 2016

Authorised500 000 000 ordinary no par value shares

Reconciliation of number of shares issued:Reported at beginning of the year 237 534 196 301 237 534 196 301 Rights share issue – 31 385 – 31 385 General issue of shares – 9 848 – 9 848 BEE structured entity 124 995 – 124 995 –

362 529 237 534 362 529 237 534Less: Treasury shares held by Share Trust (12 504) (12 774) (12 504) (12 774)

350 025 224 760 350 025 224 760

Subscription Agreement with K2016316243 (South Africa) Proprietary LimitedOn 23 August 2016, the Group announced that it had entered negotiations to increase its black ownership to more than 51% by the end of December 2016.

The Company entered into a subscription agreement (“Subscription Agreement”) with K2016316243 (South Africa) Proprietary Limited (“BEE Structured Entity”), whose shareholders comprise a consortium of pre-existing Wescoal shareholders, in terms of which the BEE Structured Entity subscribed for an additional 124 995 373 Wescoal shares.

The BEE Consortium consolidated their pre-existing shareholding in Wescoal under the BEE Structured Entity. The BEE Structured Entity was incorporated for the sole purpose of holding shares in Wescoal.

The BEE Structured Entity subscribed for the additional shares as a specific issue of shares for cash at a subscription price of R1.69 per Wescoal share, being a 10% discount to the 30-day volume weighted average price (“VWAP”) of Wescoal shares calculated as at close of trade on Wednesday, 21 September 2016. The BEE Consortium´s aggregate shareholding in Wescoal, through the BEE Structured Entity, increased from ca.37% to ca.59% post acquisition of the additional shares.

In order to give effect to the share purchase, the BEE Consortium, through the BEE Structured Entity, procured funding from the Industrial Development Corporation SOC Limited (the “IDC”) in terms of which the IDC subscribed for class A cumulative redeemable, preference shares in the BEE Structured Entity for an aggregate amount of R178 121 292 to fund the Subscription Amount (“Class A Preference Share Subscription Agreement”).

Wescoal provided funding to the BEE Structured Entity for the balance of the Subscription Amount and other related capitalised BEE Structured Entity costs, in terms of which Wescoal subscribed for class B cumulative redeemable, preference shares in BEE Structured Entity for an aggregate amount of R35.5 million (“Class B Preference Share Subscription Agreement”) (refer note 12). The BEE Consortium and the BEE Structured Entity provided certain security in connection with the Class B Preference Share Subscription Agreement to Wescoal, which security will rank behind the IDC´s security.


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On 20 December 2016, the Company announced that all suspensive conditions in relation to the Transaction had been fulfilled; 124 995 373 new Wescoal Shares were issued and allotted to the BEE Structured Entity, and subsequently listed on the JSE.

The ruling price on date of listing was R2.35 per share, exceeding the subscription price of R1.69 per Wescoal share. The Company accordingly reported a BEE discount of R82.28 million in the statement of profit or loss (refer note 29).

Issue costs of R6.96 million directly attributable to the issue of the shares have been netted against proceeds of R293.7 million as share capital.

Unissued ordinary shares137 471 049 unissued ordinary shares are under the control of the Directors in terms of a resolution of members passed at the last Annual General Meeting. This authority remains in force until the next Annual General Meeting.

Group Company

Value 2017 2016 2017 2016

IssuedOrdinary 518 651 231 870 518 651 231 870 Treasury shares held by Share Trust (18 429) (18 714) (18 429) (18 714)

500 222 213 156 500 222 213 156

The Directors are authorised to issue, allot and grant options to acquire a maximum of 29 186 272 ordinary shares in the issued share capital of the Company in terms of the incentive scheme.

Proceeds from the exercise of 270 000 share options by employees in 2017 amounted to R0.286 million (Refer note 23). No share options were exercised during the prior year.

Refer to page 61 for an analysis of major shareholders.

18. Instalment sale agreementsGroup Company

2017 2016 2017 2016

Contractual future instalments– within one year 2 543 3 336 – – – in second to third year inclusive 567 3 110 – –

3 110 6 446 – – Less: future finance charges (203) (683) – –

2 907 5 763 – –

Present value of future instalments – within one year 2 355 2 856 – – – in second to third year inclusive 552 2 907 – –

2 907 5 763 – –

Non-current liabilities 552 2 907 – – Current liabilities 2 355 2 856 – –

2 907 5 763 – –

It is Group policy to finance certain motor vehicles and equipment under instalment sale agreements.

The average finance term is three years and the average effective borrowing rate was 11.53% (2016: 11.27%). Interest rates are linked to prime (plus 1% to 2.5%) at the contract date.

The instalment sale agreements are secured by vehicles with a carrying amount of R4.64 million (2016: R7.85 million) (refer note 5).



19. Other financial liabilitiesGroup Company

2017 2016 2017 2016

Contractual future instalments– within one year 2 534 – – – – in second to third year inclusive 9 091 – – –

11 625 – – – Less: future finance charges (4 112) – – –

7 513 – – –

Present value of future instalments – within one year 1 019 – – – – in second to third year inclusive 6 494 – – –

7 513 – – –

Non-current liabilities 6 494 – – – Current liabilities 1 019 – – –

7 513 – – –

Underground access right agreementThe agreement with Nungu Trading 341 Proprietary Limited, whereby the Group obtained the use of the underground access point and the stockpile area is classified as a financial liability (refer note 7).

The financial liability has been accounted for initially at fair value and subsequently at amortised cost using the effective interest rate method. The contractual minimum future payments have been discounted at an effective interest rate equivalent to the prime interest rate of 10.5%. The liability will be settled in 54 monthly instalments with a final payment in May 2021.

20. ProvisionsGroup Company

2017 2016 2017 2016

Environmental rehabilitation 157 571 60 076 – –

Non-current liabilities 148 206 46 186 – – Current liabilities 9 365 13 890 – –

157 571 60 076 – –

GroupOpening balance Additions Utilised

Time value of money

and inflation component of rehabilitation Total

Reconciliation of provisions – 2017

Environmental rehabilitation 60 076 107 361 (13 543) 3 677 157 571

Reconciliation of provisions – 2016Environmental rehabilitation 38 563 28 586 (9 295) 2 222 60 076

The Group’s mining and exploration activities are subject to extensive environmental laws and regulations. These laws and regulations are continually changing and are generally becoming more restrictive. The Group has made and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements. The above is a reconciliation of the total liability for environmental rehabilitation.

While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the Group has estimated that, based on current environmental and regulatory requirements, the total cost for the mines, in current monetary terms, is approximately R157.57 million (2016: R60.08 million).

The breakdown of the liability per site is as follows:

Khanyisa Intibane Elandspruit Blesboklaagte Total

2017Environmental rehabilitation 30 378 25 197 97 864 4 132 157 571

2016Environmental rehabilitation 15 882 11 672 18 632 13 890 60 076


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20. Provisions (continued)In determining the above provision, the current cost estimates as determined by environmental rehabilitation experts have been escalated to a future value at an inflation rate of 6% (2016: 6%) over a period of between two and eight years (2016: two and fourteen years). The future value was then discounted at a rate of between 7.72% and 8.62% (2016: between 8.75% and 9.25%) giving a real discount rate of between 1.72% and 2.62% (2016: between 2.75% and 3.25%). A 0.5% change in the real discount rate would change the present value of the liability by R4.6 million (2016: R1.5 million).

The mine sites are concurrently rehabilitated, of which the major part of the rehabilitation will be conducted at the end of the life of each mine site. The Group utilised R9.8 million of its provision during 2017 for the rehabilitation of Blesboklaagte.

The provision for rehabilitation increased significantly over the past two financial years in line with the Elandspruit mine development in the prior year and further expansions in the year under review. The acquisition of the Mintiro Mining Right extended Intibane’s Life of Mine which further contributed to the increase in the rehabilitation provision. In addition, the Group’s method of calculation of estimated rehabilitation costs has continued to evolve in line with current developments in legislation. The total charge in estimate of R107.4 million was capitalised to mineral properties (2016: R23.4 million) with no expense to profit or loss for the year (2016: R5.2 million).

The expected Life of Mine for each mine site as at 31 March 2017 is as follows:

Khanyisa Intibane Elandspruit Blesboklaagte

Life of Mine 60 months 30 months 8 years –

The Group intends to finance the ultimate rehabilitation costs from the money invested in and ongoing contributions to environmental rehabilitation investments, as well as the proceeds on sale of assets at the time of mine closure. The Group has guarantees in place relating to environmental liabilities. These guarantees have been issued by third parties on behalf of the Group.

2017 2016

Net undiscounted obligationEstimated rehabilitation cost (undiscounted) 183 440 71 277 Amounts invested in rehabilitation investment (refer to note 13) (17 909) (22 023)

Total net undiscounted obligation 165 531 49 254

GuaranteesEnvironmental rehabilitation guarantees issued to the DMR 44 727 31 339 Environmental rehabilitation guarantees issued to other parties 6 259 6 259

50 986 37 598

Refer to note 40 for additional guarantees issued after year-end.

These guarantees have been issued by third parties on behalf of the Group and are secured by a cession over the Old Mutual Rehabilitation investment (refer to note 13), together with other Group sureties and indemnities.

21. Interest-bearing borrowingsGroup Company

2017 2016 2017 2016

Held at amortised costInvestec Bank Limited (business acquisition finance) 75 509 29 883 75 509 29 883 Investec Bank Limited (property finance) 11 564 13 061 – – Investec Group of Companies – Reichmans (Pty) Ltd* 216 276 169 933 – – Pentalin Trading 56 (Pty) Ltd 8 743 14 308 – – Coaltoll (Pty) Ltd 2 582 6 634 – –

314 674 233 819 75 509 29 883

Non-current liabilities 60 553 18 533 50 763 – Current liabilities 254 121 215 286 24 746 29 883

314 674 233 819 75 509 29 883

* Reichmans (Pty) Ltd is a member of the Investec Group of Companies.

Refer to note 3 for the undiscounted amounts of interest-bearing borrowings.



21. Interest-bearing borrowings (continued)Investec Bank Limited (business acquisition finance)The Investec Bank Limited loan of R75.5 million initially related to financing provided by Investec to Wescoal Holdings Limited to finance prior acquisitions. The Company drew down approximately R68 million during the year to finance the Keaton acquisition (refer note 40). The loan continues to bear interest at the prime overdraft lending rate plus 1% and is repayable in quarterly instalments. Maturity date of the loan has been extended from 28 October 2016 to 1 October 2019. The loan is secured by inter alia properties of Blanford 006 (Pty) Ltd with a carrying value of R11.6 million and inter alia moveable assets of Wescoal Mining (Pty) Ltd and Wescoal Trading (Pty) Ltd with a carrying value of R91.95 million. The Company’s shares in subsidiaries have been pledged as security for this loan. The Directors consider that the carrying value of the loan approximates its fair value, since the interest payable is close to current market rates.

Investec Bank Limited (property finance)The Investec Bank Limited loan of R11.6 million relates to financing provided by Investec to Blanford 006 (Pty) Ltd for the purchase of property as part of the MacPhail acquisition in 2014 and Portion 24 of Farm Rietfontein 286 in 2016.

Rietfontein MacPhail

Interest rate Prime overdraft lending rate Prime overdraft lending rate less 0.5%

Monthly instalments 60 60 with balloon payment at maturity date

Maturity date 11 February 2021 31 December 2018

Security Portion 24 of Farm Rietfontein with a carrying value of R5.1 million

Inter alia properties of Blanford 006 (Pty) Ltd with a carrying value of R12.3 million

The Company’s shares in subsidiaries have been pledged as security for the loan

The fair value of the loans are not materially different to their carrying amounts, since the interest payable on these loans are linked, or close to, current market rates.

Investec Group of Companies – Reichmans (Pty) LtdThe Reichmans (Pty) Ltd loan forms part of a working capital facility provided to the Group by Investec Group of Companies which increased to R200 million in the current year (2016: R180 million). The financing provided is a revolving credit facility of R100 million each to Wescoal Mining (Pty) Ltd and Wescoal Trading (Pty) Ltd (2016: R90 million). Reichmans further accommodates an intra-month overdraft on the overall facility up to a maximum of R50 million. Any overdraft portion of the overall lend will attract an interest rate of prime + 1.5%.

At 31 March 2017, R102.39 million (2016: R87.70 million) and R113.89 million (2016: R82.23 million) were utilised against the facility by Wescoal Mining and Trading respectively.

These loans bear interest at the prime overdraft lending rate plus 0.5% (2016: Trading plus 1.5% and Mining plus 2%). The loans are secured by trade receivables of Wescoal Mining (Pty) Ltd and Wescoal Trading (Pty) Ltd with a contractual value of R179.12 million at 31 March 2017 (2016: R193.93 million).

The fair value of the loans are not materially different to their carrying amounts, since the interest payable on these loans are close to current market rates.

CoalToll (Pty) LtdThe Group concluded an agreement with CoalToll (Pty) Ltd for the construction and commissioning of a fines plant, which operates in conjunction with the Muhanga Processing plant.

The CoalToll (Pty) Ltd loan is unsecured, bears interest at a fixed rate of 13.50% and is payable in 36 monthly installments of R391 963. Repayment commenced November 2014.

CoalToll (Pty) Ltd is not a related party of the Wescoal Group.

The fair value of the loan is not materially different to its carrying amount, since the interest payable is close to current market rates.

Pentalin Trading 56 (Pty) LtdThe Pentalin 56 (Pty) Ltd loan was entered into to co-finance the construction of the fines plant in conjuntion with CoalToll (Pty) Ltd. This loan is unsecured, bears interest at a fixed rate of 12.50% and is payable in 36 monthly instalments of R166 129. Payment commenced January 2015.

During the prior year, the Company entered into a second loan with Pentalin 56 (Pty) Ltd to finance the ROM plant. This loan is unsecured, bears interest at a fixed rate of 11.5% and is payable in 36 monthly instalments of R670 160. Payment commenced May 2015.

Pentalin 56 (Pty) Ltd is not a related party of the Wescoal Group.

The fair value of the loan is not materially different to its carrying amount, since the interest payable is close to current market rates.


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22. Trade and other payablesGroup Company

2017 2016 2017 2016

Trade payables 249 206 237 538 986 961 VAT 1 894 2 113 176 261 Accruals 12 810 8 651 11 238 627 Payroll accruals 35 117 16 157 11 990 4 956 Other payables 18 481 8 119 2 776 2 823 Deferred revenue* 14 355 – – –

331 863 272 578 27 166 9 628

* The Yoctolux mining void that was acquired will be compensated for by delivering 66,768 tons of coal over 6 months. The deferred revenue value was based on current market prices at the time of concluding the agreement and will realise upon delivery of coal mined (refer note 5).

23. Share-based paymentsInformation on options granted during the yearThe fair value of options are determined at grant date using the Black-Scholes Model. The expense is recognised on a straight-line basis over the duration of the scheme.

The following inputs were used in the valuation of options granted:

2017 2016

Weighted average share price 246 cents 111 centsExpected volatility 60% 60%Option life Five years Five yearsExpected dividends 1.6 0.6 Risk-free interest rate 8.19% 8.00%

Middle and senior management qualify to take part in the scheme. The duration of each issue is five years, and one-fifth of the options vest at each year-end. The only vesting condition is that employees must remain in the service of Wescoal for the duration of the scheme. The right to exercise the options are relinquished should the employee not remain in Wescoal’s service for the duration of the scheme. There are no market performance conditions. Volatility is calculated based on the daily share price history for the preceding five years.

Service conditions are included in assumptions about the number of options that are expected to vest based on the non-market vesting conditions. The impact of the revision to original estimates, if any, is recognised in profit or loss, with a corresponding adjustment to equity.

When the options are exercised, the shares held by the Wescoal Share Incentive Trust are issued to the employee. The proceeds received net of any directly attributable transaction costs are credited to share capital. The Wescoal Share Incentive Trust is a structured entity and is consolidated into the Group and Company financial statements.

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.

Movements in the number of share options outstanding and their related weighted average share price at exercise date of options are as follows:

2017 2016

Average exercise price

in cents per share option

Options(thousands)

Average exercise price

in cents per share option

Options(thousands)

At the beginning of the year 147 8 400 147 12 730 Granted 246 1 850 111 1 100 Options exercised (106) (270) – – Options forfeited (204) (240) (133) (5 430)

At the end of the year 169 9 740 147 8 400

Of the 9.7 million (2016: 8.4 million) outstanding options, 4.2 million (2016: 3.2 million) options were exercisable at 31 March 2017.



23. Share-based payments (continued)Information on options granted during the year (continued)Share options outstanding at the end of the year have the following expiry dates and exercise prices:

Grant date Expiry date

Exercise price in cents

per share

Share options

2017(thousands)

Share options

2016(thousands)

9 June 2010 8 June 2015 106 30 3006 August 2012 5 August 2017 90 340 34029 August 2012 28 August 2017 86 2 000 2 0004 November 2013 3 November 2018 206 120 2408 November 2013 7 November 2018 212 2 000 2 08022 July 2014 21 July 2019 181 700 74028 August 2014 27 August 2019 172 600 6004 November 2014 3 November 2019 185 1 000 1 00025 November 2015 24 November 2020 111 1 100 1 10028 November 2016 27 November 2021 246 1 850 –

9 740 8 400

24. Financial assets by category

GroupLoans and

receivables

At fair value through

profit or loss

Non-financial

assets Total

2017Trade and other receivables 262 078 – 25 308 287 386 Investments* – 17 909 – 17 909 Other receivable 36 654 – – 36 654 Cash and cash equivalents 84 411 – – 84 411 Restricted cash 350 393 – – 350 393

733 536 17 909 25 308 776 753

2016Trade and other receivables 222 707 – 2 020 224 727 Investments* – 22 023 – 22 023 Cash and cash equivalents 101 179 – – 101 179

323 886 22 023 2 020 347 929

* This is an investment with Old Mutual and was invested to assist with the payment of rehabilitation at the end of the life of mine.

CompanyLoans and

receivables

Non-financial

assets Total

2017Trade and other receivables 13 487 4 723 18 210 Loans to Group companies 200 481 – 200 481 Cash and cash equivalents 2 344 – 2 344 Other receivable 36 654 – 36 654 Restricted cash 350 393 – 350 393

603 359 4 723 608 082

2016Trade and other receivables 244 118 362 Loans to Group companies 250 547 – 250 547 Cash and cash equivalents 22 – 22

250 813 118 250 931


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25. Financial liabilities by category

Group

Financial liabilities

at amortised cost

Non-financial liabilities Total

2017Interest-bearing borrowings 314 674 – 314 674 Trade and other payables 264 564 67 299 331 863 Instalment sale agreements 2 907 – 2 907 Other financial liabilities 7 513 – 7 513 Bank overdraft 17 098 – 17 098

606 756 67 299 674 055

2016Interest-bearing borrowings 233 819 – 233 819 Trade and other payables 254 308 18 270 272 578 Instalment sale agreements 5 763 – 5 763 Bank overdraft 15 781 – 15 781

509 671 18 270 527 941

Company

Financial liabilities

at amortised cost

Non-financial liabilities Total

2017Trade and other payables 14 698 12 468 27 166 Loans from Group companies 99 608 – 99 608 Interest-bearing borrowings 75 509 – 75 509 Bank overdraft 17 047 – 17 047

206 862 12 468 219 330

2016Trade and other payables 4 411 5 217 9 628 Loans from Group companies 6 187 – 6 187 Interest-bearing borrowings 29 883 – 29 883 Bank overdraft 15 769 – 15 769

56 250 5 217 61 467

26. Revenue

Group Company

2017 2016 2017 2016(restated)

Sale of goods 2 118 020 1 589 870 – – Administration fees – – 44 377 25 890 Dividend received (refer note 28) – – – 64 917 Interest revenue (refer note 30) – – 30 776 23 200

2 118 020 1 589 870 75 153 114 007

RestatementParagraph 7 of IAS 18 Revenue, defines revenue as being the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity. During the year the Company reconsidered the definition in the context of the Company not engaging directly in any operating activities itself. The Company concluded that items such as interest received on loans advanced to subsidiary companies as well as dividends received on investments in subsidiaries should be regarded as revenue for the Company.



26. Revenue (continued)The following prior year financial statement lines have been updated to reflect the new disclosure of revenue:

Statement of profit or loss (extract)2016

Company Previously Change Restated

Revenue 25 890 88 117 114 007 Other income 64 917 (64 917) – Interest received 23 200 (23 200) –

114 007 – 114 007

The 2016 segment report had been restated accordingly (refer note 41).

27. Cost of salesGroup Company

2017 2016 2017 2016

Direct purchases 1 188 527 1 045 930 – – Royalty expense 22 739 7 708 – – Mining contractor cost 285 735 141 897 – – Consumables and maintenance cost 2 392 9 201 – – Staff cost 32 791 22 091 – – Fuel 91 615 48 304 – – Amortisation and depreciation of assets 67 692 33 217 – – Mining overhead and other cost 59 071 29 802 – –

1 750 562 1 338 150 – –

28. Other incomeGroup Company

2017 2016 2017 2016

Profit/(loss) on property, plant and equipment 933 (154) – – Other* 2 912 1 512 – –

3 845 1 358 – –

* Includes fair value return of R205 366 (2016: R364 587) on rehabilitation investment.

29. Operating profit/(loss)Group Company

2017 2016 2017 2016

Operating profit/(loss) for the year is stated after accounting for the following:Operating lease chargesPremises– Contractual amounts 4 547 3 713 408 –

Net profit/(loss) on sale of assets 933 (154) – – BEE discount (refer note 17) 82 280 – 82 280 – Share-based payment expense 1 413 1 784 477 483 Depreciation 73 882 41 064 122 28 Amortisation of intangible assets 7 825 8 238 – – Impairment of property, plant and equipment – 1 728 – – Employee costs* 95 388 67 412 30 181 16 635 Auditor’s remuneration 2 500 2 500 2 500 2 500 Consulting fees** 18 275 11 208 8 155 6 027 Repairs and maintenance 10 921 5 562 50 – Computer expenses 5 337 4 733 497 461

* Employee costs include an amount of R5.19 million (2016: R4.49 million) relating to the medical and provident fund contributions paid by the Group in the year under review. The Group has no defined benefit pension plans or post-retirement medical obligations.

** Consulting fees include an amount of R8.5 million relating to costs incurred in the acquisition of Keaton Energy Holdings Limited (refer to note 40).


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30. Interest receivedGroup Company

2017 2016 2017 2016(restated)

Interest revenueOther 2 015 833 1 377 – Interest on bank deposits 4 760 171 4 759 2 Interest received on Group loans – – 24 640 23 198

6 775 1 004 30 776 23 200 Disclosed as revenue – – (30 776) (23 200)

6 775 1 004 – –

Interest received on Group loans for 2017 comprise notional interest calculated at 10%.

31. Finance costsGroup Company

2017 2016 2017 2016

Interest bearing borrowings 23 500 21 618 5 505 5 266 Provision for Rehabilitation: Unwinding of discount 3 677 2 222 – – Bank overdrafts 1 396 1 732 419 1 607 Instalment sale agreements 481 676 – – Other 171 346 1 – SARS 400 903 – –

Total finance costs 29 625 27 497 5 925 6 873 Less: amounts capitalised on qualifying assets – (5 574) – –

29 625 21 923 5 925 6 873

32. TaxationGroup Company

2017 2016 2017 2016

Major components of the tax expenseCurrentLocal income tax – current period 31 221 11 759 763 – Local income tax – prior period 827 (10 911) – –

32 048 848 763 – DeferredTemporary differences – current period 31 637 13 214 639 (3 161)Temporary differences – prior period 6 009 14 177 (179) –

Income tax expense/(recovery) 69 694 28 239 1 223 (3 161)

Reconciliation of the tax expenseThe tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:Accounting profit/(loss) before tax 99 894 80 004 (63 498) 76 338

Tax at the applicable tax rate of 28% (2016: 28%) 27 970 22 401 (17 779) 21 375

Tax effect of adjustment on taxable income:Non-deductible expenses– Share-based payment expense 396 500 134 135 – Penalties, interest and other non-taxable items 2 619 110 3 231 1 – Amortisation of mineral right 9 212 2 111 – – – BEE discount 23 038 – 23 038 – Non-taxable income– Dividend received – – – (18 177)– Notional interest received on group loans – – (6 899) (6 495)– Interest on preference shares (323) – (323) – Deferred tax not recognised as assessed loss 3 1 – – Adjustment in respect of prior periods 6 836 3 266 (179) – Capital gain taxed at lower rate (57) (150) – –

69 694 28 239 1 223 (3 161)



33. Earnings per shareBasic earnings per shareBasic earnings per share is determined by dividing profit or loss attributable to the ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Group

2017 2016

Basic earnings per shareFrom continuing operations (cents per share) 11.64 26.23

Basic earnings per share was based on earnings of R30.2 million (2016: R51.76 million) and a weighted average number of ordinary shares of 259.56 million (2016: 197.36 million).

Profit used to calculate earnings per shareProfit for the year attributable to equity holders of the parent 30 200 51 765

Diluted earnings per shareIn the determination of diluted earnings per share, profit attributable to the equity holders of the parent and the weighted average number of ordinary shares are adjusted for the effects of all dilutive potential ordinary shares.

Diluted earnings per shareFrom continuing operations (cents per share) 11.61 26.22

Diluted earnings per share was based on earnings of R30.20 million (2016: R51.76 million) and a weighted average number of ordinary shares of 260.06 million (2016: 197.40 million).

Reconciliation of weighted average number of ordinary shares used for earnings per share to weighted average number of ordinary shares used for diluted earnings per shareWeighted average number of ordinary shares used for basic earnings per share 259 559 197 361Adjusted for:Share options in terms of the Wescoal Share Incentive Trust* 499 38

260 058 197 399

* Diluted earnings reflected showing the potential effect of dilution for 9.74 million (2016: 8.4 million) options held in terms of the Wescoal Share Incentive Trust by the Directors and employees to subscribe to new shares in Wescoal.

Headline earnings and diluted headline earnings per shareHeadline earnings and diluted headline earnings are determined by adjusting basic earnings and diluted earnings by excluding separately identifiable re-measurement items in terms of the JSE headline earnings circular, HEPS Circular 2/2013.

Headline earnings and diluted headline earnings are presented before and after tax.

2017 2016

Before tax After tax Before tax After tax

Headline earnings per share (cents) 11.28 27.06 Diluted headline earnings per share (cents) 11.25 27.05

Reconciliation between earnings and headline earningsBasic earnings 99 894 30 200 80 004 51 765 Adjusted for:(Profit)/loss on sale of property, plant and equipment (933) (933) 154 154 Impairment of property, plant and equipment – – 1 728 1 486

98 961 29 267 81 886 53 405


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34. Cash generated from/(utilised in) operationsGroup Company

2017 2016 2017 2016

Profit/(loss) before taxation 99 894 80 004 (63 498) 76 338 Adjustments for:Depreciation of property, plant, equipment and prepayment 75 308 41 064 122 28 Amortisation of intangible assets 7 825 8 238 – – Impairment of property, plant and equipment – 1 728 – – BEE discount 82 280 – 82 280 – (Profit)/loss on sale of assets (933) 154 – – Interest received – investment (6 775) (1 004) (30 776) (23 200)Finance costs 25 948 19 701 5 925 6 873 Dividend received – – – (64 917)Movement in provisions 3 677 7 454 – – Share-based payment expense 1 413 1 784 477 483 Investment return (205) (365) – –

288 432 158 758 (5 470) (4 395)Changes in working capital:Inventories 807 25 184 – – Trade and other receivables (62 659) 14 013 (17 849) 702 Trade and other payables 26 935 41 635 13 085 (8 982)

253 515 239 590 (10 233) (12 675)

35. Tax paidGroup Company

2017 2016 2017 2016

Balance at beginning of year (27 585) (39 899) 787 (407)Charge through profit or loss (32 048) (848) (763) – Balance at end of year 13 486 27 585 (326) (787)

(46 147) (13 162) (302) (1 194)

36. Related partiesRelationshipsUltimate holding company Wescoal Holdings Limited

Subsidiaries Wescoal Mining Proprietary LimitedWescoal Trading Proprietary LimitedWescoal Exploration Proprietary LimitedWescoal Mineral Recoveries Proprietary LimitedBlanford 006 Proprietary LimitedProudafrique Trading 147 Proprietary LimitedJJP Res Gedeelte 2 Van Plaas Vlakvarkfontein 213 Proprietary LimitedJJP Gedeelte 6 (Van Ged 2) Van Vlakvarkfontein 213 Proprietary LimitedJJP Gedeelte 16 (Van Ged 2) Van Vlakvarkfontein 213 Proprietary Limited

Employee share incentive scheme Wescoal Share Incentive Trust

Members of key management Directors

Group Executive Committee Key management personnel who have the authority and responsibility for planning, directing and controlling activities of the Company and subsidiaries.



36. Related parties (continued)Group Company

2017 2016 2017 2016

Related party balancesLoan accounts – Owing (to)/by related partiesWescoal Trading Proprietary Limited – – (93 424) – Wescoal Mining Proprietary Limited – – 168 808 210 042 Wescoal Mineral Recoveries Proprietary Limited – – (816) (818)Blanford 006 Proprietary Limited – – 31 672 40 505 Wescoal Exploration Proprietary Limited – – (1 337) (1 337)Proudafrique Trading 147 Proprietary Limited – – (4 031) (4 032)

– – 100 872 244 360

Shares held by TrustWescoal Share Trust – – 12 504 12 774

Related party transactionsInterest paid to/(received from) related partiesWescoal Mining Proprietary Limited – – (20 853) (20 161)Blanford 006 Proprietary Limited – – (3 787) (3 037)

– – (24 640) (23 198)

Administration fees received from related partiesWescoal Trading Proprietary Limited – – 15 432 9 708 Wescoal Mining Proprietary Limited – – 27 287 15 535 Blanford 006 Proprietary Limited – – 1 658 647

– – 44 377 25 890

Dividend received from related partiesWescoal Trading Proprietary Limited – – – 30 717 Wescoal Mineral Recoveries Proprietary Limited – – – 2 200 Proudafrique Trading 147 Proprietary Limited – – – 32 000

– – – 64 917

Compensation to Directors and prescribed officersNon-executive Directors’ fees 2 968 2 544 2 968 2 544 Remuneration 27 390 15 999 10 930 5 142 Retirement and medical contributions 799 1 101 321 315 Fringe benefits and bonus 6 897 1 277 1 992 321

38 054 20 921 16 211 8 322

37. Directors’ and prescribed officers’ remunerationExecutive Directors

2017 Remuneration

Medical and provident

fund contributions

Annual bonus

Fringe and other

benefitsCash total

IFRS 2 share option

expense

W Sulaiman 3 683 120 1 100 215 5 118 241 IJ van der Walt* 2 368 65 320 102 2 855 10 T Tshithavhane 2 783 83 – 154 3 020 74 B Mazarura** 2 096 53 – 101 2 250 87

10 930 321 1 420 572 13 243 412

* Izak van der Walt resigned as Director of the holding company with effect from 30 June 2016; he remains a director of subsidiary companies.** Bothwell Mazarura was appointed as Chief Financial Officer on 1 July 2016.


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2016 Remuneration


fund contributions

Annual bonus

Fringe and other

benefitsCash total

IFRS 2 share option

expense

M du Plessis* 1 203 90 – 279 1 572 76 W Sulaiman 3 000 225 36 – 3 261 227 IJ van der Walt 939 – 6 – 945 3

5 142 315 42 279 5 778 306

* Morne du Plessis resigned as Director and Chief Financial Officer of the Group with effect from 30 September 2015

Share options in the Company held by Directors



cents

Balance held at 31 March 2017

(thousands)


(thousands)

DirectorsW Sulaiman 2015 185 1 000 1 000

2016 111 250 250

IJ van der Walt 2016 111 75 75

T Tshithavhane 2017 246 850 –

B Mazarura 2017 246 1 000 –

Non-executive Directors Fees for services as Directors

2017 2016

JG Pansegrouw 485 482HLM Mathe 574 434MR Ramaite 468 546DMT van Gaalen 867 695KM Maroga 574 387

2 968 2 544

Prescribed Officer’s

Remuneration


fund contributions

Annual bonus

Fringe and other

benefitsCash total

IFRS 2 share option

expense

2017HP Botes 4 738 115 2 264 242 7 359 256 B Siko 2 384 76 264 128 2 852 109 E Strydom 2 006 65 264 107 2 442 27 M Berry 3 007 94 663 166 3 930 448 V Dhanooklal 1 582 47 298 91 2 018 10 BM Hlophe 1 652 49 221 95 2 017 10 KN Mbekeni 1 091 32 45 57 1 225 –

16 460 478 4 019 886 21 843 860

2016HP Botes 3 742 272 32 – 4 046 245 B Siko 2 109 147 24 214 2 494 106 E Strydom 1 779 127 21 – 1 927 53 M Berry 2 606 195 500 – 3 301 448 C Mnisi* 621 45 – 165 831 53

10 857 786 577 379 12 599 905

* C Mnisi resigned on 15 October 2015.

37. Directors’ and prescribed officers’ remuneration (continued)



37. Directors’ and prescribed officers’ remuneration (continued)Share options in the Company held by Prescribed Officers



cents


(thousands)


(thousands)

HP Botes 2013 86 2 000 2 0002015 172 500 500

E Strydom 2014 206 120 200

M Berry 2014 212 2 000 2 0002016 111 200 200

C Mnisi (resigned 15 October 2015) 2014 206 – 40

B Siko 2015 181 500 5002016 111 100 100

V Dhanooklal 2016 111 75 75

BM Hlophe 2016 111 75 75

38. Contingent liabilitiesThe Group had contingent liabilities at 31 March 2017 in respect of:

ClaimsOn the 31st of March 2016, the Group received a Statement of Claim, which commenced the pleadings in the Arbitration Proceedings pertaining to a dispute of certain provisions of a Coal Transportation Agreement concluded on 8 October 2014.

The Group disclaimed the liability and the arbitration claim was dismissed with costs on 21 October 2016.

On 1 December 2016, the Group received a notice of motion commencing review proceedings in the High Court, Gauteng Local Division, Johannesburg to set the arbitration award aside. The Review Proceedings are being opposed. The potential undiscounted amount of payments that the Group could be required to make, in addition to amounts already provided for, if there was an adverse decision related to the Review Proceedings, is estimated to be approximately R11 million.

Claims – Recoupment of historical mining costsThe Group is in discussion with a mining contractor at Intibane Mine regarding the recoupment of historical mining costs incurred in terms of the contract mining agreement. The mining contractor, on the other hand, is claiming additional revenue on the same contract. Possible settlement outcomes from the discussions are not expected to have a negative impact on the Group and, therefore, no provision has been made in the financial statements.

39. CommitmentsCapital commitmentsSignificant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

2017

Mining properties 14 308

D20 RoadThe above commitments include capital expenditure of R14 million relating to the completion of the D20 road construction (refer note 5).


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40. Post-financial year-end eventsSubsequent to 31 March 2017,

Acquisition of Keaton Energy Holdings LimitedThe Board of directors and management are committed to growing the asset base and earnings of the Group, whilst driving shareholder value. The implementation of the BEE transaction in December 2016 saw an injection of approximately R178 million in equity, thereby significantly strengthening the equity capitalisation and liquidity of the Group.

On 3 February 2017 the Company announced its firm intention offer to acquire all of the issued ordinary share capital of Keaton Energy Holdings Limited (“Keaton Energy”).

The consideration payable by Wescoal to Keaton Energy shareholders will be partly settled in cash at R1.20 per Keaton Energy share, plus Wescoal ordinary shares in the ratio of 0.30 Wescoal shares for every 1 Keaton Energy share held. On completion of the proposed transaction, Keaton Energy will become a wholly-owned subsidiary of the Company and will be delisted from the JSE.

On 4 May 2017 the Company and Keaton Energy posted circulars pertaining to the acquisition of Keaton Energy to its shareholders, which incorporated notices of general meetings of Wescoal and Keaton Energy shareholders to be held at the registered office of Wescoal and Keaton Energy respectively on 2 June 2017.

Both the Company and Keaton Energy, advised their shareholders on 2 June 2017 that their respective general meetings were quorate and that the resolutions were passed by the required majority shareholders present in person or represented by proxy at the general meetings.

Both the Company and Keaton Energy, advised their shareholders on 12 June 2017 that they had received unconditional approval for the transaction from the Competition Commission on 6 June 2017.

Both the Company and Keaton Energy, advised their shareholders on 20 June 2017 that all remaining scheme conditions had been fulfilled and that the scheme had become unconditional on that date.

The acquisition of Keaton Energy will be accounted for in terms of IFRS 3 (revised), Business Combinations, and consequently the results of Keaton Energy will be consolidated by Wescoal from the acquisition date.

For accounting purposes, the purchase price of R561.4 million for the Keaton acquisition comprises the following components:• Cash components of Scheme Consideration amounting to R351.2 million• Share component of the Scheme Consideration amounting to R180.0 million*• Cash of R30.2 million (in terms of the ESOP Waiver Payments) to be paid to Keaton employees who hold share incentive

instruments

* Calculated as 87 805 389 Wescoal shares to be issued as part of the Scheme Consideration at R2.05 per Wescoal share; being the Wescoal share price on 20 June 2017 when the scheme became unconditional.

The cash component of the consideration as well as other expenses related to the offer, will be funded by the Company through a combination of internal cash resources, existing debt facilities and the cash raised by the Company through its BEE transaction implemented in December 2016. The Company has sufficient authorised but unissued shares to settle the share component. The Company accordingly provided a guarantee issued by Investec Bank Limited for R351 221 556 (refer note 16).

Due to the timing of the transaction date being close to the date of finalising these financial statements, a provisional determination of the fair values of identifiable assets and liabilities acquired has been done. A final fair value exercise is yet to be performed and may differ from the provisional amounts disclosed below.

Goodwill amounting to R27.6 million arises from the provisional fair value allocation, being the difference between the purchase price of the transaction and the fair value of the identifiable net assets acquired. The goodwill arises mainly as a result of the deferred tax accounted for on the fair value adjustments to mining assets acquired.

Transaction costs (non-recurring) of R39 million relating to the acquisition will be allocated as follows:• R34.7 million has been expensed; and• R4.3 million has been capitalised to equity (Relating to the issue of Wescoal shares).

NOTES TO THE ANNUAL FINANCIAL STATEMENTS CONTINUED


40. Post-financial year-end events (continued)The preliminary fair value allocation is set out in the table below:

Group R’000

Non-current assets (including goodwill) 1 318 897Current assets 197 209Non-current liabilities (637 427)Current liabilities (263 047)Non-controlling interest (54 189)

561 443

Rehabilitation guaranteesAdditional rehabilitation guarantees to the value of R38 million were issued to the DMR during June 2017.

Dividend declarationThe Board of Directors in considering the Group’s financial position and strong annual performance, has agreed to distribute R12 million to shareholders as a final dividend for the year.

41. Segment reportingFor management purposes, the Group is organised into business units based on their products and activities and has four reportable operating segments.

• The Mining segment is involved in the exploration, benefication and mining of bituminous coal;• The Trading segment buys and sells coal to inland customers;• The Property Rental segment rents property to other segments within the Group; and• The Investment Holding segment is the holding company of the Group and also acts as a central treasury function.

No operating segments have been aggregated to form the above reportable operating segments. The Group EXCO is the Group’s chief decision-making body. Management has determined the operating segments based on the information received by Group EXCO. Annual segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements.

All revenue is generated from customers in Southern Africa and all operating assets are situated in South Africa. The mining segment generates its revenue mainly from sales to parastatal and other institutions. The trading segment generates its revenue from sales to a variety of customers that include private sector, government institutions, mining entities and various small and medium enterprises.


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Segments results and reporting is presented below:

2017 Mining Trading

Property rental and

otherInvestment

holding

Inter-segment

eliminations Consolidated

RevenueExternal customers 1 023 401 1 094 265 354 – – 2 118 020 Inter-segment 90 444 – 5 235 75 153 (170 832) –

Total revenue 1 113 845 1 094 265 5 589 75 153 (170 832) 2 118 020 Cost of sales (864 363) (976 643) – – 90 444 (1 750 562)

Gross profit/(loss) 249 482 117 622 5 589 75 153 (80 388) 367 458 Other income/(expense) 2 535 1 954 (644) – – 3 845 Operating expenses (72 985) (89 599) (2 861) (50 446) 49 612 (166 279)BEE discount – – – (82 280) (82 280)

Operating profit/(loss) 179 032 29 977 2 084 (57 573) (30 776) 122 744 Interest received 612 26 1 – 6 136 6 775 Interest paid (12 645) (9 935) (1 120) (5 925) – (29 625)

Profit/(loss) before income tax 166 999 20 068 965 (63 498) (24 640) 99 894

Depreciation and amortisation (70 272) (11 295) (18) (122) – (81 707)Gain/(loss) on sale of assets 39 1 538 (644) – – 933 Total assets 909 669 185 802 90 291 744 314 (338 218) 1 591 857 Total liabilities (689 316) (165 340) (80 406) (219 330) 247 167 (907 225)

Mining Trading

Property rental and

otherInvestment

holding

Inter-segment

eliminations Consolidated

2016 (restated) (restated) (restated)

RevenueExternal customers 601 152 988 183 535 – – 1 589 870 Inter-segment 26 033 – 1 174 114 007 (141 214) –

Total revenue 627 185 988 183 1 709 114 007 (141 214) 1 589 870 Cost of sales (485 226) (878 957) – – 26 033 (1 338 150)

Gross profit/(loss) 141 959 109 226 1 709 114 007 (115 181) 251 720 Other (expenses)/income 1 508 (116) (34) – – 1 358 Operating expenses (55 350) (89 957) (3 116) (30 796) 27 064 (152 155)

Operating profit/(loss) 88 117 19 153 (1 441) 83 211 (88 117) 100 923 Interest received 817 10 6 355 – (6 178) 1 004 Interest paid (3 880) (9 210) (1 960) (6 873) – (21 923)

Profit/(loss) before income tax 85 054 9 953 2 954 76 338 (94 295) 80 004

Depreciation and amortisation (36 520) (12 681) (73) (28) – (49 302)Gain/(loss) on sale of assets (49) (70) (35) – – (154)

Total assets 712 584 225 284 99 454 381 801 (399 154) 1 019 969

Total liabilities (600 548) (219 112) (91 629) (61 467) 337 848 (634 908)


SHAREHOLDERS

Analysis of Ordinary Shareholders as at 31 March 2017

Shareholder spreadNumber of

shareholdings% of total

shareholdings Number of shares % of issued capital

1 – 1 000 921 30.00 326 588 0.091 001 – 10 000 1 376 44.82 6 415 498 1.7710 001 – 100 000 662 21.56 20 321 973 5.61100 001 – 1 000 000 88 2.87 29 835 763 8.23Over 1 000 000 23 0.75 305 629 129 84.30

Total 3 070 100.00 362 528 951 100.00

Distribution of shareholderNumber of



Close corporations 31 1.01 1 018 116 0.28Collective investment schemes 4 0.13 10 455 087 2.88Custodians 1 0.03 6 655 0.00Foundations and charitable funds 4 0.13 590 169 0.16Hedge funds 2 0.07 3 972 858 1.10Investment partnerships 13 0.42 133 981 0.04Managed funds 1 0.03 20 163 0.01Private companies 45 1.47 235 567 351 64.98Retail shareholders 2 856 93.03 61 944 041 17.09Retirement benefit funds 2 0.07 23 600 0.01Scrip lending 2 0.07 15 258 248 4.21Share schemes 1 0.03 12 504 000 3.45Stockbrokers and nominees 6 0.20 5 103 953 1.41Trusts 101 3.29 15 930 728 4.39Unclaimed scrip 1 0.03 1 0.00

Total 3 070 100.00 362 528 951 100.00

Shareholder typeNumber of



Non-public shareholders 9 0.29 230 193 001 63.47Directors and associates of the company and its subsidiaries* 7 0.23 4 060 879 1.10

Directors and associates (Direct Holding) 3 0.10 1 299 800 0.33Directors and associates (Indirect Holding) 4 0.13 2 761 079 0.76

K2016316243 (SA) Pty Ltd (Empowerment SPV)^ 1 0.03 213 628 122 58.93Wescoal Share Incentive Trust 1 0.03 12 504 000 3.45Public Shareholders 3 061 99.71 132 335 950 36.53

Total 3 070 100 362 528 951 100

* Excludes share held in Share Incentive Trust and Empowerment SPV (133 628 698 shares)^ Include indirect holding by directors (133 628 698 shares)

Beneficial shareholders with a Holding greater than 3% of the issued shares Number of shares % of issued capital

K2016316243 (SA) Pty Ltd 213 628 122 58.93Peregrine Group 17 504 143 4.83Wescoal Share Incentive Trust 12 504 000 3.45

Total 243 636 265 67.21

Total number of shareholdings 3 070Total number of shares in issue 362 528 951


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Share price performanceOpening price 1 April 2016 R1.53Closing price 31 March 2017 R2.28Closing high for period R2.63Closing low for period R1.46

Number of shares in issue 362 528 951Volume traded during period 63 345 368Ratio of volume traded to shares issued (%) 17.47%Rand value traded during the period R130 989 440Price/earnings ratio as at 31 March 2017 4.578Earnings yield as at 31 March 2017 21.842Dividend yield as at 31 March 2017 1.569Market capitalisation at 31 March 2017 R826 566 008

Non-public breakdown 31 March 2017 362 528 951– Directors of the company or any of its subsidiaries

Beneficial holders >10% Count Holding %

Wescoal Share Incentive Trust 1 213 628 122 58.93

1 213 628 122 58.93

Share Scheme Count Holding %

Wescoal Share Incentive Trust 1 12 504 000 3.45

1 12 504 000 3.45

Count SharesDirectors Direct Indirect Direct Indirect

MR Ramaite* – 2 – 721 079J G Pansegrouw – 2 – 2 040 000W Sulaiman 1 – 1 110 000 –I Van der Walt 1 – 170 000 –T Tshithavhane 1 – 19 800 –

3 4 1 299 800 2 761 079

* Excludes shares held in the Empowerment SPV (133 663 698)

Wescoal stakeholder engagementsWe view communication and relationship management with our stakeholders as integral to our sustainability and a critical part of business strategy. Our stakeholder engagement informs our key strategic discussions and is critical in identifying our material issues and the steps needed to address these.

Wescoal therefore promotes and engages in open and timeous communication with shareholders and other stakeholders at all times.

As a listed company we are particularly focused on our investor relations activities to build our relationships with current and future shareholders across the South African investor community. We include the media in shareholder communications as the regulatory framework permits.

Given our junior mining stage of development we have not yet engaged in formal investor or other stakeholder surveys. However, the intention is to do so in the future after the company has reached a greater critical mass.

We identified stakeholders in terms of our business model, which include strategic partners and BEE shareholders who offer the benefit of in-depth experience, regulators, funders, local communities close to operations, contractors, employees and customers.

We also communicate with stakeholders through our website, stakeholder presentations, this integrated annual report, the AGM, SENS, site visits, proactive and reactive interactions with the media, one-on-one investor meetings and ongoing informal and formal discussions with stakeholders.


DEFINITIONS

In the IAR2017 the following acronyms and expressions bear the meanings assigned to them unless otherwise indicated:

AGM Annual General Meeting

AMCU Association of Mine Workers and Construction Union

API#4 Benchmark price reference for coal exported out of Richards Bay

Atlantis Atlantis Coal Estate CC

BCEA Basic Conditions of Employment Act

BEE Black Economic Empowerment


CEO Chief Executive Officer

CFO Chief Financial Officer

Chandler Chandler Coal Proprietary Limited

CSDP Central Securities Depository Participant

CSI Corporate Social Investment

DMR Department of Mineral Resources

DWS Department of Water Affairs and Sanitation

EE Employment Equity

Operational EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation excluding Profit on sale of assets

Elandspruit Elandspruit Mine/Colliery

EXCO Executive Committee

Express Express Technology CC

GTIS gross tons in situ

IFRS International Financial Reporting Standards

Intibane Intibane Mine/Colliery

IT Information Technology

JSE Johannesburg Stock Exchange Limited

Khanyisa Khanyisa Mine/Colliery

King III King Code of Governance Principles and King Report on Governance

LTI Lost Time Injury

LTIFR Lost Time Injury Frequency Rate

FIF Fatal Injury Frequency

Mineral Recoveries Wescoal Mineral Recoveries Proprietary Limited

MoI Memorandum of Incorporation

MTIS Minable tons in situ

mtpa Million tons per annum

NUM National Union of Mineworkers

Proudafrique Proudafrique Trading 147 Proprietary Limited

PwC PricewaterhouseCoopers Inc.

Quattro Quattro Coal Export Scheme – a 200 000 ton per annum allocation through RBCT

Razorbill Razorbill Properties 269 Proprietary Limited

RBCT Richards Bay Coal Terminal

REMCO Remuneration and Nominations Committee

ROM Run of Mine

SAMREC South African Code for Reporting Results, Mineral Resource and Mineral Reserves

SHE Safety Health and Environment

SHEQ Safety, Health, Environment and Quality

SLA Service Level Agreement

Wescoal, the Group, WHL or the Company

First Floor Building 10,Woodmead Business Park,142 Western Service Road,Woodmead

www.wescoal.com

integrated annual report ended 31 march for the year 2017 · 2 wescoal integrated annual report for...

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