The weaker trend in coal prices observed in 2015 continued into the early part of 2016. Despite expectations, international coal prices started to recover in the second half of the year, making 2016 a better year for the sector than the prior year. However, the South African economy performed poorly, with electricity demand levels reducing further compared to 2015. Despite the negative operating environment as well as offtake shortfalls from Eskom, Ichor Coal N.V.'s (IchorCoal) production remained satisfactory with good cost management and safety performance. The surface mine at Vunene came close to its end of life, with less than 300,000 tonnes of coal left to be mined by the end of the financial year. The project aimed at bringing the underground mine back into production continued at a much slower pace than planned given continuing difficulty in obtaining external project finance to complete the refurbishment. Penumbra Coal Mining remained in care and maintenance for most of the year, with preparations to bring the mine into full production reaching an advance stage in the latter part of the year.
Our joint venture with Mbuyelo performed very well with the first phase of the Manungu coal mine reaching steady state. Universal Coal commenced mining operations at New Clydesdale which is expected to reach full production by the end of 2017.
Cooperation with the management board
During the period under review, the supervisory board performed all of its obligations required by law and the company's articles of association. The management board informed us regularly, promptly and comprehensively about business policy and other fundamental issues related to corporate management and planning. Moreover, the supervisory board was kept informed about the financial position and development of the company as well as transactions and events of significance. We have advised the management board and monitored its management of the business. Important subjects and pending decisions were discussed at regular board meetings.
Further, the supervisory board had insight into the assets, earnings and financial position of the company at all times. Proposals and reports of the management board were carefully reviewed, discussed in detail and approved insofar as this is required by law and the company's articles of association. Between meetings, the management board kept the supervisory board informed by written or verbal reports about ongoing business developments, projects, earnings and financial position of the company.
Annual audit and consolidated financial statements
The auditing company selected by shareholders at the last annual general meeting was KPMG Accountants N.V., which replaced Ernst & Young after the company and the latter agreed not to renew EY's engagement. KPMG has audited the 2016 annual financial statements and management report prepared by the management board of IchorCoal as at 31 December 2016 and has issued an unqualified audit certificate. The annual financial statements of IchorCoal and the audit reports from the auditors were submitted immediately upon completion to the supervisory board. These were discussed extensively at the supervisory board meeting held on 31 December 2017. After careful review, no objections were raised and the supervisory board approved the annual financial statements of IchorCoal for the year ended 31 December 2016.
Changes in the management board
On 31 May 2011 the Dutch Parliament adopted new legislation to amend the Dutch Civil Code in connection with the rules on management and supervision within public limited liability companies. The Act on Management and Supervision came into force on 1 January 2013. In 2016 IchorCoal's supervisory board did not meet the new guidelines in terms of gender diversity but it commits itself to striving to achieve adequate and balanced board composition when making future appointments. This will be done taking into account all relevant selection criteria, including but not limited to gender balance and executive experience.
As at 31 December 2016 the supervisory board of the entity consisted of four members as it was during the 2015 financial year. Edwin Eichler, who was appointed supervisory board member in March 2014, resigned from the board on 10 April 2017.
On behalf of the supervisory board of Ichor Coal N.V., I wish to express my appreciation to all of our stakeholders for their continuing support.
South Africa, 31 December 2017
For the supervisory board
Lars Windhorst
Financial Statements:
http://www.ichorcoal.com/media/57008/ichor-coal-2016-financial-statements.pdf
Further updates will be provided as the situation develops.
Ichor Coal N.V.
The management (board)
Language: English
Company: Ichor Coal N.V.
2 Bruton Road Block C Nicol Main Office Park
Bryanston 2191,
South Africa
Telefon: +27 (11) 268 11 00
Fax: +27 (11) 268 03 78
E-Mail: info@ichorcoal.com
Internet: www.ichorcoal.com
ISIN: NL0010022307
WKN: A1JQEX
Listed: Regulated Unofficial Market in Frankfurt (Basic Board), Hamburg, Stuttgart
© 2017 Dow Jones News
