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UNIVERSAL COAL PLCRegistration number 4482856

Consolidated Half Year Financial Statementsfor the period ended 31 December 2014

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Universal Coal Plc(Registration number 4482856)Consolidated Half Year Financial Statements for the period ended 31 December 2014

Corporate directory

Directors John Hopkins OAM Non-executive Chairman

Hendrik Bonsma Non-executive Director

Anton Weber Executive Director andChief Executive Officer

Shammy Luvhengo Executive Director

David Twist Non-executive Director

Carlo Baravalle Non-executive Director

Nonkululeko Nyembezi-Heita Non-executive Director

Andries Engelbrecht Non-executive Director

Joint company secretaries Benjamin Harber (United Kingdom)of SGH Martineau Company Secretarial LLPandEmma Lawler (Australia)of Company Matters Proprietary Limited(ASX Liaison and local agent)

United Kingdom registered office One America SquareCrosswallLondon EC3N 2SGUnited KingdomTelephone: +44 20 7264 4444Facsimile: +44 20 7264 4440

Australian registered office Level 12680 George StreetSydney, NSW, 2000AustraliaTelephone: +61 28 280 7355

Operational office 467 Fehrsen StreetBrooklyn, 0182, PretoriaSouth AfricaTelephone: +27 12 460 0805Facsimile: +27 12 460 2417

Auditors BDO LLP

55 Baker StreetLondon W1U 7EUUnited Kingdom

Stock exchange listing Australian Securities Exchange(Share code: UNV)

Share registrars Comptershare Investor Services Proprietary LimitedLevel 2, 45 St. Georges TerracePerth WA 6000, Australia

Computershare Investor Services PlcThe Pavilions, Bridgwater RoadBristol BS99 6ZYUnited Kingdom

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Corporate directory

Bankers HSBC Bank Australia LimitedLevel 1, 190 St. Georges TerracePerth WA 6000, Australia

HSBC Bank PlcCoventry DSC, Harry Weston RoadBinleyWest Midlands CV3 2TQUnited Kingdom

Company registration number 4482856

Solicitors Mayer Brown International LLP201 Bishopgate LondonEC2M EUGUnited Kingdom

Webber Wentzel Attorneys10 Fricker RoadIllovo BoulevardIllovo, Johannesburg, 2196South Africa

Website www.universalcoal.com

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Universal Coal Plc (Registration number 4482856) Consolidated Half Year Financial Statements for the period ended 31 December 2014

Index

The reports and statements set out below comprise the consolidated half year financial statements presented to the shareholder:

Index Page

Summary Results 4

Chairman's Statement 5 - 12

Directors' Declaration 13

Condensed Consolidated Statement of Financial Position 14

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 15

Condensed Consolidated Statement of Changes in Equity 16

Condensed Consolidated Statement of Cash Flows 17

Significant Accounting Policies 18 - 19

Notes to the half year unaudited Consolidated Financial Statements 20 - 36

Review opinion 37 - 38

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Summary Results

1. Review of financial results and activities

Six months ended

31 Dec 2014 A$ '000

Six months ended

31 Dec 2013 A$ '000

% Movement

Operating loss (2 013) (1 990) Loss for the period (4 728) (2 365) Taxation 661 -

(1)% (100)% 100 %

Total comprehensive income / (loss) for the period attributable to equity shareholders

34 (2 609) 101 %

The underlying result for the period was encouraging given that the Group’s first operating asset, the Kangala Colliery, was only at a steady state of production for part of the period under review. Kangala generated a gross profit of A$2.2m but the Group has achieved an overall loss after tax of $4.1m once operating expenses, finance costs and taxation have been deducted. Due to favourable movements in the ZAR:AUD exchange rates, a gain of $4.1m on translation of foreign operations has been recognised providing a total comprehensive income of A$34 305.

2. Dividends

The board of directors have resolved that no dividends were decladed or paid for the financial period ended 31 December 2014 (31 December 2013 - A$ nil).

3. Earnings result

The total comprehensive income of Universal Coal Plc for the six months ended 31 December 2014 was A$ 34 305 (2013 - loss of A$ 2 608 845).

Six months ended

31 Dec 2014 A$ '000

Six months ended

31 Dec 2013 A$ '000

Basic and diluted loss per share (cents per share) (0.87) (0.73)

Weighted average number of ordinary shares used in the calculation of basic and diluted LPS

397 738 273 319 575 447

The amount used as the numerator in calculating basic and diluted loss per share is the same as the loss attributable to the owners of the parent in the consolidated statement of profit or loss and other comprehensive income.

4. Date of authorisation for issue of financial statements

The consolidated half year financial statements have been authorised for issue by the directors on 15 March 2015. No authority was given to anyone to amend the consolidated half year financial statements after the date of issue.

JOHN HOPKINS OAM Non-executive Chairman

15 March 2015

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Chairman's Statement

The Directors submit the unaudited financial statements of Universal Coal Plc (ASX: UNV; the Company) for the six months ended 31 December 2014. 1. Directors & officers The names of Directors who held office during or since the end of the half year: John Hopkins OAM Chairman and Non-executive Director Anton Weber Chief Executive Officer and Executive Director Shammy Luvhengo Executive Director Hendrik Bonsma Non-executive Director Carlo Baravalle Non-executive Director David Twist Non-executive Director Nonkululeko Nyembezi-Heita Non-executive Director appointed 16 October 2014 Andries Engelbrecht Non-executive Director appointed 16 October 2014 2. Results Universal Coal generated a comprehensive profit for the half year after tax of A$34,305 (six month ended 31 December 2013, loss of A$2,608,845). The underlying result for the period was encouraging given that the Group’s first operating asset, the Kangala Colliery, was only at a steady state of production for part of the period under review. Kangala generated a gross profit of A$2.2m but the Group has achieved an overall oss after tax of $4.1m once operating expenses, finance costs and taxation have been deducted. Due to favourable movements in the ZAR:AUD exchange rates, a gain of $4.1m on translation of foreign operations has been recognised providing a total comprehensive income of A$34 305. Importantly, the Company was able to deliver its first operation on time and within budget, whilst planting the seeds for growth through securing its next operation, and progressing another project earmarked to become the Company's third mine. That Universal Coal also achieved a positive gross margin from the mining operations for the period is testament to the quality and calibre of the Board and team working together. 3. Review of operations, development and exploration activities Coal assets The Company’s coal assets are all located in South Africa. Universal Coal has one operating coal asset (Kangala), another in acquisition and development (NCC Roodekop) and one exploration coal project (Brakfontein) all situated in the Witbank Coalfields in the Mpumalanga Province; and two exploration coking coal projects (Berenice-Somerville and Cygnus) in the Limpopo Province. Thermal Coal Operating Assets Kangala Colliery Kangala is Universal Coal’s first operation. The mine is a predominantly domestic thermal coal operation supplying coal primarily to Eskom, the major energy provider in South Africa. Development Kangala Colliery was officially completed in October 2014 and handed over to the operation team at a final capital cost of A$48.6m on time and within budget. Further capital was committed to the project development blueprint to cater for an additional 6 kidney shaped conical stockpiles to increase the total product stockpile capacity to 66,000 tonnes. Furthermore in December 2014, the technical completion tests were completed under the banking project financing agreements echoing the resounding successful development of this colliery by the Universal Coal team.

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Local Economic Development and Sustainability Initiatives During the period, Kangala established a local community operators skills training programme in collaboration with a Mining Qualification Authority certified training institute. To date, the initiative has successfully trained twelve local residents as qualified heavy mining machinery operators. Eight successful operators have been appointed as Articulate Dump Truck operators for the Kangala Colliery. The programme will train one hundred operators by the end of the next financial year. Construction of the Nkangala FET campus, which is a local economic development project, is also progressing well. The initiat ive is a joint venture with Exxaro’s Leeuwpan Coal Mine, the Department of Education and the Local Municipality. Operating Results For the period, the Kangala Colliery produced 1,083,169 run-of-mine (ROM) tonnes, fed 1,145,187 tonnes to the Coal Handling and Preparation Plant (CHPP) at an average yield of 72% and sold 709,069 product tonnes (691,341 tonnes to Eskom and 17,728 tonnes as export product). The operation performance of the Kangala Colliery is tabulated below:

Operational Performance (tonnes) 6 Months ended - 31 Dec 2014

Year ended 30 June

2014 (5 months

production)

% Change

Run-of-mine (ROM) production

Kangala Colliery 1,083,169 633,384 71% Total ROM production 1,083,169 633,384 71% Feed to plant

Kangala Colliery 1,145,187 418,450 174% Total feed to plant 1,145,187 418,450 174% Plant Yields

Kangala Colliery 72% 100% (28%) Domestic sales 691,341 375,333 84% Export sales 17,728 0 100% Total sales 709,069 375,333 89%

Group revenue for the period amounted to A$26.7m at a gross profit of A$2.2m or 8% of turnover and a positive Group Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) of A$274,569 (six month ended 31 December 2013, loss of A$2,070,879). The average selling price of coal was A$37.60 per sales tonne at an average cost per sales tonne of A$34.54, leaving a gross margin of A$3.06 per tonne. Removing non-cash operating depreciation costs within the sales cost per tonne derives a revised cash cost of A$30.95 per sales tonne and a gross margin of A$6.65 per sales tonne or 18% of turnover. The cost per ROMt for the period under review was A$22.61, deriving a revised cash cost of A$20.26 per ROMt. Whilst the cost per ROMt is slightly higher than anticipated, these costs are expected to decrease going forward – and remain in the lowest quartile for the sector - with the operation now having attained steady state. Contained within the administration costs for the period are management fees paid to the 29.5% shareholder; Mountain Rush Trading 6 (Pty) Ltd of A$0.5m per the service fee agreement entered into on 6 May 2013.

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Thermal Coal Development Assets NCC Roodekop (NCC acquisition pending) The NCC acquisition is still in progress, please refer to Section 4 Corporate details for the status of the NCC acquisition transaction. During the period, Universal Coal developed a geological model for the integrated NCC Roodekop project and announced a JORC 2012 and SAMREC compliant Coal Resource estimate of 138.9 million tonnes including a maiden Coal Reserve estimate of 14.1 million tonnes for the combined project. Development Team The Universal Coal team that implemented the Kangala Colliery has now assumed full functional development activities for the NCC Roodekop project. The mine manager, technical engineering manager, health and safety manager, financial assistant, mine geologist and the environmental co-ordinator have been appointed and a full time metallurgical manager is in the process of being recruited. Roodekop All regulatory applications required to obtain the necessary mining authorisation have been awarded and the surface rights have been acquired and transferred into the name of Universal Coal Development IV (Pty) Ltd. Site development activities have begun, with mining activities set to commence immediately after the securing of a Coal Sales Agreement, initially targeted at Eskom as the majority customer for the open pit thermal coal product. A tender process for the opencast contract mining supplier has been commissioned and is in the final stages of adjudication after which an appointment will be made. Thermal Coal Exploration Assets Brakfontein Brakfontein is located 25km east of the 2.4 Mtpa ROM Kangala Mine within the Witbank coal field. The project is earmarked as the company’s third operation. During the period, the Company completed a pre-feasibility study and announced a maiden JORC 2012 compliant Coal Reserve estimate of 9.6 million tonnes within the Northern Open-Pit Areas and an updated Coal Resource estimate of 75.8 million tonnes. The current focus remains on optimising the feasibility study including investigating the case for utilising excess capacity at the nearby Kangala operation (capacity up to 4.25Mtpa). With the Mining Right in hand and having already secured the National Environmental Management Act (NEMA) authorisation, Brakfontein only awaits the granting of the Integrated Water Use Licence (IWUL) before development activities can commence. Coking coal exploration assets Berenice/Cygnus The Company is currently seeking funding partners to progress the completion of a prefeasibility study and to complete the necessary technical work in order to lodge a mining right application by mid-2016. Donkin The Donkin project held under Universal Coal Development VI (Pty) Ltd was not considered to be prospective and the prospecting licence which expired on 8 December 2014 was not renewed.

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Universal Coal Global Coal Resources Summary (to be read in conjunction with Competent Person’s Statement)

Project

Gross

Reserve

Proved

Mt

Gross

Resource

Measured

Mt

Gross

Resource

Indicated

Mt

Gross

Resource

Inferred

Mt

Gross Total

Mt

Attributable

to Universal

Mt

Thermal Coal (Witbank)

Kangala1 22.3 93.1 19.4 33.6 146.1 103.0

NCC2-Roodekop3 14.1 114.2 24.7 - 138.9 89.67

Brakfontein4 9.6 31.7 39.4 4.7 75.8 38.1

Total Thermal Coal 46.0 239.0 83.5 38.3 360.8 230.8

Coking Coal (Limpopo)

Berenice5 - 394.0 694.3 116.1 1,204.4 602.2

Cygnus6 - 30.9 106.7 8.2 145.8 72.9

Somerville5 - - - 274.2 274.2 137.1

Total Coking Coal - 424.9 801.0 398.5 1,624.4 812.2

Total 46.0 663.9 884.5 436.8 1,985.2 1,042.97

Notes: • Mineral Resources are stated inclusive of Mineral Reserves. • Rounding (conforming to the JORC Code) may cause computational discrepancies. • The Resource and Reserve estimates for Kangala, Berenice, Cygnus and Somerville were prepared and first disclosed under the JORC Code

2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

• The Resource and Reserve estimates for the NCC project are SAMREC compliant and “qualifying foreign estimates” for the purpose of ASX Listing Rules.

• The Resource and Reserve estimates for the Roodekop and Brakfontein projects have been updated to comply with the JORC Code 2012. 1. Universal has an attributable interest of 70.5% of the Kangala Project. 2. Universal has an attributable interest of 49% in the NCC project (under acquisition). 3. Universal has an attributable interest of 74% in the Roodekop Project. 4. Universal has an attributable interest of 50.29% in the Brakfontein Project and the right to negotiate to acquire up to a 74% interest upon

completion of the BFS and award of a mining right.. 5. Universal has an attributable interest of 50% in the Berenice and Somerville Projects with an option to acquire up to a 74% interest. 6. Universal has an attributable interest of 50% in the Cygnus Project with an option to acquire up to a 74% interest.

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4. Corporate New Clydesdale Colliery acquisition The following conditions precedent are yet to be satisfied, but are expected to be satisfied on or before the final date for satisfaction, which is in the process of being extended to 31 July 2015:

i. Exxaro successfully obtaining section 11 consent, being a form of regulatory consent to the transaction required under the South African Minerals and Petroleum Resources Development Act;

ii. Universal Coal acquiring all the necessary regulatory environmental approvals; iii. No Material Adverse Change having occurred before completion – the company is not aware that any such change has

occurred. The acquisition price of A$17.9 million (R170 million) has been fully guaranteed by Rand Merchant Bank, a division of FirstRand Bank Limited, and is reflected in the restricted cash line in the statement of financial position at 31 December 2014. The Company considers that Exxaro and Universal Coal Development VIII are on track to complete the sale and acquisition of NCC in accordance with the acquisition agreement. Permitted Cash Distribution from Kangala On 17 December 2014, the Company announced the successful satisfaction of the technical completion testing requirements as determined by debt financier Rand Merchant Bank (RMB), representing another significant milestone for the Company and marking the official transition to steady state operations for the Kangala Colliery. Having fully complied with its performance obligations, Universal Coal now qualifies for more attractive project financing facility terms. Furthermore, the Kangala Colliery is now entitled to, under certain circumstances, make permitted cash distributions to its shareholders in the form of shareholder loan repayments and/or dividend distributions. 5. Prospects Steady state production at Kangala Colliery ROM production for the period was in excess of one million tonnes and the colliery is well on track in achieving its 2.4 Mtpa nameplate capacity for the full year ahead. At a gross cash margin of 18% for the period under review, the Company is well poised to deliver strong cashflow and profits going forward. In the months following the period of review, the Kangala Colliery has exceeded both ROM and sales tonnage targets paving the way for continued positive results. NCC Roodekop set to deliver first coal Development activities have commenced on the joint NCC Roodekop operation and the project development team has been commissioned with a focus on achieving first coal before the end of the 2015 calendar year. This milestone is heavily dependent on the NCC acquisition agreement closing timeously and the award of a Coal Sales Agreement with Eskom. The Company is in negotiations with debt financiers to provide the balance of the funding requirements for the boxcut and infrastructure requirements at Roodekop and the NCC plant upgrade requirements.

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6. Strategic investments and conversion of notes On 6 October 2014, Shareholders at a General Meeting approved the following transactions: Strategic investment by IchorCoal N.V. On 1 September 2014, Universal Coal Plc entered into a Subscription Agreement with IchorCoal N.V. for the strategic investment of A$24,483,400 comprising as follows:

a subscription for 80,440,000 ordinary shares of Universal Coal Plc (and CHESS Depositary Interests to which the ordinary shares relate on a one for one basis) at a price of A$0.145 per Ordinary Share for proceeds of A$11,663,800; and

a subscription for 71,220,000 non-voting, non-cumulative convertible preferred shares at a price of A$0.18 per Preferred Share for proceeds of A$12,819,600.

Furthermore, on 1 September 2014, Universal Coal Plc entered into a Warrant Instrument with IchorCoal N.V. whereby IchorCoal N.V. would subscribe for 71,220,000 Warrants, exercisable for a period of 18 months at a strike price of A$0.36. As part of the investment and effective from 16 October 2014, we welcome Messrs Nonkululeko Nyembezi-Heita and Andries Engelbrecht to the Board of Universal Coal as nominee directors of IchorCoal N.V. Further investment by Coal Development Holding B.V. An agreement was entered into with Coal Development Holding B.V. on 28 August 2014 where, Coal Development Holding B.V. exercised its conversion rights under the existing A$3.25 million Convertible Loan Notes, which converted at an effective price of A$0.125 per Ordinary Share for the issue of 26,000,000 Ordinary Shares and entered into a Subscription Letter Agreement, by which Coal Development Holding subscribed for 6,250,000 Ordinary Shares at A$0.16 per Ordinary Share for total consideration of A$1,000,000. The funds raised from the ordinary and preferred share issues have completed the financing for Universal Coal’s acquisition of the New Clydesdale Colliery from Exxaro Coal Mpumalanga (Pty) Ltd, part-funded the development of the Company’s Roodekop project of which the New Clydesdale Colliery will form part and, in respect of any balance, has been used to fund general working capital requirements. 7. Going concern The accounts have been prepared on the going concern basis. At the period-end the Group had A$ 2 495 543 (2013 - A$ 3 669 680) of unrestricted cash reserves. As disclosed in note 10 to the financial statements the Group raised A$ 25.5 million during the period through the issue of 112 690 000 ordinary shares and 71 220 000 preferred shares. The funds raised have been used to fund working capital, to provide a cash backed guarantee on the New Clydesdale Colliery (“NCC”) acquisition and to acquire the surface rights for the Roodekop Project. Despite this additional fund raise, the Group’s cash flow projections show that in order for the Group to meet its known commitments, debt repayment schedules and operating cashflow requirements in the short term, the Group is reliant on the successful operation of the Kangala Colliery. The successful operation of the Kangala Colliery is reliant on the Group fulfilling the terms of the off-take arrangement with Eskom with the key deliverable being ensuring the Group deliver the tonnage and quality of coal required by Eskom under the terms of the agreement. The Directors are confident that this milestone will be achieved and the Directors are therefore satisfied that the interim financial statements should be prepared on a going concern basis. 8. Subsequent events No significant subsequent events to report.

JOHN HOPKINS OAM Non-executive Chairman

15 March 2015

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Competent Person’s Statement The information in this report that relates to Coal Resources for Kangala, Roodekop, Brakfontein, Berenice, Cygnus and Somerville is based on information reviewed and compiled by Mr Nico Denner, who is a registered natural scientist and a member of the South African Council for Natural Scientific Professions (a Recognised Overseas Professional Organisation). Mr Denner is employed by Gemecs (Pty) Ltd and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the JORC Code. Mr Denner consents to the inclusion in this report of this information in the form and context in which it appears. The Kangala Coal Reserve estimate was prepared by Mr Ben Bruwer, who is a Principal Mining Engineer and Co-owner of VBKom Consulting Engineers who are the preferred mining consultants to Stefanutti Stocks Mining Services (Pty) Ltd. He is a member of the Engineering Council of South Africa (ECSA) (a Recognised Overseas Professional Organisation) and member of SAIMM. He has more than 15 years’ experience in the South African coal and minerals industries. VBKom CE has sufficient experience which is relevant to the type of mineralisation and the Kangala deposit and to the activity which Mr Bruwer is undertaking to qualify as a Competent Person as defined by the SAMREC and JORC Codes for Reporting of Exploration, Mineral Resources and Ore Reserves’. The information relating to NCC Coal Resources and Reserves has been provided under ASX Listing Rules 5.12.2 to 5.12.7 and is an accurate representation of the available data and studies for NCC by Exxaro as certified by the SAMREC compliant report ‘NCC Mine Mineral Resource and Ore Reserve Statement, 31 December 2012’ as reviewed by Mr. Jaco Malan. Mr Malan is a registered natural scientist and member of the South African Council for Natural Scientific Professions (a Recognised Overseas Professional Organisation). Mr Malan is employed by Universal Coal and has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the JORC Code. Mr Malan consents to the inclusion in this report of this information in the form and context in which it appears. The information in this report that relates to the Roodekop and Brakfontein Ore Reserve estimates are based on information compiled and reviewed by Mr Kevin Donaldson. Mr Donaldson is employed by Universal Coal as Chief Development Engineer and is registered with the Engineering Council of South Africa and a member of both the South African Institute of Mining and Metallurgy (Overseas Professional Organisation) and the South African Colliery Managers Association. He has more than 20 years’ experience in the South African coal mining industry and sufficient experience which is relevant to the type of mineralisation and the Roodekop and Brakfontein deposits and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the JORC Code for Reporting of Exploration, Mineral Resources and Ore Reserves. Reporting on Exploration Results The Resource/Reserve Statement was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. The statement also complies with the recommendations and guidelines set out in the revised 2007 South African Code for The Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) and the rules and guidelines relating to the independent expert’s reports set by ASIC and ASX.

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Summary of Mineral Assets

The company has an experienced team of directors, senior managers and geoscientists with extensive expertise in both coal exploration and mining in South Africa and who have a proven track record of project development.

Project Property Permit Type & Number Location Size Beneficial Interest

Held

Change in Interest

Kangala

Wolvenfontein 244IR: Portion 1 and RE of Portion 2

Mining Right: MP30/5/1/2/2/429MR

Delmas, Mpumalanga

Province, South Africa

951 Ha 70.5% None

Middelbult 235IR: Portions 40 and 82

Prospecting Right: MP30/5/1/1/2/641PR

Delmas, Mpumalanga


942 Ha 70.5% None

Modderfontein 236IR: Portion 1

Prospecting Right: MP30/5/1/1/2/639PR

Delmas, Mpumalanga


127 Ha 70.5% None

Roodekop

Roodekop 63IS Mining Right: MP30/5/1/1/2/492MR

Kriel, Mpumalanga


835 Ha 74% None

Brakfontein

Brakfontein 264IR : Portions 6, 8, 9, 10, 20, 26, 30 and Remaining Extent


Delmas, Mpumalanga


879 Ha 50.29% None

Berenice &

Somerville

Berenice 548MS, Celine 547MS, Doorvaardt 355MS, Longford 354MS, Somerville 9MS and adjacent farms

Prospecting Right: LP30/5/1/1/2/376PR

Waterpoort, Limpopo Province,

South Africa

39,484 Ha 50% None

Cygnus

Cygnus 543MS and adjacent farms

Prospecting Right: LP30/5/1/1/2/1276PR

All Days, Limpopo Province,

South Africa

12,299 Ha 50% None

NCC

Middeldrift 42 IS (portion 4), Diepspruit 41 IS (RE, RE of portions 1, 2, 3, portions 7, 8, 9, 10), Rietfontein 43 IS (RE, RE of portion 1, portion 3, M/A 2, 3, 4 of RE portion 1), Vaalkrans 29 IS (portions 4, 6, 8, 9, 11, 12, 13, 14, 16, RE of portion 16, M/A 2 of portion 6), Clydesdale 483 IS, Lourens 472 IS, Enkelbosch 20 IS (M/A 4 and 5) and Haasfontein 28 IS (portion 1, M/a 6 and 7 of portion 7)


Kriel, Mpumalanga


4,125 Ha 49%

Acquired 49% subject to Section

11 transfer and finalisation of

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Directors' Declaration

In the opinion of the directors:

a. The financial statements and notes set out on pages 14 to 36:

i. Comply with Accounting Standard IAS 34: Interim Financial Reporting; and ii. Give a true and fair view of the consolidated entity's financial position as at 31 December 2014 and of its

performance for the half year ended on that date.

b. There are reasonable grounds to believe that Universal Coal Plc will be able to pay its debts as and when they become due and payable.

Ths declaration is made in accoardance with a resolution of directors. JOHN HOPKINS OAM Non-executive Chairman

15 March 2015

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Condensed Consolidated Statement of Financial Position

Notes

Unaudited 31 December

2014 A$ '000

Audited 30 June

2014 A$ '000

Unaudited 31 December

2013 A$ '000

Assets

Non-Current Assets Property, plant and equipment

3

60 609

51 607

47 541

Intangible assets 4 60 107 56 836 64 620 Investments in associated undertakings 13 5 5 Loans receivable 5 1 679 - - Deferred tax 40 - -

122 448 108 448 112 166

Current Assets Inventories

6

1 668

3 273

52 Trade and other receivables 7 8 839 6 068 5 509 Cash and cash equivalents (including restricted amounts) 8 22 223 7 033 5 908

32 730 16 374 11 469 Total Assets 155 178 124 822 123 635

Equity and Liabilities

Equity

Equity Attributable to Equity Holders of Parent Share capital

10

95 594

68 220

67 846

Reserves 11 2 235 836 9 385 Accumulated loss (26 190) (22 870) (21 696)

71 639 46 186 55 535 Non-controlling interest 25 792 25 114 27 619

97 431 71 300 83 154

Liabilities

Non-Current Liabilities Borrowings

13

29 250

26 609

27 921

Converting notes 14 5 897 7 742 5 648 Derivative financial liability 15 2 313 1 357 - Deferred tax - 589 - Provisions 16 4 068 3 869 2 433

41 528 40 166 36 002

Current Liabilities Borrowings

13

10 331

6 464

- Finance lease obligation - 79 90 Trade and other payables 17 5 888 6 813 4 389

16 219 13 356 4 479

Total Liabilities 57 747 53 522 40 481 Total Equity and Liabilities 155 178 124 822 123 635

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Condensed Consolidated Statement of Profit or Loss and OtherComprehensive Income

Unauditedhalf year to

Unauditedhalf year to

31 December 31 December2014 2013

Notes A$ '000 A$ '000

Revenue 26 662 -

Cost of sales (24 491) -

Gross profit 2 171 -

Operating expenses (4 184) (1 990)

Operating loss (2 013) (1 990)

Finance income 19 456 129

Foreign exchange losses (8) (7)

Derivative financial liability (956) -

Finance costs 20 (2 207) (497)

Loss before taxation (4 728) (2 365)

Taxation 661 -

Loss for the period (4 067) (2 365)

Other comprehensive income:

Items that may be reclassified to profit or loss:

Exchange differences on translating foreign operations 4 101 (244)

Other comprehensive income / (loss) for the period net of taxation 4 101 (244)

Total comprehensive income / (loss) for the period 34 (2 609)

Loss for the period attributable to :

Owners of the parent (3 455) (2 343)

Non-controlling interest (612) (22)

(4 067) (2 365)

Total comprehensive income / (loss) attributable to:

Owners of the parent (644) (2 587)

Non-controlling interest 678 (22)

34 (2 609)

Loss per share

Per share information

Basic and diluted loss per share (cents) 25 (0.87) (0.73)

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Condensed Consolidated Statement of Changes in EquitySharecapital

Sharepremium

Totalsharecapital

Foreigncurrency

translationreserve

Sharebased

paymentsreserve

Convertibleinstrument

reserve

Totalreserves

Accumulatedloss

Totalattributable

to equityholders ofthe parent

Non-controlling

interest

Totalequity

A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000 A$ '000

Balance at 01 July 2013 26 054 41 792 67 846 1 824 6 298 2 053 10 175 (19 899) 58 122 27 641 85 763Loss for the period - - - - - - - (2 343) (2 343) (22) (2 365)Transfer between reserves - - - - (546) - (546) 546 - - -Other comprehensive loss - - - (244) - - (244) - (244) - (244)

Unaudited balance at 31December 2013

26 054 41 792 67 846 1 580 5 752 2 053 9 385 (21 696) 55 535 27 619 83 154

Balance at 01 July 2014 26 253 41 967 68 220 (6 844) 4 729 2 951 836 (22 870) 46 186 25 114 71 300

Loss for the period - - - - - - - (3 455) (3 455) (612) (4 067)Other comprehensive income - - - 2 811 - - 2 811 - 2 811 1 290 4 101

Total comprehensive loss for theperiod

- - - 2 811 - - 2 811 (3 455) (644) 678 34

Issue of ordinary shares 10 255 4 299 14 554 - - (1 392) (1 392) - 13 162 - 13 162Issue of preferred shares 6 481 6 339 12 820 - - - - - 12 820 - 12 820Transfer between reserves - - - (494) (20) 494 (20) 20 - - -Recycling finance charge onconvertible loan note

- - - - - - - 115 115 - 115

Total changes 16 736 10 638 27 374 (494) (20) (898) (1 412) 135 26 097 - 26 097

Unaudited balance at 31December 2014

42 989 52 605 95 594 (4 527) 4 709 2 053 2 235 (26 190) 71 639 25 792 97 431

Note 10 10 10

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Condensed Consolidated Statement of Cash FlowsUnaudited Unauditedhalf year to half year to

31 December 31 December2014 2013

Notes A$ '000 A$ '000

Cash flows from operating activities

Cash used in operations 21 (1 019) (2 369)

Finance income 368 129

Finance costs (696) (373)

Net cash from operating activities (1 347) (2 613)

Cash flows from investing activities

Property, plant and equipment acquired 3 (9 307) (22 442)

Intangible assets acquired 4 (656) (465)

Investment in associated undertakings (6) -

Movements in loan to shareholder (1 590) -

Transfer to restricted cash (15 351) (283)

Net cash from investing activities (26 910) (23 190)

Cash flows from financing activities

Proceeds on share issues, net of share issue expenses 10 24 124 -

Proceeds from RMB project finance facility 3 491 24 248

Net cash from financing activities 27 615 24 248

Total movement in cash and cash equivalents for the period (642) (1 555)

Cash and cash equivalents at the beginning of the period 2 657 5 487

Effect of exchange rate movement on cash balances 481 (262)

Total unrestricted cash and cash equivalents at the end of the period 2 496 3 670

Restricted cash 19 727 2 238

Total cash and cash equivalents at end of the period 8 22 223 5 908

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Significant Accounting Policies

1. Presentation of Consolidated Half Year Financial Statements

The consolidated half year financial statements have been prepared in accordance with International Financial ReportingStandards. The consolidated half year financial statements have been prepared on the historical cost basis, and incorporatethe principal accounting policies set out below. They are presented in Australian Dollars.

These accounting policies are consistent with the previous period.

1.1 Basis of preparation

The condensed consolidated interim financial information has been prepared using the accounting policies applied by thecompany in its 30 June 2014 annual report which are in accordance with the framework concepts and the recognition andmeasurement criteria of the International Financial Reporting Standards and interpretations adopted by the InternationalAccounting Standards Board (“IASB”) as adopted for use in the EU (“IFRSEU”), the presentation and disclosure requirementsof IAS 34: Interim Financial Reporting: During the current interim period the Company issued preference shares. These instruments have been recognised as

equity as the contractual terms do not meet the definition of a financial liability. The current and non-current financial assets and financial liabilities’ carrying values equal their fair values as presented in

these condensed consolidated interim financial information.

The condensed consolidated interim financial information are prepared in accordance with the historical cost basis as modifiedby the fair value accounting of certain assets and liabilities where required or permitted under the recognition andmeasurement criteria of the International Financial Reporting Standards. This condensed consolidated interim financial reportdoes not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read inconjunction with the annual report for the year ended 30 June 2014 and any public announcements by Universal Coal Plc.

The accounts have been prepared on the going concern basis. At the period-end the Group had A$ 2 495 543 (2013 -A$ 3 669 680) of unrestricted cash reserves. As disclosed in note 10 to the financial statements the Group raisedA$ 25.5 million during the period through the issue of 112 690 000 ordinary shares and 71 220 000 preferred shares. The fundsraised have been used to fund working capital, to provide a cash backed guarantee on the New Clydesdale Colliery (“NCC”)acquisition and to acquire the surface rights for the Roodekop Project. Despite this additional fund raise, the Group’s cash flowprojections show that in order for the Group to meet its known commitments, debt repayment schedules and operatingcashflow requirements in the short term, the Group is reliant on the successful operation of the Kangala Colliery. Thesuccessful operation of the Kangala Colliery is reliant on the Group fulfilling the terms of the off-take arrangement with Eskomwith the key deliverable being ensuring the Group deliver the tonnage and quality of coal required by Eskom under the terms ofthe agreement. The Directors are confident that this milestone will be achieved and the Directors are therefore satisfied thatthe interim financial statements should be prepared on a going concern basis.

The condensed interim financial information for the period 01 July 2014 to 31 December 2014 is unaudited. In the opinion ofthe Directors, the condensed interim financial information for the period presents the financial position, result from operations,changes in equity and cash flows for the period in conformity to IAS 34 'Interim Financial Reporting' consistently applied. Thecondensed interim financial information incorporates comparative figures for the interim periods to 30 June 2014 and 31December 2013 for the consolidated statement of financial position, the interim period from 01 July 2013 to 31 December 2013for the consolidated statement of profit or loss and other comprehensive income and the consolidated statement of cash flowsand the interim period from 01 July 2013 to 31 December 2013 for the consolidated statement of changes in equity. Thefinancial information for the year ended 30 June 2014 contained in this interim report does not constitute statutory accounts asdefined by section 435 of the Companies Act, 2006. A copy of the statutory accounts for that year has been delivered to theRegistrar of Companies. The auditors’ report on those accounts was unqualified and did not contain a statement under section498(2) – (3) of the Companies Act, 2006. It did include references to matters to which the auditors drew attention to theappropriateness of the going concern basis of preparation by way of emphasis without qualifying their opinion.

1.2 Stripping costs

As part of its mining operations, the Group incurs stripping (waste removal) costs both during the development phase andproduction phase of its operations. Stripping costs incurred in the development phase of a mine are capitalised. Stripping costsincurred during the production phase are generally considered to create two benefits, being either the production of inventoryor improved access to the coal to be mined in the future. Where the benefits are realised in the form of inventory produced inthe period, the production stripping costs are accounted for as part of the cost of producing those inventories.

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Significant Accounting Policies

1.2 Stripping costs (continued)

Where the benefits are realised in the form of improved access to coal to be mined in the future, the costs are recognised as anon-current asset, referred to as a “stripping activity asset”, if the following criteria are met: future economic benefits (being improved access to the coal body) are probable the component of the coal body for which access will be improved can be accurately identified the costs associated with the improved access can be reliably measured

If one of the criteria is not met, the production stripping costs are charged to the statement of profit or loss as operating costsas they are incurred. The stripping activity asset is initially measured at cost, which is the accumulation of costs directlyincurred to perform the stripping activity that improves access to the identified component of coal, plus an allocation of directlyattributable overhead costs.

If the costs of the inventory produced and the stripping activity asset are not separately identifiable, a relevant productionmeasure is used to allocate the production stripping costs between the inventory produced and the stripping activity asset. Thisproduction measure is calculated for the identified component of the coal body and is used as a benchmark to identify theextent to which the additional activity of creating a future benefit has taken place. The Stripping activity asset is accounted foras an addition to, or an enhancement of, an existing asset, being the “Mine asset” in the statement of financial position. Thestripping activity asset is subsequently depreciated using the units of production method over the life of the identifiedcomponent of the coal body that became more accessible as a result of the stripping activity. The stripping activity asset is thencarried at cost less depreciation and any impairment losses.

1.3 Fair value disclosure

A number of assets and liabilities included in the Group’s financial statements require measurement at, and/or disclosure of,fair value. The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises marketobservable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised intodifferent levels based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):

Level 1: Quoted unadjusted prices in active markets for identical assets or liabilities that the company can access atmeasurement date.

Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly orindirectly.

Level 3: Unobservable inputs for the asset or liability.

The Group measures a number of financial instruments at fair value. All instruments are categorised as level 3, there are nolevel 1 or level 2 instruments.

Refer to note 26 for details.

1.4 Preferred shares

Where the contractual terms of preferred shares do not meet the the definition of a financial liability, they are recognised in equity.

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Notes to the half year unaudited Consolidated Financial Statements

2. Segmental report

All investments in associates and subsidiaries operate in one geographical location being South Africa, and are organised intotwo business units from which the Group’s expenses are incurred and revenues are earned, being (1) for the exploration andextraction of coal and (2) mining and sale of coal. The reporting on these investments to the Chief Operating Decision Makers,the Board of Directors, focuses on the use of the profit and loss and capitalisation of the coal projects.

The non-current assets relating to the capitalisation expenditure associated with the coal projects are located in South Africa.All corporate expenditure, assets and liabilities relate to incidental operations carried out in the United Kingdom, Australia andSouth Africa.

For the half year to 31 December 2014 Productionand

sale of coal

A$ '000

Indirectinterest in

explorationand

developmentof coalA$ '000

Corporate(Unallocated)

A$ '000

Total

A$ '000Revenue 26 662 - - 26 662Cost of sales (24 491) - - (24 491)

Gross profit 2 171 - - 2 171Operating expenses (excluding share basedpayments)

(1 935) (200) (2 049) (4 184)

Foreign exchange loss - - (8) (8)Finance income 84 - 372 456Finance cost (1 529) - (678) (2 207)Derivative financial liability - - (956) (956)

Loss before taxation (1 209) (200) (3 319) (4 728)Taxation 661 - - 661

Loss after taxation (548) (200) (3 319) (4 067)

Total non current assets 59 872 59 881 2 695 122 448Total assets 73 033 59 979 22 166 155 178Total liabilities (50 591) (162) (6 994) (57 747)

For the half year to 31 December 2013Operating expenses (excluding share based payments) (56) (1 934) (1 990)Foreign exchange loss - (7) (7)Finance income - 129 129Finance cost - (497) (497)

Loss before and after taxation (56) (2 309) (2 365)

Total non current assets 112 029 137 112 166Total assets 117 502 6 133 123 635Total liabilities (34 335) (6 146) (40 481)

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3. Property, plant and equipment

31 December2014

30 June2014

Cost

A$ '000

Accumulateddepreciation

A$ '000

Carryingvalue

A$ '000

Cost

A$ '000

Accumulateddepreciation

A$ '000

Carryingvalue

A$ '0006

Capital work in progress 527 - 527 6 162 - 6 162Computer equipment 88 (45) 43 69 (34) 35Development and productionassets

6 142 (388) 5 754 5 208 (153) 5 055

Furniture and fixtures 40 (24) 16 36 (20) 16Land rehabilitiation assets 4 068 (279) 3 789 3 869 (114) 3 755Mine development 12 138 (842) 11 296 11 545 (295) 11 250Mine owners assets 5 050 (466) 4 584 4 803 (140) 4 663Mineral properties 9 035 (313) 8 722 3 742 (110) 3 632Mining infrastructure 11 823 (943) 10 880 11 243 (332) 10 911Motor vehicles 211 (59) 152 201 (31) 170Processing plant 15 611 (765) 14 846 6 138 (180) 5 958

Total 64 733 (4 124) 60 609 53 016 (1 409) 51 607

Reconciliation of property, plant and equipment - 31 December 2014

Openingbalance

A$ '000

Additions

A$ '000

Transfers

A$ '000

Foreignexchange

movementsA$ '000

Depreciation

A$ '000

Total

A$ '000Capital work in progress 6 162 527 (6 162) - - 527Computer equipment 35 15 - 2 (9) 43Development and productionassets

5 055 667 - 260 (228) 5 754

Furniture and fixtures 16 2 - 1 (3) 16Land rehabilitation asset 3 755 - - 193 (159) 3 789Mine development 11 250 - - 579 (533) 11 296Mine owners assets 4 663 - - 240 (319) 4 584Mineral properties 3 632 5 101 - 187 (198) 8 722Mining infrastructure 10 911 - - 563 (594) 10 880Motor vehicles 170 - - 9 (27) 152Processing plant 5 958 2 995 6 162 306 (575) 14 846

51 607 9 307 - 2 340 (2 645) 60 609

31 Dec2014

30 June2014

31 Dec2013

A$ '000 A$ '000 A$ '000

Details of mineral propertiesPortion 1 of farm Wolvenfontein, 244 IRMpumalanga Province 3 621 3 632 4 053

Portion 1 of farm Roodekop, 63 ISMpumalanga Province 5 101 - -

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4. Intangible assets

31 December2014

30 June2014

Cost

A$ '000

Accumulatedamortisation

A$ '000

Carryingvalue

A$ '000

Cost

A$ '000

Accumulatedamortisation

A$ '000

Carryingvalue

A$ '000

Mining and prospecting rightsUniversal Coal Development IProprietary Limited

958 - 958 912 - 912

Universal Coal Development IIProprietary Limited

34 913 - 34 913 33 249 - 33 249

Universal Coal Development IIIProprietary Limited

10 389 - 10 389 9 894 - 9 894

Universal Coal Development IVProprietary Limited

9 753 - 9 753 8 878 - 8 878

Universal Coal Development VProprietary Limited

3 854 - 3 854 3 671 - 3 671

Other intangible assetsComputer software 410 (170) 240 335 (103) 232

Total 60 277 (170) 60 107 56 939 (103) 56 836

Reconciliation of intangible assets - 31 December 2014

Openingbalance

A$ '000

Additions

A$ '000

Foreignexchange

movementsA$ '000

Amortisation

A$ '000

Total

A$ '000Universal Coal Development I ProprietaryLimited

912 - 46 - 958

Universal Coal Development II ProprietaryLimited

33 249 4 1 660 - 34 913

Universal Coal Development III ProprietaryLimited

9 894 32 463 - 10 389

Universal Coal Development IV ProprietaryLimited

8 878 563 312 - 9 753

Universal Coal Development V ProprietaryLimited

3 671 - 183 - 3 854

Computer software 232 57 13 (62) 240

56 836 656 2 677 (62) 60 107

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Supplementary information on intangible assets

The following detailed schedule provides additional information pertaining specifically to the interests held by Universal CoalPlc in the identifiable Mining Rights (MR) and Prospecting Rights (PR) as at 31 December 2014:

Project and entity Asset Permit number Interest(%)

Licence expirydate

Area(ha)

Kangala Project:Universal Coal Development IProprietary Limited

Middelbult 235 IR, Portions40 and 82

MP30/5/1/1/641 PR %70.5 09/07/2017 942


Wolvenfontein 244 IR,Portion 1 and RE, Portion 2

MP30/5/1/2/2/429 MR %70.5 02/05/2032 951


Modderfontein 263 IR,Portion 1

MP30/5/1/1/2/639 PR %70.5 09/07/2017 127

Berenice and Somerville Project:Universal Coal Development IIProprietary Limited

Berenice and SomervilleProjects, several farms

LP30/5/1/1/2/376 PR %50 19/03/2016 39,484

Brakfontein Project:Universal Coal Development IIIProprietary Limited

Brakfontein 264 IR, Protions6, 8 - 10, 20, 26, 30 and RE,264 IR

MP30/5/1/2/2/10027 MR %50.29 01/01/2034 879

Roodekop Project:Universal Coal Development IVProprietary Limited

Roodekop 63 IS IR MP30/5/1/1/2/492 MR %74 05/02/2034 835

Cygnus Project:Universal Coal Development VProprietary Limited

Cygnus Project LP30/5/1/1/2/1276 PR %50 In renewal 12,299

On review during the period, the Directors have noted no circumstances which would suggest that at this time an impairment isnecessary given the preliminary results on surveys obtained to date. The situation will be closely monitored and adjustmentsmade in future periods if there are indications that the assets held are not recoverable.

The Donkin project held under Universal Coal Development VI Proprietary Limited was not considered to be prospective andthe prospecting licence which expired on 08 December 2014 was not renewed.

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Notes to the half year unaudited Consolidated Financial StatementsUnaudited

31 December2014

Audited30 June

2014

Unaudited31 December

2013A$ '000 A$ '000 A$ '000

5. Loans receivable

Loans and receivablesNdalamo Resources Proprietary Limited 1 679 - -

The above loan is unsecured, bears interest at prime plus 7.5% per annum and is fully repayable by 30 June 2020 in 16 equalquarterly capital installments.

6. Inventories

ROM stockpiles 902 2 828 -Coal product stock piles 734 379 -Diesel on hand 32 66 52

1 668 3 273 52

7. Trade and other receivables

Trade receivables 5 590 3 896 91Prepayments 1 393 1 221 1 345Deposits 1 510 10Value-added tax 1 855 441 2 189Loan - Xakwa Investments - - 337Land rehabilitation guarantee - - 1 537

8 839 6 068 5 509

Prepayments: Universal Coal Development VII Proprietary Limited

On 19 April 2012, Universal Coal & Energy Holdings South Africa Proprietary Limited acquired 1 (one) ordinary share (50%) ofUniversal Coal Development VII Proprietary Limited, a special purpose entity formed with the intention of acquiring additionalprospecting rights in South Africa. The contribution of A$ 1 391 294 continues to be treated as a prepayment as certainconditions precedent still have to be concluded.

8. Cash and cash equivalents (including restricted amounts)

Cash and cash equivalents consist of:

Bank balances 1 251 57 397Fixed term deposits 1 245 2 600 3 273Restricted cash 19 727 4 376 2 238

22 223 7 033 5 908

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

8. Cash and cash equivalents (including restricted amounts) (continued)

Restricted cash and cash equivalents

Restricted cash and cash equivalents consist of standby equity and financial guarentees.

Financial guarantees 954 755 579Standby equity account 2 1 595 1 659Acquistion guarantees 15 981 2 026 -Debt service reserve account 2 790 - -

19 727 4 376 2 238

Financial guarantees

Certain financial guarantees have been entered into by Universal Coal and Energy Holdings South Africa Proprietary Limited inrelation to rehabilitation guarantees for the Department of Minerals and Energy and are secured against a cash at bankbalance of A$ 954 444 (30 June 2014 - A$ 754 970; 31 December 2013 - A$ 579 455).

Standby equity account

The balance of the standby equity account has been released by RMB as a result of the successful technical completiontesting and transferred to the Debt Service Reserve Account.

Acquisition guarantees

A deposit guarantee in the amount of A$ 2 109 260 (30 June 2014 - A$ 2 026 219; 31 December 2013 - A$ nil) has beenprovided to Exxaro Coal Mpumalanga Proprietary Limited as a non-refundable deposit and a provisional purchase priceguarantee of A$ 15 819 447 (30 June 2014 - A$ nil; 31 December 2013 - A$ nil) for the acquisition of the assets of the NewClydesdale Colliery.

The deposit guarantee has been provided by Rand Merchant Bank and is repayable in 18 equal monthly repayments from thedate the guarantee is called upon. This deposit guarantee is not collateralised by cash, however the provisional purchase priceguarantee is fully collateralised by cash.

Debt service reserve account

The DSRA is a restricted cash account held in favour of RMB which is funded to the extent required to cover the followingquarter’s capital and interest repayments to RMB under the Project Financing Facility agreement.

9. Financial assets by category

The accounting policies for financial instruments have been applied to the line items below:

Unaudited 31 December 2014 Amortisedcost

A$ '000

Non-financialinstrument

A$ '000

Total

A$ '000

Loans receivable 1 679 - 1 679Trade and other receivables 5 590 1 855 7 445Cash and cash equivalents 22 223 - 22 223

29 492 1 855 31 347

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9. Financial assets by category (continued)

Audited 30 June 2014 Amortisedcost

A$ '000


A$ '000

Total

A$ '000

Trade and other receivables 3 896 441 4 337Cash and cash equivalents 7 033 - 7 033

10 929 441 11 370


2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

10. Share capital

Authorised500 000 000 Ordinary shares of £ 0.05

Issued434 465 447 (2013 - 319 575 447) Ordinary share of £ 0.05 36 508 26 253 26 05471 220 000 (2013 - nil) Preferred shares of £ 0.05 6 481 - -Share premium 52 605 41 967 41 792

95 594 68 220 67 846

Reconciliation of shares issued:Opening balance 26 253 26 054 26 054Issue of ordinary shares 10 255 199 -Issue of preferred shares 6 481 - -

42 989 26 253 26 054

Reconciliation of share premium:Opening balance 41 967 41 792 41 792Issue of shares 10 638 175 -

52 605 41 967 41 792

Significant changes in the share capital of the Group for the half year ended 31 December 2014 were as follows:

Ordinary shares Date Number ofshares issued

Cumulativeshares issued

Opening balance - 321 775 447Issue of ordinary shares 16 October 2014 86 690 000 408 465 447Conversion of loan notes 16 October 2014 26 000 000 434 465 447

Preferred shares Date Number ofshares issued


Issue of preferred shares 16 October 2014 71 220 000 71 220 000

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10. Share capital (continued)

Significant changes in the share capital of the Group for the financial year ended 30 June 2014 were as follows:

Ordinary shares Date Number ofshare issued


Opening balance - 319 575 447Issue of ordinary shares 14 January 2014 2 200 000 321 775 447

11. Reserves

Share capital relates to the nominal value of the shares issued. The share premium relates to the excess consideration paidover the nominal value of the shares after deducting related expenses.

The foreign currency translation reserve relates to the foreign exchange effect of the retranslation of the Group's overseassubsidiaries on consolidation into the Group's interim financial statements.

The share based payment reserve, holds the equity element of the share option transactions adjusted for transfer on exercise,cancellation or expiry of options.

The convertible instrument reserve consists of the equity component recognised by fair valuing shareholder loans andconverting loan note liabilities.

The retained deficit reserve is the cumulative net losses recognised in the statement of comprehensive income adjusted fortransfer on exercise, cancellation or expiry of options from the share option reserve.

Non-controlling interest is the non-controlling shareholders' interest in the net assets of the group.

12. Share based payments

The company has share based payment arrangements relating to share options granted, which are as below:

31 December 2014Grant date

Expiry date Exercise priceA$

Numberissued

Outstanding31 December

201409/12/2010 09/12/2015 0.26 490 617 490 61709/12/2010 09/12/2015 0.20 3 800 000 3 800 00009/12/2010 09/12/2015 0.26 4 618 000 4 618 00009/12/2010 24/11/2015 0.60 3 007 110 3 007 11009/12/2010 09/12/2015 0.39 5 200 000 5 200 00009/12/2010 03/11/2015 0.34 3 200 000 3 200 00004/06/2012 03/06/2017 0.263 16 855 736 16 855 73604/06/2012 03/06/2017 0.275 5 618 579 5 618 57901/04/2013 01/04/2018 0.26 3 300 001 3 300 001

46 090 043 46 090 043

The fair value of the share-based payment is based upon the Black-Scholes formula, a commonly used option pricing model.The calculation of volatility used in the model is based upon an average of market prices against current market prices of listedcompanies operating in the mining industry.

All options are equity settled and it has been assumed that all options will vest.

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

13. Borrowings

Shareholder's loanMountain Rush Trading 6 Proprietary Limited 3 510 3 176 3 172

The above loan is unsecured, interest free and has no specified terms of repayment.

Finance facilitiesRMB Kangala Project Finance Facility 33 412 27 891 24 749RMB Short term loan 2 659 2 006 -

36 071 29 897 24 749

39 581 33 073 27 921

RMB Kangala Project Finance Facility

Universal Coal Plc, through its 100% owned subsidiary Universal Coal and Energy Holdings South Africa Proprietary Limited(UCEHSA) entered into a secured funding agreement with FirstRand Bank Limited, acting through its Rand Merchant Bankdivision for a project financing facility with a maximum commitment value of A$ 34.2 million (ZAR 325 million). These fundshave been on-lent to a 70.5% subsidiary, Universal Coal Development I Proprietary Limited (UCDI) through means of anintercompany loan agreement for the purposes of developing the Kangala Mine.

As security, UCEHSA has pledged its shares in UCDI together with any claims and loans to UCDI and UCDI has ceded itsright, title and interest to the Project Accounts, Insurances, Intellectual Property, Investments and any claims against thirdparties. The Kangala Project Financing Facility attracts an interest rate of the Johannesburg Interbank Agreed Rate (JIBAR)plus 4.95% pre-completion and JIBAR plus 4.25% post completion. The Kangala Project Financing Facility is to be repaid in 18(eighteen) equal quarterly instalments commentcing on 31 January 2015 and any interest incurred on the outstanding loanbalance has been capitalised in line with IAS 23 Borrowing Costs.

RMB Short term loan

A short-term uncommitted demand facility of A$ 2.6 million (ZAR 25 million) has been provided to the Kangala Colliery byFirstRand Bank Limited, acting through its Rand Merchant Bank division which is secured in line with the security package forthe project financing facility. At 30 June 2014 the balance drawn against this working capital facility was A$ 2 658 504 (30 June2014 - A$ 2 006 219). Interest on the daily outstanding balance is levied at JIBAR plus 2.85% per annum.

Non-current liabilitiesShareholder's loans 3 510 3 176 3 172RMB Kangala Project Finance Facility 25 740 23 433 24 749

29 250 26 609 27 921

Current liabilitiesCurrent portion of RMB Kangala Project Finance Facility 7 672 4 458 -RMB Short term loan 2 659 2 006 -

10 331 6 464 -

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

14. Converting notes

Coal Development Holding B.V. - 1 970 -Susquehanna Pacific Proprietary Limited 5 897 5 772 5 648

5 897 7 742 5 648

On 16 October 2014, Coal Development Holding B.V. exercised its conversion rights under the existing A$ 3.25 millionConvertible Loan Note Agreement, which converted at an effective price of A$ 0.125 per Ordinary Share for the issue of26 000 000 Ordinary Shares.

15. Derivative Financial Liability

Opening balances 1 357 - -Movements in the period 956 1 357 -

2 313 1 357 -

Contained within the Susquehanna Pacific Proprietary Limited Converting Notes is an acceleration option which in the eventthat the Universal Coal Plc share price is equal to or above the Conversion Price on or after 30 November 2015, there is anoption to convert all outstanding loan notes. This is an accelerated embedded derivative (“Converting Option”) contained withinthe Converting notes.

The Conversion Price is A$ 0.25696 per share, calculated as 110% of the lower of A$ 0.2336 and A$ 0.25. Refer to note 14Converting notes.

Brokers and financial analysts have provided valuation reports on Universal Coal Plc which indicate a rising share pricepotential above the Conversion Price over time. Based on this, a rational investor would in all likelihood not exercise theConverting Option and rather continue to earn the coupon on the Converting Notes (9.5% per annum) and only convert all ofthe outstanding Converting notes at the maturity date.

The fair value of the Converting Option has been determined by using the Black Scholes option pricing model, a commonlyused option pricing model.

The following key inputs were used in the valuation of the Derivative Financial Liability:

Share price A$ 0.14 A$ 0.09Strike price A$ 0.25696 A$ 0.25696Volatility %96 %93Risk free rate %2.74 %3.55Time to maturity years4.41 years4.92

The indicative fair value of the Converting Option at 31 December 2014 is A$ 0.0849 (30 June 2014 - A$ 0.0498) per option.

There are still 7 000 000 loan notes (with a face value of A$ 1 each) in issue which are convertible at a price of A$ 0.25696.

On exercise, this would result in the issue of the total of 27 241 594 new shares. The total indicative fair value of the ConvertingOption over these new shares is A$ 2 312 664 (30 June 2014 - A$ 1 356 683).

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

16. Provisions

Reconciliation of provisions - 31 December 2014

Openingbalance

Foreignexchange

movements

Total

Environmental rehabilitation 3 869 199 4 068

Reconciliation of provisions - 30 June 2014

Openingbalance

Additions Total

Environmental rehabilitation 896 2 973 3 869

The rehabilitation provision relates to the estimated costs of correcting any disturbance relating to mining activities and thoseincidental thereto for the Kangala Colliery. The level of provision is commensurate with work completed to date.

The cost of rehabilitation was estimated at A$ 4 849 032 (ZAR 45 978 521) (2013 - A$ 4 612 150 (ZAR 45 978 521)). The fairvalue of the provision was calculated by escalating estimated costs at CPI of 6% per annum over the life of the mine of 9 years.

This amount is discounted at the 10 year South African Government Bond Rate of 8.09% to arrive at a fair value ofA$ 4 067 600 (2013 - A$ 3 868 891).

17. Trade and other payables

Trade payables 4 888 6 218 3 763Accrued expenses 1 000 595 626

5 888 6 813 4 389

18. Financial liabilities by category

The accounting policies for financial instruments have been applied to the line items below:

Unaudited 31 December 2014

Amortisedcost

A$ '000


A$ '000

Fair value

A$ '000

Total

A$ '000Borrowings 39 581 - - 39 581Converting notes - - 5 897 5 897Derivative financial liability - - 2 313 2 313Trade and other payables 4 888 - - 4 888

44 469 - 8 210 52 679

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

18. Financial liabilities by category (continued)

Audited 30 June 2014

Amortisedcost

A$ '000


A$ '000

Fair value

A$ '000

Total

A$ '000Borrowings 33 073 - - 33 073Converting notes - - 7 742 7 742Derivative financial liabilities - - 1 357 1 357Trade and other payables 6 218 - - 6 218

39 291 - 9 099 48 390

19. Finance income

Interest revenueCash and cash equivalents 456 242 129

20. Finance costs

RMB Kangala Project Finance Facility 1 710 943 -Converting notes 497 1 011 497

2 207 1 954 497

21. Cash used in operations

Loss before taxation (4 728) (3 198) (2 365)Adjustments for:Depreciation and amortisation 2 706 1 407 50Share of operating loss associated undertakings - 2 -Derivative financial liability 956 1 357 -Finance income (456) (242) (129)Finance costs 2 207 1 954 497Foreign exchange loss / (gain) - 39 7Movements in provisions - 51 1 537Changes in working capital:Movements in inventories 1 775 (3 273) -Movements in trade and other receivables (1 893) (3 316) (2 481)Movements in trade and other payables (1 586) 4 611 515

(1 019) (608) (2 369)

22. Related parties

During the period, the company, in the ordinary course of business, entered into various transactions with related parties.These transactions occurred under those terms that are no less favourable than those entered into with third parties in an arm'slength transaction.

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31 December2014

Audited30 June

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2013A$ '000 A$ '000 A$ '000

22. Related parties (continued)

Related party balances

Loan accounts - Owing by related partiesNdalamo Resources Proprietary Limited 1 679 - -

Loan accounts - Owing to related partiesXakwa Investments Proprietary Limited - - 337Mountain Rush Trading 6 Proprietary Limited 4 978 4 735 3 172

Related party transactions

Fees paid to related partiesOfhani Phaswana 21 100 47African Minerals Exploration and Development GP SARL 80 154 77Mountain Rush Trading 6 Proprietary Limited 2 230 924 -IchorCoal N.V. 30 - -

Rent paid to related partiesKEE Enterprises Proprietary Limited 45 84 39

Universal Coal Development I Proprietary Limited secured a portion of the 100% Kangala equity funding requirement of A$16.9 million (ZAR - 160 million) through a shareholders loan of A$ 4.98 million (ZAR - 47.2 million) from Black EconomicEmpowerment partner Mountain Rush Trading 6 Proprietary Limited.

On 12 August 2014, a financing term sheet was entered into between Universal Coal and Energy Holdings South AfricaProprietary Limited and Ndalamo Resources Proprietary Limited for the financing of the NCC Roodekop project. The loan isunsecured, bears interest at prime plus 7.5% per annum and is fully repayable by 30 June 2020 in 16 equal quarterly capitalinstalments.

On 2 June 2010, Universal Coal and Energy Holdings South Africa Proprietary Limited granted a loan to Xakwa InvestmentsProprietary Limited on the following terms and conditions as per the loan agreement:

Interest is accrued for at the First National Bank Prime Interest rate throughout the period. Repayment of the loan will occur at the earlier of:

The date Universal Coal and Energy Holdings South Africa Proprietary Limited exercises their option to acquirean additional 24% in Universal Coal Development IV Proprietary Limited from Xakwa Investments ProprietaryLimited, reducing the option exercise price with the fair value of the loan granted on vesting date; or

At any time decided by Xakwa Investments Proprietary Limited before the purchase option has been exercised.

A consultancy agreement was extended with Ofhani Phaswana, a director of Bono Lithihi Investments Group ProprietaryLimited, on 1 September 2013 for facilitation services in the mining sector in South Africa and to represent Universal Coal Plcas a “Black- Economic Empowerment” partner. Monthly fees of A$ 10 500 have been paid, the last of which occurred on 31August 2014.

On 5 December 2012, the Company entered into a private placement agreement with Coal Development Holding B.V. (CDH)for the acquisition of 29.99% of the issued share capital of Universal Coal Plc. One of the key terms of the placement was thatCDH has the right to nominate two Non-Executive Directors to the Company’s Board. Following Shareholder approval at theCompany’s Annual General Meeting on 21 December 2012, the Board of Universal Coal Plc approved the appointment of MrDavid Twist and Mr Carlo Baravalle as Non-Executive Directors effective from 7 January 2013. Monthly fees of A$ 13 334 arepayable to African Minerals Exploration and Development GP SARL. While CDH is not defined as a related party under theASX Listing Rules, in light of CDH’s cornerstone investment in the Company and its position as a substantial shareholder of theCompany, the transaction has been disclosed accordingly.

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

22. Related parties (continued)

Fees paid to Mountain Rush Trading 6 Proprietary Limited relate to facilitation and service fees permitted in the Facilitation andService Fee Agreement entered into on 6 May 2013 between Mountain Rush Trading 6 Proprietary Limited, Universal CoalDevelopment I Proprietary Limited and Universal Coal and Energy Holdings South Africa Proprietary Limited. The transaction isconsidered to be at “arms-length”.

On 1 September 2014, Universal Coal Plc entered into a Subscription Agreement with IchorCoal N.V. for the strategicinvestment of A$ 24 483 400 and furthermore entered into a Warrant Instrument with IchorCoal N.V. whereby IchorCoal N.V.would subscribe for 71 220 000 Warrants, exercisable for a period of 18 months at a strike price of A$ 0.36. As part of theinvestment and effective from 16 October 2014, Messrs Nonkululeko Nyembezi-Heita and Andries Engelbrecht were appointedto the Board of Universal Coal as nominee directors of IchorCoal N.V. monthly fees of A$ 13 334 are payable to IchorCoal N.V.While IchorCoal N.V. is not defined as a related party under the ASX Listing Rules, in light of IchorCoal N.V’s cornerstoneinvestment in the Company and its position as a substantial shareholder of the Company, the transaction has been disclosedaccordingly.

A lease agreement was entered into with KEE Enterprises on 1 June 2014 for office rental in South Africa. The controllingshareholder of KEE Enterprises Proprietary Limited, Hendrik Bonsma is also a non-executive director of Universal Coal Plc.The period of the lease is for 5 years at a market related rental of A$ 7 500 per month with an annual escalation clause of 8%per annum. This transaction is considered to be at “arms-length”.

23. Commitments

Acquisition of the New Clydesdale Colliery (“NCC”):

On 31 January 2014, Universal Coal Plc entered into a binding sale of assets agreement with Exxaro CoalMpumalanga Proprietary Limited for an amount of A$ 17 928 707 to acquire all the assets and assume certain liabilities of theNew Clydesdale Colliery (“NCC”), located adjacent to the Universal Coal’s Roodekop deposit in the Witbank coalfield. The fullamount has been paid via an 88% cash backed bank guarantee. The transaction remains subject to the fulfilment ofsuspensive conditions for transactions of this nature such as Ministerial consent in terms of section 11 of the MineralResources and Petroleum Development Act 28 of 2002 (as amended) (“MPRDA”).

24. Contingencies

Rehabilitation Guarantee

Rehabilitation Guarantees have been provided by a financial institution to the Department of Mineral Resources in South Africain the amount of A$ 2 362 601 (30 June 2014 - A$ 2 247 185) which are secured against investment accounts which havea balance of A$ 954 444 (30 June 2014 - A$ 754 970) at year end. The unsecured amount of A$ 1 408 157(30 June 2014 - A$1 492 215) is considered to be a contingent liability at year end.

Subsequent to the period end, on 22 January 2015 the rehabilitation guarantees were increased to A$ 4 191 456 with noadditional security being provided.

Eskom Guarantee

A financial guarantee in favour of Eskom Holdings SOC Limited in the amount of A$ 267 760 (ZAR 2 538 900) hasbeen provided by Rand Merchant Bank which is secured in accordance with the security package forming part of theKangala protect finance facility.

Engen Guarantee

A financial guarantee in favour of Engen Petroleum Limited in the amount of A$ 843 704 (ZAR 8 000 000) has been providedby Rand Merchant Bank which is secured in accordance with the security package forming part of the Kangala protect financefacility.

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31 December2014

Audited30 June

2014


2013A$ '000 A$ '000 A$ '000

25. Loss per share

NumeratorLoss used in basic and diluted loss per share (3 454 322) (1 798 241) (2 342 709)

DenominatorWeighted average number of shares used in basic anddiluted loss per share

397 738 273 320 582 022 319 575 447

All share options have not been included in the calculation of diluted EPS / LPS because they are out of the money. The totalnumber of options in issue are disclosed in note 12 Share based payments.

26. Fair value information

Level 3

Financial liabilities at fair value using discounted cashflows Interest rate hedge 134 101 -Embedded derivative on Susquehanna conversion option 2 313 1 357 -

Total 2 447 1 458 -

The Group considers that the carrying amount of the following financial assets and liabilities are a reasonable approximation oftheir fair values: Trade and other receivables; Trade and other payables; Cash and cash equivalents; Loans receivables; and Derivative financial liabilities.

The following table compares the carrying amounts and fair values of the Group's financial liabilities as at 31 December 2014:

31 December 2014 30 June 2014Financial liabilties Carrying

amountA$ '000

Fair value

A$ '000

CarryingamountA$ '000

Fair value

A$ '000 Converting notes 5 897 7 000 7 742 10 250

5 897 5 897 7 742 7 742Shareholders loan 3 510 4 978 3 176 4 735RMB Kangala Project Finance Facility 33 412 33 412 27 891 27 891RMB Short term loan 2 659 2 659 2 006 2 006

39 581 41 049 33 073 34 632

45 478 48 049 40 815 44 882

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Typewritten Text

Sensitivity analysis on the key variables for the Susquehanna conversion option calculation have been run and no significant differences have been noted.



27. Risk management

Capital risk management

The Group manages its capital to ensure that the Group will be able to continue as a going concern while optimising the debtand equity balance. The capital structure of the Group consists of equity comprising issued capital, equity and retained deficitand debt comprising of converting notes, shareholder's loan, long term loans and short term loans.

The Group enters into financial transactions to ensure a degree of interest rate certainty and to guarantee the interest ratechanges through economic conditions beyond management's control is hedged through interest rate swaps. Financialinstruments entered into in pursuit of this objective are specifically designated as hedges of the planned future interest ratevariances.

Where future investment in the interest in associates or other Group projects is required the Board will assess the structure ofwhether it can be funded from existing resources or financing arrangements as appropriate.

The Group finances its operations through equity and debt. During the current year, the Group raised A$ 25.5 million throughthe issue of ordinary and preferred shares. No subsidiary company of the Group is permitted to enter into any borrowing facilityor lease agreement without prior consent of the Company.

Financial risk management

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk,cash flow interest rate risk and price risk), credit risk and liquidity risk.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of fundingthrough an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamicnature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability undercommitted credit lines.

Interest rate risk

The Group and Company’s financial assets consist of cash and cash equivalents and other receivables. The Group andCompany earn interest on its cash and cash equivalents, consequently the Group and Company are exposed to cash flowinterest rate risk on its financial assets which earn interest based on variable interest rates. To mitigate this risk the cashbalances maintained by the Group and Company are proactively managed in order to ensure that the maximum level of interestis received for the available funds but without affecting the working capital flexibility the Group and Company require.

The Group's interest rate risk arises from cash held, short term deposits and interest on long term loans, converting notes andhedges.

At 31 December 2014, if interest rates on Australian Dollar-denominated cash held had been 1% higher / lower with all othervariables held constant, post-tax profit for the period would have been A$ 6 616 (2013 - A$ 11 397) lhigher / lower, mainly as aresult of higher / lower interest rates.

At 31 December 2014, if interest rates on Rand-denominated cash held and borrowings had been 1% higher / lower with allother variables held constant, post-tax profit for the period would have been A$ 150 207 (2013 - A$ 49 270) lower / higher,mainly as a result of higher / lower interest rates.

Credit risk

The carrying amount of the Group’s financial assets represents its maximum exposure to credit risk.

The Group is exposed to credit risk on payments from customers and cash deposits however it does not consider that it hassignificant exposure because Its major customer is Eskom Holdings SOC Limited and it banks with reputable institutions invarious locations, including HSBC Bank Australia Limited, ANZ Bank Australia, Investec Limited and First Rand Bank. EskomHoldings SOC Limited is a state owned company and is backed by the South African Government.

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27. Risk management (continued)

Foreign exchange risk

The company operates internationally and is exposed to foreign exchange risk arising from various currency exposures,primarily with respect to the South African Rand and the Great British Pound. The company is exposed to currency risk on cashreserves, deposits paid, trade receivables, trade payables, shareholder's loan and project finance debt facility.

However the majority of the Group’s exposure is indirect resulting from those transactions entered into by its associatedundertakings and subsidiaries, consequently the direct currency risk facing the Group is not considered to materially affect itsfinancial position and operating results.

Price risk

Prices ultimately received for minerals in relation to the Group’s investments will have significant impact on the profitability andviability of all projects in which the Group has an interest. Increase in prices may have significant and leveraged effect to thecurrent and future values of projects and shares held, the converse will apply where prices fall.

However, the Kangala Colliery has a contracted price with a majority customer in Eskom Holdings SOC Limited, which is notsubject to global commodity pricing fluctuations.

28. Going concern

The accounts have been prepared on the going concern basis. At the period-end the Group had A$ 2 495 543 (2013 -A$ 3 669 680) of unrestricted cash reserves. As disclosed in note 10 to the financial statements the Group raisedA$ 25.5 million during the period through the issue of 112 690 000 ordinary shares and 71 220 000 preferred shares. The fundsraised have been used to fund working capital, to provide a cash backed guarantee on the New Clydesdale Colliery (“NCC”)acquisition and to acquire the surface rights for the Roodekop Project. Despite this additional fund raise, the Group’s cash flowprojections show that in order for the Group to meet its known commitments, debt repayment schedules and operatingcashflow requirements in the short term, the Group is reliant on the successful operation of the Kangala Colliery. Thesuccessful operation of the Kangala Colliery is reliant on the Group fulfilling the terms of the off-take arrangement with Eskomwith the key deliverable being ensuring the Group deliver the tonnage and quality of coal required by Eskom under the terms ofthe agreement. The Directors are confident that this milestone will be achieved and the Directors are therefore satisfied thatthe interim financial statements should be prepared on a going concern basis.

29. Events after the reporting period

There were no additional disclosable matters or circumstances arising between the end of the financial year and the date ofapproval of the financial statements.

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37

Review opinion

UNIVERSAL COAL PLC

HALF YEARLY REPORT FOR SIX MONTHS ENDED 31 DECEMBER 2014

INDEPENDENT REVIEW REPORT TO UNIVERSAL COAL PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report

for the six months ended 31 December 2014 which comprises the condensed consolidated statement of profit or loss and other

comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of

changes in equity, the condensed consolidated statement of cash flows, the related explanatory notes.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent

misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors’ responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the

directors. The directors are responsible for preparing the interim report in accordance with the rules of the Australian Stock

Exchange.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial

Reporting Standards (IFRS) as adopted by the European Union. The condensed set of financial statements as included in these

half-yearly interim statements is prepared in accordance with International Accounting Standard 34, “Interim Financial

Reporting’, as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly

financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements

of the rules of the Australian Stock Exchange and for no other purpose. No person is entitled to rely on this report unless such

a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been

expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any

other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ‘‘Review of

Interim Financial Information Performed by the Independent Auditor of the Entity’’, issued by the Auditing Practices Board for

use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons

responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially

less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently

does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an

audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements

in the half-yearly financial report for the six months ended 31 December 2014 is not prepared, in all material respects, in

accordance with the rules of the Australian Stock Exchange and International Accounting Standard 34 ‘Interim Financial

Reporting’ as adopted by the European Union.

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Review opinion

Emphasis of Matter

In forming our conclusion on the condensed set of financial statements, which is not modified, we have considered the adequacy

of the disclosures made in note 28, concerning the Group’s ability to continue as a going concern. In order for the Group to

meet its commitments, debts and operating cashflow requirements in the short term the Group is reliant on the on-going

successful operation of the Kangala Colliery including fulfilling the terms of the off-take arrangement with Eskom through

ensuring the delivery of contracted tonnage and quality of coal required by Eskom under the terms of the agreement. The

above circumstances indicate the existence of a material uncertainty, which may cast doubt on the Group’s ability to continue

as a Going concern. The condensed financial statements do not include the adjustments that would result if the Group was

unable to continue as a going concern.

BDO LLP

Chartered Accountants and Registered Auditors

Location

United Kingdom

Date: 15 March 2014

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

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