1. |
General information |
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Impala Platinum Holdings Limited (Implats) is a leading producer of platinum and associated platinum group metals (PGMs). The Group has operations on the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, the two most significant PGM-bearing ore bodies globally. |
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The Company has its primary listing on the Johannesburg Stock Exchange and a secondary listing on the London Stock Exchange. |
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The condensed consolidated interim financial information was approved for issue on 16 February 2012 by the Board of directors. |
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2. |
Independent review by the auditors |
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The consolidated statement of financial position at 31 December 2011 and the related consolidated statement of comprehensive income, statement of changes in equity and cash flow statement for the six months then ended was reviewed by the Group’s auditors, PricewaterhouseCoopers Inc. The individual auditor assigned to perform the review is Mr J-P van Staden. Their unqualified review opinion is available for inspection at the Company’s registered office. |
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3. |
Basis of preparation |
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The consolidated interim financial information for the six months ended 31 December 2011 has been prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (in particular IAS 34, ‘Interim financial reporting’), the AC 500 standards as issued by the Accounting Practices Board or its successor, requirements of the South African Companies Act, 2008 and the Listings Requirements of the JSE Limited. |
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The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2011, which have been prepared in accordance with IFRS. |
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The consolidated interim financial information has been prepared under the historical cost convention except for certain financial assets, financial liabilities and derivative financial instruments which are measured at fair value and liabilities for cash-settled share-based payment arrangements which are measured with a binomial option model. |
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The consolidated interim financial information is presented in South African rands, which is the Company’s functional currency. |
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4. |
Accounting policies |
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Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2011, as described in those annual financial statements. |
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Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. |
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The following new standards, amendments to standards and interpretations have been adopted by the Group as from 1 July 2011: |
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- IAS 1 (amendment) Presentation of Financial Statements (effective 1 July 2012). Amendment requiring items of other comprehensive income being grouped into those that will subsequently not be reclassified to profit and loss and those that will. This amendment required disclosure in the statement of comprehensive income indicating that all items will subsequently be reclassified to profit and loss.
- IAS 19 (amendment) Employee Benefits (effective 1 January 2013). This amendment has no impact on the results of the Group.
- IAS 34 (amendment) Interim Financial Reporting (effective 1 January 2013). Consequential amendment from IFRS 13 requiring disclosure for Financial Instruments as disclosed in note 13.
- IFRS 13 Fair Value Measurement (effective 1 January 2013). This new standard has no impact on the results of the Group.
- IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective 1 January 2013). This new interpretation has no impact on the results of the Group.
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5. |
Property, plant and equipment |
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R millions |
Six months
ended
31 December
2011
(Reviewed) |
Six months
ended
31 December
2010
(Reviewed) |
Year
ended
30 June
2011
(Audited) |
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Opening net book amount |
33 137 |
29 646 |
29 646 |
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Additions |
4 255 |
2 420 |
5 539 |
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Interest capitalised |
13 |
— |
1 |
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Disposals |
(557) |
(7) |
(54) |
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Depreciation (note 7) |
(804) |
(690) |
(1 372) |
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Exchange adjustment on translation |
1 070 |
(722) |
(623) |
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Closing net book amount |
37 114 |
30 647 |
33 137 |
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Capital commitments |
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Capital expenditure approved at 31 December 2011 amounted to R25.6 billion (December 2010: R23.7 billion) (June 2011: R25.5 billion), of which R4.8 billion (December 2010: R3.8 billion) (June 2011: R 2.0 billion) is already committed. This expenditure will be funded internally and, if necessary, from borrowings. |
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6. |
Borrowings |
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Borrowings from Standard Bank Limited: |
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- Loans were obtained by BEE partners for purchasing a 27% share in Marula Platinum (Proprietary) Limited amounting to R771 million (June 2011: R771 million). The BEE partnership in Marula is consolidated as the loans are guaranteed by Implats. The loans carry interest at the Johannesburg Interbank Acceptance Rate (JIBAR) plus 130 (June 2011: 130) basis points. Revolving credit facilities amounting to R111 million (June 2011: R114 million), carries interest at JIBAR plus 145 (June 2011: 145) basis points. The loans expire in 2020.
- Two loan facilities from Standard Bank of South Africa Limited to finance expansion at Zimplats remain outstanding. These loans are secured by cessions over cash, debtors and revenue of Zimbabwe Platinum Mines (Pvt) Limited:
Loan 1 – a R20 million (June 2011: R102 million) US$ denominated loan bears interest at London Interbank Offering Rate (LIBOR) plus 700 (June 2011: 700) basis points. At the end of the period the outstanding US$ balance amounted to US$2.5 million (June 2011: US$15 million). Repayments of 12 quarterly instalments commenced in December 2009 and will be fully settled by December 2012.
Loan 2 – a US$ denominated revolving credit facility of R596 million (US$88 million) bears interest at LIBOR plus 700 (June 2011: 700) basis points. The loan amortises over four years as per the relevant commitments with a final maturity date in December 2014. At the end of the period the outstanding balance amounted to R404 million (US$50 million) (June 2011: R244 million (US$36 million)).
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The total undrawn facilities at the end of the period were R3.7 billion (June 2011: R3.9 billion), of which R808 million (June 2011: R3.9 billion) were committed. |
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7. |
Cost of sales |
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R millions |
Six months
ended
31 December
2011
(Reviewed) |
Six months
ended
31 December
2010
(Reviewed) |
Year
ended
30 June
2011
(Audited) |
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Included in cost of sales: |
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On-mine operations |
5 074 |
5 439 |
9 862 |
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Wages and salaries |
2 836 |
2 734 |
5 590 |
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Share-based compensation* |
(125) |
490 |
(90) |
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Materials and other costs |
1 987 |
1 918 |
3 781 |
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Utilities |
376 |
297 |
581 |
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Concentrating and smelting operations |
1 474 |
1 309 |
2 601 |
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Wages and salaries |
278 |
247 |
517 |
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Materials and other costs |
698 |
682 |
1 355 |
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Utilities |
498 |
380 |
729 |
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Refining operations |
437 |
458 |
833 |
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Wages and salaries |
192 |
174 |
358 |
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Share-based compensation |
(5) |
52 |
8 |
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Materials and other costs |
198 |
190 |
383 |
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Utilities |
52 |
42 |
84 |
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Depreciation of operating assets (note 5) |
804 |
690 |
1 372 |
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Metal purchases |
3 438 |
3 241 |
6 835 |
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Change in metal inventories |
(621) |
(843) |
(13) |
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10 606 |
10 294 |
21 490 |
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The following disclosure items are included in cost of sales: |
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Repairs and maintenance expenditure on property, plant and equipment |
550 |
455 |
1 038 |
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Operating lease rentals |
27 |
19 |
28 |
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*Includes concentrating and smelting |
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8. |
Headline earnings |
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Headline earnings attributable to equity holders of the Company arises from operations as follows: |
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R millions |
Six months
ended
31 December
2011
(Reviewed) |
Six months
ended
31 December
2010
(Reviewed) |
Year
ended
30 June
2011
(Audited) |
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Profit attributable to owners of the Company |
3 482 |
2 070 |
6 638 |
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Adjustments: |
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Profit on disposal of property, plant and equipment |
(13) |
0 |
(1) |
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Loss on disposal of investment |
— |
— |
3 |
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Total tax effects of adjustments |
4 |
— |
(1) |
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Headline earnings |
3 473 |
2 070 |
6 639 |
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The issued share capital of the holding Company is as follows (millions): |
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Number of shares issued |
631.99 |
631.71 |
631.71 |
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Treasury shares |
(16.23) |
(16.23) |
(16.23) |
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Morokotso Trust |
(9.10) |
(14.64) |
(14.47) |
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Implats Share Incentive Trust |
(0.22) |
(0.03) |
(0.02) |
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Number of shares issued outside the Group |
606.44 |
600.81 |
600.99 |
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Adjusted for weighted average number of shares issued during the year |
(0.55) |
(0.22) |
(0.23) |
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Weighted average number of shares in issue for basic earnings per share |
605.89 |
600.59 |
600.76 |
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Adjustment for share appreciation scheme |
0.14 |
0.34 |
0.34 |
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Weighted average number of shares for diluted earnings per share |
606.03 |
600.93 |
601.10 |
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Headline earnings per share (cents) |
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Basic |
573 |
345 |
1 105 |
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Diluted |
573 |
344 |
1 104 |
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9. |
Employee Share Ownership Programme |
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During the six months ended 31 December 2011, 40% of the share options vested in terms of the rules of the Employee Share Ownership Programme. Approximately 88% of these vested options were exercised by employees. The table below explains the movement in the statement of changes in equity, resulting from the sale of Implats shares held by the Morokotso Trust. |
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R millions |
Number
of shares
issued
(million)
|
Ordinary
shares
|
Share
premium |
Share-based
payment
reserve |
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Balance at 30 June 2011 |
14.47 |
0 |
2 303 |
— |
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Shares issued |
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– Good leavers* |
(0.30) |
0 |
(48) |
— |
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– Options exercised |
(5.07) |
0 |
(807) |
(83) |
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Balance at 31 December 2011 (Reviewed) |
9.10 |
0 |
1 448 |
(83) |
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Balance at 30 June 2010 |
14.91 |
0 |
2 373 |
— |
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Shares issued – Good leavers* |
(0.27) |
0 |
(43) |
— |
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Balance at 31 December 2010 (Reviewed) |
14.64 |
0 |
2 330 |
— |
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Balance at 30 June 2010 |
14.91 |
0 |
2 373 |
— |
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Shares issued – Good leavers* |
(0.44) |
0 |
(70) |
— |
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Balance at 30 June 2011 (Audited) |
14.47 |
0 |
2 303 |
— |
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*Beneficiary resulting from retirement, retrenchment, incapacity or death. |
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10. |
Dividends |
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On 16 February 2012, a sub-committee of the Board declared an interim cash dividend in respect of 2012 of 135 cents per share amounting to R819 million. Secondary Tax on Companies on the dividend will amount to R82 million. |
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These financial statements do not reflect this dividend and related STC payable. The dividend will be accounted for in shareholders’ equity as an appropriation of retained earnings in the year ending 30 June 2012. |
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R millions |
Six months
ended
31 December
2011
(Reviewed) |
Six months
ended
31 December
2010
(Reviewed) |
Year
ended
30 June
2011
(Audited) |
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Dividends paid |
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Final dividend No. 87 for 2011 of 420 (2010: 270) cents per share |
2 546 |
1 622 |
1 622 |
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Interim dividend No. 86 for 2011 of 150 cents per share |
— |
— |
897 |
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2 546 |
1 622 |
2 519 |
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11. |
Contingent liabilities and guarantees |
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The Group has a contingent liability of US$36 million for Additional Profits Tax (APT) raised by ZIMRA (Zimbabwe Revenue Authority) consisting of an additional assessment of US$27 million in respect of the tax period 2007 to 2009 and a current APT amount of US$9 million based on the assumption that this amount would be payable should the Zimplats appeal against the ZIMRA interpretation of the APT provisions fail in the Special Court of Tax Appeals. Management, supported by the opinions of its tax advisors, strongly disagrees with the ZIMRA interpretation of the provisions. |
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As at the end of December 2011 the Group had bank and other guarantees of R558 million (June 2011: R606 million) from which it is anticipated that no material liabilities will arise. |
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12. |
Related party transactions |
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The Group entered into purchase transactions of R1.1 billion (December 2010: R1.1 billion) (June 2011: R2.3 billion) resulting in an amount payable of R605 million (December 2010: R667 million) (June 2011: R652 million) with Two Rivers Platinum, an associate company. It also received refining fees and interest to the value of R10 million (December 2010: R18 million) (June 2011: R30 million). After capital repayment received during the period the shareholders loan amounted to R48 million (December 2010: R232 million) (June 2011: R71 million). These transactions are entered into on an arm’s length basis at prevailing market rates. |
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Key management compensation (fixed and variable): |
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R 000 |
Six months
ended
31 December
2011
(Reviewed) |
Six months
ended
31 December
2010
(Reviewed) |
Year
ended
30 June
2011
(Audited) |
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Non-executive directors remuneration |
3 642 |
2 792 |
6 201 |
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Executive directors remuneration |
16 448 |
19 699 |
28 320 |
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Prescribed officers |
5 830 |
2 168 |
11 708 |
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Senior executives and Group secretary |
15 206 |
22 273 |
30 512 |
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Total |
41 126 |
46 932 |
76 741 |
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R 000 |
Six months
ended
31 December
2011
(Reviewed) |
Six months
ended
31 December
2010
(Reviewed) |
Year
ended
30 June
2011
(Audited) |
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13. |
Financial instruments (R millions) |
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Financial assets – carrying amount |
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Loans and receivables |
9 084 |
7 043 |
10 092 |
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Financial instruments at fair value through profit and loss2 |
17 |
72 |
33 |
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Held-to-maturity financial assets |
64 |
59 |
61 |
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Available-for-sale financial assets1 |
15 |
13 |
15 |
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|
9 180 |
7 187 |
10 201 |
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Financial liabilities – carrying amount |
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Financial liabilities at amortised cost |
7 034 |
6 227 |
7 255 |
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Financial instruments at fair value through profit and loss2 |
17 |
72 |
33 |
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7 051 |
6 299 |
7 288 |
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The carrying amounts of financial assets and financial liabilities approximate their fair values. |
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1Level 1 of the fair value hierarchy – Quoted prices in active markets for the same instrument |
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2Level 2 of the fair value hierarchy – Valuation techniques for which significant inputs are based on observable market data. |
