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Mvelaphanda - Audited Annual Financial Statements for the year
ended 30 September 2003
Mvelaphanda Resources Limited
(Incorporated in the Republic of South Africa)
(Registration number 1980/001395/06)
Share code: MVL
ISIN: ZAE000037610
("Mvela" or "the group" or "the company")
Audited Annual Financial Statements for the year ended 30 September 2003
DIRECTORS" REPORT
for the year ended 30 September 2003
We have pleasure in submitting the audited annual financial statements of
Mvelaphanda Resources Limited ("Mvela", "the group" or "the company") for the
year ended 30 September 2003.
Northam Platinum Limited ("Northam")
Mvelaphanda Platinum (Pty) Limited, a wholly owned subsidiary of Mvela,
effectively owns 51 738 305 shares in Northam Platinum Limited which constitutes
a 22.4% equity accounted interest in that company.
During the year to 30 June 2003, metals in concentrate produced by Northam
increased by 22.4% to 10 354 kg (3PGE+Au). Owing to increased inventories,
flowing from the re-build of the smelter after eleven years of continuous
operation, sales increased by only 2.6% to 9 174kg (3PGE+Au). The weighted
basket price of metals sold increased in US$ terms. In Rand terms, however,
the price declined by 9.4% to R145 273 per kg as a result of the strength of the
Rand against the US$. Consequently, sales revenue declined by 5.7% to R1 472
million and headline earnings were 31% lower at R275 million. During the year
Northam spent R176 million on capital expenditure, which included R35 million on
the smelter rebuild, R31 million on additional refrigeration plants and R42
million on the development programme.
Trans Hex Group Limited ("Trans Hex")
The company owns 2 530 263 Trans Hex shares, which constitute a 3.0% interest in
Trans Hex, and which has been equity accounted due to the significant influence
that the company exercises through its representation on the board of Trans Hex.
In March 2002 the company purchased 16 million Trans Hex shares for delivery on
28 February 2008. This forward purchase is treated as a derivative financial
instrument and is fair valued as shown in note 2 and 12 to the financial
statements.
The company also has an option to acquire 5 million Trans Hex shares from Remgro
Limited at an option price of R7.50 escalating at 8.94% per annum compounded
monthly in arrears from 1 January 2000 to date of payment. This option is a
derivative financial instrument and is fair valued as shown in note 2 and 12 to
the financial statements. This option expires 1 October 2007.
In addition, the company has a joint venture agreement with Trans Hex in terms
of which it has a 50% interest with Trans Hex to explore for and exploit diamond
resources in certain demarcated areas of the Republic of South Africa. The
prospecting rights acquired on behalf of the joint venture will be held in a
company called Mvelaphanda Exploration (Pty) Limited in which Mvela holds a 50%
equity interest.
During the year to 31 March 2003, net operating income of Trans Hex increased by
30.9% to R344.4 million, primarily because of increased US$ diamond prices.
Costs were well controlled and attributable income increased by 28% to R225.0
million.
This strong performance continued during the six months to 30 September 2003,
despite the adverse impact of the strong Rand on diamond revenue. Net mining
sales totalled R545.7 million and attributable income was R112.9 million.
Trans Hex has acquired four diamond concessions in Angola, which are operated in
partnership with the Angolan State Diamond Organisation (Endiama). The
Luarica alluvial concession was brought to production in a record six months.
Exploration of the Fucauma alluvial concession is well advanced and work on the
Ganga kimberlite concession and the Luana alluvial concession will commence in
2004.
SouthernEra Resources Limited ("SouthernEra")
The company entered into a formal agreement with SouthernEra on 9 October 2002
whereby the company acquired a 50% interest in the exploitation of platinum
group metals on certain properties, which adjoin the Messina Platinum Mines
Limited mining area.
It is currently estimated that the project contains 7.8 million ounces of pgm
resources based on drilling undertaken by Anglo Platinum Limited and an
independent evaluation of the data by Professor Danie Kriege, an expert in the
statistical evaluation of mineral resource exploration data.
Prospecting rights in respect of the project were granted on 3 July 2003 and an
infill drilling programme, comprising an estimated 17 240 metres of core
drilling has commenced. The results to date of this programme have been
encouraging and a feasibility study, to bankable standards, will be undertaken.
De Beers Consolidated Mines Limited ("De Beers")
In terms of a shareholders agreement, the company has secured a one third
interest in a joint venture with De Beers to undertake primary kimberlite
exploration in a defined area of the Limpopo and Mpumalanga Provinces. If the
exploration leads to the discovery of a mine and the estimated value of diamond
production at such mine exceeds US$70 million per annum, then De Beers will
manage the mine. If, however, any discovery indicates a deposit where the
value of the diamond production is estimated to be less than US$70 million,
management of the mine would pass to Mvela.
The prospecting rights applied for on behalf of the joint venture will be held
by Ndowana Exploration (Pty) Limited in which Mvela holds a 33.33% equity
interest.
GFL Mining Services Limited ("GFLMS")
Mvela has acquired the right, but not the obligation, to acquire an interest of
between 5% and 15% in the beneficial interest and a corresponding share of the
obligations, of GFLMS in the development, financing or construction of any
precious metal mine which is developed in Africa after 1 March 2002. The term
of the agreement is for five years with effect from 1 March 2002.
As consideration for entering into the agreement with Mvela, GFLMS acquired an
initial grant of options to subscribe for 380 102 linked units in Mvela at a
strike price of R26.30. The initial strike price is determined in terms of a
formula and is priced at a premium of 10% to the weighted average of the trading
price of Mvela linked units for the five days immediately prior to the issue of
the options. These initial options have at the last practicable date not been
exercised but need to be exercised by 26 September 2004.
In terms of its agreement with GFLMS, Mvela granted an additional 373 435
options to subscribe for linked units in Mvela at a strike price of R19.34 on 5
May 2003. The number of options was calculated with reference to one half of
the exploration costs incurred by GFLMS on those projects in Africa, during the
twelve-month period to 28 February 2003. These options have at the last
practicable date not been exercised but need to be exercised by May 2005.
6L13 joint venture
During the period under review, agreement was reached with Impala Platinum
Limited whereby Mvela sold its interest in the dryer plant and the remaining
material stockpiled at the 6L13 dryer plant for a consideration of R2.75
million.
Reverse acquisition in prior year
On 31 January 2002, Mvela (formerly East Daggafontein Mines Limited) concluded
the agreement with Mvelaphanda Holdings (Pty) Limited whereby it issued 41 454
429 linked units to Mvelaphanda Holdings (Pty) Limited in consideration for the
acquisition of the certain assets.
Accounting treatment of reverse acquisition
Pursuant to the issue of the new linked units, Mvelaphanda Holdings (Pty)
Limited became the controlling linked unit holder of Mvela. For accounting
purposes the acquisition was treated as a reverse acquisition, with Mvelaphanda
Platinum (Pty) Limited as the acquirer.
The group financial statements for the year ended 30 September 2002 therefore
include:
- the consolidated financial statements of Mvelaphanda Platinum (Pty) Limited
for the year ended 30 September 2002; and
- the financial statements of Mvelaphanda Resources Limited, the company, from
the date of the reverse acquisition.
Directors
Directors" fees totalling R94 500 have been accrued during this period.
Further details of the directors" fees are contained in note 3 of the notes to
the financial statements on page 22. No service contracts have been granted to
any director.
Capital
As at 30 September 2003, the authorised share capital of the company was R1 300
000 (one million three hundred thousand Rand) divided into:
- 129 200 000 ordinary shares of 1 cent each; and
- 800 000 7% redeemable participation preference shares of 1 cent each.
The issued share capital of the company comprised:
- 68 970 613 ordinary shares of 1 cent each;
- 68 970 613 unsecured debentures forming part of the linked units of 1 cent
each.
All the authorised and issued ordinary shares were of the same class and ranked
pari passu in every respect.
The debentures of Mvela were unsecured. The interest earned on the debentures
was at a variable rate, payable on a six monthly basis, in arrear. The
debentures were linked to the ordinary shares of Mvela and traded as linked
units.
The linked units issued rank pari passu in all respects.
Increase in capital
At a general meeting held on 24 October 2003, shareholders agreed to increase
the authorised share capital of the company to R2 592 000 comprising 258 400 000
ordinary shares with a par value of 1 cent each and 800 000 7% redeemable
participation preference shares with a par value of 1 cent each and after the
implementation of the scheme of arrangement to consolidate every two authorised
but unissued shares with a par value of 1 cent each into 1 ordinary share with a
par value of 2 cents each.
As a consequence of the scheme of arrangement approved at a meeting held on 24
October 2003, each issued variable rate debenture with a nominal value of 1 cent
was redeemed and the proceeds utilised to subscribe for one ordinary share with
a par value of 1 cent, resulting in a share issue of 68 970 615 ordinary shares
with a par value of 1 cent each.
After the implementation of the scheme of arrangement it was agreed to
consolidate every two issued ordinary shares with a par value of 1 cent each
held by a shareholder into one ordinary share with a par value of 2 cents.
Accordingly, with effect from 5 November 2003:
* the authorised share capital of the company is R2 592 000 divided into 129
200 000 ordinary shares of 2 cents each and 800 000 7% redeemable
preference shares with a par value of 1 cent each.
* the issued share capital of the company is R1 379 412.26
comprising 68 970 613 ordinary shares with a par value of 2 cents. It
should be noted that as from 17 November 2003, the company traded in shares
and not linked units.
As per the press announcement dated 28 November 2003, 2 550 000 shares were
issued to Mvelaphanda Holdings (Pty) Limited in settlement of certain rights.
Thereby the issued share capital of the company increased to R1 430 412.26,
comprising 71 520 613 ordinary shares with a par value of 2 cents each.
Dividend and debenture interest payment
A distribution of 30 cents per linked unit (which comprises one ordinary share
and one unsecured variable rate debenture) representing an interest payment of 1
cent per debenture and a dividend of 29 cents per share was paid on 29 April
2003.
As a consequence of the acquisition of 15% of Gold Fields Limited"s South
African mining interests as detailed under "post balance sheet events", the
directors have resolved not to declare an interest and dividend payment at year-
end.
Name change of the Debenture Trust
The name of the East Daggafontein Debenture Trust changed to the Mvelaphanda
Resources Limited Debenture Trust at a general meeting of debenture holders held
on 4 February 2003.
It is the intention of the company that after the implementation of the scheme
of arrangement to cancel the Debenture Trust.
Substantial shareholdings
According to the register of members of Mvela on 30 September 2003, the
following held five per cent or more of the issued linked units of Mvela.
These figures include members within all the nominee companies who held five per
cent or more. These figures are based on an issued share capital of 68 970 613
shares, being the issued share capital of Mvela as at 30 September 2003.
Linked unit holders Number of %
linked units
Total shares in issue 68 970 613
Mvelaphanda Holdings (Pty) 35 792 209 51.89
Limited
35 792 209 51.89
No. of linked % No. of %
LINKED UNIT HOLDER unit holders linked units
SPREAD
1 - 1 000 shares 1 531 68.35 536 546 0.78
1 001 - 10 000 shares 546 24.38 1 884 087 2.73
10 001 - 100 000 shares 119 5.31 3 857 825 5.59
100 001 - 1 000 000 36 1.60 12 527 492 18.16
shares
1 000 001 shares and 8 0.36 50 164 663 72.74
over
2 240 100.00 68 970 613 100.00
In terms of the rules of the JSE Securities Exchange South Africa ("JSE"), Mvela
is obliged to show its spread of linked unit holders between public and non-
public linked unit holders. On 30 September 2003 the spread was as follows:
LINKED UNIT HOLDERS No. of linked % No. of linked %
unit holders units
Non - Public 7 0.31 36 823 205 53.39
Directors of the Company 4 0.18 1 030 937 1.49
Holding Company 2 0.09 35 792 209 51.89
Share Trust 1 0.04 59 0.00
Public 2 233 99.68 32 147 408 46.63
2 240 100.00 68 970 613 100.00
Analysis of ordinary shareholders as at 30 September 2003
The company"s ordinary shares are listed on the JSE.
DISTRIBUTION OF LINKED No. of linked % No. of linked %
UNIT HOLDERS unit holders units
Banks 64 2.86 11 274 777 16.35
Close Corporations 38 1.70 126 210 0.18
Individuals 1 686 75.27 3 930 152 5.70
Insurance Companies 8 0.36 297 641 0.43
Investment Companies 7 0.31 4 362 155 6.32
Limited Companies 18 0.80 125 586 0.18
Mutual Fund 51 2.28 6 825 941 9.90
Nominees and Trusts 241 10.76 1 318 304 1.91
Other Corporations 57 2.54 3 496 817 5.07
Pension Fund 22 0.98 1 222 503 1.77
Private Companies 48 2.14 35 990 527 52.18
2 240 100.00 68 970 613 100.00
Directors" interests
On 30 September 2003, Mvela"s directors held the following interests in the
linked units of Mvela:
Beneficial Non-beneficial
DIRECTOR Direct Indirect Direct Indirect Total
linked linked linked linked
units units units units
TMG Sexwale 6 730 - - 8 948 052 8 954 782
E Molobi - - - - -
WJDI Scott(1) 600 605 - - - 600 605
RB Shead - - - - -
BR van Rooyen - 420 232 - - 420 232
(2)
MJ Willcox (3) 3 370 - - 2 505 455 2 508 825
MSM Xayiya (4) - - - 2 505 455 2 505 455
CA Massey - - - - -
Since 1 October 2002, Mr WJDI Scott has disposed of 900 000 ordinary shares
reducing his direct beneficial interest from 2.17% to 0.9%.
Mr BR van Rooyen acquired 420 232 ordinary shares in an indirect beneficial
capacity between 1 October 2002 and the last practicable date;
Mr M J Willcox acquired 227 136 ordinary shares in an indirect, non-beneficial
capacity between 1 October 2002 and the last practicable date.
Mr MSM Xayiya acquired 227 136 ordinary shares in an indirect, non-beneficial
capacity between 1 October 2002 and the last practicable date
All other directors interests remained unchanged between 1 October 2003 and the
last practicable date.
The Mvelaphanda Resources Limited Share Option Participation Scheme ("Mvela
Share Scheme")
The Mvela Share Scheme was obliged to sell on the open market 3 672 441 linked
units during the year in accordance with a change in the rules governing the JSE
Securities SA Listings Requirements. These shares were sold at an average
price of R23.95 per share.
At the general meeting held on 24 October 2003 an amendment was made to the
Mvela Share Scheme whereby all existing linked unit options were replaced by new
consolidated share options.
Mr C H Ewing, a partner of Cliffe Dekker Inc (Mvela attorneys) and Mr W J D I
Scott, a non-executive director of the company, act as trustees of the Mvela
Share Scheme.
Linked unit Linked unit Linked unit Linked unit
Directors options at 1 options options options
October 2002 granted exercised outstanding
at 30
September
2003*
TMG Sexwale 1 075 000 - 201 033 873 967
E Molobi 150 000 30 000 120 000
WJDI Scott - - - -
RB Shead 600 000 150 000 750 000 -
BR van 200 000 - 40 000 160 000
Rooyen
MJ Willcox 1 075 000 - 201 033 873 967
MSM Xayiya 150 000 - 16 831 133 169
CA Massey - - -
3 250 000 150 000 1 238 897 2 161 103
Employees 400 000 - 80 000 320 000
3 650 000 150 000 1 318 897 2 481 103
*All share options granted at a price of R16.50
Subsidiaries
As at 30 September 2003 Mvela has two wholly owned subsidiaries, Mvelaphanda
Platinum (Pty) Limited (a company having an issued share capital of 10 000
ordinary shares of R1 each) and East Daggafontein Mineral Holdings (Pty) Limited
(a company having an issued share capital of 10 000 ordinary shares of R1 each).
See note number 9 on page 27 of the financial statements.
Management agreement
Mvela has an existing management agreement which was entered into on 16 May
2002, in terms of which Mvelaphanda Holdings (Pty) Limited ("Mvela Holdings")
will, for so long as it is the beneficial holder of 50% or more of the issued
capital of Mvela be responsible for the day to day management of Mvela.
With effect from 1 September 2003, the management agreement was amended to
account for the dilution in Mvela Holdings interest in Mvela after the
implementation of the Gold Fields transaction. Accordingly, the management
agreement now stipulates that for so long as Mvela Holdings is the beneficial
holder of 26% or more of the issued capital of Mvela, it will be responsible for
the day to day management of the Mvela group on the terms and conditions set out
in the management agreement.
Litigation statement
The directors are not aware of any legal or arbitration proceedings (including
any such proceedings that are pending or threatened) which may have, or have
had, a significant effect on Mvela"s or its subsidiaries" financial position
during the last 12 months preceding the date of this annual report.
Mining Charter
A broadly based, Socio Economic Empowerment Charter for the Mining Industry, was
negotiated by Government and the Industry and ratified by both parties in
October 2002.
The principal feature of the Charter is the Industry"s commitment to facilitate
empowerment transactions in respect of existing mining assets, with Historically
Disadvantaged South Africans, ("HDSA"s") to a total value of R100 billion, at
market prices, over the next five years. This represents approximately 15% of
existing mining assets at ruling market values. The ultimate target is for
HDSA"s to acquire a further 11% (making 26% in total) of mining assets at market
value over the succeeding five years. As an empowerment company with a
credible track record, your company is well placed to participate in the deal
flow which will result from the implementation of the Charter.
Auditors
PricewaterhouseCoopers Inc will continue in office in accordance with Section
270 (2) of the Companies Act.
Secretary
Mrs J Korsten will continue in the position of Company Secretary to Mvela.
Post balance sheet events
Scheme Meeting
At a scheme meeting, a general meeting of linked unit holders (in their capacity
as holders of ordinary shares) and the meeting of linked units holders (in their
capacity as holders of debentures) dated 24 October 2003 the following was
approved by the requisite majority.
The scheme of arrangement in terms of Section 311 of the Companies Act, No 61 of
1973, as amended, between the company and its linked unit holders in their
capacity as holders of variable rate debentures with a nominal value of 1 cent
each.
All resolutions proposed at the general meeting and at the debenture holders"
meeting as detailed in the circular dated 26 September 2003.
In terms of the scheme, shareholders redeemed their debentures in consideration
for R11.50467 (rounded to 5 decimal places), which redemption amount was
compulsorily utilised to settle the subscription price of each ordinary share
issued pursuant to the scheme of R11.50467 (rounded to 5 decimal places).
Thereafter, in order to maintain the same number of listed instruments as were
in issue prior to the scheme, the ordinary shares were consolidated so that each
linked unit holder received one ordinary share having a par value of 2 cents
each for every linked unit held.
On Tuesday, 4 November 2003 the scheme of arrangement was sanctioned by the High
Court of South Africa (Witwatersrand Local Division) and registered on 5
November 2003 with the Registrar of Companies.
The listing of the linked units on the JSE was suspended at the commencement of
trading on Monday, 17 November 2003 and terminated at the commencement of
trading on Monday, 24 November 2003. Trading in the shares on the JSE
commenced on Monday, 17 November 2003.
Gold Fields Limited ("Gold Fields")
On 10 June 2003, it was announced that Mvela had entered into an agreement in
principle with Gold Fields in terms of which Mvela would acquire a 15%
beneficial interest in the South African gold mining assets of Gold Fields.
These comprise the Beatrix, Driefontein and Kloof mines together with certain
associated service enterprises and are held through a new Gold Fields
subsidiary, GFI- SA.
As part of the process of transforming the economy of South Africa, both Gold
Fields and Mvela have identified the need to increase the interests of HDSA"s in
the ownership structure of Gold Fields. The Mining Charter scorecard has
specified an HDSA ownership target of 15% for all South African mining assets
within five years, whether as a percentage of the equity or as a percentage of
attributable units of production.
Gold Fields and Mvela believe that the acquisition embraces and complies with
both the spirit and letter of the Mining Charter on a basis, which affects Mvela
with an outstanding opportunity and which is commercially sustainable for Gold
Fields. The transaction represents a major milestone for transformation in
South Africa.
Mvela has undertaken to further broaden the empowerment interest in the
acquisition and accordingly will facilitate the participation of a number of
identified broad-based charities, foundations, community groups and women and
youth groups in the acquisition.
Mvela further believes that the acquisition together with the facilitation of
broad-based empowerment participation, will cement its position at the forefront
of the transformation of the South African mining industry and together Mvela
and Gold Fields will proactively address the broader requirements of the Mining
Charter necessary to achieve this transformation. Mvela will be represented on
the board of GFI-SA and will serve on the Operating and Transformation
Committees of that company.
The acquisition consideration is R4 139 million which will be advanced by a
wholly owned subsidiary, "Mvela Gold", as a five year loan which will carry a
coupon rate of 95 basis points over the five year swap curve, payable semi-
annually in arrears, fixed at the time of advance. On the redemption of the
loan Mvela Gold will subscribe for new shares in GFI-SA representing 15% of its
then issued equity. Mvela Gold will further be entitled during the twelve
months following that subscription to swap its interest in GFI-SA for an
equivalent interest, at fair market value in Gold Fields.
The consideration will be satisfied in part from the proceeds of a specific
equity issue to raise R1 690 million net of costs, comprising ordinary shares
and/or convertible instruments. The balance will be raised through R1 349
million five-year bank debt, and R1 100 million in five-year mezzanine finance.
In terms of the specific issue, Mvela intends to raise capital on both the local
and international capital markets by way of an equity placement comprising
ordinary shares and/or convertible instruments. The number of ordinary shares
to be issued or committed pursuant to the specific issue will be determined by
the board of directors and its advisors and may not exceed a maximum of 80
million new ordinary shares.
To ensure that there are sufficient ordinary shares available for the specific
issue, it will be necessary to increase the authorised share capital of the
company. Pursuant to the implementation of the transaction, Mvela will move
it"s listing on the JSE Securities Exchange to the Mining Resources - "Gold"
sector.
As soon as this transaction becomes unconditional the following directors will
be appointed to the board of directors of Mvela, Messrs Michael E Beckett, Oyama
Andrew Mabandla and Mrs Nomazizi Mtshotshisa.
Shareholders are referred to the press announcement dated 27 November 2003.
Proposed participation by Mvela of certain participation rights held by
Mvelaphanda Holdings (Pty) Limited ("Mvela Holdings")
In the interests of facilitating a successful equity capital raising and to
simplify the existing relationship between Mvela and Mvela Holdings, agreement
has been reached between Mvela and Mvela Holdings, subject to JSE Securities
Exchange approval in terms of which Mvela will acquire the following rights from
Mvela Holdings with effect from 30 September 2003, the consideration which will
be settled by the issue of 2 550 000 new ordinary shares to Mvela Holdings on or
about 4 December 2003:
- 10% of Mvela"s participating interest in respect of the joint
venture between Mvela and SouthernEra, constituted to investigate the
mineral potential of the mineral rights on the properties Dwaalkop 455 KS,
Rooibokbult 121 KS and the northern portion of Turfpan 122 KS;
- 10% of Mvela"s right to purchase up to 15% but not less than
5% of the interest of GFLMS in certain projects in respect of which GFLMS
and any entity which controls, is controlled by or is under the common
control with GFLMS secures any right, title or interest on the African
continent for the five year period commencing on 1 March 2002 to prospect
for precious metals or to participate in the financing, construction,
development or operation of any precious metal mine flowing from such
prospecting; and
- Mvela Holdings" entitlement to retain a carried interest to
bankable feasibility of not less than 5% and not more than 10% of Mvela"s
interest in any mining project, anywhere in the world, excluding mining
projects relating to energy or to the agreement in terms of which Trans Hex
agreed to allot and issue to Mvelaphanda Diamonds (Proprietary) Limited, a
subsidiary of Mvela Holdings, 16 000 000 unsecured participating
convertible debentures ("the excluded projects"), referred by Mvela
Holdings to and accepted by Mvela for a period of five years commencing on
23 October 2001.
As a result of the acquisition of the rights referred to above by Mvela from
Mvela Holdings, Mvela Holdings remains obliged to offer to Mvela, any mining
project, anywhere in the world other than the excluded projects, offered to
Mvela Holdings by a third party for the remainder of the five years which
commenced on 23 October 2001 without Mvela Holdings having the right to retain a
carried interest therein.
Platinum Resource
In a cautionary announcement dated 5 November 2003 and in line with its strategy
to become a major producer of platinum group elements, Mvela has announced that
it is in negotiations for the acquisition of a 50% joint venture interest in a
significant platinum group element resource on the Eastern Limb of the Bushveld
Igneous Complex.
The measured, indicated and inferred, attributable resource on the UG2 horizon
exceeds 35 million ounces (3PGE"S+Au). The proposed acquisition from a group
of HDSA"s has received approval in principle from the Department of Minerals and
Energy. The major partners of the consideration will comprise new shares in
Mvela, the bulk of which the seller must retain for a five-year period.
Thereby the HDSA status of the company will be enhanced, providing capacity for
further acquisitions.
Mvela also holds a 22.4% equity stake in Northam Platinum Limited and a 50%
joint venture interest with SouthernEra Resources Limited in the Dwaalkop
properties on the western extension to the eastern limb. The measured,
indicated and inferred attributable resource on the UG2 on the Dwaalkop
properties is 3.9 million ounces (3PGE"S+Au).
The corporate advisors to Mvela are evaluating the options for the consolidation
of all Mvela"s PGE assets in a platinum empowerment vehicle under Mvela"s
control.
Mvelaphanda Resources Limited
INCOME STATEMENT
for the year ended 30 September 2003
Group Company
Year Year Year Year
ended ended ended ended
30-Sep-03 30-Sep-02 30-Sep-03 30-Sep-02
Notes: R"000 R"000 R"000 R"000
Revenue: 12 833 10 318 50 898 44 799
Slimes material revenue: 2 750 1 478 2 750 28 864
Interest received: 10 068 8 698 9 977 12 153
Dividends received: 15 70 22 670 2 194
Other income: - 72 15 501 1 588
Costs 37 808 76 749 24 709 39 784
Administration 17 083 7 468 16 183 11 126
expenditure:
Exploration and project 5 579 549 5 579 1 073
costs:
Debenture interest paid: 690 26 117 690 27 585
Preference dividends - 6 029 - -
paid:
Finance costs: 7 582 32 003 2 257 -
Amortisation of 6 874 4 583 - -
goodwill:
(Loss)/profit before (24 975) (66 431) 26 189 5 015
income of
associate companies
Attributable profit of 117 250 151 533 - -
associate
companies
Amortisation of negative 16 107 15 968 - -
goodwill relating to
investment in associates
Profit before unrealised 108 382 101 070 26 189 5 015
gain on financial
instruments
Unrealised gain on 2 3 575 - 3 575 -
financial instruments
Profit before taxation 3 111 957 101 070 29 764 5 015
Taxation 4 49 612 61 196 1 377 1 121
Attributable profit for 62 345 39 874 28 387 3 894
year
Basic earnings per 5 91.98 70.13
ordinary share (cents)
Headline earnings per 5 78.35 50.11
ordinary share (cents)
Diluted earnings per 5 91.03 69.80
ordinary share (cents)
Dividends per ordinary 29.00 0.004
share (cents)
BALANCE SHEET as at 30 September 2003
Group Company
30-Sep-03 30-Sep-02 30-Sep-03 30-Sep-02
Notes R"000 R"000 R"000 R"000
Assets
Goodwill 6 126 024 132 898 - -
Property, plant and 7 217 265 217 265
equipment
Loan and investments 8 2 192 3 835 1 816 59 226
Investment in subsidiary 9 - - 646 689 646 689
companies
Investment in associate 10 441 761 415 734 32 441 32 441
companies
Investment in joint 11 - - - -
venture companies
Derivative financial 12 371 641 74 414 371 641 74 414
instruments
Non-current assets 941 835 627 146 1 052 804 813 036
Receivables and 1 453 450 1 453 414
prepayments
Inter company loan 9 - - 121 659 17 281
Cash and cash 83 478 113 855 80 830 112 746
equivalents
Current assets 84 931 114 305 203 942 130 441
Total assets 1 026 766 741 451 1 256 746 943 477
Equity and liabilities
Share capital and
reserves
Share capital and share 86 805 68 577 86 805 86 805
premium
Accumulated profit 467 637 160 188 317 757 59 767
Acquisition equity 25 (421 947) (421 947) - -
adjustment
Other reserves (2 662) (363) 1 467 -
Shareholders equity 129 833 (193 545) 406 029 146 572
before linked debentures
Linked debentures and 13 793 484 751 422 793 484 793 484
debenture premium
Shareholders equity and 923 317 557 877 1 199 513 940 056
linked debentures
Non-current liabilities
Deferred taxation 14 44 625 - 44 584 -
Non-current liabilities 44 625 - 44 584 -
Current liabilities
Interest bearing 15 45 787 179 178 - -
borrowings
Taxation 1 157 1 330 682 781
Accounts payable 16 11 880 3 066 11 967 2 640
Current liabilities 58 824 183 574 12 649 3 421
Total equity and 1 026 766 741 451 1 256 746 943 477
liabilities
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
for the year ended 30 September 2003
Share Share Accumulated Acquisition Other
Capital premium profit equity reserves
adjustment Total
R"000 R"000 R"000 R"000 R"000 R"000
Balance 1 653 67 924 160 188 (421 947) (363) (193 545)
October 2002
as previously
reported
Effect of - - 249 604 - (699) 248 905
adoption of
AC133,
Financial
Instruments:
Recognition
and
Measurement
(Note 2)
Balance 1 653 67 924 409 792 (421 947) (1 062) 55 360
October 2002
restated
Sale of 37 18 191 - - - 18 228
linked units
in Mvela
Share
Scheme
Profit on - - 15 501 - - 15 501
sale of
linked units
in Mvela
Share Scheme
Unrealised - - - - (985) (985)
loss on
revaluation
of listed
investment
(Note 2)
Equity - - - - (821) (821)
portion of
foreign
currency
translation
reserve
Equity - - - - 206 206
portion of
fair value
adjustment
on available-
for-sale
financial
assets
Dividends - - (20 001) - - (20 001)
declared
Attributable - - 62 345 - - 62 345
profit for
the year
Balance at 30 690 86 115 467 637 (421 947) (2 662) 129 833
September
2003
Balance 1 177 2 384 120 317 (52 058) - 70 820
October 2001
Linked units 415 525 124 - (369 889) - 155 650
issued in
connection
with reverse
acquisition
Conversion of - (516 012) - - - (516 012)
share premium
to debenture
premium
Linked units 61 56 440 - - - 56 501
issued for
cash
Dividends - - (3) - - (3)
declared
Linked units 37 18 179 - - - 18 216
issued to
Mvela Share
Scheme
Equity - - - - (59) (59)
portion of
foreign
currency
translation
reserve
Equity - - - - (304) (304)
portion of
fair value
adjustment on
available-for-
sale
financial
assets
Elimination (37) (18 191) - - - (18 228)
of linked
units held by
Mvela Share
Scheme
Attributable - - 39 874 - - 39 874
profit for
the year
Balance at 30 653 67 924 160 188 (421 947) (363) (193 545)
September
2002
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
for the year ended 30 September 2003
Share Share Accumulated Other
capital premium profit reserves Total
R"000 R"000 R"000 R"000 R"000
Balance 1 October 690 86 115 59 767 - 146 572
2002 as previously
reported
Effect of adoption - - 249 604 2 434 252 038
of AC133, Financial
Instruments:
Recognition and
Measurement
Balance 1 October 690 86 115 309 371 2 434 398 610
2002 restated
Unrealised loss on - - - (967) (967)
revaluation of
listed investment
Dividends declared - - (20 001) - (20 001)
Attributable profit - - 28 387 - 28 387
for the year
Balance at 30 690 86 115 317 757 1 467 406 029
September 2003
Balance 1 October 177 2 384 55 876 - 58 437
2001
Linked units issued 415 525 124 - - 525 539
in connection with
Conversion of share - (516 012) - - (516 012)
premium to debenture
premium reverse
acquisition
Linked units issued 61 56 440 - 56 501
for cash
Linked units issued 37 18 179 - - 18 216
to Mvela Share
Scheme
Dividends declared - - (3) - (3)
Attributable profit - - 3 894 - 3 894
for the year
Balance at 30 690 86 115 59 767 - 146 572
September 2002
CASH FLOW STATEMENT
for the year ended 30 September 2003
Group Company
Year ended Year ended Year ended Year ended
30-Sep-03 30-Sep-02 30-Sep-03 30-Sep-02
Notes R"000 R"000 R"000 R"000
Cash flows from
operating activities
Cash (utilised 19 (12 053) 11 174 4 826 57 229
in)/generated by
operations
Interest received 10 068 8 698 9 977 12 153
Finance costs on (7 582) (38 032) (2 257) -
external borrowings
Debenture interest 20 (690) (26 117) (690) (33 348)
paid
Dividends paid 21 (20 001) (3) (20 001) (16 348)
Taxation paid 22 (994) (349) (940) (34 349)
Net cash (used in)/ (31 252) (44 629) (9 085) (14 763)
generated by
operating activities
Cash flows from - (30) - (37)
investing activities
Property, plant and
equipment acquired
Capital repayment by 10 346 38 796 - -
associate companies
Decrease in loan to - - 58 877 1 648
Mvela Share Scheme
Investment in (111) (106 856) - (106 856)
associate company
Loan advanced to - - (104 378) (17 281)
subsidiary company
Dividends received 15 70 22 670 2 194
Dividends from 48 225 88 874 - -
associate companies
Cash acquired through 25 - 118 990 - -
reverse acquisition
Net cash generated 58 475 139 844 (22 831) (120 332)
by/(used in)
investing activities
Cash flows from
financing activities
Linked units issued - 121 306 - 121 306
for cash
Loans raised 45 787 - - -
Sale of linked units 75 791 - - -
in Mvela Share Scheme
Repayment of external (179 178) (103 098) - -
borrowings
Net cash (used in)/ (57 600) 18 208 - 121 306
generated by
financing activities
Net (30 377) 113 423 (31 916) (13 789)
(decrease)/increase
in cash and cash
equivalents
Cash and cash 23 113 855 432 112 746 126 535
equivalents at
beginning of year
Cash and cash 23 83 478 113 855 80 830 112 746
equivalents at end of
year
NOTES TO THE FINANCIAL STATEMENTS at 30 September 2003
1. ACCOUNTING POLICIES
1.1 Basis of preparation
The financial statements incorporate the following principal accounting
policies, which conform with South African Statements of Generally Accepted
Accounting Practice and are consistent with the previous year, except for the
adoption of AC133, Financial Instruments: Recognition and Measurement, as
detailed in note 2. PricewaterhouseCoopers Inc has audited the accounts and the
report is available for inspection at the company"s registered offices. The
audited and unqualified printed Annual Financial Report for the year ended 30
September 2003 will be posted to shareholders on or about Friday, 19 December
2003.
1.2 Consolidation
The consolidated financial statements include those of the holding company and
its subsidiaries. Subsidiary undertakings are those companies which the group,
directly or indirectly has an interest of more than one half of the voting
rights or othe
