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MVELAPHANDA - GROUP RESULTS FOR THE NINE MONTHS ENDED 30 JUNE 2004
MVELAPHANDA RESOURCES LIMITED
(Registration number 1980/001395/06)
(Incorporated in the Republic of South Africa)
(Share code: MVL ISIN number: ZAE000050266)
GROUP RESULTS FOR THE NINE MONTHS ENDED 30 JUNE 2004
Directors: T M G Sexwale (Chairman), L N Angel* (CEO), P C Pienaar*, C
Johnson*, B R van Rooyen*, M Beckett (British), O Mabandla, E Molobi, M
Mtshotshisa, P Ncholo, R Ramaite, R B Shead, M J Willcox, M S M Xayiya
*Executive Directors
Issued Share Capital: 166 403 140 shares
Our Annual General Meeting will be held at 1st Floor, 1 Albury Park,
Magalieszicht Avenue, Dunkeld West on Thursday, 18 November 2004 at 09h00.
The company`s financial year-end has changed from 30 September to 30 June in
order to align the company`s reporting period with that of its major
investments.
INCOME STATEMENT
for the period ended 30 June 2004
Company Company Group Group
12 months 9 months Notes 9 months 12 months
ended ended ended ended
30 Sep 03 30 Jun 04 30 Jun 04 30 Sep 03
R`000 R`000 R`000 R`000
Income
Earnings from associate
- - companies 48 742 68 995
- - - Northam Platinum Ltd 5 44 315 61 580
- - - Trans Hex Group Ltd 6 4 427 7 415
Dividends received from
22 670 26 437 subsidiary companies - -
Interest earned on GFI-
SA loan advanced* 7 126 174 -
Interest earned on cash
9 977 6 706 and cash equivalents 27 6 269 10 068
Dividend received from
- - non-strategic 11 5 15
investments
Profit on disposal of
2 750 - slimes material - 2 750
15 501 - Other income - -
Amortisation of negative
goodwill relating to
- - investment in associates 5 - 6 12 080 16 107
50 898 33 143 TOTAL INCOME 193 270 97 935
Expenses
Exploration and project
5 579 14 667 development costs 14 667 5 579
11 183 12 762 Corporate expenses 12 993 12 083
2 947 166 Finance costs 96 433 8 272
-Senior bank loan (GFI-
- - SA)* 16 40 556 -
-Mezzanine finance (GFI-
- - SA)* 17 51 512 -
-Standard Corporate
- - Merchant Bank 20 2 808 8 177
2 257 166 -Other* 1 557 (595)
690 - -Linked unit debentures 24 - 690
1 425 109 575 Other expenses 186 954 8 299
5 000 - GFI-SA transaction 4 224 5 000
costs*
Participation rights
purchased from
- 59 925 Mvelaphanda Holdings 28 59 925 -
Amortisation of goodwill
arising on reverse
- - acquisition 13 5 155 6 874
Net Loss/(gain) on
revaluation of financial
(3 575) 49 650 instruments* 1 117 650 (3 575)
21 134 137 170 TOTAL EXPENSES 311 047 34 233
(Loss)/profit before
29 764 (104 027) taxation 2 (117 777) 63 702
(1 377) 30 016 Taxation 3 20 513 (1 357)
(841) - -Normal (2 669) (821)
(536) 30 016 -Deferred 23 182 (536)
28 387 (74 011) Net (Loss)/profit (97 264) 62 345
Basic (loss)/earnings
per ordinary share
(cents) 4 (89.75) 91.98
Headline (loss)/earnings
per ordinary share
(cents) 4 (96.14) 78.35
Diluted (loss)/earnings
per ordinary share
(cents) 4 (89.75) 91.03
Dividend per ordinary
share (cents) - 29.00
Adjusted headline
earnings per ordinary
share excluding `Other
expenses` (cents) 4 64.74 81.25
*These relate mainly to the GFI-SA transaction
-
BALANCE SHEET
At 30 June 2004
Company Company Group Group
30 Sept 03 30 Jun 04 Notes 30 Jun 04 30 Sep 03
R`000 R`000 R`000 R`000
Assets
Non current assets
Investment in associate
32 441 113 441 companies 538 077 441 761
- Northam Platinum Ltd
- - 5 417 150 402 353
- Trans Hex Group Ltd
32 441 113 441 6 120 927 39 408
- - GFI-SA loan advanced 7 3 407 000 -
- Loan advanced to GFI-
- - SA 4 139 000 -
- Fair value adjustment
- - (732 000) -
Derivative financial
- - instruments 8 - -
- Trans Hex Group Ltd
forward purchased
306 332 241 302 shares 241 302 306 332
- Trans Hex Group Ltd
65 309 - share options - 65 309
Booysendal Platinum
- 315 892 Project 9 315 892 -
Investment in wholly
owned subsidiary
646 689 2 336 329 companies 10 - -
- Mvelaphanda Platinum
646 689 646 689 (Pty) Ltd - -
- Mvelaphanda Gold
- 1 689 640 (Pty) Ltd - -
Non-strategic listed
investments available
1 816 1 863 for disposal 11 2 151 2 192
- Anglo Gold Ashanti
- - Limited 288 376
- Shell Transport &
1 816 1 863 Trading plc 1 863 1 816
Goodwill arising from
- - reverse acquisition 13 120 869 126 024
Property, plant and
217 235 equipment 14 235 217
1 052 804 3 009 062 TOTAL NON CURRENT 4 625 526 941 835
ASSETS
Current assets
Cash and cash
80 830 179 435 equivalents 27 218 716 83 478
Receivables and
1 453 6 477 prepayments 10 6 718 1 453
121 659 164 708 Inter-company loan 9 - -
203 942 350 620 TOTAL CURRENT ASSETS 225 434 84 931
1 256 746 3 359 682 Total assets 4 850 960 1 026 766
Equity and liabilities
Share capital and
406 029 3 286 086 reserves 2 985 884 129 833
Linked debentures and
793 484 - debentures premium 15 - 793 484
Total shareholders
equity and linked
1 199 513 3 286 086 debentures 2 985 884 923 317
Non current liabilities
- - Senior bank loan 16 1 064 432 -
- - Mezzanine finance 17 435 320 -
44 584 14 568 Deferred taxation 18 21 430 44 625
TOTAL NON CURRENT
44 584 14 568 LIABILITIES 1 521 182 44 625
Current liabilities
11 812 8 754 Accounts payable 19 9 034 11 725
155 249 Provisions 249 155
Interest bearing
- - borrowings 281 443 45 787
- Short term portion of
- - senior bank loan 16 234 374 -
- Standard Corporate
Merchant Bank sale and
- - buy back of shares 20 47 069 45 787
Booysendal Platinum
- 50 000 Project accrual 9 50 000 -
Current taxation
682 25 payable 3 168 1 157
TOTAL CURRENT
12 649 59 028 LIABILITIES 343 894 58 824
Total equity and
1 256 746 3 359 682 liabilities 4 850 960 1 026 766
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
for the period ended 30 June 2004
Share Share Accumulated Acquisition Other Total
Capital premium profit equity reserve R`000
R`000 R`000 R`000 adjustment s
R`000 R`000
Balance 1
October 2003 690 86 115 467 637 (421 947) (2 662) 129 833
Scheme of
arrangements 690 792 794 793 484
Mvelaphanda
Holdings
share issue 51 59 874 59 925
Booysendal
Platinum
Project
share issue 185 224 814 224 999
Shares
issued for
cash 1 556 1 788 443 1 789 999
Shares
issued for
cash over
allotment
option 156 178 828 178 984
Share issue
expenses (93 370) (93 370)
Equity
Portion of
foreign
currency
translation
reserve (576) (576)
Equity
portion of
fair value
adjustment
on available-
for-sale
financial
assets
(103) (103)
Unrealised
loss on
revaluation
of listed
investment (27) (27)
Attributable
loss for the
period (97 264) (97 264)
Balance at
30 June 2004 3 328 3 037 498 370 373 (421 947) (3 368) 2 985 884
Balance at 1
October 2002 653 67 924 409 792 (421 947) (1 062) 55 360
Sale of
linked units
in Mvela
Share Scheme 37 18 191 18 228
Profit on
sale of
Linked units
in Mvela
Share Scheme 15 501 15 501
Unrealised
loss on
revaluation
of listed
investment (985) (985)
Equity
portion of
foreign
currency
translation
reserve (821) (821)
Equity
portion of
fair value
adjustment
on available-
for-sale
financial
assets
206 206
Dividends
declared (20 001) (20 001)
Attributable
profit for
the year 62 345 62 345
Balance at
30 September
2003 690 86 115 467 637 (421 947) (2 662) 129 833
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
for the period ended 30 June 2004
Share Share Accumulated Other Total
capital premium profit reserves R`000
R`000 R`000 R`000 R`000
Balance 1 October
2003 690 86 115 317 757 1 467 496 029
Scheme of
arrangement 690 792 794 793 484
Mvelaphanda
Holdings share
issue 51 59 874 59 925
Booysendal
Platinum Project
share issue
185 224 814 224 999
Shares issued for
cash
1 556 1 788 443 1 789 999
Shares issued for
cash over
allotment option
156 178 828 178 984
Share issue
expenses (93 370) (93 370)
Unrealised loss on
revaluation of
listed investment
47 47
Attributable loss
for the period
(74 011) 74 012
Balance at 30 June
2004 3 328 3 037 498 243 746 1 514 3 286 086
Balance 1 October
2002 690 86 115 309 371 2 434 398 610
Unrealised loss on
revaluation of
listed investment
(967) (967)
Dividend declared
(20 001) (20 001)
Attributable
profit for the
year 28 387 28 387
Balance at 30
September
2003 690 86 115 317 757 1 467 406 029
CASH FLOW STATEMENT
for the period ended 30 June 2004
Company Company Group Group
12 months 9 months Notes 9 months 12 months
ended ended ended ended
30 Sep 03 30 Jun 04 30 Jun 04 30 Sep 03
R`000 R`000 R`000 R`000
Cash flows from
operating activities
Cash (utilised
in)/generated by
4 826 (35 375) operations 23 (38 428) (12 052)
Exploration and
(3 468) (17 164) project costs (17 164) (3 468)
5 544 (18 211) Corporate expenses (17 040) (11 334)
Proceeds on disposal
2 750 - of slimes material - 2 750
- - Mvela Gold stamp duty (4 224) -
9 977 6 706 Interest received 132 443 10 068
Finance costs of
(2 257) (166) external borrowings (58 732) (7 582)
(690) - Debenture interest 24 - (690)
paid
(20 001) - Dividends paid 25 - (20 001)
(940) (657) Taxation paid 26 (657) (994)
NET CASH GENERATED
BY/(USED IN) OPERATING
(9 085) (29 492) ACTIVITIES 34 626 (31 251)
Cash flows from
investing activities
- - Loan advanced to GFI- 7 (4 139 000) -
SA
Exercise of Remgro
options on Trans Hex
- (54 021) shares 8 (54 021) -
Proceeds on disposal
- 53 710 of Trans Hex shares 6 53 710 -
Capital repayment by
- - associate companies 18 108 10 346
Dividends received
from associate
- - companies 5 23 283 46 555
- - - Northam Platinum 6 3 437 1 670
- Trans Hex Group
Dividends received
from subsidiary
22 670 26 437 companies - -
Payment in respect of
Booysendal Platinum
- (40 892) Project (40 892) -
Dividends received
from non-strategic
- - investments 5 15
Property, plant and
- (55) equipment acquired 14 (55) -
Decrease in loan to
58 877 - Mvela Share Scheme - -
Investment in
subsidiary company -
- (1 689 640) Mvela Gold 10 - -
Loan advanced to
subsidiary companies
(104378) (18 881) - -
Purchase of additional
- - Northam shares - (111)
NET CASH (USED
IN)/GENERATED BY
(22 831) (1 723 344) INVESTING ACTIVITIES (4 135 425) 58 475
Cash flows from
financing activities
- 1 968 983 Shares issued for cash 1 968 983 -
- - Loans raised in Mvela 16-17 2 384 595 -
Gold
Loan raised in
Standard Corporate
- - Merchant Bank - 45 787
- (117 542) Transaction costs (117 542)
Sale of linked units 75 791
in Mvela Share Scheme
Repayment of external
- - borrowings - (179 178)
NET CASH GENERATED
BY/(USED IN) BY
- 1 851 441 FINANCING ACTIVITIES 4 236 036 (57 600)
Net increase
/(decrease) in cash
(31 916) 98 605 and cash equivalents 135 237 (30 376)
Cash and cash
equivalents at
beginning of
112 746 80 830 period/year 27 83 479 113 855
CASH AND CASH
EQUIVALENTS AT END OF
80 830 179 435 PERIOD/YEAR 27 218 716 83 479
ACCOUNTING POLICIES
for the year ended 30 June 2004
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. The
consolidated financial statements have been prepared under the historical cost
convention, as modified by the revaluation of available for sale financial
assets, and financial assets and financial liabilities (including derivative
instruments) at fair value.
2.Consolidation
The consolidated financial statements include those of the holding company and
its subsidiaries. Subsidiary undertakings are those companies in which the
group, directly or indirectly, has an interest of more than one half of the
voting rights or otherwise has the power to exercise control over the
operations. Subsidiaries are consolidated from the date on which effective
control is transferred to the group and are no longer consolidated from the
date of disposal. Inter company transactions and balances are eliminated on
consolidation. Any excess or shortfall of the purchase price compared with
the fair value of the attributable net assets is recognised as goodwill and
accounted for as described in the goodwill accounting policy note. In the
case of a reverse acquisition, the legally acquired company is identified as
the acquirer and the principals above are followed.
3.Investment in associates
Investments in associated undertakings are accounted for by the equity method
of accounting. These are undertakings in which the company has between 20%
and 50% of the voting rights, or over which the company exercises significant
influence, but which it does not control. Provisions are recorded for long-
term impairment in value.
Equity accounting involves recognising in the income statement the company`s
share of the associates` profit or loss for the period. The company`s
interest in the associate is carried in the balance sheet at an amount that
reflects its share of the net assets of the associate and includes goodwill on
the acquisition which is accounted for as described in the goodwill accounting
policy note. A listing of the company`s principal associated undertakings is
shown in notes 5-6 to the annual financial statements.
4.Goodwill
Goodwill, being the excess of the purchase consideration over the attributable
fair value of the identifiable net assets at the date of acquisition is
capitalised and amortised on a straight-line basis over the lesser of the
assets` useful life or twenty years. An annual impairment review is
undertaken of the carrying value and useful economic life of such goodwill and
any impairment is charged against income in the period in which the impairment
arises. Negative goodwill, being the excess of the attributable fair value
of the identifiable net assets over the purchase consideration, is either
recognised as income immediately or as and when future anticipated expenditure
or losses are incurred. Where negative goodwill does not relate to future
expected expenditure or losses it is recognised as income on a systematic
basis over the lesser of the non-monetary assets` useful life or twenty years.
5.Property, plant and equipment
Property, plant and equipment are included at historical cost. Depreciation
is calculated to write off the cost of the assets on a straight-line basis
over their expected useful lives - being office equipment five years and
furniture and fittings ten years.
6.Listed investments
Marketable securities are carried at market value. Market value is
calculated by reference to stock exchange quoted selling prices at the close
of business on the balance sheet date. Unrealised holding gains and losses
are recorded in other reserves in shareholders` equity. On disposal of a
listed investment, the difference between the net disposal proceeds and the
carrying amount is charged or credited to the income statement and amounts in
other reserves relating to that marketable security are transferred to
retained earnings.
7.Derivative financial instruments
Derivative financial instruments are initially recognised in the balance sheet
at cost and are subsequently re-measured at their fair value. Changes in the
fair value of these derivative financial instruments are recorded in the
income statement. In assessing the fair value of derivative financial
instruments, the group uses a variety of methods and makes assumptions that
are based on market conditions existing at each balance sheet date. Methods
used to assess the fair value of derivative financial instruments include
quoted market prices, dealer quotes, option pricing models and estimated
future discounted cash flows.
8.Exploration and investment in concession areas
Expenditure on exploration activities prior to a bankable feasibility study is
charged against income until the viability of the mining venture has been
proven. Costs which relate to the establishment of new viable mining
projects are accumulated separately in respect of each project until the new
mining operation is underway and thereafter amortised over the estimated life
of the project.
9.Financial instruments
The group`s financial instruments consists primarily of cash on hand, balances
with banks, deposits on call, trade and other receivables, trade payables,
borrowings and investments other than those in subsidiaries or associates.
The particular recognition method adopted are discussed in the particular
policy statements associated with each item.
10.Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments with a
maturity of three months or less. The carrying amount of cash and cash
equivalents is stated at cost which approximates fair value.
11.Trade receivables
Trade receivables are carried at anticipated realisable value. Estimates are
made for doubtful debts based on a review of all outstanding amounts at year-
end. Irrecoverable amounts are written off during the year in which they are
identified.
12.Accounts payable
Accounts payable are stated at the initial recognised obligation less payments
made and any adjustments made to reflect the fair value of the expected
economic outflow of resources.
13.Provisions
Provisions are recognised when the group has a present obligation, legal or
constructive, resulting from past events and it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the obligation.
14.Deferred taxation
Deferred income tax is provided, using the liability method, for all temporary
differences arising between the tax bases of assets and liabilities and their
carrying values for financial reporting purposes. Currently enacted tax
rates are used to determine deferred income tax.
Deferred income taxes
Deferred tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilised.
15.Borrowings
Borrowings are recognised initially at the fair value of proceeds received,
net of transaction costs incurred, when they become party to the contractual
provisions. Borrowings are subsequently stated at amortised cost using the
effective interest rate method; any difference between proceeds (net of
transaction costs) and the redemption value is recognised in the income
statement over the period of the borrowings as interest.
The financing provided to Mvelaphanda Gold (Pty) Limited by the Mezzanine
financiers as part of the GFI-SA transaction (`Mezzanine finance`) was
recognised initially at the fair value of proceeds received, net of
transaction costs incurred, when they become party to the contractual
provisions. Changes in the fair value of the Mezzanine finance are recorded
in the income statement. Finance costs associated with the Mezzanine finance
are accrued through charges to the income statement.
16.Share Capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares, other than in connection with a
business combination, are shown in equity as a deduction, net of tax, from the
proceeds. Share issue costs incurred directly in connection with a business
combination are included in the cost of acquisition.
17.Revenue recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the group and the amount of revenue can be reliably
measured. Revenue is recognised from the time when there has been a transfer
of the significant risks and rewards of ownership.
17.1 Dividend income
Dividends are recognised when the right to receive payment is
established.
17.2 Interest income
Interest is recognised on the time proportion basis taking account
of the principle outstanding and the effective rate to maturity on
the accrual basis.
18.Dividends declared
Dividends proposed and the related taxation thereon are recognised only when
the dividends are declared.
NOTES TO THE FINANCIAL STATEMENTS
at 30 June 2004
NOTES TO THE INCOME STATEMENT FOR THE PERIOD ENDED 30 June 2004
Company Company Group Group
12 months 9 month 9 months 12 months
ended ended ended ended
30 Sep 03 30 Jun 04 30 Jun 04 30 Sep 03
R`000 R`000 R`000 R`000
1. Net loss/(gain)
attributable financial
instruments
Trans Hex Group Ltd forward
purchase shares
Trans Hex Group Ltd share
(12 044) 65 030 options 65 030 (12 044)
8 496 (15 380) GFI-SA loan advanced (15 380) 8 469
- - Mezzanine finance 732 000
(664 000)
(3 575) 49 650 117 650 (3 575
2. (Loss)/Profit before
taxation
(Loss)/profit is stated
after crediting:
Distribution received from
Mvelaphanda Resources Ltd
15 501 Share Participation Scheme
22 670 26 437 Dividends received 5 15
(Loss)profit before
taxation is stated after
charging
Exchange loss on foreign
2 257 166 bank account 166 2 257
1 207 381 Auditor`s remuneration 381 1 244
271 335 - Audit 325 308
936 46 - Other services 46 936
48 37 Depreciation 37 48
Interest paid
690 - Debentures - 690
2 257 166 finance costs 96 433 7 582
Operating leases
36 26 office equipment 26 36
48 33 motor vehicles 33 48
404 333 - premises 333 404
Management fees paid to
Mvelaphanda Holdings (Pty)
5 760 4 455 Ltd 4 455 5 760
3 TAXATION
South African normal
1 377 (30 016) taxation (20 513) 1 357
841 - Current 2 669 821
536 (30 016) - Deferred taxation (23 182) 536
No secondary taxation has
been provided as the
company is in a net STC
credit position
Reconciliation of taxation
8 929 (31 208) Taxation at standard rates (35 333) 19 111
Adjusted for:
2 110 25 667 - Non deductible 49 367 5 770
expenditure
(9 662) (7 931) - Exempt income (3 624) (5 150)
- Change in prior year
- (16 544) adjustment (16 544) -
- Profit on sale of shares - 2 325
held by Mvela Share Scheme
- Effect of earnings from (14 379) (20 699)
associates
1 377 (30 016) Effective taxation (20 513) 1 357
4. (LOSS)/EARNINGS PER
SHARE
(Loss)/earnings per
ordinary share is based on
net (loss)/profit
attributable to ordinary
shareholders as presented
below:
(a) Basic (loss)/earnings (89.75) 91.98
per share (cents)
Attributable net profit (97 264) 62 345
(R`000)
Weighted average number of 108 367 958 67 784 050
shares in issue
(b)Headline (loss)/earnings (96.14) 78.35
per share (cents)
Attributable net (97 264) 62 345
loss)/profit (R`000)
Net negative goodwill (6 925) (9 233)
amortised (R`000)
Headline (loss)/earnings (104 189) 53 112
(R`000)
Weighted average number of 108 367 958 67 784 050
shares in issue
(c) Diluted (loss)/earning (89.04) 91.03
per share (cents)
Attributable net (97 264) 62 345
(loss)/profit (R`000)
Weighted average number of 108 367 958 67 784 050
shares in issue
Average number of dilutive
options outstanding during 868 429 704 199
the period/year
Diluted weighted average 109 236 387 68 488 249
number of shares in issue.
The dilutive loss per share
in 2004 is anti-dilutive.
Accordingly the basic loss
per share for 2004 is
disclosed
(d) Adjusted headline
earnings per share
excluding
`Other expenses` (cents) 64.74 81.25
Profit after taxation R`000 (97 264) 62 345
`Other expenses` per income
statement (R`000) 186 954 8 299
Net goodwill amortised
R`000) (12 080) (16 107)
Taxation relating to other
expenses (R`000) (7 447) 536
Adjusted headline earnings
(R`000) 70 163 55 073
Weighted average number of
shares in issue 108 367 958 67 784 050
5. INVESTMENT IN ASSOCIATED
COMPANIES - NORTHAM
PLATINUM LIMITED
Percentage holding - 22.4% (2003 - 22.4%)
Number of shares held - 51 738 305 (2003 - 51 738
305) 361 804 361 693
Shares at cost
Investment in additional 10 000 shares - 111
Dividends received (279 338) (256 055)
Share of accumulated profit since acquisition 343 227 298 912
Negative goodwill amortised 58 707 46 834
Negative goodwill 316 624 316 624
Unamortised balance (257 917) (269 790)
Repayment of capital (67 250) (49 142)
Carrying value 417 150 402 353
Market Value 460 471 558 774
The associate company is incorporated in the Republic of South Africa and is
listed on the JSE Securities Exchange South Africa. The associate company
operates a platinum mine in the Limpopo Province. The associate company
prepares its annual financial statements to 30 June.
The aggregate assets and liabilities at 30 June 2004 (30 June 2003) and the
results of operations for the year ended 30 June 2004 (30 June 2003) of the
associate company are:
Revenue 1 720 399 1 471 999
Operating profit before taxation 390 567 473 514
Taxation (136 869) (198 601)
Net profit attributable to ordinary
shareholders 253 698 274 913
Property, plant and equipment 1 355 765 1 334 203
Unlisted investments 181 183
Northam Platinum Restoration Trust 12 563 10 462
Inventories 223 187 339 156
Accounts receivable 79 206 113 776
Cash and cash equivalents 501 622 294 975
Deferred taxation 2 172 524 2 092 755
Long-term provisions (332 395) (330 323)
(15 151) (11 442)
Accounts payable (161 855) (173 032)
Taxation (79 481) (62 450)
Net assets 1 583 642 1 515 508
6.INVESTMENT IN ASSOCIATE COMPANIES - TRANS HEX GROUP LIMITED
Percentage holding -
6.0% (2003 - 3.0%)
Number of shares held
- 5 530 263 (2003 - 2
530 263)
32 441 32 441 Shares at cost 32 441 32 441
Share options
- 134 710 exercised 134 710 -
Sale of 2 000 000
- (53 710) shares (53 710) -
Dividends received (6 044) (2 606)
Share of accumulated
profit since
- - acquisition 14 565 10 138
Share of accumulated
- - changes in equity (1 655) (978)
Negative goodwill
- - amortised 620 413
Negative goodwill 5 513 5 513
Unamortised balance 4 893 5 100
32 441 113 441 Carrying value 120 927 39 408
59 461 105 628 Market value 105 628 59 461
Market value on 7
- 127 196 October 2004 127 196 -
The associate company is incorporated in the Republic of South Africa and is
listed on the JSE Securities Exchange South Africa. The associate company is
a diamond mining company. The associate company prepares its annual
financial statements to 31 March. Consequently, audited results for the six
months to 31 March 2004 have been included in the equity earnings for the
current year. The audited results for the six months to 31 March 2003 plus
reviewed results to 30 September 2003 have been included in the equity
earnings for the prior year. The results of operations for the six months
ended 31 March 2004 (2003 - twelve months ended 30 September 2003) of the
associate company are:
30 Mar 04 30 Sept 03
R`000 R`000
Revenue 508 839 1 098 442
Operating profit before taxation 122 067 372 774
Taxation 43 655 125 603
Net profit attributable to ordinary
Shareholders 78 412 247 171
Group Group
7.GFI-SA LOAN ADVANCED 30 Sep 03 30 Jun
R`000 04
R`000
Investment in GFI-SA 3 407 000
- Loan advanced to GFI-SA 4 139 000
Unrealised fair value loss during the
Period (732 000)
Mvela Gold advanced the GFI-SA loan to
GFI-SA. The GFI-SA loan, which is
repayable after five years, carries an
interest rate of 10.57% nominal annual
compounded semi-annually over the
five year period. Interest is payable semi-
annually in arrears to Mvela Gold during
the period of the GFI-SA loan. Gold Fields
Limited, Gold Fields Guernsey Limited and
Gold Fields Australia Proprietary Limited
jointly and severally guarantee the capital
and interest payment obligations of GFI-SA
under the GFI-SA loan.
Mvela Gold has entered into a subscription
and exchange agreement with GFI-SA in
terms of which it has undertaken to
subscribe for 15% of the issued share
capital of GFI-SA when the GFI-SA loan is
repaid. The subscription price has been
fixed at R4 139 million. Mvela Gold has the
option to exchange the GFI-SA shares
for an equivalent value of ordinary listed
Gold Fields Limited shares within a
specified period of time.
This investment, consisting of the initial
interest bearing loan advanced and the
subsequent subscription and exchange
agreement is treated as a financial
instrument for accounting purposes and its
fair value is determined by calculating the
portion of the Gold Fields Limited market
capitalisation that relates to 15% of its
South African mining operations, and the
present value of the difference between
receiving fixed interest income instead of
dividends.
The value of this investment is sensitive to
the following key drivers:
- Rand/US Dollar exchange rate;
- US Dollar gold price; and
Relative portion of Gold Fields Limited`s
market capitalisation attributable to its
South African operations.
8.DERIVATIVE FINANCIAL
INSTRUMENTS
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