Company financial statements

Company financial statements

Notes to the company financial statements 

    Year ended 30 June
(All amounts in rand millions unless otherwise stated) 2006 2005
       

1

Investments in subsidiaries, associates and joint ventures

    
  Associates 1,013.2 861.5
  Subsidiaries and joint venture (Annexure A) 1,812.1 1,119.7
    2,825.3 1,981.2
  Associates    
  At cost    
       
  Two Rivers Platinum (Proprietary) Limited 550.8 399.1
  Aquarius Platinum (South Africa) (Proprietary) Limited 462.4 462.4
  Total investments in associates 1,013.2 861.5
       

2

Available-for-sale financial investments

    
  Investment in listed shares    
  Comprises shares in the following listed company    
       
  Aquarius Platinum Limited    
  Beginning of the year 261.7 171.7
     Exchange differences 29.6 38.7
     Share price movement 455.1 51.3
  End of the year 746.4 261.7
       
During the year, the company maintained its strategic shareholding in Aquarius Platinum Limited, 
  holding 7,141,966 shares (2005: 7,141,966) which amounts to approximately 8.6% (2005: 
8.6%) of the issued share capital of that company. The company is listed on the Australian Stock 
Exchange, the London Stock Exchange and the JSE Limited. The fair value of these shares as at the 
close of business on 30 June 2006 by reference to stock exchange quoted prices and closing 
  exchange rates was R746.4 million (2005: R261.7 million).   
       
   Investment in unlisted shares    
  Shares beneficially owned in the under mentioned concern at fair value:    
  Silplat (Proprietary) Limited 14.7 14.7
    761.1 276.4
       

3

Other receivables

    
  Loans to BEE companies    
       
  Current 435.8 –
  Non-current 39.6 –
    475.4 –
Loans granted to Tubatse Platinum (Pty) Limited, the Marula Community Trust and Mmakau Mining (Pty) 
Limited in terms of a BEE transaction. The current portion is repayable on 5 July 2006 and the non-
current portion on approval and adoption by the board of directors of Marula Platinum Limited of a
feasibility study on any aspect and/or portion of the non-cash producing portion of the Marula mine. 
Interest at prime less 3 percent is payable on the outstanding balance of the loan.
                
 

4

Trade and other receivables 
  Other receivables         66.0 88.8
               

5

Cash and cash equivalents
For the purposes of the cash flow statement, the cash and cash equivalents comprise cash and 
   bank balances.    
               

6

Share capital

            
  Authorised amount         20.0 20.0
               
The total authorised ordinary share capital comprise 100 million (2005: 100 million) shares with 
  a par value of 20 cents each. All issued shares are fully paid.   
               
  Number of Ordinary Share      
  shares issued shares premium Total    
    (million) (R million) (R million) (R million)    
               
  At 30 June 2004 66.621 13.3 646.6 659.9    
  Issued to the Impala Share Incentive Trust 0.224 0.1 99.4 99.5    
  Cost of equity compensation plans     22.3 22.3    
  At 30 June 2005 66.845 13.4 768.3 781.7    
  Issued to the Impala Share Incentive Trust 0.336 0.1 166.5 166.6    
  Cost of equity compensation plans     28.3 28.3    
  At 30 June 2006 67.181 13.5 963.1 976.6    
               
Up to 10% of the unissued shares may be issued by the directors at their discretion until the next annual 
   general meeting.  
               

7

Other reserves

            
  Fair value adjustment: Available-for-sale investment    
  Balance 1 July 2004 152.0 200.6
  Revaluation 90.0 (58.0)
  Deferred tax charged to equity (13.4) 9.4
  Balance 30 June 2005 228.6 152.0
  Revaluation (Note 2) 484.7 90.0
  Deferred tax charged to equity (Note 8) (70.3) (13.4)
  Balance 30 June 2006 643.0 228.6
               

8

Deferred income tax

            
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset 
current tax assets against current tax liabilities and when the deferred income taxes relate to the same 
  fiscal authority. The offset amounts are as follows:   
               
  Deferred tax liability            
  –  Deferred tax asset to be recovered after more than 12 months (74.3) (4.0)
 
  Deferred income taxes are calculated at the tax rates prevailing in the different fiscal authorities where 
the asset or liability originates.
 
   The movement on the deferred income tax account is as follows:    
  At the beginning of the year (4.0) 9.4
  Tax charge to equity (Note 7) (70.3) (13.4)
  Net deferred tax liability at the end of the year (74.3) (4.0)
       

9

Trade and other payables
   Trade payables 4.8 26.1
       

10

Other income/(expenses)
  Exploration expenditure (12.7) (6.4)
  Restructuring of investment in associate – (2.1)
  Reversal of impairment/(impairment) of investment in subsidiary 1 193.9 (248.2)
  Professional fees (18.5) (6.2)
  Net foreign exchange transaction gains 0.1 0.9
  Profit on sale of share in Marula Platinum (Pty) Ltd 89.7 –
  Corporate, listing and other related costs (11.2) (7.3)
    241.3 (269.3)
  1 Refer Note 5 of consolidated financial statements    
       

11

Other gains

    
  Other gains consist of the following principal categories:    
       
  Interest income 0.2 1.8
  Dividends received – investments 7.1 0.7
  Dividends received – subsidiaries 6,346.5 1,456.4
    6,353.8 1,458.9
       

12

Profit before tax

    
  The following items have been charged in arriving at profit before tax:    
       
  Auditors' remuneration    
  Fees for audit services 0.7 0.5
  Professional fees 18.5 6.2
       

13

Income tax expense

    
  Current tax    
  Charge for the year 2.3 1.3
        
The tax of the company's profit differs as follows from the theoretical charge that would arise
  using the basic tax rate: % %
        
  Normal tax rate for companies 29.0 29.0
  Adjusted for:    
  Disallowable expenditure (1.1) 6.6
  Exempt income (27.9) (35.5)
  Effective tax rate 0.0 0.1
 

14 

Dividends per share
  At the board meeting on 25 August 2006, a final dividend in respect of 2006 of 2,200 cents per 
  share amounting to R1,523.2 million was approved. Secondary Tax on Companies (STC) on the 
dividend will amount to R190.4 million.
 
These financial statements do not reflect this dividend and the related STC payable. The dividend will 
be accounted for in shareholders’ equity as an appropriation of retained earnings in the year ending 
30 June 2007.
 
  Dividends paid    
       
  Final dividend No. 75 for 2005 of 1,800 (2004: 1,600) cents per share 1,181.9 1,065.8
  Interim dividend No. 76 for 2006 of 1,000 (2005: 500) cents per share 661.9 333.4
  Special dividend No. 2 for 2005 of 5,500 (2005: nil) cents per share 3,624.1 –
    5,467.9 1,399.2
       

15

Cash generated from operations
  Reconciliation of net profit to cash generated from operations:    
       
  Profit attributable to equity holders of the company 6,592.8 1,188.3
  Adjustments for:    
       
  Income tax expense (Note 13) 2.3 1.3
  Interest income (Note 11) (0.2) (1.8)
  Dividend income (Note 11) (7.1) (0.7)
  Profit on sale of investment (Note 10) (89.7) –
  (Reversal of impairment)/impairment of investment in subsidiary (193.9) 248.2
       
  Changes in working capital:    
  Trade and other receivables 22.8 (80.4)
  Trade and other payables (21.3) 15.9
  Cash generated from operations 6,305.7 1,370.8
       

16

Contingent liabilities and guarantees

    
  Guarantees    
At year end the company had contingent liabilities in respect of bank and other guarantees and other
matters arising in the ordinary course of business from which it is anticipated that no material liabilities
  will arise.   
       
  Related party contingencies    
       
  Aquarius Platinum (South Africa) (Proprietary) Limited – 146.3
  Zimbabwe Platinum Mines (Pvt) Limited 22.6 3.3
  Two Rivers Platinum (Proprietary) Limited 210.6 –
  Department of Minerals and Energy 296.9 288.0
  Total guarantees 530.1 437.6
       
  Owing to uncertainties regarding the timing and amounts, if any, potential outflows cannot be quantified.   
 

Impala Platinum Holdings Limited - Annual Report 2006