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Impala Platinum Holdings Limited (Implats/company/group) is principally in the business of producing and supplying platinum group metals (PGMs) to industrial economies. The company’s holdings in various mining and exploration activities as at 30 June 2007 are described below:
| Company | Short name | Effective interest % | Activity |
|---|---|---|---|
| Impala Platinum Limited | Impala | 100 | PGM mining processing and refining |
| Impala Refining Services Limited | IRS | 100 | Purchase of concentrate and/or smelter matte. Processing of concentrate and matte by the smelting, refining and sale of the resultant PGMs and base metals, and through toll refining. |
| African Platinum Limited | Afplats | 100 | PGM mining |
| Afplats (Pty) Limited | Leeuwkop (Afplats) | 74 | PGM mining |
| Marula Platinum Limited | Marula | 77.5 | PGM mining |
| Zimplats Holdings Limited | Zimplats | 86.9 | PGM mining |
| Mimosa Investments Limited | Mimosa | 50 | PGM mining |
| Two Rivers Platinum (Pty) Limited | Two Rivers | 45 | PGM mining |
| Aquarius Platinum (SA) (Pty) Limited | Aquarius (SA) | 20 | PGM mining |
| Aquarius Platinum Limited | Aquarius Platinum | 8.6 | PGM mining |
At the annual general meeting on 12 October 2006 the authorised share capital of the company was subdivided by a factor of eight with effect from 6 November 2006.
| R million | ||
|---|---|---|
| 100,000,000 | ordinary shares of 20 cents each | 20.0 |
| 5,501,000 | ordinary “A” shares of 20 cents each | 1.1 |
| 21.1 | ||
| R million | ||
|---|---|---|
| 800,000,000 | ordinary shares of 2.5 cents each | 20.0 |
| 44,008,000 | ordinary “A” shares of 2.5 cents each | 1.1 |
| 21.1 | ||
At a general meeting of shareholders held on 29 November 2006, the “A” ordinary shares were converted into ordinary shares.
Following these changes the authorised share capital of the company at 30 June 2007 was 844,008,000 ordinary shares of 2.5 cents each.
During the year 1,907,104 new ordinary shares were issued in terms of the Implats share option scheme. In addition, 16,432,576 new ordinary shares were issued to the Morokotso Trust at a price of R159.40 per share (2,054,072 ordinary shares at a price of R1,274.40 prior to the subdivision). These shares were issued in terms of an employee share ownership programme approved at a general meeting of shareholders on 4 July 2006.
The company issued 75,115,204 ordinary shares to the Royal Bafokeng Nation in terms of a black economic empowerment (BEE) initiative as described later in this report.
Following these issues the issued share capital currently stands at 630,899,228 ordinary shares of 2.5 cents each (2006: 537,444,344 ordinary shares of 2.5 cents each).
The group holds 9,844,976 ordinary shares of 2.5 cents each (1.56%) (2006: 9,844,976) of its own shares in terms of an approved share buy-back scheme. The shares are held as “treasury shares” by a subsidiary.
The directors were authorised to issue, allot or grant options to acquire up to a maximum of 17,416,000 ordinary shares of 2.5 cents each in the unissued share capital of the company in terms of employee share option schemes. Details of participation in the share option scheme are set out in note 15 of the financial statements.
In line with recent remuneration developments the group will no longer offer employees any further options under the existing Share Incentive Scheme, but will pay relevant employees a fully taxable bonus based on the increase in the share price (refer to note 19 of the financial statements). Employees’ interests will still be aligned with those of shareholders but without any dilutionary effect.
The rules governing the quantum and timing of benefits to be delivered to employees under the new bonus scheme will be no different from those under the existing Share Incentive Scheme.
The trustees of the scheme are Ms NDB Orleyn and Messrs JM McMahon and JV Roberts.
The issued capital of the company held by public and non-public entities as at 30 June 2007 is as follows:
| No. of shares (000s) | % | |
|---|---|---|
| Public | 520,773 | 82.5 |
| Non-public | 110,126 | 17.5 |
| Directors | 201 | – |
| Trustees of share schemes | 16,965 | 2.7 |
| Right to appoint directors | 83,115 | 13.2 |
| Treasury shares | 9,845 | 1.6 |
| Total | 630,899 | 100,0 |
The following shareholders beneficially hold more than 5% of the issued share capital:
| No. of shares (000s) | % | |
|---|---|---|
| Public Investment Commissioners | 47,656 | 7.6 |
| Royal Bafokeng Nation | 83,115 | 13.2 |
During the year it was agreed that Impala would pay an amount of R12.5 billion to the RBN in cash in respect of its obligations to pay royalties. Impala’s obligations were fully and finally discharged by this payment with effect from 1 July 2007. The cash consideration of R12.5 billion was utilised by the RBN to subscribe for 75,115,204 Implats shares. This together with the 8,000,000 Implats shares already held by the RBN resulted in a holding of 83,115,204 Implats shares (13.4% holding on a fully diluted basis).
The company owns 86.9% of Zimplats Holdings Limited (Zimplats). Zimbabwe Platinum Mines Limited is a wholly owned subsidiary of Zimplats.
The company holds a 50% shareholding in Mimosa with the balance held by Aquarius Platinum Limited.
The company owns a 45% interest in Two Rivers with the balance held by African Rainbow Minerals Resources.
The company holds an 8.6% interest in Aquarius Platinum which is listed on the Australian Securities Exchange, London Stock Exchange and the JSE Limited.
The company holds a 20% interest in Aquarius Platinum (SA) (Pty) Limited.
The company owns a 77.5% interest in Marula.
A 7.5 % equity stake in Marula is held by each of the following BEE companies:
The purchase price to each of the parties was R158.1 million of which R145 million was payable in cash on closure of the sale with the balance of R13.1 million being payable in instalments on completion of phase II of the mine development. Implats guaranteed the vendor finance (including all future funding obligations) of Tubatse and Mmakau until 31 December 2014, and Implats will provide funding on loan to the Trust until such time that the Trust is in a cash flow positive position. Implats has consolidated the BEE interest as these BEE parties are considered special purpose entities (SPE) for accounting purposes as the vendor finance is guaranteed by Implats.
During the year the company acquired a 100% interest in Afplats for a consideration of R4.2 billion.
The results for the year are fully dealt with in the financial statements forming part of the annual report. Refer to the Financials section.
An interim dividend (No 78) of 275 cents per share was declared on 15 February 2007, and a final dividend (No 79) of 700 cents per share was declared on 30 August 2007, payable on 25 September 2007 – a total of 975 cents per share (2006: 400 cents per share plus a special dividend of 687.5 cents per share, a total dividend of 1,087.5 cents per share). These dividends amounted to R5,887 million for the year (2006: R5,809 million).
Capital expenditure for the year amounted to R2,889 million (2006: R2,248 million).
The estimated R6.5 billion capital expenditure by Impala envisaged for the 2008 financial year will be funded from internal resources and, if appropriate, borrowings.
No material events have occurred since the date of these financial statements and the date of approval thereof, the knowledge of which would affect the ability of the users of these statements to make proper evaluations and decisions.
The financial statements have been prepared using the appropriate accounting policies, supported by reasonable and prudent judgements and estimates. The directors have a reasonable expectation that the group has adequate resources to continue as a going concern in the foreseeable future.
Information regarding the company’s associated companies are given in note 17 of the financial statements and regarding subsidiaries.
Details of the freehold and leasehold land and buildings of the various companies are contained in registers, which are available for inspection at the registered offices of those companies.
During the year, Ms D Earp was appointed as an executive director of the board and Ms CE Markus and Mr KC Rumble retired as an executive director and CEO respectively. Ms F Jakoet and Mr DS Phiri were appointed as additional non-executive directors. In terms of the articles of association, appointments by the directors of additional directors retain office until the next annual general meeting when they shall retire and be eligible for reelection. Shareholders will be asked to consider the election of Ms D Earp, Ms F Jakoet and Mr DS Phiri at the forthcoming annual general meeting.
The directors who retire at the next general meeting are Dr FJP Roux, Mr JV Roberts and Mr JM McMahon. Mr Roberts has indicated that he is not available for re-election. The other directors are eligible and have offered themselves for re-election.
The interests of directors in the shares of the company were as follows and did not individually exceed 1% of the issued share capital or voting control of the company.
| Direct | Indirect | ||||
|---|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | ||
| Beneficial Directors | 176,888 | 141,808 | 23,929 | 4,000 | |
| DH Brown | 80,000 | 48,000 | – | – | |
| MV Mennell | 61,808 | 61,808 | – | – | |
| L J Paton | 35,000 | 32,000 | 20,728 | 800 | |
| S Phiri | 80 | – | – | – | |
| LC van Vught | – | – | 3,200 | 3,200 | |
| Senior management | 143,608 | 138,720 | – | – | |
| Non-beneficial | – | – | – | – | |
Details of the executive directors, non-executive directors and senior management remuneration are set out in the Remuneration Report.
There were no contracts of significance during or at the end of the financial year in which the directors of the company were materially interested. No material change in the aforegoing interests has taken place between 30 June 2007 and the date of this report.
Details of directors’ fees paid during the 2007 financial year and fees proposed for the 2008 financial year are set out in the Remuneration Report.
The following special resolutions will be proposed at the annual general meeting on 25 October 2007:
A renewal of the authority to acquire up to 10% of the company’s shares subject to the JSE rules and the Companies Act.
To adopt new articles of association to the exclusion of and in substitution for the existing articles of association. The new articles incorporate provision for electronic communication between directors by means of teleconferencing and allow shareholders to elect to receive annual financial statements in electronic form.
A copy of the new articles of association is available from the company on request or from the company’s website www.implats.co.za/cr/files/Articles_of_Association_August_2007.pdf (PDF - 124KB)
During the year the following special resolutions were passed by Implats and its subsidiaries:
Allowing the company and its subsidiaries to acquire shares in the company subject to the provisions of the Companies Act 1973 and the Listing Requirements of the JSE Limited, provided that the authority may not extend beyond 15 months from the date of granting of the authority.
An amendment to the Authorised Share Capital of the company by converting the ordinary “A” shares into ordinary shares.
An amendment to the articles of association deleting the terms and conditions of the ordinary “A” shares in the capital of the company.
An amendment to the company’s articles of association to regulate the appointment of an independent non-executive chairman.
An amendment to the authorised share capital of Marula from 4,000 shares of R1 each to 400,000 shares of 1 cent each.
In terms of a service agreement, Impala Platinum Limited acts as financial, administrative and technical advisers to the Implats group during the year on a fee basis. Messrs S Bessit, DH Brown, L J Paton and Ms D Earp had an interest in this contract to the extent that they are directors of Impala and of the company, but they do not beneficially own any shares in Impala.
Mr R Mahadevey acted as secretary to Implats and Impala, and Impala acted as secretaries to other subsidiaries in the Implats group. The business and postal addresses of the secretaries are set out on the inside back cover of this report.
The business and postal addresses of the London Secretaries are set out on the inside back cover of this report.
Mr J van Deventer acted as public officer for the group for the year under review.
Impala Platinum Holdings Limited — Annual Report 2007