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Notice of availability of AFS, financial covenant testing and sustainability- linked progress report, board change
Pan African Resources Funding Company Limited
Incorporated in the Republic of South Africa with
limited liability
Registration number: 2012/021237/06
Company code: PARI
(PAR Funding Company or the Issuer)
NOTICE OF AVAILABILITY OF ANNUAL FINANCIAL STATEMENTS, FINANCIAL COVENANT TESTING
AND SUSTAINABILITY- LINKED PROGRESS REPORT, AND CHANGE TO THE BOARD OF DIRECTORS AND
DEBT OFFICER
1. Notice of availability of annual financial statements of the Guarantor and the Issuer
Noteholders are advised of the availability of the audited annual financial statements of PAR Funding
Company and of its guarantor, Pan African Resources PLC (the Guarantor) for the year ended 30 June
2024.
The annual financial statements of the Issuer (Issuer Results) can be accessed on the Guarantor's
website, at the following link: https://www.panafricanresources.com/investors/domestic-medium-
term-note-programme.
The group annual financial statements of the Guarantor and its subsidiaries (Guarantor Group Results)
can be accessed on the Guarantor's website, at the following link:
https://www.panafricanresources.com/investors/fy2024-key-documents/, as well as via the following
SENS announcement: https://senspdf.jse.co.za/documents/2024/jse/isse/pan/FYE2024.pdf
Noteholders are further advised that PricewaterhouseCoopers LLP's audit report on annual financial
statements of the Issuer and the Guarantor was unqualified.
Copies of the aforementioned annual financial results may also be requested by emailing
ExecPA@paf.co.za and electronically via the Issuer's debt sponsor (debtsponsor@questco.co.za) at no
charge during business hours.
2. Restatement of the Guarantor's previously published results:
Noteholders are advised of the following corrections of prior period errors relating to the Guarantor
Group Results:
2.1. Gold sales - timing of revenue recognition
During the current reporting period, the Group reassessed the timing of revenue recognition on gold
sales. Historically, the Group recognised revenue, at a point in time, on delivery of gold to Rand
Refinery. The Group's view was that control had transferred to a customer on delivery of gold to Rand
Refinery as control had at this point in time passed to the customer.
Following the reassessment, the Group established that control does not pass to the customer on
delivery to Rand Refinery but rather on settlement with the customer. The impact of the previous
revenue recognition treatment resulted in the Group recognising revenue at the reporting date for the
respective period then ended, in respect of gold delivered to Rand Refinery, although the customer
had not yet obtained control of the gold and settlement had not taken place.
As a consequence, revenue, cost of production and trade receivables had previously been overstated
and inventory understated. The nature of the error further impacted other expenses, royalty costs and
income tax expense and the related asset or liability. The error has been corrected by restating each
of the affected financial statement line items for the 2022 and 2023 reporting periods. In addition, the
opening statement of financial position on 1 July 2022 has also been restated. Noteholders are referred
to note 40 of the Guarantor Group Results in this regard.
2.2. Measurement of environmental rehabilitation obligation
During the current reporting period it was determined that the Mogale Gold and MSC environmental
rehabilitation obligations had, on initial recognition in 2023, been incorrectly measured.
As a consequence, the environmental rehabilitation obligation, finance costs and long-term inventory
were understated. The error has been corrected by restating each of the affected financial statement
line items for the 2023 reporting period.
The restatement impacted the purchase price allocated to assets acquired and liabilities assumed
based on their relative fair values. The restatement resulted in no change in the net asset value
acquired, however, the fair value allocated to the environmental obligation and long-term inventory
at acquisition were understated by US$4.3 million in Mogale Gold and US$2.4 million in MSC,
respectively. Noteholders are referred to note 40 of the Guarantor Group Results in this regard.
3. Financial Covenants Notification
In accordance with Condition 12.7 of the Issuer's ZAR5 billion Domestic Medium Term Note
Programme, Noteholders are advised that the Financial Covenants, as measured against the
Guarantor Group Results, are as follows:
Twelve Twelve
months months
ended ended
Covenant Measurement at period-end 30 June 2024 30 June 2023
Net debt-to-equity ratio Must be less than 1:1 0.29 0.07
Net debt-to-adjusted EBITDA
ratio Must be less than 2:1 0.8 0.2
Interest cover ratio Must be greater than 4:1 12.2 28.2
Debt service cover ratio Must be greater than 1:3 3.8 7.5
4. Sustainability-linked notes progress report
Noteholders of the sustainability-linked debt securities noted below are provided with an update on
the progress of the key performance indicators (KPIs) against the baseline/benchmark targets as
verified by the independent external reviewer, as set out in the tables below. The verification report
by the independent external reviewer is available on the Guarantor's website at
https://www.panafricanresources.com/investors/domestic-medium-term-note-programme/
PARS01
KPI Unit of Baseline SPT 2 PTL 2 Realis SPT Applicable
Measurement ed Achieved, Margin
Value SPT not Adjustment
as at Achieved but
30 above
June PTL/Baseline
2024 or SPT not
Achieved
and below
PTL/Baseline
KPI 1 Energy Percentage 0% 7% 4% 6.1% SPT not 0
consumption (%) Achieved but
generated from above PTL
renewable
means as a
percentage of
total
energy
consumed
KPI 2 Percentage 0% 8% 3% 9.4% SPT -2
Expedited land (%) Achieved
rehabilitation
KPI 3 Total 8.95 8.08% 8.95% 6.52% SPT -1
Employee recordable Achieved
safety injuries per
million hours
worked
Total Margin
Adjustment -3
PARS02
KPI Unit of Baseline SPT 2 PTL 2 Realised SPT Applicable
Measurement Value Achieved, Margin
as at 30 SPT not Adjustment
June Achieved
2024 but above
PTL/Baseline
or SPT not
Achieved
and below
PTL/Baseline
KPI 1 Energy Percentage 0% 7% 4% 6.1% SPT not 0
consumption (%) Achieved
generated from but above
renewable PTL
means as a
percentage of
total
energy
consumed
KPI 2
Expedited land Percentage 0% 8% 3% 9.4% SPT -2
rehabilitation (%) Achieved
KPI 3 Total 8.95 8.08% 8.95% 6.52% SPT -1
Employee safety recordable Achieved
injuries per
million hours
worked
Total Margin
Adjustment -3
5. Change to the board of directors and debt officer
In compliance with paragraph 6.39 of the Debt Listings Requirements of the JSE Limited, noteholders
are advised that Gideon Petrus Louw ("Deon") has advised PAR Funding Company of his intention to
retire, and as such has resigned from the board of directors ("Board") with effect from 30 September
2024. As a result, he will also step down from his role as the Issuer's debt officer with effect from the
same date.
Noteholders are further advised that Marileen Kok, the Guarantor's current Executive: Group Finance,
will be appointed as a director of PAR Funding Company and as the debt officer with effect from
1 October 2024. Marileen joined the Guarantor as Group Financial Manager in January 2020 and has
extensive experience in financial reporting, corporate finance, governance and regulatory compliance.
The Board confirms that it has considered and is satisfied with the competence, qualifications and
experience of the newly appointed debt officer.
The Board confirms that the appointment of Marileen as a director and debt officer of PAR Funding
Company has been made on the recommendation of the Group's nominations committee and in
accordance with the Group's board nomination policy.
The contact details of the debt officer are as follows:
Telephone: +27 (0)11 243 2900
Email: marileen@paf.co.za
Rosebank
11 September 2024
Debt sponsor
Questco Corporate Advisory Proprietary Limited
Date: 11-09-2024 08:01:00
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