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Abridged audited group financial statements and notice of Annual General Meeting
WESIZWE PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/020161/06)
JSE code: WEZ ISIN: ZAE000075859
(the "Company" or "Wesizwe")
ABRIDGED AUDITED GROUP FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL
MEETING
HIGHLIGHTS
At 31 December 2012 –
- A total of 219 828 fatality free shifts were worked on the Bakubung
Platinum Mine Project since the start of the project.
- The shaft sinking contract at the Bakubung Platinum Mine was awarded
and the first blasts on the ventilation and main shafts took place
within schedule.
- The water supply feasibility study, conducted jointly with Maseve
Investments 11 (Pty) Limited, was concluded and a detailed
engineering and costing presented as part of the water supply
feasibility study. The water supply project remains on time and
within budget.
- Wesizwe introduced a new, 4-year, apprenticeship programme focused
on developing essential engineering skills.
- The Bakubung Platinum Mine Project achieved a local employment
percentage of 30.25% with 71% of that percentage coming from the
Ledig area.
- The ventilation and main shafts (both in pre-sink phase) were sunk
to depths, below surface, of 117.5 m and 63.6 m respectively and
both shafts were on time and within budget.
- Total project cost spent to year end was R779.1 million with
R1,4 billion committed as at the end of the financial year.
- China Development Bank (CDB) has approved the US$650 million project
funding. The finalization of project funding documentation is currently
in progress and the CDB, as part of the US$650 million project funding,
has approved two bridging loans of US$100 million each, of which one
US$100 million drawdown has taken place.
- The cash balance at the end of the financial year was R1.4 billion.
- Eskom has delivered the Phase 1 permanent power supply of 8 MVA to
the project site.
NOTICE OF ANNUAL GENERAL MEETING
Shareholders are hereby advised that the annual integrated report will be
posted tomorrow, Thursday, 28 March 2013, which incorporates the notice of
annual general meeting to be held at Glenhove Conference Centre, 52 Glenhove
Road, Melrose Estate, Houghton, Johannesburg on Monday, 1 July 2013 at 09h00.
The date on which shareholders must be recorded as such in the share register
of the Company for purposes of being entitled to attend and vote at this meeting
is Friday, 21 June 2013 with the last day to trade being Thursday, 13 June 2013.
The audited group financial statements have been prepared under the supervision
of the Finance Director, Mr Wenliang Ma.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2012
2012 2011
Audited Audited
Notes R’000 R’000
ASSETS
Non-current assets 3 334 789 2 664 691
Property, plant and equipment 6 2 395 964 1 734 383
Available-for-sale financial
18 910 13 760
asset
Investment in equity-accounted
7 919 515 916 548
investee
Deferred tax asset 11 400 -
Current assets 1 526 484 1 276 472
Other receivables 21 590 30 128
Taxation 11 11 231 9 544
Restricted cash 8 95 189 69 307
Cash and cash equivalents 1 398 474 1 167 493
Total Assets 4 861 273 3 941 163
EQUITY AND LIABILITIES
Capital and reserves 3 636 332 3 625 222
Stated / share capital 9 3 425 544 16
Share premium 10 - 3 425 528
Share-based payment reserve 472 179 472 179
Available-for-sale financial
2 891 1 529
asset reserve
Accumulated loss (264 282) (274 030)
Non-current liabilities 287 413 281 362
Deferred tax liability 11 267 265 268 775
Environmental rehabilitation
obligation 20 148 12 587
Current liabilities 937 528 34 579
Interest-bearing borrowing 15 847 916 -
Trade and other payables 87 690 33 299
Taxation 11 1 922 1 280
Total Equity and Liabilities 4 861 273 3 941 163
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2012
2012 2011
Audited Audited
Notes R’000 R’000
Operations
Administration expenses (61 322) (51 895)
Impairment of loan to Bakubung
community 5 (2 744) (8 257)
Impairment of investment in equity-
accounted investee (1 655) -
Project related expenses capitalised 20 738 -
Loss on dilution of interest in equity
accounted investee - (9 187)
Share of profit in equity-accounted
investee 4 622 3 515
Net operating costs (40 361) (65 824)
Financial income/expense
Finance income 56 612 46 255
Profit on sale of property, plant
and equipment 91 -
Foreign exchange loss - (4 666)
Finance expense (1 955) (486)
Net finance income 54 748 41 103
Profit/(loss) from operations 14 387 (24 721)
Equity financing
Share-based payment expense - (408 002)
Foreign exchange gain - 60 585
Net equity financing costs - (347 417)
Profit/(loss) before tax 14 387 (372 138)
Income tax (expense)/income (4 639) 13 811
Profit/(loss) for the year 9 748 (358 327)
Total other comprehensive income 1 362 517
Gain on fair value movements of
available-for-sale asset 2 026 517
Tax on other comprehensive income (664) -
Total comprehensive income for the
year 11 110 (357 810)
Earnings/(loss)per share
Basic earnings/(loss) per share
(cents) 0.60 (26.58)
Diluted earnings/(loss) per share
(cents) 0.60 (26.58)
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2012
2012 2011
Audited Audited
Note R’000 R’000
Cash flows from operating activities
Cash receipts from customers - -
Cash paid to suppliers and employees (25 905) (61 548)
Cash utilised in operations (25 905) (61 548)
Finance income received 75 148 26 068
Finance cost paid (200) (156)
Taxation paid (9 418) (15 791)
Cash generated from/(utilised in)
39 625 (51 427)
operating activities
Cash flows from investing activities
Acquisition of property, plant and
equipment as a result of increase in (605 615) (139 571)
operations
Available-for-sale investment
contributions (3 124) (2 960)
Proceeds on disposal of property,
plant and equipment 7 -
Net cash outflow from investing
activities (608 732) (142 531)
Cash flows from financing activities
Proceeds from issue of shares - 1 565 595
Share issue expenses - (34 633)
Interest-bearing borrowing raised 849 810 17 800
Bridging loan repaid - (51 070)
Equalisation liability repaid - (125 830)
Loans paid on behalf of related party 5 (2 744) -
Net cash inflow from financing
activities 847 066 1 371 862
Net increase in cash and cash
equivalents 277 959 1 177 904
Effects of exchange rate fluctuation
on cash held (2 560) -
Cash at beginning of year 1 216 613 38 709
Cash at end of year 1 492 012 1 216 613
Cash at end of year comprises:
Restricted cash 8 95 189 69 307
Bank balances 1 396 823 1 147 306
Cash at end of year 1 492 012 1 216 613
Interest accrued 1 651 20 187
1 493 663 1 236 800
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2012
Stated/ Share Available- Share- Accumu- Total
share premium for-sale based lated
capital reserves payment profit/
reserve (loss)
R’000 R’000 R’000 R’000 R’000 R’000
Balance at
1 January 2011 8 1 955 159 1 012 65 384 84 297 2 105 860
Total
comprehensive
income for the
year
Loss for the
year - - - - (358 327) (358 327)
Other
comprehensive - - 517 - - 517
income
Transactions
with owners
recorded
directly in
equity
Issue of shares 8 1 505 002 - - - 1 505 010
Share issue
- (34 633) - - - (34 633)
expenses
Share-based
payment expense - - - 406 795 - 406 795
Balance at
16 3 425 528 1 529 472 179 (274 030) 3 625 222
31 December 2011
Total
comprehensive
income for the
year
Profit for the
year - - - - 9 748 9 748
Total other
comprehensive - - 1 362 - - 1362
income
Transactions
with owners
recorded
directly in
equity
Transfer of
share premium to 3 425 528 (3 425 528) - - - -
stated capital
Balance at 31
December 2012 3 425 544 - 2 891 472 179 (264 282) 3 636 332
ABRIDGED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2011
1. Reporting entity
Wesizwe Platinum Limited (“Wesizwe” or “the Company”) is a company
domiciled in the Republic of South Africa. The abridged audited
consolidated financial results as at 31 December 2012 comprise the
Company, its subsidiaries and the Group’s interest in its equity
accounted investee (together referred to as the “Group”). The audited
consolidated financial statements of the Group for the year ended
31 December 2012 are available upon request from the Company’s
registered office at Unit 13, 2nd Floor, 3 Melrose Boulevard,
Melrose Arch, Johannesburg, 2076 or at www.wesizwe.com.
2. Statement of compliance
These abridged audited consolidated financial statements are
prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards,
the presentation and disclosure requirements of IAS 34 Interim
Financial Reporting, the Companies Act 2008, as amended, and the
SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Reporting Pronouncements as
issued by Financial Reporting Standards Council.
These summary financial statements have been extracted from the
complete set of financial statements on which the auditors, KPMG
Inc, have expressed an unqualified audit opinion. A copy of the
auditor’s report is available for inspection at the Company’s
registered office.
3. Accounting policies
The accounting policies used to prepare this report are consistent
with those used in the previous annual financial statements.
4. Estimates
The financial statements and commentary contain information and is
based on calculations that require management to make judgments,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income
and expenses. Actual results may differ from these estimates.
In preparing these abridged audited consolidated financial statements,
the significant judgments made by management in applying the Group’s
accounting policies and the key sources of estimation, except as listed
below, were the same as those that applied to the consolidated financial
statements for the year ended 31 December 2011.
Management engaged the services of various professional research and
forecasting experts, including that of SFA Oxford Limited for product
prices to prepare projections and forecasts regarding future economic
outlook, exchange rates and product prices.
The following economic parameters were assumed:
2012 2011
US$ exchange rate (ZAR) 9.06 8.50
Pt price (US$/oz) 2297 2 000
Pd price (US$/oz) 761 760
Rh price (US$/oz) 5 656 5 900
Au price (US$/oz) 1 400 1 400
MR basket price (US$/oz) 2 040 1 926
Discount rate/Weighted Average Cost of
Capital (%) (Real) 8.20 8.20
Management acknowledges that the ZAR/US$ exchange rate and commodity
prices have been volatile and movements would have an impact on the
values as determined by management. Management is of the opinion that,
given the fact that the net asset value of the mining assets at
year-end were below the determined fair values, the assets of the
Group are not impaired.
5. Impairment of loan to the Bakubung community
2012 2011
R’000 R’000
Opening balance - 8 257
Loan advanced 2 744 -
Impairment (2 744) (8 257)
Closing balance - -
As previously reported, the Company was requested by the Department
of Mineral Resources to assist the Bakubung Community (“the Community”)
and the Royal Family in their efforts to obtain proper accounting for
the Community’s assets in relation to Wesizwe. Consequently, funds were
advanced by way of direct payment to service providers. In 2010 the
courts made a ruling in favour of the Community that the cost of legal
proceedings be paid by the respondents.
In evaluating the recoverability of the loan, management is of the opinion
that recoverability thereof is doubtful and has, accordingly, impaired the
loan for accounting purposes.
6. Property, plant and equipment
Mine
Assets Other Total
R'000 R'000 R'000
Balance at 1 January 2011 1 721 244 13 139 1 734 383
Additions and transfers 650 426 12 704 663 130
Disposals - (7) (7)
Depreciation - (1 542) (1 542)
Balance at 31 December 2012 2 371 670 24 294 2 395 964
7. Investment in equity accounted investee
2012 2011
R'000 R'000
Opening balance 916 548 922 220
Share of profit in equity-accounted
investee 4 622 3 515
Loss on dilution of interest in
equity-accounted investee - (9 187)
Impairment of investment (1 655) -
Closing balance 919 515 916 548
8. Restricted cash
2012 2011
R'000 R'000
Department of Mineral Resources -
Rehabilitation obligation 27 000 27 370
Landlord - Operating lease agreement 940 896
Eskom - Connection guarantees 10 249 31 791
Transferring attorneys - Purchase of land - 9 250
Aveng Mining Limited – Payment guarantee 57 000 -
Total 95 189 69 307
9. Stated / share capital
A special resolution in terms of regulation 31 of the Companies Act
Regulations 2011 was adopted at the Annual General Meeting held on
19 July 2012 whereby all the ordinary shares were converted into
ordinary shares with no par value. It was resolved that all
ordinary shares in the share capital of the company, comprising
2,000,000,000 authorised and 1 627 827 058 issued ordinary shares
with a par value of R0.00001 be converted into ordinary shares with
no par value and that the share capital account and the share premium
account of the company be transferred to the stated capital account.
Following the above, shareholders were advised that the Company has
received confirmation from the Companies and Intellectual Property
Commission that the said special resolutions were registered on
Monday, 3 September 2012. The Company’s shares commenced trading as
shares of no par value on 6 September 2012.
2012 2011
R'000 R'000
Authorised
2 000 000 000 no par value ordinary shares - 20
Issued
1 627 827 058 no par value ordinary shares 16 16
Transfer of share premium to stated capital 3 425 528 -
Total stated / share capital 3 425 544 16
10. Share premium
Refer note 9 above.
2012 2011
R'000 R'000
Opening balance 3 425 528 1 955 159
Premium on issue of 829 884 460
shares - 1 505 002
Share issue expenses - (34 633)
Transfer of share premium to
stated capital (3 425 528) -
Closing balance - 3 425 528
11. Taxation
11.1 Income tax receivable
2012 2011
R'000 R'000
Balance at the beginning of the
year (8 264) -
Profit or loss charge 7 213 7 527
Penalties 1 160 -
Taxation paid (9 418) (15 791)
Balance at the end of the year (9 309) (8 264)
11.2 Deferred tax
2012 2011
R'000 R'000
Deferred tax liability
Balance at the beginning of the
year 268 775 290 113
Current year charges (1 510) (21 338)
Realised exchange rate gains - (4 862)
Calculated tax losses - (16 476)
Property, plant and equipment 182 448 -
Available-for-sale financial asset 664 -
Unredeemed mining capex (182 505) -
Provisions (2 117) -
Balance at the end of the year 267 265 268 775
Deferred tax asset
Balance at the beginning of the
year - -
Current year charges - provisions (400) -
Balance at the end of the year ( 400) -
Net deferred tax liability 266 865 268 775
12. Environmental rehabilitation obligation
This long-term obligation reflects the net present value of closure,
restoration and environmental rehabilitation (which includes the
dismantling and demolition of infrastructure, removal of residual
materials and remediation of disturbed areas) cost. The annual changes
can be ascribed to additional disturbances caused during the year and
changes in the escalation and discount rates. This estimate is based
on the current cost estimate and escalated to the future planned closure
date and then discounted at an appropriate rate. The current estimates
are based on environmental plans in accordance with current technology,
environmental and regulatory requirements and the measurements of an
independent professional surveyor. The discount rate is based on a pre-tax
risk-free rate available in the current market.
At the time of establishing the provision, a corresponding asset was
recognised that will be depreciated over the future life of the asset
to which it relates. The provision is re-assessed on an annual basis
for changes in cost estimates, discount rates and useful lives.
As required by the Department of Mineral Resources a deposit of
R27.0 million (2011: R27.3 million) is held with a financial
institution. These investments have been ceded as security in
favour of the guarantees the bank issued on behalf of the Group.
13. Segment reporting
No segment reporting has been included as the Group is conducting
activities in one geological location which represents only one
business activity.
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any
of the Group’s other companies. The operating results for the Group as
a whole are reviewed regularly by the Group’s CEO to make decisions about
resources to be allocated and to assess its performance.
14. Subsequent events
There were no events that occurred after the reporting period that
requires further disclosure in these audited financial statements.
15. Interest bearing borrowings
2012 2011
R’000 R’000
Opening balance - -
Loan advanced - China Development Bank 849 810 -
Foreign exchange loss (2 560) -
Interest accrual 666 -
Closing balance 847 916 -
The Group has an unsecured loan with a carrying amount of
US$100 million at 31 December 2012 (2011: RNil). According to the
terms of the agreement, this loan is repayable before 21 December
2013. Interest is payable six monthly in arrears at a rate equal to
the six month LIBOR on the first day of the interest cycle plus
2.3% per annum. The facility will be used for on-going capital
development of the Bakubung Platinum Mine.
16. Headline earnings per share
The basis of calculation of headline
earnings/(loss) and diluted headline
earnings/( loss) per share is:
Profit/(loss) attributable to
ordinary shareholders (Rand) 9 747 918 (358 326 233)
Profit on disposal of property plant
and equipment (7 000)
Impairment of investment in equity-
accounted investee 1 654 528 -
Loss on dilution of interest in
equity-accounted investee - 9 186 957
Headline earnings/(loss) 11 395 446 (349 139 276)
Weighted average number of ordinary
shares in issue (shares) 1 627 827 058 1 348 167 363
Headline earnings/( loss) and diluted
headline earnings(loss) per share
(cents) 0.70 (25.90)
17. Capital commitments
Capital commitments for the next 12 months amounts to
R428.1 million (2011: R305.3 million).
By order of the Board:
Dawn Mokhobo (Chairman) Jianke Gao (Chief Executive Officer)
Sponsors: PSG Capital Proprietary Limited
Directors: DNM Mokhobo (Chairman)*, D Chen (Deputy Chairman)*#, J Gao
(Chief Executive Officer)#, W Ma (Financial Director)#, WM Eksteen*, J
Li#, LV Ngculu*, L Teng*#, BJ van der Merwe*, CWN Molope *
*Non Executive #Chinese
Company secretary: Vasta Mhlongo
Registered address: Unit 13, 2nd Floor, 3 Melrose Boulevard, Melrose
Arch, 2076.
www.wesizwe.com
27 March 2013
Johannesburg
Date: 27/03/2013 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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