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EVRAZ HIGHVELD STEEL & VANADIUM LTD - Group unaudited results for the quarter ended 31 March 2013

Release Date: 20/05/2013 16:00
Code(s): EHS     PDF:  
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Group unaudited results for the quarter ended 31 March 2013

EVRAZ Highveld Steel and Vanadium Limited
(Incorporated in the Republic of South Africa)
(Registration No: 1960/001900/06)
Share code: EHS
ISIN: ZAE000146171
(“the Company” or “the Group”)

GROUP UNAUDITED RESULTS FOR THE QUARTER ENDED 31 MARCH 2013

Chairman and CEO’s Review

     -   Headline profit R30 million (Q4 2012: loss R222 million)
     -   Net profit R30 million (Q4 2012: loss R222 million)

1.       Safety

         EVRAZ Highveld improved its employee’s safety performance by 50% for Q1 2013 compared to Q4 2012.
         For all hours worked at the Company, the progressive Lost Time Injury Frequency Rate (LTIFR), the key
         indicator of safety at work, decreased by 48% from 2.58 in Q4 2012 to 1.34 in Q1 2013, which ended on 31
         March 2013.

2.       Key Financials

         The operating profit for Q1 2013 was R50 million, compared to a loss of R283 million in Q4 2012. The
         improved performance can be attributed to increased sales, higher vanadium prices and reduction in costs.
         The EBITDA for the period was a profit of R124 million, compared to a R212 million loss for Q4 2012.
         Revenue increased to R1 414 million in Q1 2013 compared to R1 029 million Q4 2012.

3.       Operations

         Steel

         Steel output increased by 6% from 165 715 to 175 397 tons as a result of improved shaking ladle process
         control and melting of stockpiled iron units.

         Production of rolled products was flat relative to Q4 2012 at 123 774 tons.

         Longer processing times and availability issues in both mills have resulted in increased inventories of cast
         steel, which are expected to be worked down during the winter months when high peak period electricity
         tariffs impact on iron production.

         The project to improve kiln pre-reduction performance remains on track for completion in Q3 2013. This
         project will result in a reduction of electrical energy consumption in the Ironmaking furnaces.

         Mining

         Production of ROM, lumpy and fines ore showed an increase in volumes for Q1 2013 compared to all
         quarters of 2012. Fine ore was dispatched for Q1 2013 at favourable pricing. In March 2013 pit mining
         trial commenced and will be running until June 2013. The trial will provide data needed to extend current
         ore reserves at Mapochs Mine.

         The SLP housing programme has reached its final planning stages with all tenders and proposals finalised.
         Municipal infrastructure has been completed and construction of the houses will commence in Q3 2013.

         Vanadium

         Improved operating performance of vanadium in Q1 2013 resulted in a total of 12 057 tons of vanadium
         slag produced containing 1 627tons V compared to 10 209 tons slag containing 1 487tons V during the
         previous quarter.
4.     Markets

       Global and local markets

       Global crude steel production for January and February 2013 was 253 million tons versus 246 million tons
       during the same period in 2012. This 2.8% increase was on the back of increased production in Asia while
       crude steel production in most other major global regions declined when comparing the first two months of
       2013 to the same period in 2012.

       South African crude steel production for January and February 2013 was 1.085 million tons versus 1.214
       million tons produced during the first two months of 2012, a decline of 10.6%. Consumption information is
       published by SAISI on an annual basis thus domestic consumption information is not available for Q1
       2013.

       EVRAZ Highveld Sales

       Steel sales volumes increased by 21% to 135 512 tons in Q1 2013 against 111 587 tons in Q4 2012. This
       includes approximately 11,000 tons of Q4 2012 production despatched in Q1 2013 as customers were
       closed the last two weeks of December 2012.

       Domestic steel sales increased from 108 647 in Q4 2012 to 134 231 in Q1 2013. Export steel sales
       volumes decreased by 56% to 1 281 tons in Q1 2013 against 2 940 tons in Q4 2012.

       Ferrovanadium sales for Q1 2013 increased to 1 084 tons V compared to 870 tons V in Q4 2012. Nitrovan
       sales increased from 193 tons V in Q4 2012 to 224 tons V in Q1 2013. Domestic vanadium slag sales were
       at 104 tons V in Q1 2013 compared to 101 tons V in Q4 2012.

5.     Outlook

       In the absence of major government infrastructure spending growth, domestic steel demand is expected to
       remain correlated with GDP growth. As the Chinese economy has not recovered to an extent that it can
       absorb more of its own output and while the European economic contraction has not stabilised, the
       international steel market suffers from oversupply which is unlikely to subside. Most 2013 forecasts predict
       global steel growth between 2% and 5% largely driven by China and non-residential US construction.

       Following a strong performance in the closing months of 2012 and during Q1 2013, Vanadium prices
       started to retreat in April 2013. Although demand growth is expected, ramp-ups in Chinese vanadium
       production could mitigate future price increases.

       The Company participated in the NERSA public hearings in Q1 2013 regarding the Eskom MYPD3 and
       was notified by Eskom that final adjudication by NERSA resulted in a 9.6% tariff increase for 2013/14,
       compared to the original 21% applied for. Although this development offers welcome relief, energy and
       labour costs are expected to remain major challenges in the medium term.

BJT Shongwe                                             MD Garcia
(Chairman)                                              (Chief Executive Officer)
20 May 2013

Directors: B J T Shongwe (Chairman), M D Garcia (Chief Executive Officer) (American), G C Baizini (Italian), M Bhabha,
Mrs B Ngonyama, T Mosololi, VM Nkosi, D Šcuka (Czech), P M Surgey, P S Tatyanin (Russian), J Valenta )(Czech) and
T I Yanbukhtin (Russian)
Acting Company Secretary: Ms A Weststrate

Registered office:                                      Transfer secretaries:
Portion 93 of the farm                                  Computershare Investor Services
Schoongezicht No. 308 JS                                Proprietary Limited
District eMalahleni                                     70 Marshall Street
Mpumalanga                                              Johannesburg
PO Box 111                                                PO Box 61051
Witbank 1035                                              Marshalltown 2107

Tel:    (013) 690 9911                                    Tel: (011) 370 5000
Fax:    (013) 690 9293                                    Fax: (011) 688 5200

Sponsor:
J.P. Morgan Equities South Africa (Pty) Ltd


GROUP UNAUDITED FINANCIAL RESULTS

Basis of preparation

The Group's financial results for the quarter ended 31 March 2013 set out below have been prepared in
accordance with the principal accounting policies of the Group, which comply with International Financial Reporting
Standards (IFRS) and in the manner required by the Companies Act in South Africa and are consistent with those
applied in the Group's most recent annual financial statements, including the Standards and Interpretations as
listed below.

These results are presented in terms of International Accounting Standards (IAS) 34 applicable to Interim Financial
Reporting.

Significant accounting policies

i)
The Group has adopted the following new and revised Standards and Interpretations issued by the International
Accounting Standards Board (the IASB) and the International Financial Reporting Interpretation Committee (IFRIC)
of the IASB, that are relevant to its operations and effective for accounting periods beginning on 1 January 2013.
These Standards had no impact on the results or disclosures of the Group.

    -   IAS 12, Amended - Deferred taxes: Recovery of underlying assets (effective from 1 January 2012);
    -   IAS 1, Amended - Presentation of items of other comprehensive income (effective from 1 July 2012);
    -   IAS 27, Separate financial statements (consequential revision due to the issue of IFRS 10) (effective from 1
        January 2013);
    -   IAS 28, Investments in associates and joint ventures (consequential revision due to the issue of IFRS 10
        and 11) (effective from 1 January 2013);
    -   IFRS 7, Amended - Disclosures: Offsetting financial assets and financial liabilities (effective from 1 January
        2013);
    -   IFRS 10, Consolidated financial statements (effective from 1 January 2013);
    -   IFRS 11, Joint arrangements (effective from 1 January 2013);
    -   IFRS 12, Disclosure of interest in other entities (effective from 1 January 2013);
    -   IFRS 13, Fair value measurement (effective from 1 January 2013);
    -   IFRIC 20, Stripping costs in the production phase of a surface mine (effective from 1 January 2013); and
    -   Improvements to IFRS - Issued May 2012 (effective from 1 January 2013).

ii)
The Group implemented IAS 19 Employee Benefits from 1 January 2013. The Group previously only recognised
the net cumulative unrecognised actuarial gains and losses, which exceeded 10% of the greater of the defined
benefit obligation and the fair value of the plan assets. As a consequence, the Group's statement of financial
position did not reflect a significant part of the unrecognised net actuarial gains and losses. In 2013 the Group
changed its accounting policy to recognise actuarial gains and losses in the period in which they occur in total in
other comprehensive income. Changes have been applied retrospectively in accordance with IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors, resulting in the adjustment of prior year financial
information.

As a result of the accounting policy change, the following changes were made to the financial statements:
As of 1 January 2012:

    -   Increase in employee benefit liability: R26 million
    -   Decrease in opening retained earnings: R26 million

As of 31 December 2012:

    -   Increase in employee benefit liability: R29 million
    -   Net expense recognised on other comprehensive income: R3 million
    -   Decrease in retained earnings: R26 million

For the period ended 31 March 2013:

    -   No increase in employee benefit liability - will be calculated during 2013.
    -   No deferred tax impact as the Company is in an assessed loss position and the deferred tax asset has
        been impaired.

iii)
The following Standards, amendment to the Standards and Interpretations, effective in future accounting periods
have not been adopted in these financial statements:

    -   IAS 32, Amended - Offsetting financial assets and financial liabilities (effective from 1 January 2014);
    -   IFRS 9, Financial instruments - classification and measurement (effective from 1 January 2015); and
    -   IFRS 9 and IFRS 7, Amended - Mandatory effective date and transition disclosures (IFRS 9 effective from
        1 January 2015, IFRS 7 depends on when IFRS 9 is adopted).


This abridged report was prepared under supervision of the Chief Financial Officer, Mr. Jan Valenta (Chartered
Accountant).


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                        Unaudited as
                                                                  at    Restated as at    Restated as at
                                                        31 Mar 2013      31 Dec 2012        1 Jan 2012
                                             Notes               Rm               Rm                Rm
 ASSETS
 Non-current assets                                            1 767             1 801            1 927
 Property, plant and equipment                                 1 688             1 722            1 760
 Deferred tax asset                                               79                79              167

 Current assets                                                2 167             1 866            2 531
 Inventories                                                     876               858              831
 Trade and other receivables and pre-
 payments                                       5                708               480              516
 Taxation                                                          -                 1                -
 Cash and short-term deposits                                    583               527            1 184

 TOTAL ASSETS                                                  3 934             3 667            4 458

 EQUITY AND LIABILITIES

 Total equity                                                  1 789             1 709            2 594

 Non-current liabilities                                         801               789              650
 Interest-bearing loans and borrowings          6                 16                16                -
 Provisions                                                      785               773              650
Current liabilities                                          1 344               1 169               1 214
Trade and other payables                                       808                 924               1 016
Interest-bearing loans and borrowings            6             402                 102                   -
Income tax payable                                               1                   -                  45
Provisions                                                     133                 143                 153

TOTAL EQUITY AND LIABILITIES                                 3 934               3 667               4 458
Net Cash                                                       165                 409               1 184
Net asset value - cents per share                            1 804               1 724               2 616


CONDENSED CONSOLIDATED INCOME STATEMENT




                                                              Unaudited        Unaudited
                                                            for the three    for the three       Audited for
                                                                  months           months          the year
                                                                   ended            ended            ended
                                                            31 Mar 2013      31 Mar 2012       31 Dec 2012
                                                     Note              Rm               Rm               Rm
Revenue                                                             1 414            1 334            4 354
Sale of goods                                                       1 413            1 331            4 346
Cost of sales                                                     (1 244)          (1 327)          (4 746)
Gross profit / (loss)                                 7               169                 4           (400)
Other operating income                                8                 11                -             138
Selling and distribution costs                                        (64)             (73)           (248)
Administrative expenses                                               (61)             (82)           (289)
Other operating expenses                                               (5)              (3)             (55)
Operating profit / (loss)                                               50           (154)            (854)
Finance costs                                                         (19)             (11)             (52)
Finance income                                                           1                3                8
Profit / (loss) before tax                                              32           (162)            (898)
Income tax (expense) / credit                         9                (2)               68             (45)
Profit / (loss) for the period/year                                     30             (94)           (943)


                                                                     Cents            Cents          Cents
Profit / (loss) per share - basic and diluted                         30.3            (94.8)        (951.1)


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



                                                     Unaudited for      Unaudited
                                                         the three    for the three      Restated for
                                                           months           months           the year
                                                            ended            ended             ended
                                                     31 Mar 2013      31 Mar 2012        31 Dec 2012
                                                               Rm               Rm                Rm

Profit / (loss) for the period/year                             30             (94)             (943)
Other comprehensive income/ (loss):
Exchange differences on translation of foreign                  47             (13)                49
operations
Actuarial loss on defined benefit plan                                  -                                   (3)
Total comprehensive income / (loss) for the
period/year                                                         77               (107)                (897)


HEADLINE EARNINGS PER SHARE


                                                        Unaudited             Unaudited
                                                      for the three         for the three       Audited for
                                                            months                months          the year
                                                             ended                 ended            ended
                                                      31 Mar 2013           31 Mar 2012       31 Dec 2012
                                                                Rm                    Rm               Rm
Reconciliation of headline profit / (loss)
Profit / (loss) for the period/year                                30               (94)             (943)
(Deduct)/add after tax effect of:
Proceeds on successful litigation against the
Channel Induction Furnace supplier                                  -                   -                (79)
(Profit) / loss on disposal and scrapping of
property, plant and equipment                                       *                  *                (*)
Headline profit / (loss)                                           30               (94)           (1 022)
* Less than R1 million.
                                                             Cents                Cents             Cents
Profit / (loss) per share - headline and diluted              30.3                (94.8)         (1 030.4)


                                                            Million               Million           Million
Number of shares
                                          +
Ordinary shares in issue as at end date *                     99.2                  99.2                 99.2
* Rounded to nearest hundred thousand.
+
  Agree to weighted average and diluted number
of ordinary shares.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                         Issued
                                                         capital
                                                      and share                 Other        Retained
                                                       premium               reserves        earnings             Total
                                               Note         Rm                    Rm              Rm               Rm
2012
Balance at 1 January 2012 - Restated                        585                   203           1 806             2 594
Loss for the period                                                                               (94)              (94)
Other comprehensive loss for the quarter                                         (13)                               (13)
Balance at 31 March 2012 - Restated                         585                  190            1 712             2 487
Loss for the period                                                                             (282)             (282)
Other comprehensive income for the
quarter                                                                            11                                11
Share-based payment reserve                                                         8                                 8
Balance at 30 June 2012 - Restated                          585                   209           1 430             2 224
Loss for the period                                                                             (345)             (345)
Other comprehensive income for the
quarter                                                                            13                                13
Share-based payment reserve                                                         2                                 2
Balance at 30 September 2012 -
Restated                                                  585             224              1 085              1 894
Loss for the period                                                                        (222)              (222)
Other comprehensive income for the
quarter                                                                       38                                 38
Actuarial loss on defined benefit plan                                                           (3)             (3)
Share-based payment reserve                                                    2                                   2
Balance at 31 December 2012 -
Restated                                                  585             264                860              1 709
2013
Balance at 1 January 2013 - Restated                      585             264                860              1 709
Profit for the period                                                                         30                 30
Other comprehensive income for the
quarter                                                                    47                                    47
Share-based payment reserve                  10                             3                                     3
Balance at 31 March 2013 - Unaudited                      585             314                890              1 789



                                                         Unaudited for        Unaudited for              Audited for
                                                             the three            the three                the year
                                                         months ended         months ended                   ended
                                                          31 Mar 2013          31 Mar 2012             31 Dec 2012
                                                                Cents                Cents                    Cents
Dividends per share
Dividends declared and paid                                           -                      -                     -


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                  Unaudited     Unaudited
                                                     for the       for the
                                                       three         three         Audited for
                                                    months        months             the year
                                                     ended         ended               ended
                                                    31 Mar        31 Mar              31 Dec
                                                       2013          2012                2012
                                                         Rm            Rm                 Rm
Cash flows from operating activities
  Cash used in operations before tax paid             (233)         (286)               (608)
  Income tax paid                                       (1)            (*)                (2)
Net cash used in operating activities                 (234)         (286)               (610)
Cash flows from investing activities
  Proceeds from sale and scrapping of
property, plant and equipment                              *              1                 4
  Net additions to property, plant and
equipment                                               (38)          (61)              (203)
Net cash used in investing activities                   (38)          (60)              (199)
Cash flows from financing activities
  Increase in long-term interest-bearing loans
and borrowings                                             -           15                  15
  Increase in short-term interest-bearing
loans and borrowings                                    300             -                 102
Net cash generated by financing activities              300            15                 117
Net increase/(decrease) in cash and cash
equivalents                                              28         (331)               (692)
Cash and cash equivalents at the beginning of
the period/year                                           527          1 184          1 184
Effects of exchange rate changes on cash
held in foreign currencies                                 28           (13)             35
Cash and cash equivalents at the end of the
period/year                                               583            840            527
* Less than R1 million.


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1   Companies Act and JSE Limited Listings Requirements
    Compliance with the Companies Act, No 71 of 2008, as well as the Listings Requirements of the JSE Limited
    has been maintained throughout the reporting periods.

2   Related party transactions
    Sales to East Metals A.G. (a fellow subsidiary) amounted to R60 million (March 2012 YTD: R74 million) for the
    3 months ended 31 March 2013. This constitutes 4% of total revenue for the period, compared to 6% for the
    period ended 31 March 2012. Technical services (slag tolling agreement) and other services with EVRAZ
    Vametco Alloys Proprietary Limited (a fellow subsidiary) amounted to R20 million for the year 3 months ended
    March 2013 (March 2012 YTD: R17 million).

3   Segment information
    The Group is organised into business units based on their products and has two reportable segments as
    follows:

    Steelworks
    The major products of the steel segment are magnetite iron ore, structural steel, plate and coil.

    Vanadium
    The major products of the vanadium segment are vanadium slag and ferrovanadium. Vanadium slag is a by-
    product from the steelmaking process, and this slag is transferred from the Steelworks to the Vanadium Plant,
    which then forms the input into the business of the vanadium business.

    No operating segments have been aggregated to form the above reportable operating segments.
    Management monitors the operating results of its business units separately for the purposes of making
    decisions about resource allocation and performance assessment. Segment performance is evaluated based
    on operating profit.

    The following tables present the revenue, operating profit and total assets information regarding the Group's
    operating segments:


                             Unaudited for
                                 the three       Unaudited for       Audited for
                                   months     the three months         the year
                                    ended                ended           ended
                              31 Mar 2013          31 Mar 2012     31 Dec 2012
                                       Rm                  Rm               Rm
Revenue
Steelworks                           1 117               1 005            3 181
Vanadium                               372                 335            1 199
Elimination in
intersegmental revenue                 (75)                 (9)             (26)
Total                                1 414               1 331            4 354
                            Unaudited for
                                the three      Unaudited for      Audited for
                                  months    the three months        the year
                                   ended               ended          ended
                             31 Mar 2013         31 Mar 2012    31 Dec 2012
                                      Rm                 Rm              Rm
Operating profit/(loss)
Steelworks                           (37)              (234)         (1 153)
Vanadium                               87                 80             299
Total                                  50              (154)           (854)



                              Unaudited
                                   as at      Audited as at
                            31 Mar 2013       31 Dec 2012
                                    Rm                 Rm
Total assets
Steelworks                         3 310              2 935
Vanadium                             624                732
Total                              3 934              3 667

4   Supplementary revenue information - Unaudited

                                                               For the three
                                               For the three         months      For the year
                                              months ended            ended            ended
                                               31 Mar 2013     31 Mar 2012      31 Dec 2012
Sales volumes of major products
Total steel                    Tons                 135 512        133 241          453 836
Ferrovanadium                 Tons V                  1 084          1 554            4 766
Modified Vanadium Oxide       Tons V                      0             16              244
Nitrovan                      Tons V                    224            119              669
Vanadium slag                 Tons V                    104              0              181
Fines ore                      Tons                 183 970        165 765          687 380


Weighted average selling prices achieved for major products
Total steel                    US$/t                    762            849             764
Ferrovanadium                US$/kg V                    29             23              23
Modified Vanadium Oxide      US$/kg V                      -            17              18
Nitrovan                     US$/kg V                    30             24              23
Vanadium slag                US$/kg V                    10              -               7
Fines ore                      US$/t                     44             19              20

Average R/$ exchange
rate                                                   8.95           7.76            8.21

5   Trade and other receivables and pre-payments
    The increase of R192 million can mainly be attributed to increased sales volumes and prices in 2013.
    December months are also historically low sales months due to the holiday periods.

6   Interest-bearing loans and borrowings
    The long-term borrowings of R16 million (2012: R16 million) consist of the loan due by Umnotho Iron and
    Vanadium Proprietary Limited payable to Umnotho weSizwe Group Proprietary Limited. This loan has no
    fixed repayment terms and interest is charged at prime rate. The short-term borrowings are with Citibank and
    Investec Bank. The loans are uncommitted and carry interest at market related interest rates.
7    Gross profit / (loss)
     The improvement in gross profit is as a result of improved steel selling prices, increased vanadium- and fines
     ore selling prices and reduction in costs.

8    Other operating income and expenses
     The R11 million (2012: Rnil million) other operating income includes sundry income and inventory
     adjustments. The other operating expense of R5 million (2012: R3 million) includes foreign exchange
     differences of R4 million.

9    Income tax

                                                    Unaudited
                               Unaudited for      for the three     Audited for
                                   the three            months        the year
                               months ended              ended          ended
                                31 Mar 2013       31 Mar 2012     31 Dec 2012
                                         Rm                 Rm             Rm
South African
Normal
  Prior year                                  -               -             (44)

Deferred
  Current                                     -           (68)               86

Non-South African
Normal
   Current                                   2                *               3
Income tax
expense/(credit)                             2            (68)               45
* Less than R1 million

     The period income tax expense is accrued using the estimated average annual effective income tax rate
     applied to the pre-tax income of the interim report.

10   Share-based payment reserve
     Certain key management personnel participate in a Long Term Incentive Plan (LTIP) over shares in EVRAZ
     plc. The shares are traded on the London Stock Exchange. The vesting of the shares occur on the 90th day
     following the announcement of EVRAZ plc financial results. The cost of the LTIP award will be settled in
     equity by EVRAZ plc. The amount recognised according to IFRS 2 in Q1 2013 is R3 million (2012 year: R12
     million).

11   Guarantees
     As required by the Mineral and Petroleum Resources Development Act, a guarantee amounting to R264
     million (2012: R264 million) was issued on 1 February 2007 in favour of the Department of Mineral
     Resources (DMR) for the unscheduled closure of Mapochs Mine. This guarantee is issued by EVRAZ
     Highveld on behalf of Mapochs Mine.

     As required by certain suppliers of the Group, guarantees were issued in favour of these suppliers to the
     value of R9 million (2012: R9 million) in the event the Group will not be able to meet its obligations to the
     supplier.

12   Contingent liabilities
     In terms of the Group's employment policies, certain employees could become eligible for post-retirement
     medical aid benefits at any time in the future prior to their retirement subject to certain conditions. The
     potential liability for the Group should they become medical scheme members in the future is R32 million
     before tax and R23 million after tax (2012: R32 million before tax and R23 million after tax).
     On 5 June 2008, the Commission initiated a complaint against Highveld for an alleged contravention of
     section 4(1)(b)(i) of the Competition Act, No. 89 of 1998 ("the Competition Act"). The allegations against
     Highveld are that it fixed prices and trading conditions for flat and long steel products. In a letter from the
     Commission dated 18 September 2009, the Commission confirmed that it would not be pursuing a case of
     collusion in the long steel market against Highveld. On 30 March 2012 the Commission referred the
     complaints relating to the the flat steel market to the Competition Tribunal for prosecution. The allegations
     against Highveld contained in the Commission’s complaint referral are that Highveld fixed prices and trading
     conditions for flat steel products, and divided markets in respect of flat steel products, which are
     contraventions of sections 4(1)(b)(i) and 4(1)(b)(ii) of the Competition Act respectively. It is further alleged in
     the Commission’s Complaint Referral that Highveld has contravened sections 4(1)(b)(i) and 4(1)(b)(ii),
     alternatively section 4(1)(a), of the Competition Act by engaging in the exchange of information with a
     competitor through information exchanges and meetings of the South African Iron and Steel Institute or its
     committees. Should the Competition Commission be successful, it could raise a maximum penalty of R554
     million against EVRAZ Highveld.

13   Subsequent events
     There are no events to be reported on since 31 March 2013.

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