Wrap Text
Audited summarised annual financial results and final cash dividend declaration for the year ended 31 December 2013
Kumba Iron Ore Limited
A member of the Anglo American plc group
(Incorporated in the Republic of South Africa)
(Registration number 2005/015852/06)
JSE Share code: KIO
ISIN: ZAE000085346
KUMBA IRON ORE LIMITED
AUDITED SUMMARISED ANNUAL FINANCIAL RESULTS AND FINAL CASH DIVIDEND
DECLARATION
FOR THE YEAR ENDED 31 DECEMBER 2013
KEY FEATURES
- No loss of life
- Sishen mine’s production down 8% for the year; improved significantly in
4Q13 by 31% from 3Q13
- Outstanding performance at Kolomela mine continued, increasing production
by 27% to 10.8 Mt
- Export sales of 39.1 Mt, down 2%
- Operating profit of R28.4 billion, up 20%
- Headline earnings of R15.4 billion, up 24%
- Final cash dividend declared of R19.94/share, total dividend for 2013
R40.04 up 26%
- Supply Agreement concluded with ArcelorMittal S.A.
- Constitutional Court judgment delivered, bringing an end to the legal
process
COMMENTARY
Kumba Iron Ore Limited (Kumba, the company, or the group) announces its
preliminary results for the year ended 31 December 2013.
2013 was a year which was spent on reviewing and assessing our assets, our
portfolio and resetting our strategy. It was a challenging year in many
respects but we are pleased with the overall results. In particular it was
very gratifying that Kumba ended 2013 with no loss of life at its
operations. However, there was a marked deterioration in our lost-time
injury frequency rate (LTIFR) per 200,000 hours worked to 0.18 from 0.10 in
2012.
2012 and 2013 were very difficult years for employee relations in the South
African mining industry and this has continued into 2014. In Kumba, 2013 saw
improved relations with no significant work stoppages, quite different from
2012 when we had a serious unprotected strike at Sishen mine. This was
achieved by significantly improving communication with our employees and
instituting a number of post-strike studies and remedial actions. Wage
negotiations are set to commence during 2014.
Total production of iron ore of 42.4 million metric tonnes (Mt) decreased by
2% primarily as a result of the production shortfalls at Sishen mine, which
were mostly offset by the excellent performance at Kolomela mine. The
optimisation and strategic reviews undertaken at Sishen mine have resulted
in a focused recovery and optimisation plan to increase production.
The steady financial performance achieved in the first half of the year was
maintained, with headline earnings of R15.4 billion for the full year, a
24% increase on the R12.5 billion achieved in 2012. The marginal 2% decrease
in export iron ore volumes to 39.1 Mt, offset by the 2% stronger average
export iron ore prices achieved, together with a 17% decline in the average
Rand/US dollar exchange rate, resulted in revenue increasing by 20% to
R54.5 billion (2012: R45.4 billion).
Attributable and headline earnings per share were R48.09 and R48.08 per
share respectively, and a final dividend of R19.94/share has been declared
(total dividend for 2013 is R40.04 per share; 2012: R31.70 per share).
Excellent progress was made in the resolution of major legal and regulatory
matters. In November 2013, Kumba’s 73.9% subsidiary, Sishen Iron Ore Company
(Pty) Ltd (SIOC), entered into a new Supply Agreement with ArcelorMittal
S.A. regulating the sale and purchase of iron ore between the parties. This
agreement is effective from 1 January 2014 and settled the arbitration and
various other disputes between the parties.
The legal proceedings involving the 21.4% undivided share of the Sishen
mine mineral rights continued through 2013 with the Constitutional Court
hearing, on 3 September 2013, of the Department of Mineral Resources (DMR)
and Imperial Crown Trading 289 (Pty) Ltd (ICT) appeal applications
against the Supreme Court of Appeal’s judgment.
In a detailed and comprehensive judgment delivered on 12 December 2013,
the Constitutional Court ruled that, based on the provisions of the
Mineral and Petroleum Resources Development Act (MPRDA), only SIOC can
apply for the residual 21.4% undivided share of the Sishen mining right.
The grant of the mining right may be made subject to such conditions
considered by the Minister to be appropriate, provided that the proposed
conditions are permissible under the MPRDA. Based on this, SIOC continues to
account for 100% of what is mined from the reserve at Sishen mine. SIOC has,
in compliance with the Constitutional Court order, submitted an application
to be granted this right.
Following the Constitutional Court ruling, the sale of iron ore from SIOC
to ArcelorMittal S.A. will remain regulated by the recently concluded
Supply Agreement.
MARKET OVERVIEW
The global steel and iron ore markets have generally been stable in 2013,
and better than anticipated. An increase in global steel production of 3% to
1,582 Mt (2012: 1,529 Mt), supported the demand for iron ore. The sustained
government infrastructure spend in China, as well as steel mill restocking
prior to the winter season, assisted this rise.
China – the main producer of steel worldwide – increased its production by
an unexpectedly strong 7% this year to 779 Mt (2012: 731 Mt). Growth in
Japan and South Korea was also above expectations, and Europe has stabilised
during the year, which supported global demand.
Seaborne iron ore supplies increased by 10% in 2013 to 1,324 Mt (2012:
1,208 Mt), as the increase from Australia more than compensated for lower
supplies from India and flat exports from Brazil.
Iron ore index prices were strong and averaged 4% higher at US$135/tonne
(Platts 62% Fe CFR China) (2012: US$130/tonne). Index prices reached a high
of US$160/tonne in February 2013, but fell to a low of US$110/tonne in May
2013, before stabilising at around US$135/tonne towards the end of the year.
Kumba’s pricing mechanism continued to evolve with prices in China now
mostly based on index values around the discharge date. In other markets,
we largely continue to use a quarterly pricing mechanism.
OPERATIONAL PERFORMANCE
Safety
Kumba ended 2013 without any loss of life. However, there was a marked
deterioration in our lost time injury frequency rate with 33 lost-time
injuries recorded for the year (2012: 20), most arising from materials
handling but of less severity than in previous periods. Kumba has renewed
its focus on entrenching individual responsibility and behaviour,
particularly in relation to repeat incidents, and various processes are
underway to improve effective learning and hazard identification risk
assessments.
We continue to drive structured safety improvement plans to enhance our
safety culture and highlight the importance of employee focus with regard
to safety in every task in the work place.
Production summary (Unaudited)
Year ended
Mt 31 Dec 2013 31 Dec 2012 % change
Mine production 42.4 43.1 (2)
Sishen mine 30.9 33.7 (8)
DMS plant 20.4 23.1 (12)
Jig plant 10.5 10.6 -
Kolomela mine 10.8 8.5 27
Thabazimbi mine 0.6 0.8 (25)
Sishen mine
Total tonnes mined at Sishen mine rose by 22% to 208.8 Mt (2012: 171.6
Mt), of which waste mined amounted to 167.8 Mt, an increase of 26%
(2012: 133.5 Mt) as the planned waste ramp up continues to alleviate the
current pit constraints at the mine. Iron ore production at Sishen mine,
however, decreased by 8% compared with 2012, to 30.9 Mt. Production from
the dense media separation (DMS) plant was impacted by availability of
material from the pit and resulted in 12% lower output for the year.
Production from the Jig plant was in line with the prior year although
still below design capacity due to feedstock quality constraints. The mine
was further hampered by several section 54 regulatory safety stoppages
relating to the operation of trackless mobile machinery in August 2013,
which also resulted in a gradual ramp up of the mine thereafter.
The Sishen mine pit is currently constrained, resulting in insufficient
exposed ore. A production recovery plan to address the current pit
constraints and a longer term operational optimisation strategy are being
implemented, which include re-designing of waste mining push backs to
rotate mining direction in some areas through 90 degrees, optimising
smaller push backs, and design changes to enable faster sink rates to
expose ore. A three-year expansion programme to develop and build a
maintenance workshop for heavy mining equipment was completed on time and
on budget, improving sustainability and productivity.
To facilitate the expansion of Sishen mine to the west, Kumba has
completed a comprehensive feasibility study for the relocation of the
Dingleton community in conjunction with an extensive consultation process
with interested and affected parties, the community and relevant government
departments. The Kumba Board approved the plan to resettle the community
in the town of Kathu in the Northern Cape Province. This is expected to cost
an estimated R4.2 billion over a four to six year period.
Kolomela mine
Kolomela mine continued to deliver an outstanding performance in 2013,
increasing production by 27% to 10.8 Mt (2012: 8.5 Mt). Production exceeded
monthly design capacity for most of the year, and reached a new record level
during October 2013. Total tonnage mined increased by 38% to 59.9 Mt (2012:
43.5 Mt), of which waste mined increased by 39% to 46.7 Mt.
Thabazimbi mine
Production at Thabazimbi mine was 25% lower at 0.6 Mt (2012: 0.8 Mt), mainly
as a result of partial plant shutdowns towards the end of 2013. The new
Supply Agreement with ArcelorMittal S.A. may enable the extension of the
life of Thabazimbi mine to 2023, and beyond that through the introduction of
low grade beneficiation technologies.
Logistics
Volumes railed on the Iron Ore Export Channel (IOEC) remained steady at
40.1 Mt (2012: 40.0 Mt), as Transnet Freight Rail continued its solid
performance of recent years. Of this, 11.1 Mt came from Kolomela mine.
Kumba shipped 39.3 Mt from the Saldanha port, a 2% increase on 38.5 Mt of
the previous financial year.
Total finished product stockpiles amounted to 2.8 Mt at the end of the
year, compared with 3.7 Mt at the end of 2012.
Shipping
The group’s shipping business increased volumes shipped on behalf of
customers from the Saldanha port to 25.7 Mt, 1.6 Mt or 7% up over 2012.
Long-term freight contracts accounted for 6.7 Mt or 26% of the total
volume.
Sales
Sales summary (Unaudited)
Year ended
Mt 31 Dec 2013 31 Dec 2012 % change
Total sales volumes 43.7 44.4 (2)
Export sales 39.1 39.7 (2)
Domestic sales 4.6 4.7 (2)
Sishen mine 3.9 3.5 11
Thabazimbi mine 0.7 1.2 (42)
Notwithstanding the lower production from Sishen mine, Kumba’s total sales
volumes were only 2% lower at 43.7 Mt (2012: 44.4 Mt) as both export and
domestic sales volumes to ArcelorMittal S.A. for the year decreased by 2%
to 39.1 Mt (2012: 39.7 Mt) and 4.6 Mt (2012: 4.7 Mt), respectively. The
lower export sales volumes were mainly impacted by the production shortfalls
at Sishen mine which reduced export stock levels across the value chain,
mostly offset by the performance from Kolomela mine.
Export sales volumes to China accounted for 68% of the company’s total
export volumes for the year, compared to 69% in 2012. Sales volumes to
Japan and South Korea rose by 13% to 8.3 Mt and represented 21% of the total
export sales for the year, and the remaining 11% went to Europe. In 2014
this spread is expected to shift slightly as more iron ore is shipped to
China and less to Europe.
The group’s lump:fine ratio was 63:37, resulting in significant benefit as
the lump premiums strengthened towards the end of 2013. The superior
physical characteristics of Kumba’s lump ore allows for the production of
niche lump products with very specific sizing, commanding an additional
premium in the market.
FINANCIAL RESULTS
Revenue
The group’s total revenue rose 20% to R54.5 billion (2012: R45.4 billion).
This improvement directly reflects the 2% increase in the average iron ore
export prices realised, supported by stronger lump premiums particularly in
the second half of the year, as well as the weakening of the Rand/US
Dollar exchange rate, closing at R10.46/US$ from a starting point of
R8.48/US$ at the beginning of the financial year.
Operating expenses
Total operating costs rose by 20% to R26.1 billion (2012: R21.8 billion),
driven primarily by above inflation cost increases and the mining of
47.5 Mt of additional waste at Sishen and Kolomela mines. As a result of the
planned increase in mining activity at Sishen mine, the production
shortfalls and above inflationary input cost escalations, the mine’s unit
cash cost increased by 35% to R267/tonne compared to R198/tonne at the end
of 2012. Kolomela mine’s unit cash cost was R182/tonne for 2013 (2012:
R180/tonne).
The group’s selling and distribution costs of R4.5 billion (excluding
shipping expenses) were 12% higher (2012: R4.1 billion) and were impacted
by higher rail and port tariffs, as well as the utilisation of 2.1 Mt from
Kolomela mine at a super tariff.
Operating profit
The group’s operating profit margin of 52% for the period under review
(56% from mining activities) is a healthy one, and a steady continuation
of the 2012 performance, despite the production challenges at Sishen mine.
Operating profit increased by 20% to R28.4 billion (2012: R23.6 billion)
in line with:
- A weighted average increase of 2% in realised iron ore export prices; and
- The average Rand/US$ exchange rate of R9.62/USD1.00, which was 17% weaker
than the R8.19 achieved during 2012.
These increases were partially offset by a R2.2 billion or 17% increase in
operating expenses (excluding selling and distribution expenses, shipping
expenses and the mineral royalty) driven mostly by the 53.6 Mt increase in
total tonnes mined at Sishen and Kolomela mines. The mineral royalty expense
for 2013 doubled to R2.2 billion (2012: R1.1 billion), principally as a
result of higher revenue, as well as lower capital allowances related to
Kolomela mine.
Cash flow
Cash generated by the group’s operations amounted to R29.4 billion for the
year, a 19% increase on 2012 (R24.7 billion) and in line with the iron ore
price increases and a weakened Rand. These cash flows were used to pay
taxation of R6.2 billion, royalties of R2.1 billion and dividends of
R13.7 billion.
Kumba spent R4.5 billion on stay-in-business capital, mainly on heavy
mining equipment such as haul trucks and shovels for Sishen and Kolomela
mines in support of the waste mining ramp up.
Ore Reserves and Mineral Resources
Kumba’s ore reserves and mineral resources remained stable when compared
to the previous year of reporting.
As of 31 December 2013 Kumba had ore reserves estimated at 1.1 billion
tonnes at its three mining operations (Sishen, Kolomela and Thabazimbi),
at an average unbeneficiated grade of 60.1% Fe, which is converted to
a saleable product of 830 Mt at a product grade of 65.1%. Kumba’s estimated
mineral resources, in addition to its ore reserves at these three
operations, as well as the Zandrivierspoort magnetite project, totalled
1.2 billion tonnes.
The net decrease of 5% in Kumba’s ore reserves in 2013 was primarily
attributable to annual production.
Kumba’s mineral resources, excluding ore reserves, showed a net increase
of 2% from 2012 to 2013. The increase is mainly due to the addition of a
significant amount of Mineral Resources to the Zandrivierspoort project
following an update of the resource pit shell to align the Zandriverspoort
project in terms of the definition of reasonable prospects for eventual
economic extraction with the company’s operations.
The Constitutional Court ruled in December 2013 that when SIOC lodged its
application for conversion of its old order right, SIOC converted only the
right it held at that time (being a 78.6% undivided share in the Sishen
mining right).
The Constitutional Court further held that SIOC was the only party competent
to apply for and be granted the residual 21.4% share of the Sishen Mining
Right. SIOC therefore has a reasonable expectation for the grant of the
residual right and declares 100% of the Sishen resources and reserves in
terms of the provisions of the SAMREC Code. SIOC has, in compliance with
the Constitutional Court order, submitted an application to be granted
this right. At the time of reporting, the right had not yet been granted
and therefore SIOC’s attributable ownership in Sishen mine is stated as
78.6%. On grant of the application, SIOC’s attributable ownership in
Sishen mine will revert to 100%.
Significant progress has been made in the progression of the Sishen
Western Expansion Project (SWEP). Project development remains within
budget, and construction activities have been completed. A major milestone
in the development of the project was the relocation of the Transnet
railway line from its previous position, to the far western extent of the
SIOC property. The relocation of the railway line was completed in
May 2013.
As a consequence of Transnet having previously held the surface rights
over the SWEP Rail properties, the Rail properties are excluded from the
Sishen Mining Right area. SIOC has applied to the DMR to obtain the
necessary rights in relation to the Rail properties. The Sishen life-of-mine
schedule is dependent on the grant of this right, which, if not successful,
affects 30% or 262 Mt of the Sishen mine ore reserves. SIOC does, however,
have a reasonable expectation for the grant of the right and hence
classifies the volume in the Sishen probable ore reserves. Kumba is actively
engaging with the DMR to expedite the grant of this right and remains
confident that it will be granted.
Changes in directorate
The Board of directors of Kumba announced the following changes in Kumba’s
directorate during 2013. The Board expresses its gratitude to Mr David
Weston, who retired from Anglo American plc and resigned as a non-executive
director of Kumba on 30 September 2013, for his invaluable contribution to
the Board and the company, and wishes him well in his future endeavours.
The Board welcomes Mr Tony O’Neill, who joined as a non-executive director
on 30 September 2013. Mr O’Neill is also a member of the Anglo American
Group Management Committee.
Change in management
The Board of directors of Kumba announced that Mr Vusani Malie will resign
as Company Secretary of Kumba with effect from 1 March 2014. Mr Malie who
has been the Company Secretary of the Company since 7 May 2007 will take
up the position of Chief Executive Officer at the Sishen Iron Ore Company
Community Development Trust. The board expresses gratitude to Mr Malie for
his valued contribution to the Company.
Mr Kevin Lester, Head of Legal of Anglo American South Africa, will be
appointed as acting Company Secretary with effect from 1 March 2014.
OUTLOOK
It is anticipated that global crude steel demand in 2014 will grow further
by 3%, with China’s production rising to about 806 Mt, up 4%, while growth
in production in other developing countries is expected to be countered by
a reduction in output in some of the developed markets. It is anticipated,
however, that the supply/demand balance will shift in the second half of
2014 due to more supply from Australia and Brazil, and slowing demand
growth. This is expected to put some pressure on the iron ore price in the
second half of 2014.
The Sishen mine recovery and optimisation plan expects a phased production
increase from the 30.9 Mt in 2013, to approximately 35 Mt in 2014. As the
ore body dips and thins to the west, waste stripping of up to 270 Mtpa is
required by 2016 for the production of 37 Mtpa at current marketing
specifications.
At Kolomela mine, technical studies have confirmed the mine’s capacity to
sustain production at 10 Mtpa, 1 Mtpa above its original design capacity.
Further, incremental expansions of the mine are also being studied.
Export sales volumes are expected to be in line with 2013 levels.
“2013 has been a challenging year, however, we remain confident in our
employees and our mines. We are more focused now on building a world class
portfolio of operations and I believe we have optimised our business in
order to provide the best possible outcomes for all our stakeholders.
We have delivered very good returns for all our stakeholders in a
challenging year.
We remain focused on delivery. 2014 will be all about the execution of the
strategy we revised in 2013. Looking ahead, we want to be working to a
common goal with our employees, our customers, our investors and other key
stakeholders.”
Norman Mbazima, Chief executive
FINANCIAL RESULTS
PRINCIPAL FINANCIAL STATEMENTS
SUMMARISED GROUP BALANCE SHEET
as at
Restated
Audited Audited Audited
31 December 31 December 01 January
Rand million Notes 2013 2012 2012
Assets
Property, plant and
equipment 5 29,922 25,258 20,878
Biological assets 6 8 6
Investments in
associate and joint
ventures – 47 33
Investments held by
environmental trust 737 673 568
Long-term prepayments
and other receivables 605 130 95
Deferred tax assets 920 842 658
Non-current assets 32,190 26,958 22,238
Inventories 5,171 4,136 3,864
Trade and other
receivables 6,124 4,332 3,537
Current tax asset – 76 32
Cash and cash
equivalents 1,053 1,527 4,742
Current assets 12,348 10,071 12,175
Total assets 44,538 37,029 34,413
Equity
Shareholders' equity 6 20,831 15,238 15,833
Non-controlling interest 6,353 4,426 4,759
Total equity 27,184 19,664 20,592
Liabilities
Interest-bearing
borrowings 7 2,234 3,200 –
Provisions 1,809 1,420 901
Deferred tax liabilities 7,888 6,835 4,942
Non-current liabilities 11,931 11,455 5,843
Short-term portion of
interest-bearing
borrowings 7 615 2,669 3,191
Short-term portion of
provisions 355 26 11
Trade and other payables 3,888 3,012 4,556
Current tax liabilities 565 203 220
Current liabilities 5,423 5,910 7,978
Total liabilities 17,354 17,365 13,821
Total equity and
liabilities 44,538 37,029 34,413
SUMMARISED GROUP INCOME STATEMENT
for the year ended
Restated
Audited Audited
31 December 31 December
Rand million Note 2013 2012
Revenue 54,461 45,446
Operating expenses (26,076) (21,800)
Operating profit 8 28,385 23,646
Finance income 117 102
Finance costs (396) (405)
Loss from equity accounted
joint venture (46) –
Profit before taxation 28,060 23,343
Taxation (7,760) (6,888)
Profit for the year 20,300 16,455
Attributable to:
Owners of Kumba 15,446 12,486
Non-controlling interest 4,854 3,969
20,300 16,455
Earnings per share for profit
attributable to the owners of
Kumba (Rand per share)
Basic 48.09 38.87
Diluted 48.03 38.81
SUMMARISED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Profit for the year 20,300 16,455
Other comprehensive income for the
year, net of tax 570 155
Exchange differences on translation
of foreign operations 570 193
Net effect of cash flow hedges – (38)
Total comprehensive income for the
year 20,870 16,610
Attributable to:
Owners of Kumba 15,917 12,615
Non-controlling interest 4,953 3,995
20,870 16,610
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Total equity at the beginning of
the year * 19,664 20,592
Changes in share capital and premium
Shares issued during the year 2 5
Treasury shares issued to employees
under employee share incentive
schemes 87 105
Purchase of treasury shares (265) (261)
Changes in reserves
Equity-settled share-based payments 504 579
Vesting of shares under employee
share incentive schemes (91) (123)
Total comprehensive income for the
year 15,917 12,615
Dividends paid (10,561) (13,516)
Changes in non-controlling interest
Total comprehensive income for the
year 4,953 3,995
Dividends paid (3,146) (4,490)
Movement in non-controlling
interest in reserves 120 163
Total equity at the end of the year 27,184 19,664
Comprising
Share capital and premium (net of
treasury shares) (297) (121)
Equity-settled share-based payments
reserve 1,236 822
Foreign currency translation reserve 1,010 571
Cash flow hedge reserve 8 (24)
Retained earnings 18,874 13,990
Shareholders' equity 20,831 15,238
Attributable to the owners of Kumba 19,977 14,663
Attributable to non-controlling
interest 854 575
Non-controlling interest 6,353 4,426
Total equity 27,184 19,664
Dividend (Rand per share)
Interim 20.10 19.20
Final ** 19.94 12.50
* The adoption of IFRIC 20 - Stripping costs in the production phase of a
surface mine did not impact the 2012 opening balance.
** The final dividend was declared after 31 December 2013 and has not
been recognised as a liability in this financial report. It will be
recognised in shareholders' equity in the year ending 31 December 2014.
SUMMARISED GROUP CASH FLOW STATEMENT
for the year ended
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Cash generated from operations 29,354 24,688
Net finance costs paid (161) (227)
Taxation paid (6,171) (5,215)
Cash flows from operating activities 23,022 19,246
Additions to property, plant and
equipment (6,453) (5,917)
Investments in associate and joint
ventures (17) (14)
Investments held by environmental
trust – (45)
Proceeds from the disposal of
property, plant and equipment 37 37
Deconsolidation of subsidiary 5 3
Cash flows from investing activities (6,428) (5,936)
Shares issued 2 5
Purchase of treasury shares (265) (261)
Vesting of Envision share scheme – (968)
Dividends paid to owners of Kumba (10,500) (13,428)
Dividends paid to non-controlling
shareholders (3,207) (4,578)
Net interest-bearing borrowings
(repaid)/raised (3,332) 2,678
Cash flows from financing activities (17,302) (16,552)
Net decrease in cash and cash
equivalents (708) (3,242)
Cash and cash equivalents at
beginning of year 1,527 4,742
Exchange differences on translation
of cash and cash equivalents 234 27
Cash and cash equivalents at end of
year 1,053 1,527
HEADLINE EARNINGS
for the year ended
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Reconciliation of headline earnings
Profit attributable to owners of
Kumba 15,446 12,486
Net profit on disposal and
scrapping of property, plant and
equipment (2) (21)
Net profit on disposal of investment (5) (3)
15,439 12,462
Taxation effect of adjustments 3 6
Non-controlling interest in
adjustments 1 4
Headline earnings 15,443 12,472
Headline earnings (Rand per share)
Basic 48,08 38,83
Diluted 48,02 38,76
The calculation of basic and
diluted earnings and headline
earnings per share is based on the
weighted average number of ordinary
shares in issue as follows:
Weighted average number of ordinary
shares 321,186,591 321,223,241
Diluted weighted average number of
ordinary shares 321,595,563 321,753,827
The adjustment at 31 December 2013 of 408 972 (31 December 2012: 530 586)
shares to the weighted average number of ordinary shares is as a result of
the vesting of share options previously granted under the various employee
share incentive schemes.
SALIENT FEATURES AND OPERATING STATISTICS
for the year ended
Restated
Unaudited Unaudited
31 December 31 December
2013 2012
Share statistics ('000)
Total shares in issue 322,086 322,059
Weighted average number of shares 321,187 321,223
Diluted weighted average number of
shares 321,596 321,754
Treasury shares 1,445 1,064
Treasury shares (Rand million) 665 487
Market information
Closing share price (Rand) 443 569
Market capitalisation (Rand million) 142,829 183,213
Market capitalisation (US$) 13,655 21,616
Net asset value attributable to
owners of Kumba (Rand per share) 64.68 47.32
Capital expenditure (Rand million)
Incurred 6,453 5,917
Contracted 600 772
Authorised but not contracted 4,943 1,335
Capital expenditure relating to
Thabazimbi mine to be financed by
ArcelorMittal S.A
Contracted – 7
Authorised but not contracted 18 16
Finance lease commitments 300 –
Operating commitments
Operating lease commitments 27 93
Shipping services 12,222 8,762
Economic information
Average Rand/US Dollar exchange
rate (ZAR/US$) 9.62 8.19
Closing Rand/US Dollar exchange
rate (ZAR/US$) 10.46 8.48
Operating statistics (Mt)
Production 42.4 43.1
Sishen mine 30.9 33.7
Kolomela mine 10.8 8.5
Thabazimbi mine 0.6 0.8
Sales 43.7 44.4
Export 39.1 39.7
Domestic 4.6 4.7
Sishen mine 3.9 3.5
Thabazimbi mine 0.7 1.2
Sishen mine FOR unit cost
Unit cost (Rand per tonne) 325.28 257.39
Cash cost (Rand per tonne) 266.94 197.75
Unit cost (US$ tonne) 33.81 31.43
Cash cost (US$ tonne) 27.75 24.15
Kolomela mine FOR unit cost
Unit cost (Rand per tonne) 240.97 255.69
Cash cost (Rand per tonne) 181.81 180.20
Unit cost (US$ tonne) 25.05 31.22
Cash cost (US$ tonne) 18.90 22.00
NOTES TO THE AUDITED SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS
1. CORPORATE INFORMATION
Kumba is a limited liability company incorporated and domiciled in South
Africa. The main business of Kumba, its subsidiaries, joint ventures and
associates is the exploration, extraction, beneficiation, marketing, sale
and shipping of iron ore. The group is listed on the JSE Limited (JSE).
The audited summarised consolidated financial report of Kumba and its
subsidiaries for the year ended 31 December 2013 was authorised for issue
in accordance with a resolution of the directors on 7 February 2014.
2. BASIS OF PREPARATION
The audited summarised consolidated financial report has been prepared,
under the supervision of FT Kotzee CA(SA), chief financial officer, in
accordance with the requirements of the JSE Limited Listings Requirements
for preliminary reports, and the requirements of the South African Companies
Act No 71 of 2008 applicable to summary financial statements. The Listings
Requirements require preliminary reports to be prepared in accordance with
the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by Financial Reporting Standards Council
and to also, as a minimum, contain the information required by IAS 34
Interim Financial Reporting.
The audited summarised consolidated financial report has been prepared in
accordance with the historical cost convention except for certain
financial instruments, share-based payments and biological assets which
are stated at fair value, and is presented in Rand, which is Kumba’s
functional and presentation currency.
3. ACCOUNTING POLICIES
The accounting policies applied in the preparation of the consolidated
financial statements from which the summary consolidated financial
statements were derived are in terms of IFRS and are consistent with those
accounting policies applied in the preparation of the previous consolidated
annual financial statements, except as disclosed below.
3.1 New standards, amendments to published standards and interpretations
The following standards, amendments to published standards and
interpretations which became effective for the year commencing on
1 January 2013 were adopted by the group:
IFRIC 20 – Stripping costs in the production phase of a surface mine
(effective date: 1 January 2013)
In surface mining operations, entities may find it necessary to remove
mine waste materials (‘overburden’) to gain access to mineral ore deposits
in the production phase. This waste removal activity is known as
‘stripping’. The interpretation clarifies that there can be benefits
accruing to an entity from stripping activity: usable ore that can be used
to produce inventory and improved access to further quantities of material
that will be mined in future periods. The interpretation considers when
and how to account for the benefits arising from the stripping activity,
as well as how to measure these benefits both initially and subsequent to
the change in accounting policy.
The adoption of the IFRIC required the company to componentise each of its
mines into geographically distinct ore bodies to which the stripping
activities being undertaken within that component could be allocated. This
is a change from the accounting policy previously applied, which had
resulted in each mine being accounted for as a single component when
calculating the value of waste stripping costs to be deferred. This has
resulted in more stripping costs being deferred than under the previous
accounting policy.
The IFRIC has also resulted in the company depreciating the deferred costs
capitalised on a unit of production method, with reference to the ex-pit
ore production from a component. Under the previous accounting policy
adopted, deferred stripping costs were only reversed to the extent the
actual stripping ratio achieved for the current period fell below the life
of mine stripping ratio. This has resulted in the deferred stripping
assets created for each component, being depreciated in earlier periods.
The transitional provisions of IFRIC 20 requires an entity to apply this
IFRIC to production stripping costs incurred on or after the beginning of
the earliest period presented. The group has adopted the IFRIC for the
current accounting period, which commenced on 1 January 2013. The IFRIC is
therefore applied to production stripping costs incurred on or after
1 January 2012.
A summary of the impact of the change in accounting policy on the results
is set out below:
12 months
31 December 31 December
2013 2012
Impact As Restated
of previously for As
Rand million IFRIC 20 reported IFRIC 20 reported
Balance sheet impact
Increase in assets
Property, plant and
equipment
Cost 823 30,603 504 31,107
Accumulated depreciation 117 5,838 11 5,849
Increase in equity and
liabilities
Retained earnings 391 13,716 274 13,990
Non-controlling interest 117 4,345 81 4,426
Deferred tax liabilities 198 6,697 138 6,835
Income statement impact
Decrease in operating
expenses 706 22,293 (493) 21,800
Increase in taxation –
deferred tax 198 6,750 138 6,888
Increase in profit for
the year 508 16,100 355 16,455
Attributable to owners
of Kumba 391 12,212 274 12,486
Attributable to
non-controlling
interest 117 3,888 81 3,969
Basic earnings per share 1.22 38.02 0.85 38.87
Diluted earnings per
share 1.22 37.95 0.85 38.81
Headline earnings per
share 1.22 37.97 0.85 38.83
IFRS 10 – Consolidated financial statements
IAS 27 – Separate financial statements
(effective date: 1 January 2013)
IFRS 10 builds on existing principles by identifying the concept of
control as the determining factor in whether an entity should be included
within the consolidated financial statements. The standard provides
additional guidance to assist in determining control where this is
difficult to assess.
The revised IAS 27 deals only with the accounting for subsidiaries,
associates and joint ventures in the separate financial statements of the
parent company after the control provisions of IAS 27 had been included in
IFRS 10.
The application of these standards has not resulted in any changes to the
group’s financial statements.
IFRS 11 – Joint arrangements
IAS 28 – Investments in associates and joint ventures (effective date:
1 January 2013)
IFRS 11 provides for a more realistic reflection of joint arrangements by
focusing on the rights and obligations of the arrangement, rather than its
legal form. Proportional consolidation of joint ventures is no longer
allowed. The revised IAS 28 sets out the requirements for applying the
equity method of accounting to investments in joint ventures and
associates.
This resulted in the group’s 50% joint investment in the Polokwane Iron
Ore Company Proprietary Limited being classified as a joint venture
relationship under IFRS 11. The entity was previously proportionately
consolidated into the group. Under the new standard the entity has been
consolidated into the group applying the equity method of accounting as
prescribed by IAS 28.
The impact of the adoption of the standard was not significant for the
financial year ended 31 December 2012. The standard has therefore been
applied prospectively from 1 January 2013. A loss of R46 million was
recognised for the year. This resulted in no investment balance being
recognised in the balance sheet, as the losses for the year were greater
than the group’s interest in the entity.
IFRS 12 – Disclosures of interests in other entities (effective date:
1 January 2013)
This standard includes the disclosure requirements for all forms of
interests in other entities, including joint arrangements, associates,
special purpose vehicles and other off balance sheet vehicles. The standard
has not had an effect on the reported results or the group accounting
policies for the year ended 31 December 2013 and will not affect the
reported results of the group.
It will, however, result in additional disclosure being provided in the
notes to the annual financial statements for the financial year ended
31 December 2013.
IFRS 13 – Fair value measurement (effective date: 1 January 2013)
This standard aims to improve consistency and reduce complexity by
providing a precise definition of fair value and a single source of fair
value measurement and disclosure requirements for use across IFRSs. The
requirements, which are largely aligned between IFRSs and US GAAP, do not
extend the use of fair value accounting but provide guidance on how it
should be applied where its use is already required or permitted by other
standards within IFRS.
The adoption of IFRS 13 does not have a significant impact on Kumba’s
reported results, due to the limited use of fair value methodology in
measuring assets and liabilities
Annual improvements to IFRSs — 2009 to 2011 cycle (effective date:
1 January 2013)
The group adopted the amendments to five issued accounting standards
issued by the International Accounting Standards Board (IASB) as part of
its Annual Improvements to IFRSs for the 2009 to 2011 cycle. These
amendments have not had an effect on the reported results or the group
accounting policies.
3.2 New standards, amendments to existing standards and interpretations
that are not yet effective and have not been early adopted
In 2013 the group did not early adopt any new, revised or amended
accounting standards or interpretations. The accounting standards,
amendments to issued accounting standards and interpretations, which are
relevant to the group but not yet effective at 31 December 2013, are being
evaluated for the impact of these pronouncements.
4. CHANGE IN ESTIMATES
The life of mine plan on which accounting estimates are based, only
includes proved and probable ore reserves as disclosed in Kumba’s 2012
annual ore reserves and mineral resources statement. The estimated
remaining life of mine of Thabazimbi mine has been increased to 10 years,
a 7 year increase from that previously reported. There has been no change
to the life of mine plans of the Sishen or Kolomela mines for the year
under review. Management has revised the estimated rehabilitation and
decommissioning provisions for Thabazimbi mine.
Management has also revised the estimated rehabilitation and
decommissioning provisions at Sishen, Kolomela and Thabazimbi as a result
of changes in assumptions on the discount rate and inflation rate used to
calculate the provisions for the three mines.
The effect of this change is detailed below:
Audited
31 December
Rand million 2013
Increase in environmental rehabilitation provision 261
Increase in decommissioning provision 8
The change in estimate in the environmental rehabilitation provision was
applied prospectively from 1 January 2013 and resulted in a decrease in
attributable profit and basic, diluted and headline earnings per share for
the year ended 31 December 2013 of R201 million and 63 cents,
respectively. The change in estimate in the decommissioning provision has
been capitalised to the related property, plant and equipment.
5. PROPERTY, PLANT AND EQUIPMENT
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Capital expenditure 6,453 5,917
Comprising:
Expansion 1,132 2,195
Stay-in-business (SIB) 4,498 3,204
Deferred stripping 823 518
Transfers from assets under
construction to property, plant and
equipment 5,864 3,905
Expansion capital expenditure comprised of the final expenditure on
Kolomela mine and the first phase of SWEP (Sishen Westerly Expansion
Project), both of which are being completed, as well as the upgrade of the
group’s financial systems. SIB capital expenditure to maintain operations
was principally for the acquisition of heavy mining equipment, the
completion of the Sishen workshop infrastructure and housing developments.
6. SHARE CAPITAL AND SHARE PREMIUM
Reconciliation of share capital and share premium
(net of treasury shares):
Audited Audited
31 December 31 December
Rand million 2013 2012
Balance at beginning of year (121) 30
Total shares issued for cash
consideration 2 5
Shares issued – share premium 2 –
Net movement in shares held by
Kumba Iron Ore Management Share
Trust – 5
Net movement in treasury shares
under employee share incentive
schemes (178) (156)
Purchase of treasury shares (265) (261)
Shares issued to employees 87 105
(297) (121)
Reconciliation of number of shares
in issue:
Number of shares
Balance at beginning of year 322,058,624 322,058,624
Ordinary shares issued 27,350 –
Balance at end of year 322,085,974 322,058,624
Reconciliation of treasury shares
held:
Balance at beginning of year 1,064,531 1,075,970
Shares purchased 660,923 473,435
Shares issued to employees under
the Long-Term Incentive Plan, Kumba
Bonus Share Plan and Share
Appreciation Rights Scheme (251,570) (400,542)
Net movement in shares held by
Kumba Iron Ore Management Share
Trust (29,358) (84,332)
Balance at end of year 1,444,526 1,064,531
Treasury shares held as conditional
share awards under the Kumba Bonus
Share Plan 1,444,526 1,035,173
7. INTEREST-BEARING BORROWINGS
Kumba’s net debt position at the balance sheet dates was as follows:
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Interest-bearing borrowings 2,849 5,869
Cash and cash equivalents (1,053) (1,527)
Net debt 1,796 4,342
Total equity 27,184 19,664
Interest cover (times) 102 76
Movements in interest-bearing borrowings are analysed as follows:
Audited Audited
31 December 31 December
Rand million 2013 2012
Balance at the beginning of the year 5,869 3,191
Interest-bearing borrowings raised 2,000 5,869
Interest-bearing borrowings repaid (5,332) (3,195)
Finance lease raised 312 –
Deferred transaction costs
recognised – 4
Balance at the end of the year 2,849 5,869
The R6.0 billion facility was renegotiated and the revised committed debt
facility of R10.9 billion was effective 27 November 2013. The interest on
the facility is charged at Jibar plus a margin, determined by the period
for which the funds are borrowed.
At 31 December 2013, R2.0 billion of the R10.9 billion long-term debt
facility had been drawn down and R568 million of the total short-term
uncommitted facilities of R9.1 billion had been drawn down. Kumba was not
in breach of any of its financial covenants during the year. The group had
undrawn long-term borrowings and uncommitted short-term facilities at
31 December 2013 of R17.4 billion (2012: R9.0 billion).
The group entered into a finance lease in respect of mining equipment
during the year.
8. SIGNIFICANT ITEMS INCLUDED IN OPERATING PROFIT
Operating expenses is made up as follows:
Audited Audited
31 December 31 December
Rand million 2013 2012
Production costs 15,411 13,339
Movement in inventories 257 59
Finished products 1,141 441
Work-in-progress (884) (382)
Cost of goods sold 15,668 13,398
Mineral royalty 2,157 1,127
Selling and distribution costs 4,538 4,065
Cost of services rendered – shipping 3,747 3,222
Sublease rent received (34) (12)
Operating expenses 26,076 21,800
Operating profit has been derived
after taking into account the
following items:
Employee expenses 3,041 2,710
Share-based payment expenses 634 756
Depreciation of property, plant and
equipment 2,039 1,535
Deferred waste stripping costs
capitalised
(refer to note 3.1) (823) (518)
Net profit on disposal and
scrapping of property, plant and
equipment (2) (21)
Net profit on disposal of investment (5) –
Finance gains (830) (148)
Operating expenses capitalised (2) (98)
9. SEGMENTAL REPORTING
Shipping
Sishen Kolomela Thabazimbi Logis- opera-
Rand million mine mine mine tics tions Total
Audited year ended
31 December 2013
Revenue from
external
customers 36,685 13,022 1,079 – 3,675 54,461
Depreciation 1,441 570 1 5 – 2,017
EBIT 24,888 9,296 301 (4,538) (72) 29,875
Total segment
assets 177 66 75 – 398 716
Restated audited
year ended
31 December 2012
Revenue from
external
customers1 33,001 8,239 1,014 – 3,192 45,446
Depreciation 1,033 471 3 – – 1,507
EBIT 23,559 5,945 (25) (4,065) (30) 25,384
Total segment
assets 404 198 130 – – 732
1 Inter-segment revenue is no longer reported for the logistics segment
as was the case for the year ended 31 December 2012 in the Annual
Financial Statements 2012. The reason for this being that the group’s
executive committee, as the chief operating decision maker, reviews the
segment’s performance with reference only to volumes railed and rail
tariffs paid, i.e. as a cost centre.
The total reported segment revenue is measured in a manner consistent with
that disclosed in the income statement.
The performance of the operating segments are assessed based on a measure
of earnings before interest and taxation (EBIT), which is measured in a
manner consistent with ’Operating profit’ in the financial statements.
Finance income and finance costs are not allocated to segments, as
treasury activity is managed on a central group basis.
Total segment assets comprise finished goods inventory only, which is
allocated based on the operations of the segment and the physical location
of the assets.
’Other segments’ comprise corporate, administration and other expenditure
not allocated to the reported segments.
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Sale of products * 50,786 42,254
Shipping services 3,675 3,192
Total revenue 54,461 45,446
Reconciliation of EBIT to total
profit before taxation:
EBIT for reportable segments 29,875 25,384
Other segments (1,490) (1,738)
Operating profit 28,385 23,646
Net finance costs (279) (303)
Loss from equity accounted joint
venture (46) –
Profit before taxation 28,060 23,343
Restated
Audited Audited
31 December 31 December
Rand million 2013 2012
Reconciliation of reportable
segments’ depreciation to total
depreciation:
Depreciation for reportable segments 2,017 1,507
Other segments 22 28
Depreciation per the income
statement 2,039 1,535
Reconciliation of reportable
segments' assets to total assets:
Segment assets for reportable
segments 716 732
Other segments and WIP inventories 4,455 3,404
Inventories per balance sheet 5,171 4,136
Other current assets 7,177 5,935
Non-current assets 32,190 26,958
Total assets 44,538 37,029
Geographical analysis of revenue and non-current assets:
Audited Audited
31 December 31 December
Rand million 2013 2012
Total revenue from external customers
South Africa 3,672 2,832
Export 50,789 42,614
China 35,154 28,277
Rest of Asia 10,587 9,889
Europe 4,926 4,322
Middle East and Africa 122 126
54,461 45,446
Total non-current assets *
South Africa 31,154 25,938
China – 1
Singapore 2 –
31,156 25,939
* Excluding prepayments, investments in associates and joint ventures and
deferred tax assets.
10. RELATED PARTY TRANSACTIONS
During the year, Kumba, in the ordinary course of business, entered into
various sale, purchase and service transactions with associates, joint
ventures, fellow subsidiaries, its holding company and Exxaro Resources
Limited. These transactions were subject to terms that are no less
favourable than those offered by third parties.
No short-term deposit facilities were placed with Anglo American SA
Finance Limited (AASAF) at 31 December 2013 (2012: R237 million). Interest
earned on the facility during the year amounted to R96 million at a
weighted average interest rate of 4.96% (2012: R83 million at a weighted
average interest rate of 5.45%).
At 31 December 2013 a short-term deposit is held with Anglo American
Capital of R572 million (2012: R’nil’). The interest earned on the deposit
is based on prevailing market rates.
Interest-bearing borrowings drawn down at 31 December 2013 of R568 million
was from facilities with AASAF (2012: R5,869 million).
Interest paid on borrowings from AASAF during the year was market related
and amounted to R204 million (2012: R118 million) at a weighted average
interest rate of 6.63% per annum (2012: 6.25%).
11. CONTINGENT ASSET
Kumba initiated arbitration proceedings against La Société des Mines De
Fer Du Sénégal Oriental (Miferso) and the State of Senegal under the rules
of the Arbitration of the International Chamber of Commerce in 2007, in
relation to the Falémé Project.
Following the arbitration award rendered in July 2010, a mutually agreed
settlement was concluded between the parties. The settlement agreement was
revised in June 2013. The parties agreed that the precise terms of the
settlement agreement will remain confidential.
12. GUARANTEES
During the year ended 31 December 2013, the group negotiated additional
financial guarantee facilities for the group’s environmental rehabilitation
and decommissioning obligations to the DMR with Lombard Insurance Group (one
of the approved insurance providers by the DMR), Rand Merchant Bank and the
Standard Bank of South Africa Limited to the total value of R1.2 billion.
Included in this amount are financial guarantees for the environmental
rehabilitation and decommissioning obligations of the group to the DMR in
respect of Thabazimbi mine of R331 million (2012: R’nil’). ArcelorMittal
S.A. has guaranteed this full amount by means of bank guarantees issued in
favour of SIOC.
The guarantees for the balance of the shortfall (R88 million) were issued
subsequent to year end by both ArcelorMittal S.A. and SIOC.
The total guarantees issued for environmental closure liabilities at
31 December 2013 is R2.1 billion (2012: R874 million).
13. LEGAL PROCEEDINGS
13.1. 21.4% undivided share of the Sishen mine mineral rights
On 28 March 2013 the Supreme Court of Appeal (SCA) dismissed the appeals
of the Department of Mineral Resources (DMR) and Imperial Crown Trading
289 (Pty) Ltd (ICT) against the decision of the North Gauteng High Court,
which, inter alia, confirmed that Sishen Iron Ore Company (Pty) Ltd (SIOC)
became the exclusive holder of the mining rights at the Sishen mine in
2008 when the DMR converted SIOC’s old order rights, and further set aside
the grant of a prospecting right to ICT by the DMR. The SCA held that as a
matter of law and as at midnight on 30 April 2009, SIOC became the sole
holder of the mining right to iron ore in respect of the Sishen mine,
after ArcelorMittal S.A. failed to convert its undivided share of the old
order mining right.
Both ICT and the DMR lodged applications for leave to appeal against the
SCA to the Constitutional Court. The Constitutional Court hearing was held
on 3 September 2013.
On 12 December 2013, the Constitutional Court granted the DMR’s appeal in
part against the SCA judgment. In a detailed judgment, the Constitutional
Court clarified that SIOC, when it lodged its application for conversion
of its old order right, converted only the right it held at that time
(being a 78.6% undivided share in the Sishen mining right). The
Constitutional Court further held that ArcelorMittal S.A. retained the
right to lodge its old order right (21.4% undivided share) for conversion
before midnight on 30 April 2009, but failed to do so. As a consequence of
such failure by ArcelorMittal S.A., the 21.4% undivided right remained
available for allocation by the DMR.
The Constitutional Court ruled further that, based on the provisions of
the Mineral and Petroleum Resources Development Act (the MPRDA), only
SIOC can apply for the residual 21.4% undivided share of the Sishen mining
right. The grant of the mining right may be made subject to such
conditions considered by the Minister to be appropriate, provided that the
proposed conditions are permissible under the MPRDA. SIOC had previously
applied for this 21.4%, and continues to account for 100% of what is mined
from the reserves at Sishen mine. SIOC has however, in compliance with the
Constitutional Court order, submitted a further application to be granted
this right.
As a further consequence of this finding, the ruling setting aside the
prospecting right granted by the DMR to ICT also stands.
The findings made by the Constitutional Court are favourable to both SIOC
and the DMR. SIOC’s position as the only competent applicant for the
residual right, protects SIOC’s interests. The DMR’s position as custodian
of the mineral resources on behalf of the nation, and the authority of the
DMR to allocate rights, has also been ratified by the Court.
13.2. ArcelorMittal S.A. Supply Agreement
The dispute between SIOC and ArcelorMittal S.A. regarding the contract
mining agreement had been referred to arbitration in 2010. In December
2011, the parties agreed to delay the arbitration proceedings until the
final resolution of the mining rights dispute (see 13.1).
Interim Pricing Agreements were implemented to 31 December 2013.
In November 2013, SIOC and ArcelorMittal S.A. entered into a new Supply
Agreement regulating the sale and purchase of iron ore between the parties
which became effective from 1 January 2014. This agreement, subject to
certain express conditions, is contemplated to endure until the end of
life-of-mine for the Sishen mine.
The conclusion of this agreement settled the arbitration and the various
other disputes between the companies.
Following the Constitutional Court ruling (see 13.1), the sale of iron ore
from SIOC to ArcelorMittal S.A. will remain regulated by the recently
concluded Supply Agreement.
13.3. Lithos Corporation Proprietary Limited
On 3 September 2013, the Supreme Court of Appeal dismissed Lithos’
application for leave to appeal, with costs. Lithos has not sought leave
to appeal to the Constitutional Court, and the process to recover a
contribution towards legal costs from Lithos is underway.
14. CORPORATE GOVERNANCE
The group subscribes to the Code of Good Corporate Practices and Conduct
and complies with the recommendations of the King III Report. Full
disclosure of the group’s compliance will be contained in the
2013 Integrated Report.
15. EVENTS AFTER THE REPORTING PERIOD
No further material events have occurred between the end of the reporting
period and the date of the release of these audited summarised
consolidated financial statements.
16. INDEPENDENT AUDITORS’ AUDIT REPORT
These summarised consolidated financial statements for the year ended
31 December 2013 have been audited by Deloitte & Touche, who expressed an
unmodified opinion thereon. The auditor also expressed an unmodified
opinion on the annual financial statements from which these summarised
consolidated financial statements were derived.
A copy of the auditor’s report on the summarised consolidated financial
statements and of the auditor’s report on the annual consolidated
financial statements are available for inspection at the company’s
registered office, together with the financial statements identified in
the respective auditor’s reports.
Any reference to future financial performance included in this
announcement has not been reviewed or reported on by the company’s
auditors.
On behalf of the Board
F Titi NB Mbazima
Chairman Chief executive
7 February 2014
Pretoria
NOTICE OF FINAL CASH DIVIDEND
At its Board meeting on 7 February 2014 the directors approved a gross final
cash dividend of 1,994 cents per share on the ordinary shares from profits
accrued during the year ended 31 December 2013. The dividend has been
declared from income reserves.
The company has no unutilised Secondary Tax on Companies’ (STC) credits
left. The dividend will be subject to a dividend withholding tax of 15% for
all shareholders who are not exempt from or do not qualify for a reduced
rate of withholding tax. The net dividend payable to shareholders subject to
withholding tax at a rate of 15% amounts to 1,694.90000 cents per share.
The issued share capital at the declaration date is 322,085,974 ordinary shares.
The salient dates are as follows:
- Date of declaration Tuesday, 11 February 2014
- Last day for trading to qualify and participate in the final dividend
(and change of address or dividend instructions) Friday, 7 March 2014
- Trading ex-dividend commences Monday, 10 March 2014
- Record date Friday, 14 March 2014
- Dividend payment date Monday, 17 March 2014
Share certificates may not be dematerialised or rematerialised between
Monday, 10 March 2014 and Friday, 14 March 2014, both days inclusive.
By order of the Board
VF Malie
Company secretary
7 February 2014
Pretoria
ADMINISTRATION
Registered office:
Centurion Gate
Building 2B
124 Akkerboom Road
Centurion
0157
Republic of South Africa
Tel: +27 12 683 7000
Fax: +27 12 683 7009
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
70 Marshall Street
Republic of South Africa
PO Box 61051, Marshalltown, 2107
Sponsor to Kumba:
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Directors:
Non-executive – F Titi (chairman), ZBM Bassa, GS Gouws, KT Kweyama,
DD Mokgatle, AJ Morgan, LM Nyhonyha, AM O’Neill, BP Sonjica,
Executive – NB Mbazima (chief executive), FT Kotzee (chief financial
officer)
Company secretary:
VF Malie
Company registration number:
No 2005/015852/06
Incorporated in the Republic of South Africa
Income tax number:
9586/481/15/3
(Kumba or the company or the group)
11 February 2014
www.angloamericankumba.com
www.angloamerican.com
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