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HAR - Harmony Gold Mining Company - Financial Review For The Fourth

Release Date: 27/08/2007 09:15:03      Code(s): HAR
HAR - Harmony Gold Mining Company - Financial Review For The Fourth             
                                  Quarter And Year-Ended 30 June 2007           
HARMONY GOLD MINING COMPANY LIMITED                                             
Incorporated in 1950                                                            
Registration number 1950/038232/06                                              
Share code: HAR                                                                 
NASDAQ, NYSE: HMY                                                               
ISIN: ZAE000015228                                                              
Trading Symbols                                                                 
JSE Limited                      HAR                                            
New York Stock Exchange, Inc.    HMY                                            
NASDAQ                           HMY                                            
London Stock Exchange plc        HRM                                            
Euronext Paris                   HG                                             
Euronext Brussels                HMY                                            
Berlin Stock Exchange            HAM1                                           
Issuer code                      HAPS                                           
HARMONY FINANCIAL REVIEW FOR THE FOURTH QUARTER AND YEAR-ENDED 30 JUNE 2007     
ANNUAL HIGHLIGHTS                                                               
* Headline earnings of 43 SA cents per share                                    
* Cash earnings per share up by 73%                                             
* First net profit in three years                                               
* Development up by 35%                                                         
FINANCIAL SUMMARY FOR THE QUARTER AND YEAR ENDED 30 JUNE 2007                   
                                             Quarter      Quarter      Q-on-Q   
                                          March 2007    June 2007  % variance   
Gold produced                   - kg           18 010       16 396       (9.0)  
- oz          579 032      527 141       (9.0)   
Cash costs                      - R/kg        103 608      149 180      (44.0)  
                               - $/oz            445          655      (47.2)   
Cash operating profit           - Rm              869           39      (95.5)  
- US$m            120            6      (95.0)   
Cash earnings                   - SA c/s          218           10      (95.4)  
                               - US c/s           30            1      (96.7)   
Basic profit/(loss)             - SA c/s           62        (163)     (362.9)  
- US c/s            9         (23)     (355.6)   
Headline profit/(loss)          - SA c/s           58        (133)     (329.3)  
                               - US c/s            8         (19)     (337.5)   
Fully diluted earnings/(loss)   - SA c/s           61        (163)     (367.2)  
- US c/s            8         (23)     (387.5)   
                                             Quarter          Financial year    
                                           June 2006         2006        2007   
Gold produced                   - kg           17 243       74 242      72 602  
- oz          554 373    2 386 925   2 334 198   
Cash costs                      - R/kg         93 968       88 629     112 407  
                               - $/oz            452          433         486   
Cash operating profit           - Rm              645        1 459       2 554  
- US$m            100          229         353   
Cash earnings                   - SA c/s          163          371         642  
                               - US c/s           25           58          89   
Basic profit/(loss)             - SA c/s         (11)        (133)          86  
- US c/s          (2)         (21)          12   
Headline profit/(loss)          - SA c/s         (52)        (269)          43  
                               - US c/s          (8)         (42)           6   
Fully diluted earnings/(loss)   - SA c/s         (11)        (133)          85  
- US c/s          (2)         (21)          12   
TOTAL OPERATIONS - QUARTERLY FINANCIAL RESULTS (Rand/metric) (unaudited)        
                                               For the quarter ended            
                                            30 June 2007     31 March 2007      
Ore milled           -   t`000                      5 308             5 114     
Gold produced        -   kg                        16 396            18 010     
Gold price received  -   R/kg                     151 552           151 833     
Cash operating costs -   R/kg                     149 180           103 608     
R million         R million      
Revenue                                             2 485             2 735     
Cash operating costs                              (2 446)           (1 866)     
Cash operating profit                                  39               869     
Amortisation and depreciation of mining                                         
properties,                                                                     
mine development costs and mine plant                                           
facilities                                          (208)             (308)     
Corporate expenditure                                (87)              (50)     
Reversal of provision/(provision) for                                           
rehabilitation costs                                   14               (3)     
Operating (loss)/profit                             (242)               508     
Amortisation and depreciation other than                                        
mining properties,                                                              
mine development costs and mine plant                                           
facilities                                           (11)              (17)     
Care and maintenance costs of restructured                                      
shafts                                               (14)              (13)     
Share based compensation                              (4)              (14)     
Exploration expenditure                              (70)              (68)     
Impairment of assets                                (268)                 -     
Loss from associates                                  (1)                 -     
Gain/(loss) on financial instruments                   29              (24)     
Profit on sale of property, plant and                                           
equipment                                              93                 4     
Other (expenses)/income - net                        (42)                15     
Provision for former employees` post                                            
retirement benefits                                    13                 -     
Mark-to-market of listed investments                   31                29     
(Loss)/profit on sale of listed investment           (37)                10     
Investment income                                      87                36     
Finance cost                                        (236)             (106)     
(Loss)/profit before taxation                       (672)               360     
Taxation                                               19             (113)     
Net (loss)/profit                                   (653)               247     
(Loss)/earnings per share (cents) *                                             
- Basic (loss)/earnings                             (163)                62     
- Headline (loss)/earnings                          (133)                58     
- Fully diluted (loss)/earnings ** ***              (163)                61     
Dividends per share (cents)                                                     
- Interim                                               -                 -     
- Proposed final                                        -                 -     
Prepared in accordance with International Financial Reporting Standards         
* Calculated on weighted average number of shares in issue at quarter           
end 30 June 2007: 398.6 million (31 March 2007: 398.4 million).                 
** Calculated on weighted average number of diluted shares in issue at          
quarter end 30 June 2007: 403.1 million (31 March 2007: 403.3 million).         
*** The effect of the share options is anti-dilutive.                           
Reconciliation of headline (loss)/profit:                                       
Net (loss)/profit                                   (653)               247     
Adjustments:                                                                    
- Profit on sale of assets                           (66)               (4)     
- Profit on sale of GBS investment                      -               (9)     
- Profit/(Loss) on disposal of investment in                                    
Goldfields                                             31               (1)     
- Impairment of fixed assets - net of tax             157                       
Headline (loss)/profit                              (531)               233     
CONDENSED CONSOLIDATED INCOME STATEMENT (reviewed)                              
                                                    For the year ended          
                                                30 June 2007  30 June 2006      
(restated)*     
                                         Notes     R million     R million      
Continuing operations                                                           
Revenue                                                 9 148         6 823     
Production cost (exclusive of                                                   
amortisation and depreciation of                                                
mining properties, mine development costs                                       
and mine plant facilities)                    3       (6 866)       (5 582)     
Amortisation and depreciation of mining                                         
properties,                                                                     
mine development costs and mine plant                                           
facilities                                              (802)         (893)     
Amortisation and depreciation other than                                        
mining properties,                                                              
mine development costs and mine plant                                           
facilities                                               (61)          (57)     
Corporate expenditure                                   (249)         (174)     
Exploration expenditure                                 (194)          (71)     
Employment termination and restructuring                                        
costs                                                       -            72     
Care and maintenance costs of                                                   
restructured shafts                                      (52)         (118)     
Share-based compensation                                 (40)          (95)     
Reversal of provision for rehabilitation                                        
costs                                                      16            20     
Profit on sale of property, plant and                                           
equipment                                                 182            40     
Reversal of impairment of assets                          123           216     
Gain/(loss) on financial instruments          4            41         (516)     
Other expenses - net                                     (38)         (137)     
Operating profit/(loss)                                 1 208         (472)     
Loss from associates                          5          (19)         (105)     
(Loss)/profit on sale of listed investment    6          (35)           306     
Profit on sale of investment in                                                 
subsidiaries                                                -            14     
Profit on sale of investment in associate     5           236             -     
Provision for former employees` post                                            
retirement benefits                                        13           (7)     
Mark-to-market of listed investments                      111            87     
Investment income                                         197           201     
Finance cost                                            (515)         (436)     
Profit/(loss) before tax                                1 196         (412)     
Taxation                                                (249)         (138)     
Net profit/(loss) from continuing                                               
operations                                                947         (550)     
Discontinued operations:                                                        
(Loss)/profit from discontinued operations    7         (332)            25     
Loss from measurement to fair value less                                        
cost to sell                                  7         (274)             -     
Net profit/(loss)                                         341         (525)     
Attributable to:                                                                
Equity holders of the Company                             340         (525)     
Minority interest                                           1             -     
                                                         341         (525)      
Earnings/(loss) per share for profit from                                       
continued operations attributable                                               
to the equity holders of the Company                                            
during the year (cents)                       7                                 
- Basic earnings/(loss)                                   238         (139)     
- Fully diluted earnings/(loss)                           235         (139)     
Earnings/(loss) per share for profit from                                       
discontinued operations attributable                                            
to the equity holders of the Company                                            
during the year (cents)                       7                                 
- Basic (loss)/earnings                                 (152)             6     
- Fully diluted (loss)/earnings                         (151)             6     
Dividends per share (cents)                                                     
- Interim                                                   -             -     
- Proposed final                                            -             -     
* The comparative figures for 2006 were adjusted to exclude the                 
discontinued operations.                                                        
CONDENSED CONSOLIDATED BALANCE SHEET (Rand)                                     
At 30 June     At 31 March      At 30 June      
                                      2007            2007            2006      
                        Notes    R million       R million       R million      
                                (reviewed)     (unaudited)      (reviewed)      
ASSETS                                                                          
Non-current assets                                                              
Property, plant                                                                 
and equipment                        24 398          24 472          23 318     
Intangible assets                     2 307           2 270           2 270     
Restricted cash                         279             509             255     
Investment financial assets           3 912           4 430           2 255     
Investments in associates   5             6               -           1 909     
Deferred income tax                   2 321           1 548           1 975     
Trade and other receivables              69              42             107     
                                    33 247          33 271          32 089      
Current assets                                                                  
Inventories                             742             722             666     
Trade and other receivables             801           1 180             721     
Income and mining taxes                  16              25              27     
Cash and cash equivalents               711             476             651     
2 270           2 403           2 065      
Non-current assets                                                              
classified as held                                                              
for sale                    7         1 267               -               -     
3 582           2 403           2 065      
Total assets                         36 829          35 674          34 154     
EQUITY AND LIABILITIES                                                          
Share capital and reserves                                                      
Share capital                        25 636          25 590          25 489     
Other reserves                        (370)            (79)           (271)     
Accumulated loss                    (1 681)         (1 023)         (2 015)     
                                    23 585          24 488          23 203      
Non-current liabilities                                                         
Borrowings                   9        2 794           3 494           2 591     
Deferred income tax                   5 000           4 211           4 275     
Derivative financial                                                            
instruments                 10            -             448             631     
Provisions for other                                                            
liabilities and charges               1 250           1 001             983     
                                     9 044           9 154           8 480      
Current liabilities                                                             
Trade and other payables              1 091           1 038           1 199     
Accrued liabilities                     547             586             259     
Borrowings                            1 804             401           1 006     
Cash and cash equivalents               220               -               -     
Shareholders for dividends                7               7               7     
                                     3 669           2 032           2 471      
Liabilities directly                                                            
associated with non-current                                                     
assets classified as                                                            
held for sale                 7         530               -               -     
Total liabilities                     4 199           2 032           2 471     
Total equity and liabilities         36 829          35 674          34 154     
Number of ordinary shares in                                                    
issue                           399 608 384     398 736 629     394 369 190     
Net asset value per share                                                       
(cents)                               5 902           6 141           5 771     
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED        
30 JUNE 2007 (Rand)(reviewed)                                                   
                    Issued share         Other      Retained                    
capital      reserves      earnings         Total      
                       R million     R million     R million     R million      
Balance as at 1 July                                                            
2006                       25 489         (271)       (2 015)        23 203     
Issue of share capital        147             -             -           147     
Currency translation                                                            
adjustment and other            -          (99)             -          (99)     
Net earnings                    -             -           341           341     
Dividends paid                  -             -           (7)           (7)     
Balance as at 30 June                                                           
2007                       25 636         (370)       (1 681)        23 585     
Balance as at 1 July                                                            
2005                       25 289         (586)       (1 490)        23 219     
Issue of share capital        200             -             -           200     
Currency translation                                                            
adjustment and other            -           315             -           315     
Net loss                        -             -         (525)         (531)     
Balance as at 30 June                                                           
2006                       25 489         (271)       (2 015)        23 203     
SUMMARISED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2007 (Rand)           
Year        Year      Quarter    Quarter   
                                    ended       ended       ended       ended   
                                  30 June     30 June     30 June    31 March   
                                     2007        2006        2007        2007   
R million   R million   R million   R million   
                                (reviewed)  (reviewed) (unaudited) (unaudited)  
Cash flow from operating activities                                             
Cash generated/(utilised) by                                                    
operations                            1 221         346       (248)       511   
Interest and dividends received         204         224          87        36   
Interest paid                         (226)       (201)        (83)      (48)   
Income and mining taxes paid           (14)        (12)        (11)         3   
Cash generated/(utilised) by                                                    
operating activities                  1 185         357       (255)       502   
Cash flow from investing activities                                             
Decrease/(Increase) in restricted                                               
cash                                   (29)       (203)         225     (215)   
Net proceeds on disposal of listed                                              
investments                             395       2 462         166       199   
Acquisition of investment in                                                    
associate                                 -     (2 012)           -         -   
Net additions to property, plant                                                
and equipment                       (2 549)     (1 667)       (784)     (706)   
Other investing activities             (47)           -        (10)      (52)   
Cash utilised by investing                                                      
activities                          (2 230)     (1 420)       (401)     (774)   
Cash flow from financing activities                                             
Long-term loans raised/(repaid)         802       (393)         651       152   
Ordinary shares issued - net of                                                 
expenses                                138         183          37         2   
Dividends paid                          (7)         (7)         (7)         -   
Cash generated/(utilised) by                                                    
financing activities                    933       (217)         681       154   
Foreign currency translation                                                    
adjustments                            (45)         153         (7)      (15)   
Net (decrease)/increase in cash and                                             
equivalents                           (157)     (1 127)          18     (133)   
Cash and equivalents - beginning of                                             
period                                  651       1 778         476       609   
Cash and equivalents - end of period    494         651         494       476   
RECONCILIATION BETWEEN CASH OPERATING PROFIT AND CASH GENERATED/(UTILISED)      
BY OPERATIONS FOR THE YEAR ENDED 30 JUNE 2007 (Rand)(unaudited)                 
                                        Year      Year   Quarter   Quarter      
                                       ended     ended     ended     ended      
30 June   30 June   30 June  31 March      
                                        2007      2006      2007      2007      
                                   R million R million R million R million      
Cash operating profit                   2 554     1 459        39       869     
Other cash items per income statement:                                          
Other income (Including interest                                                
received and profit                                                             
on sale of mining assets)                 340       203       138        56     
Employment termination, restructuring                                           
and care                                                                        
and maintenance costs                    (66)      (96)      (14)      (13)     
Corporate, administration and other                                             
expenditure                             (259)     (185)      (87)      (50)     
Exploration expenditure                 (239)     (106)      (70)      (68)     
Provision for rehabilitation costs        (3)       (6)       (1)       (1)     
Cash flow statement adjustments:                                                
Cost of close out of hedges             (576)     (344)     (367)      (70)     
Profit on sale of mining assets         (182)      (65)      (93)       (4)     
Interest and dividends received         (204)     (224)      (87)      (36)     
Other non-cash items                    (103)      (87)       (9)      (25)     
Effect of changes in operating working                                          
capital items:                                                                  
Receivables                             (212)      (54)       241     (246)     
Inventories                             (198)      (82)     (143)        21     
Accounts payable                          162      (30)       244     (208)     
Accrued liabilities                       207      (37)      (39)       286     
Cash generated/(utilised) by operations 1 221       346     (248)       511     
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE        
YEAR ENDED 30 JUNE 2007 (reviewed)                                              
1.   Basis of accounting                                                        
The condensed consolidated financial statements for the year ended 30 June 2007 
have been prepared using accounting policies that comply with International     
Financial Reporting Standards (IFRS), which are consistent with the accounting  
policies used in the audited annual financial statements for the year ended 30  
June 2006. These condensed consolidated financial statements are prepared in    
accordance with IAS 34, Interim Financial Reporting and should be read in       
conjuction with the financial statements as at and for the year ended 30 June   
2006.                                                                           
2.   New accounting standards and IFRIC interpretations                         
Certain new accounting standards and IFRIC interpretations have been published  
that are mandatory for accounting periods beginning on or after 1 January 2007. 
These new standards and interpretations have not been early adopted by the      
Group and a reliable estimate of the impact of the adoption thereof for the     
Group cannot yet be determined for all of them, as management are still in the  
process of determining the impact thereof on future financial statements.       
At the date of finalising these financial statements, the following Standards   
and Interpretations were in issue but not yet effective:                        
Title                                      Effective date                       
New Statement                                                                   
? IFRS 7 - Financial instruments:          # Financial year commencing          
 Disclosures, and a complementary           on or after 1 January 2007          
 Amendment to IAS 1, Presentation                                               
of Financial Statements                                                        
 - capital Disclosures                                                          
? IFRS 8 - Operating segments              # Financial year commencing on       
                                            or after 1 January 2009             
Amendments                                                                      
? IFRS 3 - Implementation guidance         # Financial year commencing on       
                                            or after 1 January 2007             
? IAS 23 - (Revised) Borrowings Costs      # Financial year commencing on       
(Revised March 2007)                       or after 1 January 2009             
New Interpretation                                                              
? IFRIC Interpretation 10                  # Financial year commencing on       
 - Interim financial reporting              or after 1 November 2006            
and impairment                      
? IFRIC 11 - IFRS 2 - Group and Treasury   # Financial year commencing on       
 Share Transactions                         or after 1 March 2007               
? IFRIC 12 - Service Concession            # Financial year commencing on       
Arrangements                               or after 1 January 2008             
# Not yet assessed                                                              
3.   Cash operating profit                                                      
The income statement is now presented `by nature` as per the requirements of    
IAS1 - Presentation of financial statements.                                    
The major differences are that `cash operating costs` and `cash operating       
profit` are not reflected on the face of the income statement. If no change was 
effected, the cash operating profit would have been as follows:                 
30 June       30 June      
                                                        2007          2006      
                                                   R million     R million      
Revenue                                                 9 148         6 823     
Cash operating costs                                  (6 866)       (5 582)     
Cash operating profit                                   2 282         1 241     
4.   Gain/(loss) on financial instruments                                       
A decrease in the volatility of the gold price resulted in a decrease in the    
mark-to-market adjustment on the Australian gold hedge book.                    
5.   Investment in associate                                                    
The Group accounted for its 29.2% stake in Western Areas Limited through its    
subsidiary, ARMgold/Harmony Joint Investment Company Pty Ltd, on the equity     
basis for accounting until 1 December 2006. On this date the Group accepted     
GoldFields Limited`s (GFI) offer of 35 GFI shares for every 100 Western Area    
Limited shares held. This conversion resulted in a profit of R236 million. This 
investment in GFI is now classified as available for sale and included in       
investments in financial assets on the balance sheet. The GFI shares were sold  
subsequent to year-end (refer to note 10).                                      
                                                     30 June       30 June      
                                                        2007          2006      
R million     R million      
6.   (Loss)/Profit on sale of listed investments                                
Loss on sale of investment in San Gold Corporation          -           (1)     
(Loss)/Profit on sale of investment in GoldFields                               
Limited                                                  (35)           307     
                                                        (35)           306      
7.   Non-current assets held for sale and discontinued operations               
The assets and liabilities related to Mt Magnet and South Kal (operations in    
Australia), ARMgold Welkom and Orkney operations (operations in the Free State  
and Northwest areas), and Kudu and Sable (operations in the Free State area),   
which have been presented as held for sale following the approval by the        
Group`s management and the Board of Directors on 20 April 2007.                 
30 June       30 June      
                                                        2007          2006      
                                                   R million     R million      
Operating cash flows                                    (370)         (100)     
Investing cash flows                                       48           339     
Financing cash flows                                        -         (159)     
Foreign exchange translation adjustment                    23            18     
Total cash flows                                        (299)            99     
(a)   Non-current assets classified as held for sale                            
Property, plant and equipment                             876             -     
Restricted cash                                             5             -     
Investment in financial assets                             64             -     
Deferred income tax                                       103             -     
Inventories                                               121             -     
Trade and other receivables                                84             -     
Income and mining taxes                                    12             -     
Cash and cash equivalents                                   3             -     
                                                       1 267             -      
(b)   Liabilities directly associated with                                      
non-current assets classified as held for sale                                  
Borrowings                                                  1             -     
Deferred income tax                                        82             -     
Provisions for other liabilities and charges              257             -     
Trade and other payables                                  136             -     
Accrued liabilities                                        54             -     
                                                         530             -      
(c)   Analysis of the results of discontinued                                   
operations, and the results recognised                                          
on the remeasurement of assets or disposal group                                
Revenue                                                 1 567         1 216     
Expenses                                              (1 703)       (1 190)     
(Loss)/Profit from discontinued operations before                               
tax                                                     (136)            26     
Taxation                                                (196)           (1)     
(Loss)/Profit from discontinued operations after tax    (332)            25     
Pre-tax loss recognised on the remeasurement to                                 
fair value less cost to sell                            (391)             -     
Tax                                                       117             -     
(Loss)/Profit for the year from discontinued                                    
operations                                              (606)            25     
8.   Earnings/(Loss) per share                                                  
Earnings/(Loss) per share is calculated on weighted average number of shares in 
issue for the year ended 30 June 2007: 397.9 million (30 June 2006:             
392.7 million)                                                                  
The fully diluted earnings/(loss) per share is calculated on weighted average   
number of diluted shares in issue for the year ended 30 June 2007: 402.4        
million (30 June 2006: 392.7 million). The effect of the share options is       
anti-dilutive.                                                                  
30 June       30 June      
                                                        2007          2006      
Total earnings/(loss) per share (cents):                                        
- Basic earnings/(loss)                                    86         (133)     
- Headline earnings/(loss)                                 43         (263)     
- Fully diluted earnings/(loss)                            85         (133)     
                                                   R million     R million      
Reconciliation of headline earnings/(loss)                                      
Continued operations                                                            
Net profit/(loss)                                         947         (550)     
Adjusted for:                                                                   
Profit on sale of property, plant and equipment         (129)          (65)     
Loss/(Profit) on sale of listed investment                 30         (306)     
Profit on sale of investment in associate               (220)             -     
Profit on sale of subsidiary                                -          (14)     
Reversal of impairment of assets                        (116)         (151)     
Headline profit/(loss)                                    512       (1 058)     
Discontinued operations                                                         
Net (loss)/profit                                       (606)            25     
Adjusted for:                                                                   
Profit on sale of property, plant and equipment             -             -     
Profit on sale of listed investment                       (7)             -     
Impairment of assets                                      273             -     
Headline (loss)/profit                                  (340)            25     
Total headline profit/(loss)                              172       (1 033)     
                                                     30 June       30 June      
                                                        2007          2006      
                                                   R million     R million      
9.   Borrowings                                                                 
Unsecured long-term borrowings                                                  
Convertible unsecured fixed rate bonds                  1 541         1 463     
Rand Merchant Bank term loan facility                       -         1 000     
Africa Vanguard Resources (Proprietary) Limited            32            32     
                                                       1 573         2 495      
Less: Short term portion                                    -       (1 000)     
Total unsecured long-term borrowings                    1 573         1 495     
Secured long-term borrowings                                                    
GoldFields Limited                                          -             5     
Westpac Bank Limited                                        2             -     
Africa Vanguard Resources (Nedbank Limited)               170           154     
ARM Empowerment Trust 1 (Nedbank Limited)                 450           402     
ARM Empowerment Trust 2 (Nedbank Limited)                 601           540     
Auriel Alloys                                               -             1     
Performance Equity Swap (Rand Merchant Bank)              752             -     
Bridging finance (Rand Merchant Bank)                     500             -     
Redeemable preference shares (Rand Merchant Bank)         550             -     
                                                       3 025         1 102      
Less: Short term portion                              (1 804)           (6)     
Total secured long-term borrowings                      1 221         1 096     
Total long-term borrowings                              2 794         2 591     
Subsequent to year end the Performance Equity Swap and the Redeemable           
preference shares were settled (refer to note 10).                              
10. Derivative financial instruments                                            
Hedge book                                                                      
During May 2007, Harmony closed out the remainder of the Australian hedge book  
inherited with the acquisition of the Hill 50 mine in Western Australia. 220    
000 ounces were closed out at an average spot rate of AUD808.887 per ounce, for 
a total cost of AUD72.8 million (R418.4 million).                               
On year-end partial settlement was effected with available cash resources,      
leaving AUD14.12 million (R84.7 million) to be settled during July 2007.        
The mark-to-market movement for the year was a positive R35.4 million. The      
mark-to-market value of the hedge book as at 29 June 2007 was a negative        
AUD14.12 million (R84.7 million) (at 30 June 2006: R631 million) and represents 
the residual cash settlement cost associated with the unwinding of the book.    
Forward exchange commitment                                                     
Abele an indirect subsidiary, had entered into a contract in November 2006 for  
the purchase of the mining fleet to be used on the Hidden Valley project. The   
contract is in four different currencies and the estimated value is R241.7      
million. The delivery date for the equipment has been split into two phases     
with the first phase received in April 2007 and the second phase being expected 
in November 2007.                                                               
The underlying cash flows that will be required by the contract will therefore  
be modified in accordance with movements in the foreign exchange rates to which 
the contract is linked. The embedded derivative relating to the exchange rates  
were calculated based on the adjusted price at 30 June 2007 and Price Retail    
Index (PRI) movements since September 2005.                                     
The mark-to-market movement for the embedded derivative was a positive          
R5.4 million.                                                                   
                                                     30 June       30 June      
                                                        2007          2006      
R million     R million      
11. Commitments and Contingencies                                               
Capital expenditure commitments                                                 
Contracts for capital expenditure                         352           153     
Authorised by the directors but not contracted for      1 881         2 678     
                                                       2 233         2 831      
This expenditure will be financed from existing                                 
resources and where appropriate, borrowings.                                    
Contingent liabilities                                                          
Guarantees and suretyships                                 18            18     
Environmental guarantees                                  129           129     
                                                         147           147      
12. Subsequent events                                                           
(a) On 24 August 2007 the Group entered into an agreement with RMB Morgan       
Stanley (Pty) Ltd (RMB) to sell 7 348 079 of its GFI ordinary shares at R100    
per ordinary share, resulting in a loss of R35.02 per share. The proceeds were  
used to settle the Randfontein redeemable preference shares issued to RMB on 5  
April 2007.                                                                     
(b) On 24 August 2007 the Group also settled the Performance Equity Swap with   
RMB linked to the balance of its GFI shares (5 747 000 shares) at R100 per      
ordinary share, resulting in a loss of R35.02 per share.                        
13. Audit review                                                                
The condensed consolidated financial statements for the year ended 30 June 2007 
have been reviewed in terms of Rule 3.23 of the Listings Requirements of the    
JSE Limited by the company`s auditors, PricewaterhouseCoopers Inc. Their        
unqualified review opinion is available for inspection at the company`s         
registered office. The results for quarter 3 and 4 and the convenience          
translation of the 2007 financial year presented in this document has not been  
reviewed.                                                                       
27 August 2007                                                                  
Sponsor:  Merrill Lynch SA                                                      
Date: 27/08/2007 09:15:02 Supplied by www.sharenet.co.za                     
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