GROUP FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – for the year ended 30 June 2014

    2014  
Rm  		 2013  
Rm  

19.  

Borrowings  

    
  Summary – Balances      
  Standard Bank Limited – BEE Partners Marula   878   876  
  Standard Bank Limited – Zimplats   1 117   1 037  
  Convertible bonds – ZAR   2 429   2 365  
  Convertible bonds – US$   1 981   1 803  
  Finance leases   1 382   1 398  
    7 787   7 479  
  Short-term portion   (618)  (220) 
  Long-term portion   7 169   7 259  
  Summary – Movement      
  Beginning of the year   7 479   2 940  
  Proceeds   –   4 146  
  Leases capitalised (note 5)  –   (20) 
  Interest accrued (note 29)  549   344  
  Repayments   (462)  (273) 
  Exchange adjustments   221   342  
  End of the year   7 787   7 479  
  The effective interest rates for all borrowings for the year were as follows:      
  Bank loans ZAR   9   8  
  Bank loans US$   5   5  
  (i) Standard Bank Limited – BEE Partners Marula      
  Beginning of the year   876   882  
  Interest accrued   60   58  
  Repayments   (58)  (64) 
  End of the year   878   876  
  Short-term portion   (20)  (18) 
  Long-term portion   858   858  
 
  • Loans were obtained by BEE partners for purchasing a 27% share in Marula. The BEE partners’ shareholding in Marula and their loans are consolidated as the loans are guaranteed by Implats. The loans carry interest at the Johannesburg Interbank Acceptance Rate (JIBAR) plus 130 (2013: 130) basis points. Revolving credit facilities amounting to R108 (2013: R108) million are included and carry interest at JIBAR plus 145 (2013: 145) basis points. The loans are repayable in 2020.
    2014  
Rm  		 2013  
Rm  
  (ii) Standard Bank Limited – Zimplats      
  Beginning of the year   1 037   637  
  Proceeds   –   238  
  Interest accrued   86   57  
  Repayments   (86)  (57) 
  Exchange adjustments   80   162  
  End of the year   1 117   1 037  
  Short-term portion   (319)  –  
  Long-term portion   798   1 037  
 
  • US$ denominated revolving credit facility of R1 117 (US$105) million bears interest at LIBOR plus 700 (2013: 700) basis points. The loan repayments commence in January 2015 with final maturity in December 2017. At the end of the period the US dollar balance amounted to US$105 (2013: US$105) million.
    
  (iii) Convertible bonds – ZAR      
  Beginning of the year   2 365   –  
  Proceeds   –   2 300  
  Interest accrued   198   65  
  Repayments   (134)  –  
  End of the year   2 429   2 365  
  Short-term portion   (129)  (65) 
  Long-term portion   2 300   2 300  
 
  • The ZAR denominated bonds have a par value of R2 672 million and carry a coupon of 5% (R133.6 million) per annum. The coupon is payable bi-annually for a period of five years ending 21 February 2018. The bond holder has the option to convert the bonds to Implats shares at a price of R214.90. The value of this compound instrument’s equity portion relating to conversion is R319 million (before tax). Implats has the option to call the bonds at par plus accrued interest at any time on or after 21 February 2016, if the aggregate value of the underlying shares per bond for a specified period of time is 130% or more of the principal amount of that bond. The effective interest rate of the bond is 8.5% (2013: 8.5%).
    
  (iv) Convertible bonds – US$      
  Beginning of the year   1 803   –  
  Proceeds   –   1 608  
  Interest accrued   59   17  
  Repayments   (21)   
  Exchange adjustments   140   178  
  End of the year   1 981   1 803  
  Short-term portion   (21)  (17) 
  Long-term portion   1 960   1 786  
 
  • The US$ denominated bonds have a par value of US$200 million and carry a coupon of 1% (US$2 million) per annum.
    The coupon is payable bi-annually for a period of five years ending 21 February 2018. The bond holder has the option to convert the bonds to Implats shares at a price of US$24.13. The value of this conversion option derivative was R106 million at initial recognition. Implats has the option to call the bonds at par plus accrued interest at any time on or after 21 February 2016, if the aggregate value of the underlying shares per bond for a specified period of time is 130% or more of the principal amount of that bond. The effective interest rate is 3.1% (2013: 3.1%).

    2014  
Rm  		 2013  
Rm  
  (v) Finance leases      
  Beginning of the year   1 398   1 421  
  Leases capitalised (note 5)  –   (20) 
  Interest accrued   146   147  
  Repayments   (163)  (152) 
  Exchange adjustments   1   2  
  End of the year   1 382   1 398  
  Short-term portion   (129)  (120) 
  Long-term portion   1 253   1 278  
    2014 2013
    Minimum  
lease  
payments  
Rm  		 Interest  
Rm  		 Principal  
Rm  		 Minimum  
lease  
payments  
Rm  		 Interest  
Rm  		 Principal  
Rm  
  Lease liabilities              
  Less than one year   146   144   2   157   145   12  
  Between one and five years   686   558   128   648   568   80  
  More than five years   1 864   612   1 252   2 038   733   1 305  
    2 696   1 314   1 382   2 843   1 446   1 397  
  The rand denominated finance leases comprise mainly the houses leased from Friedshelf. The lease agreement has an effective interest rate of 10.2% and is repayable over the next 13 years. It also includes a lease arrangement for a Sasol hydrogen pipeline and a oxygen and nitrogen plant with a remaining life of 10 years and seven years respectively and an effective interest rate of 11.5%.