Annual financial statements statement 2015
Supplement to the integrated annual report 30 June 2015
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GROUP FINANCIALS STATEMENTS

MENU Notes to the consolidated financial statements — for the year ended 30 June 2015

  1. Accounting policies
  2. Segment information
  3. Property, plant and equipment
  4. Exploration and evaluation assets
  5. Investment in equity-accounted entities
  6. Deferred tax
  7. Other financial assets
  8. Derivative financial instrument
  9. Prepayments
  10. Inventories
  11. Trade and other receivables
  12. Cash and cash equivalents
  13. Share capital
  14. Non-controlling interest
  15. Borrowings
  16. Other financial liabilities
  17. Sundry liabilities
  18. Provisions
  19. Trade and other payables
  20. Financial instruments and financial risk management
  21. Current tax
  22. Revenue
  23. Cost of sales
  24. Other operating income
  25. Other operating expenses
  26. Impairment
  27. Royalty (income)/expense
  28. Finance income
  29. Finance cost
  30. Other income
  31. Other expenses
  32. Income tax expense
  33. Earnings per share
  34. Dividends
  35. Cash generated from operations
  36. Contingent liabilities and guarantees
  37. Related-party transactions

15.  

Borrowings  
 
      2015   2014  
    Notes   Rm   Rm  
  Standard Bank Limited – BEE Partners Marula   15.1   881   878  
  Standard Bank Limited – Zimplats term loan   15.2   913   1 117  
  Standard Bank Limited – Zimplats revolving credit facility   15.3   85   —  
  Convertible bonds – ZAR   15.4   2 499   2 429  
  Convertible bonds – US$   15.5   2 313   1 981  
  Finance leases   15.6   1 385   1 382  
      8 076   7 787  
  Current     (710)  (618) 
  Non-current     7 366   7 169  
         
  Beginning of the year     7 787   7 479  
  Proceeds     80   —  
  Leases capitalised (note 3)    5   —  
  Interest accrued (note 29)    577   549  
  Capital and interest repayments     (805)  (462) 
  Exchange adjustments     432   221  
  End of the year     8 076   7 787  
  The effective interest rates for all borrowings for the year were as follows:        
  Bank loans ZAR     9   9  
  Bank loans US$     5   5  
 

Refer note 20 for fair value and financial risk disclosure.

15.1

Standard Bank Limited – BEE Partners Marula

BEE partners obtained term loans of R773 million, which carries interest at the Johannesburg Interbank Acceptance Rate (JIBAR) + 220 bps (2014: 145 bps) and revolving credit facilities of R108 million which carried interest at JIBAR + 220 bps (2014: 145 bps) to purchase 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 are repayable in 2020.

15.2

Standard Bank Limited – Zimplats term loan
 

US$ denominated revolving credit facility of R913 (US$75) million bears interest at three-month LIBOR plus 700 (2014: 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$75 (2014: US$105) million.

15.3

Standard Bank Limited – Zimplats revolving credit facility
 

During the year Zimplats drew down $7 million on its $24 million revolving credit facility. The loan bears interest at LIBOR plus 278 basis points.

15.4

Convertible bonds – ZAR
 

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 semi-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 was R319 million (before tax) on issue. 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% (2014: 8.5%).

15.5

Convertible bonds – US$
 

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 semi-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% (2014: 3.1%). (Refer note 16 for additional information regarding the conversion option and note 8 for information regarding the CCIRS entered into, to hedge certain aspects of the foreign exchange risk on this bond.)

15.6

Finance leases
 

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 12 years. It also includes a lease arrangement for a Sasol hydrogen pipeline and an oxygen and nitrogen plant with a remaining life of nine years and six years respectively and an effective interest rate of 11.5% as well as forklifts with a remaining life of five years and at an effective interest rate of 8.5%.
    2015   2014  
    Minimum       Minimum      
    lease       lease      
    payments   Interest   Principal   payments   Interest   Principal  
    Rm   Rm   Rm   Rm   Rm   Rm  
  Lease liabilities              
  Less than one year   157   144   13   146   144   2  
  Between one and five years   737   542   195   686   558   128  
  More than five years   1 663   486   1 177   1 864   612   1 252  
    2 557   1 172   1 385   2 696   1 314   1 382  

15.7

Capital management
 

The Group defines total capital as “equity” in the consolidated statement of financial position plus debt. The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce cost of capital.

In order to maintain or improve the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue or repurchase shares.

The Group monitors the debt to equity ratio. This ratio is calculated as net debt over net debt plus equity. The Group excludes leases in its determination of net debt. The gearing ratio is allowed to a maximum of 10%, currently at 7.9%