Integrated Annual Report 2015
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Business Model 
Financial capital – Group review

In the current price environment, the Group’s priorities have been materially rebalanced to focus on profitability and cash preservation. It is nevertheless critical to safeguard the completion of key capital projects to secure the long-term value of the Group.

Financial summary and statistics
Summary statement of comprehensive income  

for the year ended 30 June 2015

  2015   2014    
  Rm   Rm    
Revenue   32 477   29 028  
Cost of sales   (30 849)  (25 786) 
Gross profit   1 628   3 242    
Other operating income   953   239    
Other operating expenses   (1 338)  (1 809)   
Impairment   (5 847)  (1 000) 
Royalty expense   575   (693) 
Profit/(loss) from operations   (4 029)  (21)   
Other   (327)  36    
Income tax expense   217   (144) 
Profit/(loss) for the year   (4 139)  (129)   
Other comprehensive income:        
Other   (10)  (42)   
Exchange differences on translation   1 495   711    
Total comprehensive income   (2 654)  540    
Headline earnings (cps)  36   86    

   

Royalties were impacted by Zimplats court case which resulted in a credit of R1.2 billion in the 2015 financial year.
Taxation was impacted by additional profit tax (APT) at Zimplats of R913 million due to the outcome of two court cases, one being a prior year adjustment for the deductibility of assessed losses in the calculation of APT (R300 million) and second by the current year impact of the reduced royalty rates of R613 million. Royalties and tax offset arrangements have been agreed with the revenue authorities in Zimbabwe.
 
Consolidated statement of cash flow    
for the year ended 30 June 2015    
  2015   2014    
  Rm   Rm    
Cash flow from operating activities   2 328   4 096    
Cash flow from investing activities   (3 845)  (3 537)   
Cash flow from financing activities   (276)  (379)   
Cash and cash equivalents – end of year   2 597   4 305  
Debt excluding leases   6 691   6 405  

Equity raising

In the current price environment, the Group’s priorities have been materially rebalanced to focus on profitability and cash preservation. It is nevertheless critical to safeguard the completion of key capital projects to secure the long-term value of the Group. Central to this is the completion of 16 and 20 shafts at the Impala Lease Area, which collectively require R3.9 billion investment over the next three years.

Following the operating and capital cost cutting response plans, the Group is expected to be EBITDA positive in the current PGM price environment and free cash flow positive across the Impala Lease Area and IRS, before replacement and development expenditure.

The Group successfully executed a R4.0 billion equity raising in October 2015 via an accelerated book build process.

This cash secures the completion of the key capital projects and together with the unutilised committed debt facilities secures the Group balance sheet.