ANNUAL REPORT - Assmang Proprietary Limited · 2 Assmang Limited Annual Report 2013 Group profile Assmang Limited (“Assmang” or “Company”), a company incorporated in the Republic

ANNUAL REPORT 2013

2 Group profile

2 Forward looking statements

2 Salient features

3 Administration

4 Location of operations

5 Mineral Resources and Reserves

17 Corporate governance

19 Five-year review

20 – 58 Annual financial statements

Contents

1Assmang Limited Annual Report 2013

2 Assmang Limited Annual Report 2013

Group profile

Assmang Limited (“Assmang” or “Company”), a company incorporated in the Republic of South Africa (Company registration number 1935/007343/06) and its joint venture and subsidiary companies (“Group”).

The Company mines manganese ore at Black Rock Mine, iron ore at Khumani and Beeshoek Mines in the Northern Cape province and chrome ore at Dwarsrivier Mine in the Mpumalanga province. The Company also produces manganese alloys at its works at Cato Ridge in the KwaZulu-Natal province and at Machadodorp in the Mpumalanga province.

Cato Ridge Alloys Proprietary Limited, a joint venture between the Company and Mizushima Ferroalloys Company Limited (40%) and Sumitomo Corporation (10%), both of Japan, produces refined manganese alloys at Cato Ridge Works.

Manganese ore is also transferred to the works at Cato Ridge and Machadodorp where it is used in the production of manganese alloys.

Incorporated in 1935, the Group employs 6 567 (2012: 6 734) permanent employees and operates as three divisions, namely iron ore, manganese and chrome. Assmang is controlled jointly by African Rainbow Minerals Limited (“ARM”) and Assore Limited (“Assore”), which each holds 50% of the issued share capital and voting rights of the Company. Both shareholders are listed on the JSE Limited (“JSE”).

The bulk of the Group’s production is exported to the Far East, Europe and the United States of America.

Forward looking statements

Certain statements included in this report may constitute “forward looking statements”. Inevitably such forward looking statements involve known and unknown risks and uncertainties and other factors that may cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by those forward looking statements. The business of the Group is subject to fluctuations in world commodity prices, exchange rates and interest rates as well, as the risks inherent in mining and smelting operations. While every effort is made to anticipate and counter the adverse impacts of these risks on the Group’s performance, it is not possible to forecast the outcome of future results with any certainty.

Salient features

Year ended30 June

2013R’000

Year ended30 June

2012R’000

Turnover 25 003 167 23 688 390

Profit for the year 6 209 902 6 883 987

Dividends paid 3 000 000 2 000 000

Capital expenditure 4 064 103 4 517 413


DIRECTORSDesmond Sacco – ChairmanJ C Steenkamp – Deputy Chairman M Arnold*C J Cory*A Joubert*S M LangaF T OlivierP E SaccoM P SchmidtA D Stalker‡B H van AswegenA J Wilkens

ALTERNATE DIRECTORSR Avenant-Buys (Mrs)C ElsW M GuleP G W Henderson F H KalpG C T KarstenB R Mashiane (Mrs)A McAdam‡G R PieterseH L SmithJ C Venter* Audit Committee

‡ British

MANAGEMENT SERVICESAfrican Rainbow Minerals Limited (“ARM”)29 Impala RoadChislehurston, 2196South AfricaPO Box 786136Sandton, 2146South AfricaTelephone: +2711 779 1300Telefax: +2711 779 1318

TECHNICAL ADVISERSAfrican Rainbow Minerals LimitedAfrican Mining and Trust Company Limited

SOLE SELLING AGENTS AND DISTRIBUTORSOre & Metal Company LimitedAssore House15 Fricker RoadIllovo Boulevard, 2196South AfricaPrivate Bag X03Northlands, 2116South AfricaTelephone: +2711 770 6800Telefax: +2711 268 6440

MANAGEMENT AT THE OPERATIONSExecutive MinesW S Grobbelaar

Iron oreD Selemo, Senior General Manager – KhumaniW Smith, Financial ManagerM A Oosthuizen, Senior General Manager – BeeshoekW Jansen van Rensburg, Financial Manager

Manganese oreP Becker, Senior General ManagerM Smit, Financial Manager

Chrome oreM Mtshengu, Senior General ManagerR Burger, Financial Manager

Executive SmeltersL Meyer

Manganese alloysCato Ridge WorksC Padayachee, Senior General ManagerA Santhilal, Financial Manager

Machadodorp WorksA Mcleod, Senior General ManagerL R Wohlberg, Financial Manager

AUDITORSErnst & Young Incorporated

BANKERSThe Standard Bank of South Africa LimitedABSA Bank Limited

REGISTERED OFFICEAfrican Rainbow Minerals Limited24 Impala RoadChislehurston, 2196South AfricaPO Box 782058Sandton, 2146South AfricaTelephone: +2711 779 1000Telefax: +2711 779 1019

RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe financial statements were prepared under the supervision of George Karsten BCom, FCMA, MBL Executive Finance

COMPANY SECRETARYAfrican Rainbow Minerals Limited

Administration


Location of operations

Machadodorp

Richards Bay

Durban

Black RockNchwaning

Gloria

Khumani

Beeshoek Postmasburg

Port ElizabethCape Town

Saldanha Bay East London

Dwarsrivier

Kathu

Johannesburg Maputo

Cato Ridge

Cr ChromeFe Iron oreMn ManganeseFeCr FerrochromeFeMn Ferromanganese

MineProcessing plantCity/TownExport chain


Mineral Resources and Reserves

COMPETENT PERSON’S REPORT ON MINERAL RESOURCES AND MINERAL RESERVESThe report is issued as the annual update of the Mineral Resources and Reserves to inform shareholders of the mineral assets held by Assmang.

Salient features F2013

Khumani In-fill drilling at King and Bruce confirmed the continuation of the ore-bodies towards the west and north respectively.

Nchwaning Mineral Reserves of 3,85 million tonnes have been declared for Manganese Seam 2 where mining has commenced.

Gloria Measured Mineral Resources increased by 4% to 35.44 million tonnes due to additional geological data and remodelling of Gloria Manganese Seam 1.

F2013 MINERAL RESOURCES/RESERVES SUMMARY

MANGANESEMEASURED AND

INDICATEDPROVED AND

PROBABLE

Mineral Resources Mineral Reserves

Mt Mn % Fe % Mt Mn % Fe %

NCHWANING

No 1 Seam 136,76 43,7 9,1 104,1 43,7 9,1

No 2 Seam 180,71 42,4 15,5 3,85 44,5 15,6

BLACK ROCK

No 1 Seam 43,60 40,6 18,1 – – –

No 2 Seam 26,81 38,6 19,8 – – –

GLORIA

No 1 Seam 128,35 37,8 4,7 102,64 37,7 4,7

No 2 Seam 29,40 29,9 10,1 – – –

IRON OREMEASURED AND

INDICATEDPROVED AND

PROBABLE


Mt Fe % Mt Fe %

BEESHOEK

Open Pit 110,04 63,53 47,75 63,91

Dumps – – 7,04 55,08

KHUMANI

Bruce 211,11 64,36 173,05 64,31

King 470,61 64,17 315,68 64,64

Dumps – – 4,94 55,75

CHROMITEMEASURED AND

INDICATEDPROVED AND

PROBABLE


Mt Cr2O

3% FeO % Mt Cr

2O

3% FeO %

DWARSRIVIER 53,14 38,10 22,54 37,31 34,04 21,27

General statementAssmang’s method of reporting Mineral Resources and Mineral Reserves conforms to the South African Code for Reporting Mineral Resources and Mineral Reserves (SAMREC Code).

The convention adopted in this report is that Mineral Resources are reported inclusive of that portion of the total Mineral Resource converted to a Mineral Reserve. Resources and reserves are quoted as at 30 June 2013.

External consulting firms audit the resources and reserves of the Assmang operations on a three-to-four year cycle basis. Underground resources are in-situ tonnages at the postulated mining width, after deductions for geological losses. Underground Mineral Reserves reflect milled tonnages while surface Mineral Reserves (dumps/stockpiles) are in-situ tonnages without dilution. Both are quoted at the grade fed to the plant. Open-pit Mineral Resources are quoted as in-situ tonnages and Mineral Reserves are tonnages falling within an economic pit-shell.

The evaluation method is generally Ordinary Kriging with mining block sizes ranging from 10 x 10 metres to 100 x 100 metres to 250 x 250 metres in the plan view. The blocks vary in thickness from 2,5 to 10 metres. The evaluation process is fully computerised, generally using the CAE Studio 3 software package.

The classification into Measured, Indicated and Inferred Mineral Resources is done by means of geostatistical parameters such as kriging efficiency, kriging variance, slope of regression and a combination of the number of samples used and the dynamic search volume. The spacing of boreholes as well as the geological structures are also considered in the classification.

The Mineral Resources and Mineral Reserves are reported on a total basis regardless of the attributable beneficial interest that Assmang has on the individual projects or mines. When the attributable beneficial interest on a mine or project is less than 100%, the actual percentage of the attributable interest is specified.

Maps, plans and reports supporting resources and reserves are available for inspection at Assmang’s registered office and at the relevant mines.

In order to satisfy the requirements of the Minerals and Petroleum Resources Development Act, Assmang’s operations will have to obtain new order mining rights for all properties required to support the planned operations over the next 30 years. The act was effective from 1 May 2004. Certain operations have already had their conversions approved while some are still in various stages of application.

Rounding of figures may result in computational discrepancies on the Mineral Resource and Reserve tabulations.


DefinitionsThe definitions of Mineral Resources and Reserves, quoted from the SAMREC Code (2009), are as follows:

A ‘Mineral Resource’ is a concentration or occurrence of material of economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, or estimated from specific geological evidence, sampling and knowledge interpreted from an appropriately constrained and portrayed geological model. Mineral Resources are subdivided, and must be so reported, in order of increasing confidence in respect of geoscientific evidence, into Inferred, Indicated or Measured categories.

An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which volume or tonnage, grade and mineral content can be estimated with only a low level of confidence. It is inferred from geological evidence and sampling and assumed but not verified geologically or through analysis of grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited in scope or of uncertain quality and reliability.

An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on information from exploration, sampling and testing of material gathered from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological or grade continuity but are spaced closely enough for continuity to be assumed.

A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable information from

exploration, sampling and testing of material from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.

A ‘Mineral Reserve’ is the economically mineable material derived from a Measured or Indicated Mineral Resource or both. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a Pre-Feasibility Study for a project and a Life-of-Mine Plan for an operation must have been completed, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors (the modifying factors). Such modifying factors must be disclosed.

A ‘Probable Mineral Reserve’ is the economically mineable material derived from a Measured or Indicated Mineral Resource or both. It is estimated with a lower level of confidence than a Proved Mineral Reserve. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a Pre-Feasibility Study for a project or a Life-of-Mine Plan for an operation must have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. Such modifying factors must be disclosed.

A ‘Proved Mineral Reserve’ is the economically mineable material derived from a Measured Mineral Resource. It is estimated with a high level of confidence. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a Pre-Feasibility Study for a project or a Life-of-Mine Plan for an operation must have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. Such modifying factors must be disclosed.

RELATIONSHIP BETWEEN EXPLORATION RESULTS, MINERAL RESOURCES AND MINERAL RESERVES

Mineral Resources and Reserves (continued)


CompetenceThe Competent Person with overall responsibility for the compilation of the Mineral Resources and Reserves report is Shepherd Kadzviti, Pr.Sci.Nat, an African Rainbow Minerals (ARM) employee.

Shepherd Kadzviti graduated with a BSc and MSc in Geology from the University of Zimbabwe. He later completed a Graduate Diploma in Mining Engineering (GDE) at the University of Witwatersrand. He worked at RioZim’s Renco Gold Mine for fourteen years in various capacities of Geologist, Technical Services Superintendent and Mine Manager. In 2005 he joined Anglo American Platinum as an Evaluation Geologist with responsibilities for geological database management and mineral resource estimation. After two years at Union Mine he was transferred to Anglo American Platinum Corporate office where he was appointed Resource Geologist. He then joined African Rainbow Minerals (ARM) as Mineral Resource Specialist in 2008 where he was involved in the evaluation of the various mineral deposits. In 2012 he was appointed Group Mineral Resources Manager for ARM. He is registered with the South African Council for Natural Scientific Professions (SACNASP) as a Professional Natural Scientist in the field of practice of geological science, registration number 400164/05, and as such is considered to be a Competent Person.

All Competent Persons at the operations have sufficient relevant experience in the type of deposit and in the activity for which they have taken responsibility. Details of the Competent Persons are available from the Company Secretary on written request.

The following Competent Persons were involved in the calculation of Mineral Resources and Reserves:

P J van der Merwe Pr.Sci.Nat (SACNASP) Iron/Manganese/Chrome

M Burger Pr.Sci.Nat (SACNASP) IronS van Niekerk Pr.Sci.Nat (SACNASP) IronB Ruzive Pr.Sci.Nat (SACNASP) ManganeseA Pretorius* Pr.Sci.Nat (SACNASP) Chrome

* External consultant

S Kadzviti 24 Impala Road, Chislehurston, Sandton

2 September 2013

MANGANESE MINES LOCALITY – The manganese mines are situated in the Northern Cape Province in South Africa, approximately 80 kilometres North-West of the town of Kuruman. Located at latitude 27°07’50”S and longitude 22°50’50”E, the site is accessed via the national N14 route between Johannesburg and Kuruman, and the provincial R31 road.

HISTORY – In 1940, Assmang acquired a manganese ore outcrop on a small hillock known as Black Rock. Several large properties underlain by ore were subsequently found and acquired. Today the Black Rock area is considered to be one of the largest and richest manganese deposits in the world. Manganese ore operations were extended and today include the Gloria and Nchwaning underground mines. Manganese ore is supplied locally to Assmang owned smelters, but is mainly exported through Port Elizabeth as well as Durban and Richards Bay.

MINING AUTHORISATION – The Nchwaning mining lease (ML10/76) comprises an area of 1 986 hectares and is located on the farms Nchwaning (267), Santoy (230) and Belgravia (264). The Gloria mining lease (ML11/83) comprises an area of 1 713 hectares and is located on portion 1 of the farm Gloria (266). The new order mining right for Nchwaning and Gloria was executed on 13 July 2011. Registration of right is in process.

GEOLOGY – The manganese ores of the Kalahari Manganese field are contained within sediments of the Hotazel Formation of the Griqualand West Sequence, a subdivision of the Proterozoic Transvaal Supergroup. At Black Rock, Belgravia and Nchwaning, the Hotazel, Mapedi and Lucknow Formations have been duplicated by thrusting. The thrusted ore bodies comprising Black Rock (Koppie), Belgravia 1 and Belgravia 2 are collectively known as Black Rock ore bodies. The average thickness of the Hotazel Formation is approximately 40 metres.

The manganese orebodies exhibit a complex mineralogy and more than 200 mineral species have been identified to date. The hydrothermal upgrading has resulted in a zoning of the orebody with regard to fault positions. Distal areas exhibit more original and low grade kutnohorite and braunite assemblages, while areas immediately adjacent to faults exhibit a very high-grade hausmannite rich ore. The intermediate areas exhibit a very complex mineralogy, which includes bixbyite, braunite and jacobsite amongst a host of other manganese bearing minerals. A similar type of zoning also exists in the vertical sense. At the top and bottom contacts it is common to have high iron (Fe) and low manganese (Mn) contents while the reverse is true towards the centre of the seam. This vertical zoning has given rise to a mining practice where only the centre 3,5 to 4,5 metre-high portion of the seam is being mined. At the Gloria Mine the intensity of faulting is much less, which also explains the lower grade.

Two manganese seams are present. The number 1 seam is up to 6 metres in thickness, of which up to 4,5 metres are mined, using a manganese marker zone for control. There is, therefore, minimum dilution. Limited mining of Nchwaning Seam 2 has been done, while no mining has been undertaken to date on Gloria Seam 2.

Nchwaning Mineral Resources and ReservesMineral Resource classification at Nchwaning Mine is based on consideration of a number of parameters: kriging variance, kriging efficiency, regression slope, geological structures and quality of assay data. Each of these parameters contributes to the overall classification depending on weighting assigned to each of the parameters. Measured and Indicated Resources have been defined for Nchwaning. Geological losses are incorporated into the grade models.


Nchwaning Mine: Seam 1 Manganese Resources and Reserves



Measured 41,10 45,6 9,5 Proved 31,35 45,6 9,4

Indicated 95,66 42,9 8,9 Probable 72,75 42,9 8,9

Total Resources (Seam 1) 2013 136,76 43,7 9,1 Total Reserves (Seam 1) 2013 104,10 43,7 9,1


Mineral Resources are inclusive of Mineral Reserves.Totals are rounded off.Modifying factors: pillar losses.

The Nchwaning Mine was diamond drilled from surface at 330 metre centres and the data is captured in a Geological Database Management System (GDMS) developed by CAE Mining. The core was logged and 0,5-metre-long, half-core, diamond-saw cut samples were submitted to Assmang’s laboratory at Black Rock for X-ray fluorescence (XRF) analyses. Mn and Fe values were checked by Wet Chemical analyses. Several standards were used to calibrate the XRF equipment, and results are compared with other laboratories on a regular basis.

At Nchwaning a total of 322 boreholes and 24 085 underground sample sections were considered in the grade estimation for Nchwaning Seam 1. The data was optimised over a thickness of 4,5 metres (Nchwaning 3) and 3,5 metres for the rest of Nchwaning, and exported into data files for computerised statistical and geostatistical manipulation to determine the grades of Mn, Fe, silica (SiO

2), calcium (CaO) and magnesium (MgO). Ordinary Kriging

interpolation within Studio 3 was used to estimate the grade of each 50 x 50 x 3,5/4,5 metre block generated within the geological model. Sub-cell splitting of the 50 x 50 metre blocks was allowed to follow the geological boundaries accurately.

The relative density of the Nchwaning manganese ore was determined as 4,3 t/m3.Trackless mechanised equipment is used in the board and pillar mining method. Mining in the eastern extremity of Nchwaning occurs at a depth of 200 metres while the deepest (current) excavations can be found at a depth of 519 metres below surface. Ore from Nchwaning No 2 Mine is

crushed underground before being hoisted to a surface stockpile via a vertical shaft. Similarly, ore from the Nchwaning No 3 Mine is crushed underground before being conveyed to a surface stockpile via a declined conveyor system. Ore is withdrawn from the surface stockpile and forwarded to two stages of crushing, dry screening and wet screening to yield lumpy and fine products.

At the plant the finer fractions are stockpiled while the coarser fractions are extracted from the respective product boxes into road haulers, sampled, weighed and stored on stacks ahead of despatch. Samples from each stack are analysed for chemical content and size distribution. This ensures good quality control and enables the ore control department to blend various stacks according to customer demand.

NCHWANING YEAR-ON-YEAR CHANGE – The Mineral Resources for Seam 1 decreased from 142,38 to 136,76 million tonnes mainly due to the Nchwaning 3 North West section being excluded from the Mineral Resource as Seam 1 is poorly developed due to intense thrusting in the area as well as mining depletion. Nchwaning Seam 2 Mineral Resources marginally reduced to 180,71 from 180,8 million tonnes due to mining which was undertaken during the year.

Mineral Reserves for Nchwaning Seam 1 decreased by 6% to 104,10 million tonnes mainly due to the exclusion of the Nchwaning 3 North West block as well as mining depletion.



Nchwaning Mine: Seam 2 Manganese Mineral Resources and Reserves



Measured 53,28 42,0 16,3 Proved 1,04 44,3 15,7


Total Resources (Seam 2) 2013 180,71 42,4 15,5 Total Reserves (Seam 2) 2013* 3,85 44,5 15,6

Total Resources (Seam 2) 2012 180,80 42,4 15,5 Total Reserves (Seam 2) 2012

Black Rock Mineral Resources The Black Rock ore bodies occur in the Black Rock (Koppie), Belgravia 1 and Belgravia 2 areas. They are all part of a large thrust complex. Modelling of these ore bodies was undertaken using 151 Nchwaning boreholes that intersected the thrust complex and 174 Black Rock infill boreholes. A 38% manganese cut-off was used in the modelling. Seam 1 and 2 were modelled at variable thicknesses.

Black Rock : Seam 1 Manganese Mineral Resources

Mineral Resources Mt Mn% Fe%

Measured 9,03 40,3 18,1

Indicated 34,57 40,7 18,1

Total Resources (Seam 1) 2013 43,60 40,6 18,1


Totals are rounded off.

Black Rock: Seam 2 Manganese Mineral Resources

Mineral Resources Mt Mn% Fe%

Measured 8,23 37,4 19,8

Indicated 18,58 39,2 19,8




Gloria Mineral Resources and Reserves Procedures for drilling and assaying at Gloria Mine are the same as at Nchwaning. A total of 172 boreholes and 6 628 underground samples were considered in the evaluation of the Gloria Seam 1. The underground sampling values were used in evaluating areas close to current mining. The boreholes were optimised over an evaluation width of 3,5 metres and the relative density was determined as 3,8 t/m3. The seams

Mineral Resources are inclusive of Mineral Reserves.Totals are rounded off.Modifying factors: pillar losses.* Seam 2 Mineral Reserves were confined to 150m around existing mining area.


were evaluated by means of statistical and geostatistical methods to determine the grades of Mn, Fe, SiO2, CaO and MgO. Ordinary

Kriging interpolation within CAE Studio 3 was used to estimate the grade of each 50 x 50 x 3,5 metre block generated within the geological model. Sub-cell splitting of the 50 x 50 metre blocks was allowed to follow the geological boundaries. Mineral resource classification techniques are the same as for Nchwaning. Gloria Mine is extracting manganese at depths that vary between 180 to 250 metres. Ore is crushed underground before being conveyed to surface stockpile via a decline shaft. Ore is withdrawn from the surface stockpile and forwarded to two stages of crushing, dry screening, and wet screening to yield lumpy and fine products. At the plant the ore is processed in a similar way as at Nchwaning.

GLORIA YEAR-ON-YEAR CHANGE – Gloria Measured and Indicated Mineral Resources for Seam 1 increased by 1% to 128,35 million tonnes. Inferred Resources decreased from 48,49 to 46,99 million tonnes due to upgrade to Indicated Mineral Resources. Mineral Reserves increased from 93,82 to 102,64 million tonnes due to changes in the mining extraction factors. The Mineral Resources for Gloria Seam 2 remained the same. There are no markets for Gloria Seam 2 ore at this time.

Gloria Mine: Seam 1 Manganese Mineral Resources and Reserves



Measured 35,44 37,7 4,9 Proved 28,34 37,7 4,9




Inferred 2013 46,99 36,8 5,0

Inferred 2012 48,49 36,7 5,0

Mineral Resources are inclusive of Mineral Reserves.Totals are rounded off.Modifying factors: pillar losses and mining losses.



Gloria Mine: Seam 2 Manganese Mineral Resources

Mineral Resources Mt Mn % Fe %

Measured – – –

Indicated 29,40 29,9 10,1



Inferred 2013 128,24

Inferred 2012 128,24


Historical manganese production at Nchwaning and Gloria Mines (saleable product)

Year Nchwaning Mt Gloria Mt

2008/2009 2,63 0,51

2009/2010 1,30 0,67

2010/2011 2,35 0,70

2011/2012 2,46 0,84

2012/2013 2,40 0,75

IRON ORE MINES LOCALITY – The iron ore division is made up of the Beeshoek Mine located on the farms Beeshoek 448 and Olynfontein 475, and the Khumani Mine situated on the farms Bruce 544, King 561 and Mokaning 560. All properties are in the Northern Cape approximately 200 kilometres west of Kimberley. The Beeshoek open-pit operations are situated 7 kilometres west of Postmasburg and the Khumani open pits are adjacent to, and south-east of, the Sishen mine, which is operated by Kumba Iron Ore Limited. Beeshoek and Khumani are located at latitude 28°30’00”S/longitude 23°01’00”E, and latitude 27°45’00”S/ longitude 23°00’00”E respectively. Khumani Mine supplies iron ore to the export markets. Exports are railed to the iron ore terminal at Saldanha Bay. Beeshoek ore is mainly supplied to local customers, with some exported via Khumani.

HISTORY – Mining of iron ore (mainly specularite) was undertaken as early as 40 000 BC on the farm Doornfontein which is due north of Beeshoek. The potential of iron ore in this region was discovered in 1909, but, due to lack of demand and limited infrastructure, this commodity was given little attention. In 1929 the railway line was extended from Koopmansfontein (near Kimberley) to service a manganese mine at Beeshoek. In 1935 The Associated Manganese Mines of South Africa Limited (Assmang) was formed, and in 1964 the Beeshoek iron ore mine was established, with a basic hand sorting operation. In 1975 a full washing and screening plant was installed. The Khumani Iron Ore Mine was commissioned in 2007.

MINING AUTHORISATION – The Beeshoek mining lease (ML3/93) comprises an area of 5 686 hectares and is located on the farms Beeshoek (448) and Olynfontein (475). The converted mining right was executed on 16 March 2012 and was registered on 29 May 2013.

The Khumani new order mining right comprises an area of 7 388 hectares and is located on the farms Bruce (544), King (561) and Mokaning (560). The mining right was executed on 25 January 2007 and was registered on 5 March 2007.

GEOLOGY – The iron ore deposits are contained within a sequence of early Proterozoic sediments of the Transvaal Supergroup deposited between 2 500 and 2 200 million years ago. In general two ore types are present, namely laminated hematite ore forming part of the Manganore Iron Formation and conglomerate ore belonging to the Doornfontein Conglomerate Member at the base of the Gamagara Formation.

The older laminated ore types occur in the upper portion of the Manganore Iron Formation as enriched high-grade hematite bodies. The boundaries of high-grade hematite orebodies crosscut primary sedimentary bedding, indicating that secondary hematitisation of the iron formation took place. In all of these, some of the stratigraphic and sedimentological features of the original iron formation are preserved. The conglomeratic ore is found in the Doornfontein Conglomerate Member of the Gamagara Formation and is lenticular and not persistently developed along strike. It consists of stacked, upward fining conglomerate-gritstone- shale sedimentary cycles. The lowest conglomerates and gritstones tend to be rich in sub-rounded to rounded hematite ore pebbles and granules and form the main orebodies. The amount of iron ore pebbles decreases upwards in the sequence so that upper conglomerates normally consist of poorly sorted, angular to rounded chert and banded iron formation pebbles.

The erosion of the northern Khumani deposit is less than that in the southern Beeshoek area. The result is that Khumani is characterised by larger stratiform bodies and prominent hangingwall outcrops. The down-dip portions are well preserved and developed, but in outcrop the deposits are thin and isolated. Numerous deeper extensions occur into the basins due to karst development. A prominent north-south strike of the orebodies is notable. The southern Beeshoek orebodies were exposed to more erosion and are hence more localised and smaller. Outcrops are limited to the higher topography on the eastern side of the properties. Down dip to the west, the ore is thin and deep. The strike of the orebodies is also in a north south direction, but less continuous.


Haematite is the predominant ore mineral, but limonite and specularite also occur. Mining operations are all open pit, based on the conventional drill -and-blast, truck-and-shovel operations. Run-of-mine ore is crushed and stored as ‘on’ or ‘off grade’ on blending stockpiles. Ore from the stockpiles is either sent to the wash-and-screen plants or, if off grade, to the beneficiation plants. The washing and screening plants consist primarily of tertiary crushing, washing, screening, conveying and stacking equipment. The beneficiation plants consist of tertiary crushers; scrubbers; coarse and fine jigs; lumpy and fines product stockpiles; and a rapid load-out facility. No chemicals are being used in any of the treatment plants.

MINERAL RESOURCES AND RESERVES – Only Measured and Indicated Resources are converted to Proved and Probable Reserves respectively. Modifying factors were applied to these resources and financially optimised. The optimized financial parameters are used to define the optimal pit. The resources within this mining constraint are defined as reserves. These are categorised into different product types, destined for the different plant processes and then scheduled for mining.

The methodology followed to identify targets is initiated with geological mapping, followed by geophysics (ground magnetics and gravity). Percussion drilling is used to pilot holes through overlying waste rock down to the iron orebodies. Diamond drilling is the next phase, which is usually on a 200 x 200 metre grid. Further infill drilling is carried out at spacing ranging from 100 x 100 metres to 25 x 25 metres, depending on the complexity of the geological structures. Numerous exploration programmes have been completed in the last 40 years. Core samples are logged and

split by means of a diamond saw and the half-core is sampled every 0,5 metres. Before submission for assaying, the half-cores are crushed, split and pulverised. Samples with values larger than 60% are included in the definition of the orebodies.

Any lower-grade samples inside the orebody are defined as internal waste and modelled separately. Each zone is modelled per section, and then wire framed to get a three-dimensional (3D) model. Ordinary Kriging interpolation within Studio 3 is used to estimate the grade of each 25 x 25 x 10 metre block generated within the geological model. Densities in the resource model are calculated using a fourth degree polynomial fit applied to the estimated Fe grade. Densities range from 4,38 t/m3 (60% Fe) to 5,01 t/m3 (68% Fe). All blast holes are sampled on a metre basis, but composited per hole. All holes are analysed for density and blast holes in ore are sampled and analysed for Fe, potassium oxide (K

2O), sodium oxide (Na

2O), silica (SiO

2), aluminium oxide

(Al2O

3), phosphorus (P), sulphur (S), CaO, MgO, Mn and barium

oxide (BaO). Every fifth blast hole is geologically logged per metre, which is used to update the geological model. The chemical results of these holes are used to update the ore block model. The major analytical technique for elemental analyses is XRF spectroscopy.

Volumetric titration is used as verification method for the determination of total iron in the ore. International standards (e.g. SARM11) and in-house iron standards are used for calibration of the XRF spectrometer. The Khumani laboratory participates in a round robin group that includes eleven laboratories for verification of assay results.


BEESHOEK IRON ORE MINE: RESOURCES AND RESERVES

MeasuredResources

IndicatedResources

InferredResources

Total Resources Measured and

IndicatedProved

ReservesProbableReserves

TotalReserves

Pit/Area Mt Fe % Mt Fe % Mt Fe % Mt Fe % Mt Fe % Mt Fe % Mt Fe %

BN 20,38 63,39 – – – – 20,38 63,39 11,41 63,55 – – 11,41 63,55

HF/HB 16,00 64,10 – – – – 16,00 64,10 6,87 64,27 – – 6,87 64,27

BF 8,45 63,51 0,23 63,54 0,001 65,24 8,68 63,51 1,02 61,59 – – 1,02 61,59

East Pit 8,71 64,83 0,04 64,23 8,75 64,83 5,86 64,79 0,01 63,64 5,87 64,79

Village 39,90 63,10 0,64 61,40 0,180 61,40 40,54 63,07 22,50 63,86 0,08 64,56 22,58 63,86

GF 3,13 63,81 0,09 61,80 – – 3,22 63,75 – – – – – –

HH Ext 0,28 62,63 – – – – 0,28 62,63 – – – – – –

HL 2,69 64,93 0,05 65,03 – – 2,74 64,93 – – – – – –

West Pit 9,45 63,19 – – 0,050 61,88 9,45 63,19 – – – – – –

Detrital* – – – – 2,500 60,00 – – – – – – – –

Total 2013 108,99 63,54 1,05 62,18 2,731 60,13 110,04 63,53 47,66 63,91 0,09 64,46 47,75 63,91

Total 2012 114,06 63,73 3,39 63,55 2,553 60,04 117,45 63,73 53,99 64,05 0,01 63,64 54,00 64,05

Mineral Resources are inclusive of Mineral Reserves.Totals are rounded off.Modifying factors: economic pit design, fines generated and customer product specifications.* Detrital comprise loose and fragmented material occurring in various areas at Beeshoek.


Beeshoek Dumps

Proved Reserves Probable Reserves Total Reserves

Area Mt Fe% Mt Fe% Mt Fe%

North Mine (ROM On-Grade) – – 0,06 64,00 0,06 64,00

North Mine (B Dump Off-Grade) – – 0,22 55,00 0,22 55,00

South Mine (B Dump Off-Grade) – – 0,01 55,00 0,01 55,00

South Mine (C Dump) – – 6,75 55,00 6,75 55,00

Total 2013 Dumps* – – 7,04 55,08 7,04 55,08

Total 2012 Dumps* – – 12,50 55,44 12,50 55,44

Totals are rounded off.* Dumps are beneficiated to produce a saleable product.

BEESHOEK YEAR-ON-YEAR CHANGE – Measured and Indicated resources for Beeshoek Mine decreased by 6% to 110,04 million tonnes, mainly due remodelling of the Village orebody and mining of East and BN pits. Mineral Reserves consequently reduced from 54,00 to 47,75 million tonnes.

A total of 7,04 million tonnes of ore dumps have been declared as Probable Reserves. The dumps are beneficiated to produce a saleable product. Village pit Feasibility Study was completed and capital application is awaited.


KHUMANI IRON ORE MINE: RESOURCES AND RESERVES

Measured Resources

IndicatedResources

InferredResources

Measuredand

IndicatedProved

ReservesProbableReserves

TotalReserves

Pit/Area Mt Fe % Mt Fe % Mt Fe % Mt Fe % Mt Fe % Mt Fe % Mt Fe %

Bruce A 19,29 64,53 86,87 64,41 – – 106,16 64,43 16,84 64,46 75,94 64,43 92,78 64,44Bruce B 70,16 64,43 20,16 63,81 6,52 63,88 90,32 64,29 60,03 64,31 11,45 63,63 71,48 64,20Bruce C 14,63 64,29 – – – – 14,63 64,29 8,79 63,96 – – 8,79 63,96King/Mokaning 285,47 64,52 185,14 63,64 16,28 63,14 470,61 64,17 254,95 64,66 60,73 64,57 315,68 64,64Total 2013 389,55 64,50 292,17 63,88 22,80 63,35 681,72 64,23 340,61 64,57 148,12 64,43 488,73 64,53Total 2012 476,90 64,48 232,07 63,82 23,86 62,73 708,97 64,26 334,50 64,55 178,36 64,27 512,86 64,46

Mineral Resources are inclusive of Mineral Reserves.Totals are rounded off.Modifying factors: economic pit design, fines generated and customer product specifications.

Khumani Dumps

Proved Reserves Probable Reserves Total Reserves

Area Mt Fe% Mt Fe% Mt Fe%

Bruce (ROM On Grade) – – 0,18 64,00 0,18 64,00Bruce (B Dump Off-grade) – – 3,56 55,00 3,56 55,00King (ROM On Grade) – – 0,06 64,00 0,06 64,00King (B Dump Off-grade) – – 0,83 55,00 0,83 55,00King (Detrital) – – 0,31 60,00 0,31 60,00Total 2013 Dumps* – – 4,94 55,75 4,94 55,75Total 2012 Dumps – – 1,76 56,22 1,76 56,22

Totals are rounded off.* Dumps are beneficiated to produce a saleable product.


KHUMANI YEAR-ON-YEAR CHANGE – Measured and Indicated resources decreased by 4% to 681,72 million tonnes mainly due remodelling of King and Bruce orebodies. Total reserves decreased to 488,73 from 512,86 million tonnes due to remodelling of orebodies and depletion by mining. Ore dumps amounting to 4,94 million tonnes at 55,75% Fe have been reported as Probable Reserves.

HISTORICAL PRODUCTION AT BEESHOEK AND KHUMANI MINES (SALEABLE PRODUCT)

Financial yearBeeshoek

MtKhumani

Mt

2008/2009 2,66 6,65

2009/2010 0,52 8,77

2010/2011 0,96 8,73

2011/2012 2,10 11,60

2012/2013 2,94 13,17


CHROMITE MINELOCALITY – Chromite operations at Dwarsrivier Mine form part of the chrome division of Assmang Limited. The mine is situated on the farm Dwarsrivier 372KT, approximately 30 kilometres from Steelpoort and 60 kilometres from Lydenburg, in Mpumalanga province in South Africa. Located at longitude 30°05’00”E/latitude 24°59’00”S, Assmang purchased the farm from Gold Fields Limited, together with all surface and mineral rights in October 1998.

HISTORY – Neighbouring properties to the north and south of Dwarsrivier had existing chrome mining operations at the time of purchase. The feasibility study of the plant, tailings dam and designs for the open pit and underground mines then commenced. After the completion of the feasibility study, approval to proceed with the final design and construction work was given in July 1999.Chromite was obtained from the open pit mining areas at a rate of approximately 0,9 million tonnes a year and these areas were mined out within five years. Underground mining commenced in 2005 at a rate of 1,2 million tonnes ROM a year. Dwarsrivier Mine was specifically geared to deliver high quality metallurgical grade chromite to the Machadodorp smelter. In addition, the plant has been designed to produce chemical grade products for export.

MINING AUTHORISATION – An old order Mining Licence 21/99 was granted in October 1999. The new mining right was executed on 15 May 2013. Registration of the right is in process.

GEOLOGY – Dwarsrivier Mine is situated in the eastern limb of the Bushveld Complex, which comprises persistent layers of mafic and ultramafic rocks, containing the world’s largest known resources of platinum group metals, chromium and vanadium. The mafic rocks termed the Rustenburg Layered Suite, are approximately 8 kilometres thick in the eastern lobe, and are divided formally into five zones. The rocks of the Marginal Zone at the base of the succession consist mainly of pyroxenites with some dunites and harzburgites. Above the Marginal Zone, the Lower Zone comprises mainly pyroxenites, harzburgites and dunite, and is present only in the northern part of the Eastern Lobe, and only as far south as Steelpoort.

The appearance of chromitite layers marks the start of the Critical Zone, economically the most important zone. The layers are grouped into three sets termed the Lower, Middle and Upper Groups. The sixth chromitite seam in the Lower Group, LG6, is

an important source of chromite ore and is the orebody being mined at Dwarsrivier Mine. In the Eastern Lobe, in the vicinity of Dwarsrivier, the strike is nearly north-south, with a dip of approximately 10 degrees towards the west. Average thickness of the LG6 seam is about 1,86 metres in the Dwarsrivier area. Pipe-like dunite intrusions are evident in the area, as well as dolerite dykes that normally strike northeast southwest. No significant grade variation is evident, especially not vertically in the ore seam in the Dwarsrivier resource.

MINERAL RESOURCES AND RESERVES – Mineral Resources were estimated from boreholes on 150 to 300 metre grid spacing. All possible resources down to a mineable depth of 350 metres below surface have been considered. Vertical diamond drill holes are used for geological and grade modelling. The Mineral Resources at Dwarsrivier Mine are based on a total of 284 diamond boreholes, that have been used for grade estimation and orebody modelling purposes. The drill core is NQ size and is geologically and geotechnically logged. The collar positions of the drill holes are surveyed, but no down-hole surveys are done, and the holes are assumed to have minimal deflection. The chromitite seam is bounded above and below by pyroxenites and as such, the ore horizon is clearly defined. The core is sampled from the top contact downwards at 0.5 metre intervals. The core is split and half is retained as reference material in the core sheds. The other half is crushed and split into representative samples, which are crushed and pulverised for chemical analysis. The samples are analysed using fusion/ICP-OES for chrome oxide (Cr

2O

3), SiO

2, FeO, Al

2O

3, MgO

and CaO. Three laboratories, all ISO 17025 accredited for this method, are used. Every tenth sample is analysed in duplicate. The density for each sample is measured using a gas pycnometer.

Mineral Resources have been estimated using Ordinary Kriging, where Cr

2O

3, FeO, Al

2O

3, MnO and MgO-contents of the LG6

seam and densities were determined, using block sizes of 50 x 50 x 4 metres. During mining, a slightly diluted run of mine ore inclusive of the ‘false’ hanging wall is fed to the beneficiation plant. In the dense media separation part of the plant, the coarse fraction is upgraded to 40 per cent Cr

2O

3, with a yield of 80%. In the spiral

section of the plant the finer fraction is upgraded for metallurgical grade fines and chemical grade fines to 44% Cr

2O

3, and 46% Cr

2O

3

respectively. A 67% yield is achieved in the spiral circuit.

DWARSRIVIER CHROME MINE: CHROME RESOURCES AND RESERVES


Mt Cr2O

3FeO % Mt Cr

2O

3FeO %

Measured 18,56 38,48 22,62 Proved 11,19 33,80 21,13


Total Measured and Indicated 2013 53,14 38,10 22,54 Total Reserves 2013 37,31 34,04 21,27

Total Measured and Indicated 2012 55,03 38,11 22,54 Total reserves 2012 39,15 34,01 21,27

Inferred 2013 48,07 38,35 22,96

Inferred 2012 48,17 38,35 22,96

Mineral Resources are inclusive of Mineral Reserves.Totals are rounded off.Modifying factors: pillar losses and mining losses.


YEAR-ON-YEAR CHANGE – Measured Mineral Resources decreased by 9% to 18,56 million tonnes due to depletion related to mining. A re-interpretation of a 40 metre thick dyke on the southern portion of the Mine marginally reduced Indicated and Inferred Mineral Resources by less than 1%.

HISTORICAL PRODUCTION AT DWARSRIVIER CHROME MINE (ROM)

Financial year Mt

2008/2009 1,03

2009/2010 0,78

2010/2011 1,25

2011/2012 1,50

2012/2013 1,60



Corporate governance

The board of Assmang is committed to maintaining the standards of integrity, accountability and openness advocated in the King Report on Corporate Governance for South Africa 2009 (King III Report).

BOARD OF DIRECTORSDetails of the board of directors are set out on page 3 of this report.

The chairman is a non-executive director and the board meets at least four times a year on predetermined dates and none of the directors have a service contract with the Company.

During the year Mr L S Matsimela and Mr P C Crous resigned from the board of directors. Mr F T Olivier and B H van Aswegen has been appointed as executive director in their place.

MeetingsThe board met on four occasions in the year under review and attendance at these meetings was as follows:

Possible Attended

Desmond Sacco 4 4

M Arnold 4 4

C J Cory 4 4

P C Crous 2 2

A Joubert* 4 4

S M Langa* 4 3

L S Matsimela 3 3

F T Olivier* 1 1

P E Sacco 4 4

M P Schmidt 4 4

A D Stalker* 4 4

J C Steenkamp* 4 4

B H van Aswegen* 2 2

A J Wilkens 4 4

* Executive

EXCO COMMITTEEJ C Steenkamp (Presiding Officer), A Joubert, S M Langa, F T Olivier, H L Smith, A D Stalker, P Thwala (Mrs) and B H van Aswegen.

This board-appointed committee is mandated to consider and implement strategy and maintain effective management of the Group’s operations. The committee meets at least quarterly on predetermined dates, but during the year under review has met on 14 occasions (2012: 12 times). The members of the committee

include six executive directors, and committee members contribute a diverse range of professional skills across a broad spectrum of the Group’s activities.

During the year Mr L S Matsimela was replaced by Mr H L Smith and Mr P C Crous was replaced by Mr F T Olivier as Operations Committee members.

AUDIT COMMITTEEC J Cory (Chairman), M Arnold and A Joubert.

The Audit Committee comprises of two non-executive directors. The committee meets at least three times a year on predetermined dates to consider the interim and final financial statements, recommends dividend declarations and monitors the internal and external audit functions. The committee operates under a board-approved charter and met three times during the year under review.

The main responsibilities of this committee include the safeguarding of the Group’s assets and shareholders’ investments, the maintenance of high standards of record keeping and systems of internal control as well as monitoring compliance with standards of corporate governance. In addition, the committee pursues the objective of ensuring that effective policies and practices are adopted in the preparation of financial information. Audit plans are based on relative risk and the committee conducts reviews of audits, undertaken by both internal and external auditors. It examines their respective plans and reports to ensure effectiveness. Both external and internal auditors have unrestricted access to the chairman of the Audit Committee who is a non-executive director. The provision of a ‘whistle-blowing’ facility is in operation.

The Audit Committee, after due consideration, is of the view that the independent registered audit firm, which is responsible for expressing an opinion on the conformity of the audited financial statements with International Financial Reporting Standards (IFRS), is independent of the Group and its management.

Based on the results of the formal documented review of the design, implementation and effectiveness of the Group’s system of internal financial controls conducted by the internal audit function during the 2013 financial year and, in addition, considering information and explanations given by management plus discussions held with the external auditors on the results of their audit, the committee is of the opinion that the Group’s system of internal financial controls is effective and forms a basis for the preparation of reliable financial statements.

The committee reviewed the Group and Company financial statements and is satisfied that they comply with International Financial Reporting Standards.


Corporate governance (continued)

SOCIAL AND ETHICS COMMITTEEThe Group has appointed a Social and Ethics Committee and is made up of three members (Mr S M Langa (Chairman), A Joubert and B H van Aswegen).

The key aspects of its terms of reference include the monitoring of the Group’s activities relating to relevant legislation, other legal requirements or prevailing codes of best practice with regard to matters relating to:• social and economic development;• good corporate citizenship;• the environment, health and public safety, including the impact

of the Group’s activities and of its products or services;• consumer relationships, including the Group’s advertising, public

relations and compliance with consumer protection laws; and• labour and employment.

INTERNAL AUDITThe Group’s internal audit function, which has been outsourced, operates with full authority of the Audit Committee and under guidance of the directors. The engagement director reports directly to the chairman of the Audit Committee and has unrestricted access to the chairman of the board and other members of the Audit Committee. The internal auditors examine and evaluate the effectiveness of internal control in all operating sectors of the Group’s businesses. Through this process, significant business risks are highlighted and the systems of operating

and financial controls are monitored. Issues are brought to the attention of the Audit Committee and external auditors, and issues that require corrective action are discussed with senior management and acted upon under the auspices of the Audit Committee.

REMUNERATIONThe board-appointed Operations Committee (refer above) ensures appropriate levels of remuneration for senior management of the Group. This committee determines policy for individual remuneration and benefits to maintain a compensation policy which is both competitive and equitable.

Directors of the Company are not remunerated for their services other than by way of directors’ fees paid in terms of the Company’s Memorandum of Incorporation.

Details of emoluments paid to directors are disclosed on page 24 of this report.

EMPLOYEE PARTICIPATIONThe Group has for many years entered into collective bargaining arrangements and recognition agreements with various employee organisations and unions.

CODE OF ETHICSThe Group is committed to the highest standards of integrity, behaviour and ethics in dealing with all its stakeholders.


Five-year review

FINANCIAL INFORMATION FOR THE YEAR

ENDED 30 JUNE 2013 2012 2011 2010 2009

R’000 R’000 R’000 R’000 R’000

Statements of comprehensive income

Revenue 25 289 897 24 126 289 19 222 134 13 071 591 15 736 562

Turnover 25 003 167 23 688 390 19 074 942 12 869 713 15 263 603

Profit before taxation 8 700 829 9 468 516 8 560 999 4 161 748 9 923 181

Income tax expense 2 490 927 2 584 529 2 774 191 1 429 526 3 604 023

Comprehensive income for the year 6 209 902 6 883 987 5 786 808 2 732 222 6 319 158

Ordinary dividends declared 3 000 000 2 000 000 2 000 000 1 000 297 4 302 732

Retained profit 3 209 902 4 883 987 3 786 808 1 731 923 2 016 426

Statements of financial position

Assets

Property, plant and equipment and intangible assets 19 477 734 17 636 497 14 659 840 11 553 410 9 181 181

Other non-current financial assets 579 766 301 057 106 203 154 024 84 268

Current assets 14 417 612 12 269 154 9 647 584 7 864 229 7 627 762

Total assets 34 475 112 30 206 708 24 413 627 19 571 663 16 893 211

Total equity and liabilities

Shareholders’ equity 25 601 215 22 391 313 17 507 326 13 720 518 11 988 593

Deferred tax liabilities 4 771 611 4 475 790 3 980 043 3 146 243 2 438 340

Long-term provisions 797 987 646 133 407 769 394 532 378 417

Current liabilities 3 304 299 2 693 472 2 518 489 2 310 370 2 087 861

Total equity and liabilities 34 475 112 30 206 708 24 413 627 19 571 663 16 893 211

Sales volumes:

– Iron ore tonnes ’000 16 070 14 753 10 006 9 799 7 409

– Manganese ore (excluding sales to Cato Ridge Works and Machadodorp Works) tonnes ’000 2 856 2 905 2 882 3 095 2 152

– Manganese alloys (excluding sales to Cato Ridge Alloys Proprietary Limited) tonnes ’000 260 270 218 238 117

– Chrome ore (excluding sales to Machadodorp Works) tonnes ’000 1 054 521 373 272 256

– Chrome alloys tonnes ’000 77 174 238 189 144

Capital expenditure R’000 4 064 103 4 517 413 4 150 047 3 336 315 2 779 776

Annual financial statements

21 Approval of annual financial statements

21 Certificate by secretary

22 Independent auditors’ report

23 Directors’ report

26 Statements of financial position

27 Statements of comprehensive income

28 Statements of cash flows

29 Statements of changes in equity

30 Notes to the financial statements

46 Accounting Policies



Approval of annual financial statements for the year ended 30 June 2013

The annual financial statements of Assmang Limited and Group annual financial statements for the year ended 30 June 2013 as set out on pages 20 to 58 have been prepared under the supervision of Mr GCT Karsten (BCom, FCMA, MBL), have been audited in accordance with section 30(2)(a) of the Companies Act of 2008, as amended, were approved by the board of directors on 28 October 2013 and are signed on its behalf by:

Desmond Sacco Chairman

JC SteenkampDeputy Chairman

Johannesburg 28 October 2013

Certificate by secretary

We certify that the requirements as stated in section 88(2)(e) of the Companies Act have been met and that all returns and notices, as are required of a public company in terms of the aforementioned Act, have been submitted to the Companies and Intellectual Property Commission and that such returns and notices are true, correct and up to date.

African Rainbow Minerals Limited

Company Secretaryper: GCT Karsten

Johannesburg 28 October 2013


Independent auditors’ report to the shareholders of Assmang Limited

Report on the financial statementsWe have audited the consolidated and separate financial statements of Assmang Limited set out on pages 26 to 58, which comprise the consolidated and separate statements of financial position as at 30 June 2013, and the consolidated and separate statements of comprehensive income, consolidated and separate statements of changes in equity and consolidated and separate statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ responsibility for the financial statementsThe Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Assmang Limited as at 30 June 2013, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Other reports required by the Companies ActAs part of our audit of the consolidated and separate financial statements for the year ended 30 June 2013, we have read the Directors’ Report, Audit Committee report, within the Corporate Governance report, and the Certificate by secretary for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate financial statements. These reports are the responsibility of the preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Ernst & Young Inc.Director: Dawid Petrus Venter Registered AuditorChartered Accountant (SA)

Wanderers Office Park52 Corlett Drive, IllovoJohannesburg

28 October 2013


Directors’ report

Business of the GroupThe Company and its subsidiaries and joint venture companies are incorporated in the Republic of South Africa (Company Registration number 1935/007343/06). The Company mines manganese ore at Black Rock Mine and iron ore at Beeshoek and Khumani Mines in the Northern Cape province and chrome ore at Dwarsrivier Mine in the Mpumalanga province. The Company also produces manganese alloys at its works at Cato Ridge in the KwaZulu-Natal province and at its works in Machadodorp, in the Mpumalanga province. Cato Ridge Alloys Proprietary Limited, a joint venture between the Company and Mizushima Ferroalloys Company Limited (40%) and Sumitomo Corporation (10%), both of Japan, produces refined ferromanganese at the Cato Ridge Works.

Incorporated in 1935 – the Group employs 6 567 (2012: 6 734) permanent employees and is operated as three divisions, namely iron ore, manganese and chrome. Assmang is controlled jointly by African Rainbow Minerals Limited and Assore Limited which each hold 50% of the issued share capital and both of which are listed on the JSE Limited (“JSE”).

Most of the Group’s production is exported to the Far East, Europe and the United States of America. Manganese ore is also transferred to the works at Cato Ridge and Machadodorp where it is used in the production of manganese alloys.

Directors’ responsibility relating to the annual financial statementsIt is the directors’ responsibility to prepare annual financial statements that fairly present the state of affairs and the results of the Company and the Group. The independent auditors are responsible for auditing and reporting on these annual financial statements. The annual financial statements set out in this report have been prepared by management in accordance with International Financial Reporting Standards. They are based on appropriate accounting policies which have been consistently applied. The accounting policies are supported by reasonable and prudent judgements and estimates. The annual financial statements have been prepared on a going-concern basis and the directors have no reason to believe that the business will not be a going concern in the foreseeable future.

In fulfilling its responsibilities, management ensures that adequate accounting records are maintained and has developed and continues to maintain systems of internal accounting controls which are designed to provide reasonable, although not absolute, assurance as to the integrity and reliability of the annual financial statements and to adequately safeguard, verify and maintain the assets of the Group. These controls are monitored throughout the Group and nothing has come to the directors’ attention to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred to the date of this report.

2013 2012

Group operations for the year ended 30 June tonnes ’000 tonnes ’000

Ore and alloys dispatched for export and local markets were as follows:

Iron ore 16 070 14 753 Manganese ore (excluding sales to Cato Ridge Works and Machadodorp Works) 2 856 2 905 Chrome ore (excluding sales to Machadodorp Works) 1 054 521 Manganese alloys (excluding sales to Cato Ridge Alloys (Pty) Limited) 260 270 Chrome alloys 77 174

Group expenditure on property, plant and equipment was as follows: R’000 R’000

Iron ore mines 2 709 138 3 339 900 Manganese ore mines 776 604 469 815 Chrome ore mine 132 015 211 224 Ferromanganese alloy plant 446 346 415 946 Ferrochrome alloy plant – 80 528

4 064 103 4 517 413

Borrowing powersIn accordance with the Memorandum of Incorporation the borrowing powers of the Group at 30 June 2013 were limited to R25,6 billion (2012: R22,39 billion). Group borrowings at that date were Rnil (2012: Rnil) (refer note 16).

InvestmentsInformation regarding the Company’s interests in subsidiaries and joint controlled entities are provided in notes 5 and 6 to the financial statements.

Directorate and SecretaryThe names and details of the directors and secretary of the company at the end of the year are reflected on page 3. There are no service contracts between the company and any of its directors.

Internal controlBased on the information and explanations given by management, and reports presented by the internal and external auditors on the results of their audits, the directors are of the opinion that the internal accounting controls are adequate to address risks as identified by management.

Nothing has come to the attention of the directors or the internal auditors to indicate that any material breakdown in the functioning of the controls, procedures and systems has occurred during the year under review.


Directors’ emolumentsThe table below sets out directors’ emoluments paid by the Company during the year under review. No emoluments were paid to alternate directors.

2013 2012

R’000 R’000

Executive directors 189 189G C Butler* (Resigned 17 November 2011) – 9 P C Crous (Resigned 31 August 2012) 18 36 A Joubert* 36 36 S M Langa* 36 36 F T Olivier (Appointed 1 February 2013) 9 –A D Stalker 36 36 J C Steenkamp* 36 36 B H van Aswegen (Appointed 1 September 2012) 18 –Non-executive directors 257 257Desmond Sacco (Chairman) 50 50 M Arnold* 36 36 C J Cory 36 36 L S Matsimela (Resigned on 31 January 2013) 27 36 P E Sacco 36 36 M P Schmidt* 36 27 A J Wilkens* 36 36

Total 446 446

* Fees paid to African Rainbow Minerals Limited.

Key management personnelAll of the directors, including alternate directors, are employees of one of the two controlling shareholders (African Rainbow Minerals Limited and Assore Limited) and are remunerated by the controlling shareholder concerned. The controlling shareholders provide a combination of management, marketing and administration services to the group for which they are compensated by way of fee income (refer note 30).

Major shareholdersAs at the date of this report, the shareholders of the company were as follows:

Number PercentageAfrican Rainbow Minerals Limited 1 774 103 50,0Assore Limited 1 774 103 50,0

Special resolutions Special resolutions passed by the company, its subsidiary and joint venture companies during the period 1 July 2012 to the date of this report:

Memorandum of IncorporationApproval of the revised Memorandum of Incorporation in terms of Section 16 of the Companies Act 71 of 2008, on 29 April 2013 for the company, its subsidiary and joint venture companies.

PROJECTSKhumani Iron Ore Mine Expansion ProjectThe commissioning of the WHIMS (Wet High Intensity Magnetic Separation) plant at Khumani which is designed to improve the recovery of very fine and high grade ore, currently lost to the slimes dam, is in progress and the first units have been commissioned within budget and ahead of time. Building of additional final product stockpile area at the mine has been completed. The diversion of the Transnet Freight Rail main line which runs through the King mining areas will be completed and handed over by April 2014.

Beeshoek Iron Ore MineThe R885 million development of the East pit to extend production by July 2018 is in progress and 15 million tons of overburden was moved from the pit this year. The diversion of the R385 road between Postmasburg and Olifantshoek to allow for the mining of the future Beeshoek Villlage pit has been completed. The servicing of the stands for housing in Postmasburg was completed and the construction of housing is in progress.

Manganese Ore ExpansionA complete review of the initial scope to expand the Black Rock Mine operations from 3 million tonnes per annum to above 4 million tonnes of ore per annum is underway. This review was necessitated following a marketing study on the demand for the various grades of ore which can be mined from the Nchwaning Mine. Several trade-off studies are underway to ensure that the scope is re-defined to capitalise on this opportunity and to ensure that capital will be spent efficiently. The operating expenditure, capital expenditure and financial modelling for the revised scope will be completed by Q2 F2014.

Sakura Manganese ProjectAssmang (54%), Sumitomo Corporation (27%) and China Steel Corporation (19%) have agreed to establish a joint venture ferromanganese alloy smelting facility in the Sarawak State of Malaysia, Sakura Ferroalloys SDN.BHD (“Sakura”).

Directors’ report (continued)


Sakura is a greenfields project and the facility will be constructed in the Samalaju Industrial Park in Sarawak. The intention is to commission and operate two 81MVA furnaces complete with all related infrastructure, equipment and services to allow for the production of ferromanganese alloy.

Besides being the majority shareholder, Assmang will provide marketing and technical services to Sakura. The project is estimated to cost US$328 million and due to start in the 2014 calendar year and to be commissioned in the second half of 2015.

LogisticsIron ore export sales were 14 million tonnes due to the excellent performance and co-operation between Transnet, the marketing team and the operational team at Khumani Mine. Transnet also railed 270 000 tonnes of ore for a new BEE entrant by utilising the rapid load-out facility at Khumani.

The Manganese ore export channel to Port Elizabeth continued to operate under difficult conditions and many challenges were overcome allowing increased volumes of ore to be transported by rail. This reduced the ore tonnages transported by road however manganese ore exported through the port of Durban increased.

Assmang and Transnet continue to engage regarding future export capacity and growth for both iron ore and manganese ore. To this effect Transnet concluded the feasibility study to expand its manganese ore export capacity to 12 mtpa through the Port of Ngqura from April 2018. This schedule and capacity allocation is aligned with the Assmang growth plan and ramp-up schedule for the Black Rock mine.

Assmang and Transnet will engage on a new manganese ore export contract through the port of Port Elizabeth which will cater for future allocation through this channel for the period 1 October 2013 until 31 March 2018.

SafetyDuring the year Beeshoek Mine achieved 2,4 million (2012: 2,0 million) fatality-free shifts.

Khumani Mine achieved 3,4 million (2012: 2,5 million) fatality-free shifts.

Black Rock Mine achieved 2,3 million (2012: 1,7 million) fatality-free shifts.

Cato Ridge Works and Dwarsrivier Mine also achieved significant safety milestones during 2013 reaching 1,5 million and 1,9 million fatality-free shifts respectively.

Mining rights statusKhumani Iron Ore mine: New order mining right was executed and registered during 2008 for 30 years.

Beeshoek Iron Ore mine: Converted Mining Rights were executed on 16 March 2012 and registered on 29 May 2013.

Black Rock Manganese mine: Converted Mining Rights (for manganese ore) was executed on 13 July 2012 and now awaits registration.

Dwarsrivier Chrome mine: Mining Rights (for chrome ore) was executed on 15 May 2013 and now awaits registration.

Occupational health and wellnesssMedical surveillance done periodically and medical examinations on exit from employment were conducted at all operations according to the requirements of the relevant legislation. Audiometric tests were also conducted at all operations.

Hearing conservation remains a major focus at all operations as part of the occupational health surveillance and management programmes. Chronic conditions are managed as a risk issue, especially the newly diagnosed medical cases. Hypertension is the main concern at all operations and is monitored.

Operations keep a chronic disease register to monitor and manage employees who are on treatment as required by the Department of Mineral Resources (“DMR”).

TB has become a national focus area for the Department of Health especially at Mining operations. Employees who visit the site clinic for any medical surveillance are passively screened for TB as required by the Department of Health. Employees who are suspected of having TB are referred to the public health facilities for active screening and management. Operations conduct passive TB screening to contacts at the workplace and contact the local clinic to conduct screening for contacts at the employee’s family.

HIV&AIDS forms part of the comprehensive wellness management at all operations. All operations, except for Machadodorp, provide HIV counselling to employees visiting the clinic for any medical surveillance, but HIV testing remains voluntary.

Impairment of AssetsThe carrying value of furnace 5 and the pelletising plant at Machadodorp Works were impaired by R152,4 million as no further chrome beneficiation will be done in the foreseeable future. Furnaces 3 and 4 were impaired at Cato Ridge Works by R159,4 million as these furnaces have become uneconomical to operate due to current market conditions.

DividendsOn 5 August 2012, the board of directors declared dividend number 147 of R422,75 per share amounting to R1,5 billion, which was paid on 19 August 2012. On 1 February 2013, the board of directors declared dividend number 148 of R422,75 per share amounting to R1,5 billion, which was paid on 11 February 2013 making a total dividend of R3,0 billion (2012: R2,0 billion).

Events subsequent to year-endDividendOn 22 August 2013, the board declared dividend number 149 of R422,75 per share amounting to R1,5 billion, which was paid to shareholders on 28 August 2013.


Statements of financial position as at 30 June 2013

GROUP COMPANY

2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

ASSETS

Non-current assets 20 057 500 17 937 554 20 546 168 18 232 988

Property, plant and equipment 1 19 476 155 17 634 558 19 430 208 17 592 340

Intangible assets 2 1 579 1 939 – –

Loans and long-term receivables 3 389 452 213 332 866 491 495 084

Non-current financial assets 4 190 314 87 725 190 314 87 725

Investments in and loans to subsidiary companies 5 20 933 19 617

Interest in a joint venture 6 38 222 38 222

Current assets 14 417 612 12 269 154 13 606 502 11 706 801

Inventories 7 4 252 382 3 802 470 3 652 443 3 401 080

Trade and other receivables 8 4 831 525 4 008 193 4 692 131 3 902 664

Cash and cash equivalents 9 5 333 705 4 458 491 5 261 928 4 403 057

Total assets 34 475 112 30 206 708 34 152 670 29 939 789

EQUITY AND LIABILITIES

Equity

Issued capital 10 1 774 1 774 1 774 1 774

Share premium 10 11 612 11 612 11 612 11 612

Retained earnings 25 587 829 22 377 927 25 414 102 22 211 031

Total equity 25 601 215 22 391 313 25 427 488 22 224 417

Non-current liabilities 5 569 598 5 121 923 5 569 498 5 122 388

Deferred tax liability 11 4 771 611 4 475 790 4 771 511 4 476 255

Long-term provisions 12 797 987 646 133 797 987 646 133

Current liabilities 3 304 299 2 693 472 3 155 684 2 592 984

Short-term provisions 13 504 599 506 840 504 599 506 840

Trade and other payables 14 2 238 269 2 010 882 2 095 028 1 915 116

South African Revenue Service 27 561 431 175 750 556 057 171 028

Total equity and liabilities 34 475 112 30 206 708 34 152 670 29 939 789


Statements of comprehensive income for the year ended 30 June 2013

GROUP COMPANY

2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

Revenue 17 25 289 897 24 126 289 24 986 805 23 939 736

Turnover 17 25 003 167 23 688 390 24 726 674 23 523 199

Cost of sales (14 542 367) (13 380 796) (14 257 968) (13 195 626)

Gross profit 10 460 800 10 307 594 10 468 706 10 327 573

Other operating income 18 1 149 082 1 602 365 1 134 670 1 540 903

Other operating expenses 19 (3 131 354) (2 660 536) (3 113 657) (2 640 342)

Profit from operations 20 8 478 528 9 249 423 8 489 719 9 228 134

Income from investments 21 273 399 247 380 251 162 244 317

Finance costs 22 (51 098) (28 287) (51 036) (28 285)

Profit before taxation 8 700 829 9 468 516 8 689 845 9 444 166

Taxation 23 (2 490 927) (2 584 529) (2 486 774) (2 575 314)

Total comprehensive income for the year, net of tax 6 209 902 6 883 987 6 203 071 6 868 852


Statements of cash flows for the year ended 30 June 2013

GROUP COMPANY

2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

Cash flow from operating activities

Cash received from customers 25 183 833 24 307 741 24 926 790 24 147 900

Cash paid to suppliers and employees (15 454 123) (14 296 434) (15 003 878) (14 032 349)

Cash generated from operations 26 9 729 710 10 011 307 9 922 912 10 115 551

Net cash outflow from operating activities (4 536 108) (3 995 990) (4 555 347) (3 990 869)

Interest received 21 273 399 247 380 251 162 231 817

Interest paid 22 (82) (415) (20) (413)

Dividends received 21 – – – 12 500

Taxation paid 27 (1 809 425) (2 242 955) (1 806 489) (2 234 773)

Dividends paid (3 000 000) (2 000 000) (3 000 000) (2 000 000)

Net cash outflow from investing activities (4 318 388) (4 615 185) (4 508 694) (4 685 120)

Capital expenditure:

– to maintain operations (1 655 863) (1 401 226) (1 649 381) (1 386 221)

– to expand operations (2 429 887) (3 116 187) (2 430 070) (3 116 652)

Increase in long-term receivables (176 120) (107 127) (372 723) (191 602)

Net (increase)/decrease in non-current financial assets (100 583) 7 091 (100 583) 7 091

Proceeds on disposal of property, plant and equipment 44 065 2 264 44 063 2 264

Net cash outflow from financing activities – (4 717) – (4 717)

Decrease in short-term borrowings – (4 717) – (4 717)

Cash and cash equivalents

– net increase for the year 875 214 1 395 415 858 871 1 434 845

– at beginning of year 4 458 491 3 063 076 4 403 057 2 968 212

– at end of year 9 5 333 705 4 458 491 5 261 928 4 403 057


Statements of changes in equity for the year ended 30 June 2013

GROUP COMPANY

2013 2012 2013 2012

Note R’000 R’000 R’000 R’000

Issued capital and share premium

Issued capital 10 1 774 1 774 1 774 1 774

Share premium 10 11 612 11 612 11 612 11 612

Total 13 386 13 386 13 386 13 386

Retained earnings

Balance at beginning of year 22 377 927 17 493 940 22 211 031 17 342 179

Total comprehensive income for the year, net of tax 6 209 902 6 883 987 6 203 071 6 868 852

Ordinary dividends paid (3 000 000) (2 000 000) (3 000 000) (2 000 000)

No 145 totalling 28 183 cents per share (1 000 000) (1 000 000)




Balance at end of year 25 587 829 22 377 927 25 414 102 22 211 031

Total equity 25 601 215 22 391 313 25 427 488 22 224 417


Mine develop-

ment R’000

Plant and machinery

R’000

Land and buildings

R’000

Mineral rights R’000

Furniture, equipment,

vehicles and other R’000

2013 Total

R’000

2012 Total

R’000

1. Property, plant and equipment

GROUP

Cost

Balance at beginning of year 2 826 991 15 127 556 760 874 141 509 4 456 756 23 313 686 19 234 213

Reclassifications 16 233 (75 999) – – 59 766 – –

Additions 644 207 2 367 206 115 755 – 936 935 4 064 103 4 517 413

Disposals (132 248) (19 717) – (157 798) (309 763) (437 940)

Balance at end of year 3 487 431 17 286 515 856 912 141 509 5 295 659 27 068 026 23 313 686

Accumulated depreciation

At beginning of year 523 951 3 251 016 143 974 53 627 1 706 560 5 679 128 4 576 672

Impairments – 302 032 9 737 – 69 311 838 138 312

Reclassifications 39 5 084 (2) – (5 121) – –

Depreciation 191 036 951 314 29 136 6 077 637 237 1 814 800 1 395 984

Disposals – (106 680) (10 981) – (96 234) (213 895) (431 840)

Balance at end of year 715 026 4 402 766 171 864 59 704 2 242 511 7 591 871 5 679 128

Carrying value at 30 June 2 772 405 12 883 749 685 048 81 805 3 053 148 19 476 155 17 634 558

COMPANY

Cost

At beginning of year 2 826 991 15 044 234 745 442 139 327 4 446 602 23 202 596 19 137 663

Reclassifications 16 231 (79 307) 11 182 – 51 894 – –

Additions 644 207 2 362 083 115 592 – 935 922 4 057 804 4 502 873

Disposals (131 659) (19 717) – (152 122) (303 498) (437 940)

Balance at end of year 3 487 429 17 195 351 852 499 139 327 5 282 296 26 956 902 23 202 596


At beginning of year 523 951 3 192 122 143 439 53 627 1 697 117 5 610 256 4 516 493

Impairments – 302 032 9 737 – 69 311 838 138 312

Reclassifications 39 2 400 43 – (2 482) – –

Depreciation 191 036 949 156 28 920 6 077 637 043 1 812 232 1 387 291

Disposals – (106 093) (10 981) – (90 558) (207 632) (431 840)

Balance at end of year 715 026 4 339 617 171 158 59 704 2 241 189 7 526 694 5 610 256

Carrying value at 30 June 2 772 403 12 855 734 681 341 79 623 3 041 107 19 430 208 17 592 340

A register containing details of land and buildings is available for inspection, by members or their duly authorised agents during normal business hours at the registered address of the company.

Borrowing costs No borrowing costs were capitalised during the year (2012: Nil).

Capital work-in-progress Included in mine development, plant and machinery and furniture and equipment is capital work-in-progress costing R2,37 million

(2012: R2,32 million), mainly related to the Khumani Iron Ore Mine.

Impairment The carrying value of three furnaces and a pelletising plant at Cato Ridge Works and Machododorp Works were fully impaired at

year-end by the amount of R311,8 million as no future benefit will arise from these assets.

Notes to the financial statements for the year ended 30 June 2013


GROUP COMPANY

2013 2012 2013 2012

R’000 R’000 R’000 R’000

2. Intangible assets

Cost

Balance at beginning of year 7 203 7 203 – –

Balance at end of year 7 203 7 203 – –


Balance at beginning of year 5 264 4 904 – –

Amortisation 360 360 –

Balance at end of year 5 624 5 264 – –

Carrying value at 30 June 1 579 1 939 – –

Intangible assets consist of licensing and proprietary technical information.

3. Loans and long-term receivables

Khumani Housing Development Company Proprietary Limited (refer note 5) – – 866 491 495 084

Long-term housing loans repayable by Company employees 389 452 213 332 – –

389 452 213 332 866 491 495 084

The receivables consist of long-term housing loans granted to employees by the Company, the repayment terms of which vary between 5 and 20 years and bear interest at the prime lending rate, less 2%.

Loans are secured by means of instalment sale agreements.

4. Non-current financial asset

Balance at beginning of year 87 725 – 87 725 –

New investment relating to retention scheme 100 583 86 802 100 583 86 802

Fair value adjustment through profit and loss 2 006 923 2 006 923

Closing balance 190 314 87 725 190 314 87 725

Current year investment: R100,58 millionThe investment is a structured product, vesting over a fixed term, offering a remuneration incentive to attract, retain, motivate and reward middle and senior management. A new investment with a maturity date of 1 July 2015 was made which guarantees the capital amount invested.

Prior year investment: R86,80 millionThe investment is a structured product, vesting over a fixed term, offering a remuneration incentive to attract, retain, motivate and reward middle and senior management. The capital growth for the investment is 10% guaranteed growth. The investment maturity date is 1 July 2014.


Notes to the financial statements (continued)

for the year ended 30 June 2013

Issued capital

Interest in capital

Shares at cost

2012 and 2013

2012 and 2013

2012 and 2013 Indebtedness

Book value of the Company’s interests

Name and nature of business R’000 % R’000

2013 R’000

2012R’000

2013 R’000

2012R’000

5. Investment in and loans to subsidiary companies

Cato Ridge DevelopmentCompany Limited– township development 1 950 100 1 520 19 413 18 097 20 933 19 617

Khumani Housing DevelopmentCompany Proprietary Limited– township development (Note 3) * 100 * 866 491 495 084 866 491 495 084

* Amount is less than a thousand rand

The subsidiaries are incorporated and carry on operations in the Republic of South Africa.

The loan to Cato Ridge Development Company Limited is interest free with no fixed repayment terms. Assmang does not intend to recall the loan within the next 12 months. Loans to Khumani Housing Development Company Proprietary Limited are interest free and will not be repaid in the next 12 months. Assmang does not intend to recall the loans within the next 12 months.

GROUP COMPANY

2013 2012 2013 2012

R’000 R’000 R’000 R’000

6. Interest in a joint venture

The Company has a 50% interest in Cato Ridge Alloys Proprietary Limited (CRA): at cost – – 38 222 38 222

The venture is controlled jointly by the Company, Mizushima Ferroalloys Company Limited and Sumitomo Corporation and produces refined ferromanganese at the Cato Ridge Works.

The financial statements include the following amounts relating to CRA, which were proportionately consolidated.

Share of the joint venture’s statement of financial position:

Current assets 307 083 280 191

Non-current assets 32 563 29 314

Current liabilities (96 170) (73 566)

Non-current liabilities (5 329) (4 547)

Equity 238 147 231 392

Share of the joint venture’s revenue and profit:

Revenue 369 630 322 073

Cost of sales (352 101) (298 623)

Other operating income 12 684 29 433

Other operating expense (20 831) (29 738)

Profit before taxation 9 382 23 145

Taxation (2 627) (10 606)

Profit for the year from continuing operations 6 755 12 539

Commitments for future capital expenditure amount to R6,74 million (2012: R4,53 million) at year-end and there were no contingent liabilities relating to the company’s interest in the joint venture at year end.


GROUP COMPANY

2013 2012 2013 2012

R’000 R’000 R’000 R’000

7. InventoriesRaw materials at cost 240 141 253 300 239 665 271 016

Work-in-progress at cost 264 369 230 769 264 369 230 769

Consumables stores at cost 838 944 519 998 836 748 518 138

Finished goods (cost or net realiasable value) 2 908 928 2 798 403 2 311 661 2 381 157

4 252 382 3 802 470 3 652 443 3 401 080

Cost of inventory recognised as an expense included in cost of sales 3 012 620 2 701 598 2 803 934 2 613 262

Cost of inventory written down during the year recognised in cost of sales 35 822 113 020 35 822 113 020

8. Trade and other receivablesTrade receivables 3 402 541 3 147 398 3 313 811 3 091 140

Other receivables 1 428 984 860 795 1 378 320 811 524

4 831 525 4 008 193 4 692 131 3 902 664

Current 3 976 233 3 375 807 3 837 405 3 270 278

Outstanding, more than 30 days 396 711 346 290 396 711 346 290




Total due, not impaired 4 831 525 4 008 193 4 692 131 3 902 664

Trade and other receivables are non-interest bearing and are generally on 30 – 60 day payment terms.

No provision is currently necessary for trade receivables that are 90- and 120 days outstanding as they are regarded as recoverable in full. Other receivables consist mostly of VAT receivables as well as payments in advance and deposits, all of which are considered recoverable in full.

9. Cash and cash equivalentsCash at bank and on deposit 5 175 819 4 320 071 5 104 042 4 264 637

Rehabilitation Trust Fund – subject to legal use restrictions 157 886 138 420 157 886 138 420

5 333 705 4 458 491 5 261 928 4 403 057

All cash earns interest at deposit rates linked to prime.

10. Issued capital and share premiumAuthorised

3 636 260 ordinary shares of 50 cents each 1 818 1 818 1 818 1 818

63 740 unclassified shares of 50 cents each 32 32 32 32

Issued

3 548 206 ordinary shares of 50 cents each 1 774 1 774 1 774 1 774

Share premium 11 612 11 612 11 612 11 612




GROUP COMPANY

2013R’000

2012R’000

2013R’000

2012R’000

11. Deferred tax liabilityAt year-end:

Raised on the following:

Accelerated capital allowances 5 085 218 4 674 364 5 080 014 4 674 960

Provisions raised (262 312) (220 045) (262 312) (220 045)

Other (51 295) 21 471 (46 191) 21 340


Movement for the year

Balance at beginning of year 4 475 790 3 980 043 4 476 255 3 979 722

Adjusted as follows: 295 821 495 747 295 256 496 533

Accelerated capital allowances 410 854 584 876 405 054 589 293

Provisions raised (42 267) (107 229) (42 267) (110 729)

Other (72 766) 18 100 (67 531) 17 969


12. Long-term provision

Environmental obligations:

Provisions for decommissioning costs

Balance at beginning of year 350 878 289 425 350 878 289 425

Movement for the year 2 636 61 453 2 636 61 453

Provisions (reversed)/raised during the year (21 647) 73 500 (21 647) 73 500

Unwinding of discount rate 32 526 19 353 32 526 19 353

Transferred from decommissioning assets (8 243) (31 400) (8 243) (31 400)

Balance at end of year 353 514 350 878 353 514 350 878

Provisions for restoration costs



Restoration costs

Provisions (reversed)/raised for the year (8 744) 78 453 (8 744) 78 453

Unwinding of discount rate 18 490 8 519 18 490 8 519

Transferred to restoration provision 8 243 31 400 8 243 31 400


Post-retirement health care benefits




Deferred investment for senior employees


Provision raised for the period 129 562 57 313 129 562 57 313

Transferred to short-term provisions (refer note 13) (349) (1 972) (349) (1 972)



GROUP COMPANY

2013R’000

2012R’000

2013R’000

2012R’000

12. Long-term provision (continued)

Summary of long-term provisions:


Total provision raised during the year 101 187 212 464 101 187 212 464

Total unwinding of discount rate 51 016 27 872 51 016 27 872

Total payments made for the year – – – –

Total transfer to short-term provision (349) (1 972) (349) (1 972)

Total long-term provision at year-end 797 987 646 133 797 987 646 133

The net present value of the provision for decommissioning and restoration cost is based on a discount rate of 7,5% (2012: 8,4%) inflation rate of 6% (2012: 6%) and life of mine from 5 and 25 years (2012: 4 and 25 years). The provision is based on estimates of cash flows which are expected to occur at the end of the life of the mines. These calculations include inherent uncertainties as they are derived from future estimates of commodity prices, exchange rates and inflation.

13. Short-term provisions


Provisions raised during the year 346 913 397 601 346 913 397 601

Less: Payments made during the year (349 503) (55 901) (349 503) (55 901)

Transfer from long-term provisions (refer note 12) 349 1 972 349 1 972


Short-term provisions relate to leave pay, short-term incentive bonuses and deferred bonus provision obligations.

14. Trade and other payables

Trade payables 1 363 485 1 094 868 1 272 450 1 024 614

Capital project payables 153 940 386 026 153 940 386 007

Other payables 720 844 529 988 668 638 504 495


Trade and other payables are non-interest bearing and are initially recorded at fair value. Trade payables are normal day to day creditors for the Group. These creditors are mostly on a 30 – 60 day payment term.

15. Capital commitments

Approved by directors

– contracted for 1 868 998 3 289 512 1 862 258 3 282 772

– not contracted for 1 766 041 405 659 1 766 041 405 659

3 635 039 3 695 171 3 628 299 3 688 431

It is anticipated that this expenditure, which relates to the acquisition of plant and equipment, will be incurred over a two year period and will be financed from the Group’s operating cash flows and by utilising existing borrowing facilities.




GROUP COMPANY

2013R’000

2012R’000

2013R’000

2012R’000

16. Borrowing powersThe borrowing powers of the Group, in terms of its Memorandum of Incorporation, are as follows:

Borrowing powers 25 601 215 22 391 313

The borrowing powers of the Group are limited to the aggregate of the issued and paid-up share capital, the share premium of the Company and the consolidated retained earnings.

17. RevenueRevenue comprises

– Revenue derived from the sale of ore and alloy products 25 003 167 23 688 390 24 726 674 23 523 199

– Interest received (note 21) 273 399 247 380 251 162 231 817

– Dividend received (note 21) – – – 12 500

– Insurance proceeds 7 128 185 117 6 520 170 236

– Other 6 203 5 402 2 449 1 984

25 289 897 24 126 289 24 986 805 23 939 736

Turnover comprises of the sale of iron, manganese, chrome ores, ferrochrome, ferromanganese and other products at invoice value, net of value added tax, trade discounts and intragroup sales.

18. Other operating income

Foreign exchange gains

– realised 990 894 1 229 195 981 050 1 219 171

– unrealised 105 425 30 793 105 425 30 793

Proceeds on insurance claim 7 128 185 117 6 520 170 236

Fair value adjustments of non-current financial asset 2 006 923 2 006 923

Sundry income 43 629 156 337 39 669 119 780

1 149 082 1 602 365 1 134 670 1 540 903

19. Other operating expenses

Foreign exchange losses

– realised 494 571 700 711 491 242 696 833

– unrealised 42 493 51 209 42 493 50 493

Management fees 391 122 350 105 391 122 350 105

Loss on disposal of assets 51 803 3 836 51 803 3 836

Short workings 299 973 91 915 299 038 90 878

Mining royalty paid 892 447 874 965 892 447 874 965

Impairment charge 311 838 138 312 311 838 138 312

Other 647 107 449 483 633 674 434 920

3 131 354 2 660 536 3 113 657 2 640 342


GROUP COMPANY

2013R’000

2012R’000

2013R’000

2012R’000

20. Profit from operations

Profit from operations is stated after taking into account the following items of income and expenditure:

Expenditure:

Amortisation of intangible assets 360 360 – –

Auditors’ remuneration 9 509 5 580 8 949 5 347

– audit fees 8 277 5 167 8 703 4 951

– other services 1 232 413 246 396

Depreciation 1 814 800 1 395 984 1 812 232 1 387 291

– mine development 191 036 105 314 191 036 105 314

– plant and machinery 951 314 738 245 949 156 738 243

– land and buildings 29 136 22 680 28 920 22 508

– mineral rights 6 077 4 890 6 077 4 890

– furniture, equipment, motor vehicles and other assets 637 237 524 855 637 043 516 336

Directors’ emoluments for services as directors 446 446 446 446

Increase in provisions 448 100 610 065 448 100 610 065

– long-term 101 187 212 464 101 187 212 464

– short-term 346 913 397 601 346 913 397 601

Loss on impairment of furnaces and plant 311 838 138 312 311 838 138 312

Inventory written down 35 822 113 020 35 822 113 020

Raw materials and consumables included in cost of sales 3 012 620 2 701 598 2 803 934 2 613 262

Loss on disposal of property, plant and equipment 51 803 3 836 51 803 3 836

Remuneration for services

– advisory 23 869 23 586 23 869 22 121

– secretarial, management, administration and technical 403 599 347 083 403 599 347 083

Staff costs

– salaries and wages 2 369 953 2 097 653 2 357 577 2 097 653

– healthcare 95 811 82 719 95 811 82 719

– retirement/provident fund contributions 132 404 116 753 132 404 116 753

21. Income from investments

Interest received 273 399 247 380 251 162 231 817

Dividends received from joint-venture entity – – – 12 500

273 399 247 380 251 162 244 317

22. Finance costs

Unwinding of the discount rate used in calculating:

– decommissioning provision 32 526 19 353 32 526 19 353

– restoration provision 18 490 8 519 18 490 8 519

Finance charge 82 415 20 413

51 098 28 287 51 036 28 285




GROUP COMPANY

2013R’000

2012R’000

2013R’000

2012R’000

23. Taxation

South African normal taxation

– current year 2 195 106 1 990 657 2 191 518 1 980 656

Deferred taxation

– temporary differences (refer note 11) 295 821 495 747 295 256 496 533

Secondary tax on companies – 98 125 – 98 125

2 490 927 2 584 529 2 486 774 2 575 314

Reconciliation of rate of taxation % % % %

Standard rate of company taxation 28,00 28,00 28,00 28,00

Adjusted for :

State’s share of profits – (0,74) – (0,77)

Secondary tax on companies – 0,04 – 0,04

Non deductible permanent differences 0,63 – 0,62 –

Effective rate of taxation 28,63 27,30 28,62 27,27

R’000 R’000 R’000 R’000

Estimated losses available for the reduction of future taxable income arising in certain joint-venture and subsidiary companies 27 300 25 981 – –

24. Retirement benefit informationThe Group has made provision for pension plans covering all employees. These comprise of a defined-contribution retirement fund, which is governed by the Pension Funds Act, 1956, and two defined-contribution provident funds administered by employee organisations within the industries in which members are employed. The contributions paid by the Group for retirement benefits are charged to the statement of comprehensive income as they are incurred.

The above defined-contribution plans are determined based on accumulated contributions and returns on investments.

Members contribute 7,5% and the company 12,5% of pensionable salaries to the funds.

25. Post-retirement health care benefits The Group has obligations to fund a portion of certain retiring employees’ medical aid contributions based on the cost of benefits. The anticipated liabilities arising from these obligations have been actuarially determined using the projected unit credit method, and a corresponding liability has been raised (refer note 12).

2013R’000

2012R’000

2011R’000

2010R’000

2009R’000

Group

Current service cost 348 552 548 498 737

Interest cost on benefit obligation 2 275 2 277 2 124 1 886 1 638

Benefits paid (605) (951) (769) (709) (664)

Net actuarial loss/(gain) – 1 320 605 (1 776) 1 064

Shortfall/(surplus) charged/(credited) to the statement of comprehensive income 2 018 3 198 2 508 (101) 2 775


25. Post-retirement health care benefits (continued)

Sensitivity of accounting provisions to changes in inflation rate for year ended 30 June 2013:

Service cost Interest cost Accrued liability

Change in inflation R’000 % change R’000 % change R’000 % change

1% increase 671 22,60 2 603 15,30 30 885 14,80

1% decrease (448) (17,80) (1 972) (12,40) (23 648) (12,10)

The liability is assessed periodically by an independent actuarial survey based on the following principal actuarial assumptions:

– A net discount rate of 1,0% (2012: 1,0%) per annum

– Healthcare cost increasing at a rate of 8,51% (2012: 8,51%) per annum.

– Assumed rate of return on assets at 9,6% (2012: 9,6%) per annum.

The liabilities raised in the financial statements are based on the present value of the post retirement benefits and have been recognised in full.

The most recent actuarial valuation was conducted for the year ended 30 June 2012.

GROUP COMPANY

2013R’000

2012R’000

2013R’000

2012R’000

26. Reconciliation of profit from operations to cash generated from operations

Profit from operations 8 478 528 9 249 423 8 489 719 9 228 134

Adjusted for :

Non-cash items included in profit from operations: 2 269 929 2 225 169 2 267 001 2 215 400

– depreciation of property, plant and equipment 1 814 800 1 395 984 1 812 232 1 387 291

– amortisation of intangible asset 360 360 – –

– unrealised foreign exchange (gains)/losses net (62 932) 20 416 (62 932) 19 700

– inventory written down to net realisable value 35 822 113 020 35 822 113 020

– loss on disposal of property, plant and equipment 51 803 3 836 51 803 3 836

– net movement in long- and short-term provisions 120 244 554 164 120 244 554 164

– fair value adjustment of non current financial assets (2 006) (923) (2 006) (923)

– impairment charge 311 838 138 312 311 838 138 312

Adjusted operating profit before working capital changes 10 748 457 11 474 592 10 756 720 11 443 534

Increase in inventories (485 734) (495 261) (287 185) (383 673)

Increase/(decrease) in payables 227 387 (9 799) 179 912 (23 273)

Increase in receivables (760 400) (958 225) (726 535) (921 037)

9 729 710 10 011 307 9 922 912 10 115 551

27. Taxation paid

Balance due at beginning of year (175 750) (329 923) (171 028) (327 020)

Amounts charged to the statement of comprehensive income (2 490 927) (2 584 529) (2 486 774) (2 575 314)

Adjustment for deferred taxation 295 821 495 747 295 256 496 533

Balance due at end of year 561 431 175 750 556 057 171 028

(1 809 425) (2 242 955) (1 806 489) (2 234 773)




28. Segmental information

The Groups’ operations are managed by divisions determined by commodity mined, and where applicable, beneficiated at various works operations as follows:

– Iron ore (iron ore division)

– Manganese ore and alloys (manganese division)

– Chrome ore and alloys (chrome division)

Iron oredivision

Manganesedivision

Chromedivision Total

R’000 R’000 R’000 R’000

Segment analysis

Year to 30 June 2013

Turnover of ore and alloy products 15 690 490 7 436 563 1 876 114 25 003 167

Contributions to profit/(loss) after taxation 5 517 176 827 117 (134 391) 6 209 902

Other information

Consolidated total assets 23 185 870 10 513 131 776 111 34 475 112

Consolidated total liabilities 5 985 484 2 555 835 332 578 8 873 897

Capital expenditure 2 709 138 1 222 950 132 015 4 064 103

Depreciation 1 180 239 532 832 101 729 1 814 800

Year to 30 June 2012

Turnover of ore and alloys products 15 295 969 6 352 392 2 040 029 23 688 390

Contributions to profit/(loss) after taxation 5 835 547 1 223 279 (174 839) 6 883 987

Other information

Consolidated total assets 19 718 533 9 316 287 1 171 888 30 206 708

Consolidated total liabilities 5 042 603 1 934 427 838 365 7 815 395

Capital expenditure 3 339 900 885 761 291 752 4 517 413

Depreciation 909 707 323 768 162 519 1 395 984

Group turnover by segment

2013 2012

R’000 R’000

Turnover by geographical location to which product is supplied is set out below:

Far and Middle East 16 812 336 18 771 635

Europe 3 569 145 1 916 673

USA 1 222 223 1 132 882

South Africa 2 409 675 1 774 766

Other 989 788 92 434

Total turnover of ore and alloy products 25 003 167 23 688 390

All the Group’s property, plant and equipment is located in South Africa.


GROUP

2013R’000

2012R’000

29. Contingent liabilities

The following guarantees have been issued in the Group:

Eskom: Electricity supply 28 124 28 298

Department of Mineral Resources: Rehabilitation liabilities 390 677 413 999

418 801 442 297

30. Related-party transactions

Related parties transaction are concluded at arm’s length and under terms and conditions that are no less favourable than those arranged with third parties.

The following entities were identified as related parties to the Group:

African Rainbow Minerals Limited Major shareholder

Ore and Metal Company Limited Wholly-owned subsidiary of Assore Limited

Cato Ridge Development Company Proprietary Limited Wholly owned subsidiary

Cato Ridge Alloys Proprietary Limited Jointly controlled entity

Khumani Housing Development Company Proprietary Limited

Wholly owned subsidiary

Kingfisher Insurance Captive Insurance Company of ARM Ltd

Key Management Personnel

The following significant related-party transactions occurred during the year:

African Rainbow Minerals Limited – fees for provision of services 565 175 523 651

Ore and Metal Company Limited – fees for provision of services 812 012 757 707

Cato Ridge Development Company Proprietary Limited – housing rental received 875 1 220

Cato Ridge Alloys Proprietary Limited – purchases of molten metal 563 892 493 018

– infrastructure rental received 6 929 6 558

Khumani Housing Development Company Proprietary Limited – housing rental received 3 754 3 419

Kingfisher Insurance – captive insurance company of ARM Ltd

109 497 155 912

Key Management Personnel – remuneration paid to 67 424 53 619

Amounts owed to related parties on current account at end of year:

– African Rainbow Minerals Limited 76 653 72 865

– Ore and Metal Company Limited 4 705 15 319

Amounts owed by related parties at end of year:

– Khumani Housing Development Company Proprietary Limited

– Refer to note 5 866 491 495 084

– Cato Ridge Development Company Proprietary Limited – Refer to note 5 20 933 18 097

– Cato Ridge Alloys Proprietary Limited 6 174 5 276




31. Financial instruments and risk management

The Group is exposed to certain financial risks in the normal course of its operations. To manage these risks, a treasury risk management committee monitors transactions involving financial instruments. The Group does not acquire, hold or issue derivative instruments for trading purposes.

The above risks are managed in accordance with the policies set out below:

Market riskMarket risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices are affected by the following types of risks: interest rate risk, foreign currency risk, commodity price risk and other price risk, such as equity price risk.

Foreign currency riskForeign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s revenue activities.

The Group’s markets are predominantly priced in US dollars which exposes the Group’s cash flows to foreign exchange currency risks. In addition there is currency risk on long-lead time items which are denominated in US dollars, Euros or other currencies.

The following table illustrates the sensitivity of the Group’s profit before tax to a change in the US dollar exchange rate, with all other variables held constant.

GROUP

2013R’000

2012R’000

At year-end the foreign currency value of accounts receivables amounted to:Accounts receivable balance 3 158 674 2 371 488 Year-end exchange rate 9,93 8,15Movement in accounts receivable balance if the R/$ exchange rate increases by R1 318 094 290 980 Movement in accounts receivable balance if the R/$ exchange rate decreases by R1 (318 094) (290 980)

There were no forward exchange contracts as at 30 June 2013 (2012: nil).

The table below summarises the maturity profile of the Group’s financial liabilities at 30 June 2013 based on undiscounted cash flows:

Withinone year

R’000

2 – 5yearsR’000

TotalR’000

Year to 30 June 2013Trade and other payables (refer note 14) 2 238 269 – 2 238 269 South African Revenue Service (refer note 27) 561 431 – 561 431

2 799 700 – 2 799 700 Year to 30 June 2012Trade and other payables (refer note 14) 2 010 882 2 010 882 South African Revenue Service (refer note 27) 175 750 – 175 750

2 186 632 – 2 186 632

The table below summarises the maturity profile of the Company’s financial liabilities at 30 June 2013 based on undiscounted cash flows:

Withinone year

R’000

2 – 5yearsR’000

TotalR’000

Year to 30 June 2013Trade and other payables (refer note 14) 2 095 028 – 2 095 028South African Revenue Service (refer note 27) 556 057 – 556 057

2 651 085 – 2 651 085Year to 30 June 2012Trade and other payables (refer note 14) 1 915 116 – 1 915 116South African Revenue Service (refer note 27) 171 028 – 171 028

2 086 144 – 2 086 144


31. Financial instruments and risk management (continued)Commodity riskCommodity price risk arises from the possible adverse effect of fluctuations in commodity prices on current and future earnings. Most of these prices are US dollars and euro-based and determined internationally on the open market. The Group does not actively hedge future commodity revenue of the commodities that it produces against price fluctuations for the commodities that it produces.

Fair value riskExcept for interest-free loans provided by the Company to its subsidiaries, the carrying amounts of trade receivables, cash and cash equivalents and trade and other payables approximate fair value because of the short-term duration of these instruments.

Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in prime interest rates.

GROUP

2013R’000

2012R’000

Cash and cash equivalent balances at year-end 5 333 705 4 458 491 Effect on profit before tax if interest rate increases by 1% 53 337 44 585 Effect on profit before tax if interest rate decreases by 1% (53 337) (44 585)Effect on net cash flow if interest rate increases by 1% 38 403 32 101 Effect on net cash flow if interest rate decreases by 1% (38 403) (32 101)

Carryingvalue at

year-endR’000

Maturitydates

Effectiveinterest

rate

Exposure of the Group to interest rate risk at year-end was as follows:

Financial assetsYear ended 30 June 2013Loans and long-term receivables 389 452 5 – 20 years Prime less 2%

OvernightCash on deposit with financial institutions 5 333 705 Current call deposit

Year ended 30 June 2012Loans and long-term receivables 213 332 5 – 20 years Prime less 2%

OvernightCash on deposit with financial institutions 4 458 491 Current call deposit

Financial liabilitiesYear ended 30 June 2013Trade payables 2 238 269 F2014 –South African Revenue Service 561 431 F2014 –

Year ended 30 June 2012

Trade payables 2 010 882 F2013 –

South African Revenue Service 175 750 F2013 –




31. Financial instruments and risk management (continued)

Carryingvalue at

year-endR’000

Maturitydates

Effectiveinterest

rate

Exposure of the Company to interest rate risk at year-end were as follows:

Financial assets


Loans and long-term receivables 866 491 5 – 20 years Prime less 2%

Overnight

Cash on deposit with financial institutions 5 261 928 Current call deposit


Loans and long-term receivables 495 084 5 – 20 years Prime less 2%

Overnight

Cash on deposit with financial institutions 4 403 057 Maturity date call deposit

Financial liabilities



South African Revenue Services 556 057 F2014 –



South African Revenue Services 171 028 F2013 –

Fair value of financial instrumentsThe estimated fair value of the Group’s financial instruments as at 30 June 2013 was estimated to approximate the carrying amounts reflected in the statement of financial position.

Treasury risk managementThe treasury function is outsourced to a third-party specialist who, together with the Group executives, coordinate the daily cash requirements of the Group in the South African domestic money market.

A treasury committee, consisting of senior managers in the Group and representatives from the third party meet on a regular basis to analyse currency and interest rate exposure as well as future funding requirements with the Group. The committee reviews the treasury operations dealings to ensure compliance with the Group’s policies and counterparty exposure limits.

Capital managementCapital includes equity attributable to the equity holders of the holding company.

No external capital requirements.

The primary objective of the Group’s capital management is to ensure that it maintains a strong rating and healthy capital ratios in order to support its business and ensure significant funding levels for capital projects.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.

No changes were made in the objectives, policies or processes relating to capital management during the year.


Group financial assets and liabilities by category

Fair value through

profit and loss

Loans andreceivables

Otherliabilities atamortised

cost TotalR’000 R’000 R’000 R’000

GROUPYear ended 30 June 2013Loans and long-term receivables – 389 452 – 389 452 Non-current financial asset 190 314 – – 190 314 Trade and other receivables – 4 831 525 – 4 831 525 Cash and cash equivalents – 5 333 705 – 5 333 705 South African Revenue Service – – (561 431) (561 431)Trade and other payables – – (2 238 269) (2 238 269)

Year ended 30 June 2012Loans and long-term receivables – 213 332 – 213 332 Non-current financial asset 87 725 – – 87 725 Trade and other receivables – 4 008 193 – 4 008 193 Cash and cash equivalents – 4 458 491 – 4 458 491 South African Revenue Service – – (175 750) (175 750)Trade and other payables – – (2 010 882) (2 010 882)

COMPANY

Year ended 30 June 2013Loans and long-term receivables – 866 491 – 866 491 Non-current financial asset 190 314 – 190 314 Trade and other receivables – 4 692 131 – 4 692 131 Cash and cash equivalents – 5 261 928 – 5 261 928 South African Revenue Service – – (556 057) (556 057) Trade and other payables – – (2 095 028) (2 095 028) Year ended 30 June 2012Long-term loans and receivables – 495 084 – 495 084 Non-current financial asset 87 725 – – 87 725 Trade and other receivables – 3 902 664 – 3 902 664 Cash and cash equivalents – 4 403 057 – 4 403 057 South African Revenue Service – – (171 028) (171 028)Trade and other payables – – (1 915 116) (1 915 116)

Fair value hierarchyThe Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

Currently the only financial asset measured at fair value is the financial asset which is disclosed in note 4 which falls within level 2 of the hierarchy.

During the year there were no transfers between any of the levels of fair value measurements. There are currently no financial liabilities measured at fair value.

Accounting policies

47 Basis of preparation

51 Implementation

52 Significant accounting judgement, estimates and assumptions

53 Basis of consolidation

53 Intragroup transactions and balances

53 Property, plant and equipment and depreciation

54 Leased assets and capitalisation of leases

54 Production stripping cost

55 Intangible assets

55 Financial instruments

55 Impairment of financial assets

55 Derecognition of financial assets

55 Interest-bearing loans and borrowings

55 Derecognition of financial liabilities

55 Inventories

56 Impairment of non-financial assets

56 Provisions

56 Contingent liabilities

56 Revenue recognition

57 Cost of sales

57 Exploration expenditure

57 Borrowing Costs

57 Foreign currency transaction and balances

57 Employee benefits

58 Taxation

58 Set-off

58 Definitions



Accounting policies

Basis of preparationThe Group and Company financial statements have been prepared on the historical-cost basis except for the revaluation of financial assets and financial liabilities (including derivative instruments if any) measured at fair value through profit or loss.

The principal accounting policies as set out below are consistent in all material aspects with those applied in the previous year except as stated under the heading “Changes in accounting policies” below.

The financial statements are presented in South African Rand and all values are rounded to the nearest thousand unless otherwise indicated.

Statement of complianceThe Group and Company annual financial statements are prepared in accordance with and comply with International Financial Reporting Standards (IFRS) and interpretations of those standards, as adopted by the International Accounting Standards Board (IASB) and applicable legislation.

Changes in accounting policiesThe accounting policies adopted are consistent with those of the previous financial year.

Amendments resulting from Improvements to IFRSs to the following standards did not have any impact on the accounting policies, financial position or performance of the Group and Company:• IAS1Financialstatementpresentation(Amendment)–1January2012• IAS12Incometaxes(Amendment)–1January2012• ImprovementstoIFRSs(issuedin2011)

Standards or interpretations adopted during the year :

IAS 1 Financial statement presentation (Amendment)The amendment is effective for annual periods beginning on or after 1 January 2012 and requires that items of other comprehensive income be grouped in items that would be reclassified to profit or loss at a future point (for example, upon derecognition or settlement) and items that will never be reclassified. This amendment only effects the presentation in the financial statements and had no impact on the Group as they have no other comprehensive income.

IAS 12 Income taxes (Amendment)The amendment is effective for annual periods beginning on or after 1 January 2012 and introduces a rebuttable presumption that deferred tax on investment properties measured at fair value will be recognised on a sale basis, unless an entity has a business model that would indicate the investment property will be consumed in the business. If consumed a use basis should be adopted. Furthermore, it introduces the requirement that deferred tax on non-depreciable assets that are measured using the revaluation model in IAS 16 always be measured on a sale basis of the asset. This amendment has had no impact on the financial statements after initial application.

Standards issued but not yet effectiveStandards issued but not yet effective up to the date of issuance of the Group and Company financial statements are listed below. This listing is of standards and interpretations issued, which the Group reasonably expects to be applicable at a future date. The Group intends to adopt those standards when they become effective. The Group expects that adoption of these standards, amendments and interpretations in most cases will not have any significant impact on the Group’s financial position or performance in the period of initial application but in certain cases, additional disclosures will be required. In cases where it will have an impact the Group is still assessing the possible impact.

STANDARD DESCRIPTION

EFFECTIVE FOR FINANCIAL PERIODS COMMENCING IMPACT

IAS 19 Post-employee Benefits (Amendment)

1 January 2013 The revised standard includes a number of amendments that range from fundamental changes to simple clarifications and re-wording. The more significant changes include the following:

•Fordefinedbenefitplans,theabilitytodeferrecognitionofactuarialgainsandlosses (i.e., the corridor approach) has been removed. As revised, amounts recorded in profit or loss are limited to current and past service costs, gains or losses on settlements, and net interest income (expense). All other changes in the net defined benefit asset (liability), including actuarial gains and losses are recognised in other comprehensive income with no subsequent recycling to profit or loss.

•Terminationbenefitswillbe recognisedat theearlierofwhen theofferoftermination cannot be withdrawn, or when the related restructuring costs are recognised under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

•Thedistinctionbetweenshort-termandotherlong-termemployeebenefitswill be based on the expected timing of settlement rather than the employee’s entitlement to the benefits.


Accounting policies (continued)



IAS 27 Separate Financial Statements (as revised in 2011)

1 January 2013 As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. The Group does not present separate financial statements.

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011)

1 January 2013 As a consequence of the new IFRS 11 and IFRS 12. IAS 28 has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates.

Refer “IFRS 11” below.IAS 32 Financial Instruments:

Presentation – Offsetting Financial Assets and Financial Liabilities

1 January 2014 The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off ’; and that some gross settlement systems may be considered equivalent to net settlement. The amendments clarify that rights of set-off must not only be legally enforceable in the normal course of business, but must also be enforceable in the event of default and the event of bankruptcy or insolvency of all of the counterparties to the contract, including the reporting entity itself. The amendments also clarify that rights of set-off must not be contingent on a future event.

IFRS 1 Time Adoption of international Financial Reporting Standards (Amendment) – Government Loans

1 January 2013 The IASB has added an exception to the retrospective application of IFRS 9 Financial Instruments (or IAS 39 Financial Instruments: Recognition and Measurement, as applicable) and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. These amendments require first-time adopters to apply the requirements of IAS 20 prospectively to government loans existing at the date of transition to IFRS. However, entities may choose to apply the requirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to government loans retrospectively if the information needed to do so had been obtained at the time of initially accounting for those loans.

This standard will have no impact on the Group as the Group is not a first time adopter.

IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities – Amendments to IFRS 7

1 January 2013 These amendments require an entity to disclose information about rights of set-off and related arrangements (e.g., collateral agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognised financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or ‘similar agreement’, irrespective of whether they are set off in accordance with IAS 32.




IFRS 9 The classification and measurement of financial assets

1 January 2015 IFRS 9 for financial assets was first published in November 2009 and was updated in October 2010 to include financial liabilities.

These pronouncements initially required the adoption of the standard for annual periods on or after 1 January 2013. Amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date of both the 2009 and 2010 versions of IFRS 9 from 1 January 2013 to 1 January 2015.

IFRS 9 is being developed in phases with a view to replacing IAS 32 and IAS 39 in its entirety.

Phase 1 of IFRS 9 addressed the classification and measurement of financial assets. All financial assets are measured at fair value at initial recognition.

Debt instruments may, if the fair value option (FVO) is not invoked, be subsequently measured at amortised cost if:

•Theassetisheldwithinabusinessmodelthathastheobjectivetoholdtheassets to collect the contractual cash flows; and

•Thecontractual termsof thefinancialassetgiverise,onspecifieddates, tocash flows that are solely payments of principal and interest on the principal outstanding.

All other debt instruments are subsequently measured at fair value.

All equity investment financial assets are measured at fair value either through other comprehensive income (OCI) or profit or loss. Equity instruments held for trading must be measured at fair value through profit or loss. Entities have an irrevocable choice of recognising changes in fair value either in OCI or profit or loss by instrument for all other equity investment financial assets.

Phase 2 of IFRS 9 addressed the classification and measurement of financial liabilities. All financial assets are measured at fair value at initial recognition.

For FVO liabilities, the amount of change in the fair value of a liability that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of the liability’s credit risk in OCI would create or enlarge an accounting mismatch in profit or loss.

All other IAS 39 classification and measurement requirements for financial liabilities have been carried forward into IFRS 9, including the embedded derivative separation rules and the criteria for using the FVO.

The Board’s work on the other phases is ongoing, and includes impairment of financial instruments and hedge accounting.

The adoption of the first phase of IFRS 9 will primarily have an effect on the classification and measurement of the Group’s financial assets but will potentially have no impact on classification and measurements of financial liabilities. The Group is currently assessing the impact of adopting IFRS 9, however, the impact of adoption depends on the assets held by the Group at the date of adoption, it is not practical to quantify the effect.





IFRS 10IFRS 11IFRS 12

IFRS 10; Consolidated Financial Statements; IFRS 11 Joint Arrangements; IFRS 12 Disclosure of Interest in Other Entities.

1 July 2013 IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also includes the issues raised in SIC 12 Consolidation – Special Purpose Entities. IFRS 10 establishes a single control model with a new and broader definition of control that applies to all entities. It does not change consolidation procedures but rather whether an entity is consolidated. The changes will require management to make significant judgement to determine which entities are controlled and therefore required to be consolidated by the parent. Therefore, IFRS 10 may change which entities are within a Group.

IFRS 11 replaces IAS 31 Interest in Joint Ventures and SIC 13 Jointly Controlled Entities – Non-monetary Contributions by Ventures. IFRS 11 uses some of the terms that were used in IAS 31 but with different meanings which may create some confusion as to whether there are significant changes. IFRS 11 focuses on the nature of the rights and obligations arising from the arrangement compared to the legal form in IAS 31. IFRS 11 uses the principle of control in IFRS 10 to determine joint control which may change whether joint control exists. IFRS 11 addresses only two forms of joint arrangements; joint operations where the entity recognises its assets, liabilities, revenues and expenses and/or its relative share of those items and joint ventures which is accounted for on the equity method (no more proportional consolidation).

IFRS 12 includes all the disclosures that were previously required relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities as well as extensive qualitative and quantitative new disclosures. The new disclosure requirements are to help the users of financial statements understand:

•Theeffectsof anentity’s interests inotherentitieson its financialposition,financial performance and cash flows and

•Thenatureof,andtherisksassociatedwith,theentity’sinterestinotherentities

An entity is now required to disclose the judgements made to determine whether it controls another entity.

The Group will need to consider the new definition of control to determine which entities are controlled or jointly controlled and then to account for them under the new standards.

IFRS 10IFRS 12IAS 27

IFRS 10 Consolidated Financial Statements; IFRS 12 Disclosure of Interest in Other Entities; IAS 27 Separate Financial Statements – Investment entities (Amendment)

1 January 2014 The investment entities amendments apply to investments in subsidiaries, joint ventures and associates held by a reporting entity that meets the definition of an investment entity.

The exception to consolidation requires investment entities to account for subsidiaries at fair value through profit or loss in accordance with IFRS 9 (or IAS 39, as applicable), except for investments in subsidiaries, associates and joint ventures that provide services that relate only to the investment entity, which must be consolidated (investments in subsidiaries) or accounted for using the equity method (investments in associates or joint ventures).

The amendment will have no impact on the Group as the parent Company does not meet the definition of an investment entity.




IFRS 13 Fair Value Measurement

1 January 2013 IFRS 13 establishes a single framework for all fair value measurement (financial and non-financial assets and liabilities) when fair value is required or permitted by IFRS. IFRS 13 does not change when an entity is required to use fair value but rather describes how to measure fair value under IFRS when it is permitted or required by IFRS. There are also consequential amendments to other standards to delete specific requirements for determining fair value. Fair value under IFRS 13 is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” (i.e., an ‘exit price’). New disclosures related to fair value measurements are also required to help users understand the valuation techniques and inputs used to develop fair value measurements and the effect of fair value measurements on profit or loss.

The Group will need to consider the new requirements to determine fair values going forward.

IFRIC 21 Levies 1 January 2014 This new interpretation clarifies the accounting for levies imposed by governments by the entity that is paying the levy. The scope of the interpretation is broad and covers all levies, except outflows that are in the scope of IAS 12 and penalties for breaches of legislation.

Improvements to IFRSs – 2009 – 2011 Cycle (issued in 2012 effective for annual periods beginning on or after 1 January 2013): • IFRS1First-timeAdoptionofInternationalFinancialReportingStandards(Amendments): – Repeated application of IFRS 1 – clarifies that an entity that has stopped applying IFRS may choose to either : (i) Re-apply IFRS 1, even if the entity applied IFRS 1 in a previous reporting period; or (ii) Apply IFRS retrospectively in accordance with IAS 8 (i.e., as if it had never stopped

applying IFRS)

in order to resume reporting under IFRS. If the entity re-applies IFRS 1 or applies IAS 8, it must disclose the reasons why it previously stopped applying IFRS and subsequently resumed reporting in accordance with IFRS.

– Borrowing costs – clarifies that, upon adoption of IFRS, an entity that capitalised borrowing costs in accordance with its previous GAAP, may carry forward, without adjustment, the amount previously capitalised in its opening statement of financial position at the date of transition. Once an entity adopts IFRS, borrowing costs are recognised in accordance with IAS 23, including those incurred on qualifying assets under construction.

• IAS 1 Presentationof Financial Statements (Amendments).The amendment clarifies the difference between voluntary additionalcomparative information and the minimum required comparative information. Generally, the minimum required comparative period is the previous period.

• IAS16Property,PlantandEquipment(Amendment).Theamendmentclarifiesthatmajorsparepartsandservicingequipmentthatmeet the definition of property, plant and equipment are not inventory.

• IAS32Financial Instruments:Presentation.Theamendment removesexisting incometax requirements from IAS32and requiresentities to apply the requirements in IAS 12 to any income tax arising from distributions to equity holders.

• IAS34InterimFinancialReportingTheamendmentclarifiestherequirementsinIAS34relatingtosegmentinformationfortotalassetsand liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. Total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous annual financial statements for that reportable segment.

Implementation projectIn addition to the major IFRS projects, the IASB also has a number of items on its work plan dealing with implementation issues. These include narrow scope amendments and interpretations. Below is a listing of the current implementation projects based on the IASB’s work plan as at 21 June 2013, as well as those that have been completed since the March 2013 edition of the pocketbook guide.

IAS 36 Recoverable Amount Disclosures for Non-Financial Assets (Amendments) The amendments relate to the disclosure in respect of fair value less costs of disposal. The amendments are intended to clarify the IASB’s original intentions when amendments were made to IAS 36 as a result of the issuance of IFRS 13 Fair Value Measurement.

The amendments also require additional information about the fair value measurement of impaired assets when the recoverable amount is based on fair value less costs of disposal and the discount rates that have been used when the recoverable amount.

The amendment is effective for annual periods beginning on or after 1 January 2014.



IAS 39 Novation of Derivatives and Continuation of Hedge Accounting (Amendments) The IASB amended IAS 39 to provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. Novation indicates that parties to a contract agree to replace their original counterparty with a new one.

The amendment is effective for annual periods beginning on or after 1 January 2014.Significant accounting judgements, estimates and assumptionsThe preparation of the Group and Company financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Set out below are the areas where management considers significant estimation uncertainty exists in preparing the financial statements.

Mine rehabilitation provision Each entity in the Group assesses its mine rehabilitation provision annually. Significant estimates and assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases and changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. Provision at the reporting date represents management’s best estimate of the present value of the future rehabilitation costs required. Changes to estimated future costs are recognised in the statement of financial position by adjusting the rehabilitation asset and liability. If, for mature mines, the revised valued mine assets, net of rehabilitation provisions, exceeds the carrying value, that portion of the increase is charged directly to profit and loss. For closed sights, changes to estimated costs are recognised immediately in profit or loss.

Ore reserve and resource estimates Ore reserves are estimates of the amount of ore that can be economically and legally extracted from the Group’s mining properties. The Group estimates its ore reserves and mineral resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body, and requires complex geological judgements to interpret the data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgements made in estimating the size and grade of the ore body. Changes in the reserve or resource estimates may impact upon carrying value of exploration and evaluation assets, mine properties, property, plant and equipment, provisions for rehabilitation, recognition of deferred tax assets, and depreciation and amortisation charges.

Unit of production depreciation Estimated recoverable reserves are used in determining the annual depreciation and/or amortisation of mine specific assets. This results in a depreciation/amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item’s life, which is assessed annually, has regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which the asset is located. These calculations require the use of estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure.

Exploration expenditure The application of the accounting policy for exploration expenditure requires judgement in determining whether it is likely that future economic benefits are likely, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in profit or loss in the period when the new information becomes available.

Impairment of assets The Group assesses each cash-generating unit annually to determine whether any indications of impairment exist. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and assumptions such as commodity prices, discount rates, future capital requirements, exploration potential and operating performance. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Fair value for mineral assets is generally determined as the present value of estimated future cash flows arising from the continued use of the asset, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted at an appropriate discount rate to determine the net present value. For the purposes of calculating the impairment of any asset, management regards an individual mine or works site as a cash-generating unit.

Capitalised stripping costsThe Group incurs waste removal costs (stripping costs) during the development and production phases of its surface mining operations. Furthermore, during the production phase, stripping costs are incurred in the production of inventory as well as in the creation of future benefits by improving access and mining flexibility in respect of the ore to be mined, the latter being referred to as a ‘stripping activity asset’. Judgement is required to distinguish between these two activities at each of the surface mining operations.

In addition, the Group is required to identify the various separately identifiable components of the ore bodies for each of its surface mining operations. An identifiable component is described in IFRIC 20 as, a specific volume of the ore body that is made more accessible by the stripping activity. Judgement is required to identify and define these components, and also to determine the expected volumes (tonnes) of waste to be stripped and ore to be mined in each of these components. These assessments may vary between mines because the assessments are undertaken for each individual mine and are based on a combination of information available in the mine plans, specific characteristics of the ore body, the milestones relating to major capital investment decisions, and the type of mineral(s) being mined.

Judgement is also required to identify a suitable production measure that can be applied in the calculation and allocation of production stripping costs between inventory and the stripping activity asset. The Group considers the ratio of expected volume (tonnes) of waste


to be stripped for an expected volume (tonnes) of ore to be mined for a specific component of the ore body, compared to the current period ratio of actual volume (tonnes) of waste to the volume (tonnes) of ore be the most suitable production measure.

These judgements and estimates are used to calculate and allocate the production stripping costs to inventory and/or the stripping activity asset(s). Furthermore, judgements and estimates are also used to apply the units of production method in determining the depreciable lives of the stripping activity asset(s).

Basis of consolidationThe consolidated financial statements comprise the financial statements of the Company, subsidiary companies and a jointly controlled entity, both of which were prepared for the same reporting year as the parent company, using consistent accounting policies.

Subsidiary companiesSubsidiary companies are investments in entities in which the Company has control over the financial and operating decisions of the entity.

Subsidiaries are consolidated in full from the date of acquisition, being the date on which the Group obtains control and continue to be consolidated until the date such control ceases. Investments in subsidiaries in the Company’s financial statements are accounted for at cost less impairments.

Joint venturesThe Group has an interest in a joint venture which is a jointly controlled entity, whereby the parties have a contractual arrangement that establishes joint control over the economic activities of the entity. The agreement requires unanimous agreement for financial and operating decisions among the parties. The Group recognises its interest in the joint venture using the proportionate consolidation method. The Group combines its proportionate share of each of the assets, liabilities, income and expenses of the joint venture with similar items, line by line, in its consolidated financial statements. The financial statements of the joint venture are prepared for the same reporting period as the Group and adjustments are made where necessary to bring the accounting policies in line with those of the Group.

Adjustments are made in the consolidated financial statements to eliminate the Group’s share of intergroup balances, transactions and unrealised gains and losses on such transactions between the Group and its jointly controlled entity. Losses on transactions are recognised immediately if the loss provides evidence of a reduction in the net realisable value of current assets or an impairment loss. The joint venture is proportionately consolidated until the date on which the Group ceases to have joint control over the joint venture.

Upon loss of joint control the Group measures and recognises its remaining investment at its fair value. Any difference between the carrying amount of the former joint controlled entity upon loss of joint control and the fair value of the remaining investment and proceeds from disposal are recognised in profit or loss. When the remaining investment constitutes significant influence, it is accounted for as an investment in an associate.

Intragroup transactions and balancesConsolidation principles relating to the elimination of intercompany transactions and balances and adjustments for unrealised intercompany profits and losses are applied to all intragroup dealings, for all transactions with subsidiaries and associated companies or joint ventures.

Property, plant and equipment and depreciation Property, plant and equipment is stated at cost excluding the day-to-day maintenance costs, less accumulated depreciation and any accumulated impairment in value. Costs include the cost of replacing part of the plant and equipment when incurred, if the recognition criteria are met.

The remaining useful life and residual value of assets is reviewed on an annual basis and depreciation rates are adjusted if required.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year in which the asset is derecognised.

Specific asset categories are accounted for as follows: Mine development Costs to develop new ore bodies, to define further mineralisation in existing ore bodies and to expand the capacity of a mine, or its current production are capitalised. Assets representing the future economic benefits relating to environmental rehabilitation provisions for decommissioning are recognised and capitalised when the obligation arises. Development costs to maintain production are expensed as incurred.

Mine development and decommissioning costs are amortised using the lesser of their estimated useful life or the units-of-production method based on proven and probable ore reserves. Proven and probable ore reserves reflect estimated quantities of economically recoverable reserves which can be recovered in future from known mineral deposits. These reserves are reassessed annually. Where the reserves are not determinable due to their scattered nature, the straight-line method of amortisation is applied based on the estimated life of the mine. The maximum period of amortisation using these methods is 25 years.

Plant and machinery Mining plant and machinery is amortised over its estimated useful life using the units-of-production method based on estimated proved and probable ore reserves. Non-mining plant and machinery is depreciated over its useful life or life of mine. The maximum life of any single item of plant and machinery, used in the amortisation calculation, is 25 years.

The carrying values of plant and machinery are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

An item of plant and machinery is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss of the year in which the asset is derecognised.



The asset’s residual values, useful lives and methods are reviewed, and adjusted if appropriate, at each financial year-end. When each major inspection is performed, its cost is recognised in the carrying amount of the plant and machinery as a replacement if the recognition criteria are satisfied. When plant and equipment comprises major components with different useful lives, these components are accounted for as separate items. Expenditure incurred to replace or modify a significant component of plant is capitalised and any remaining book value of the component replaced is written off in profit or loss.

Land and buildings Land and buildings are carried at cost. Land is not depreciated. Buildings are depreciated on a straight-line basis over their estimated useful lives to an estimated residual value. The annual depreciation rates used vary between 2 to 5%.

Mineral rights Mineral rights are carried at cost less depreciation and impairments in value. Mineral rights that are being depleted are amortised over their estimated useful lives using the units-of-production method based on proven and probable ore reserves. Where the reserves are not determinable, due to their scattered nature, the straight-line method is applied. The maximum rate of depletion of any mineral right is 25 years. Mineral rights are written off in full when they no longer have any commercial value.

Furniture, equipment and vehicles Furniture, equipment, vehicles and other properties are depreciated on the straight-line basis over their expected useful lives, to estimated residual values. The residual value is the estimated realisation value of the asset at the end of its useful life, after deducting expected costs of disposal.

The annual depreciation rates for vehicles and furniture and office equipment are: Motor vehicles 20%Furniture and office equipment 10 to 33%

Leased assets and capitalisation of leasesThe determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

A reassessment is made after inception of the lease only if one of the following applies:• thereisachangeincontractualterms,otherthanarenewalorextensionofthearrangement;• arenewaloptionisexercisedorextensiongranted,unlessthetermoftherenewalorextensionwasinitiallyincludedintheleaseterm;;• thereisachangeinthedeterminationofwhetherfulfilmentisdependentonaspecificasset;or• thereisasubstantialchangetotheasset.

Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gives rise to the reassessment.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease either at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income as incurred.

Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term. Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases.

Production stripping costs The capitalisation of pre-production stripping costs as part of Mine development and decommissioning assets ceases when the mine is commissioned and ready for production. Subsequent stripping activities that are undertaken during the production phase of a surface mine may create two benefits, being either the production of inventory or improved access to the ore to be mined in the future.

Where the benefits are realised in the form of inventory produced in the period, the production stripping costs are accounted for as part of the cost of producing those inventories. Where production stripping costs are incurred and where the benefit is the creation of mining flexibility and improved access to ore to be mined in the future, the costs are recognised as a non-current asset, referred to as a ‘stripping activity asset’, if: • futureeconomicbenefits(beingimprovedaccesstotheorebody)areprobable;• thecomponentoftheorebodyforwhichaccesswillbeimprovedcanbeaccuratelyidentified;and• thecostsassociatedwiththeimprovedaccesscanbereliablymeasured.

If all the criteria are not met, the production stripping costs are charged to the statement of comprehensive income as operating costs.

The stripping activity asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified component of ore, plus an allocation of directly attributable overhead costs. If incidental operations are occurring at the same time as the production stripping activity, but are not necessary for the production stripping activity to continue as planned, these costs are not included in the cost of the stripping activity asset. If, the costs of the stripping activity asset and the inventory produced are not separately identifiable, a relevant production measure is used to allocate the production stripping costs between the inventory produced and the stripping activity asset.

The stripping activity asset is subsequently depreciated over the life of the identified component of the ore body that became more accessible as a result of the stripping activity. Based on proven and probable reserves, the units-of-production method is used to determine the expected useful life of the identified component of the ore body that became more accessible. As a result, the stripping activity asset is carried at cost less depreciation and any impairment losses.


Intangible assets Intangible assets represent proprietary technical information acquired from third parties. Intangible assets are reflected at cost and are amortised on a straight-line basis over the anticipated useful life of the assets up to a maximum of 20 years.

Financial instruments Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable repayments that are not quoted in an active market. Such assets are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method less any allowance for impairment. Gains and losses are recognised in profit and loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Cash and cash equivalents • Cashandcashequivalentsaremeasuredatamortisedcost.• Cashthatissubjecttolegalorcontractualrestrictionsinuseisclassifiedseparately.

Trade receivables Trade receivables, which generally have 30 to 60-day terms, are initially recognised at fair value and subsequently at amortised cost. Receivables are classified as loans and receivables for the purposes of IAS 39 disclosures. An impairment is recognised when there is evidence that an entity will not be able to collect all amounts due according to the original terms of the receivable. The impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rates. The amount of the impairment is charged to profit or loss when it occurs.

Payables Trade and other payables are not interest-bearing and are initially recorded at fair value and subsequently at amortised cost.

Impairment of financial assets The Group assesses at each reporting date whether a financial asset or Group of financial assets is impaired. If there is objective evidence that an impairment loss has been incurred on loans and receivables carried at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (ie the effective interest rate computed at initial recognition).

The carrying amount of the asset shall be reduced either directly or through use of an allowance account. The amount of the loss shall be recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is derecognised where:• therightstoreceivecashflowsfromtheassethaveexpired;or• theGroupretainstherighttoreceivecashflowsfromtheasset,buthasassumedanobligationtopaytheminfullwithoutmaterial

delay to a third party under a ‘pass-through’ arrangement; or• theGrouphastransferreditrightstoreceivecashflowsfromtheassetandeither(a)hastransferredsubstantiallyalltheriskand

rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Group has transferred its right to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Interest-bearing loans and borrowings All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is determined by using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of comprehensive income. The losses arising from impairment are recognised in profit or loss.

Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Inventories Inventories are valued at the lower of cost and net realisable value with due allowance being made for obsolete and slow moving items.

Cost includes the costs incurred in bringing each product to its present location and condition and is determined as follows: Raw materials – weighted average cost; Consumable stores – average cost; andFinished goods and work in progress – cost of direct materials and labour and a proportion of manufacturing overheads based

on normal operating capacity but excluding borrowing costs on an average cost basis.



Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that non-financial assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or a cash-generating unit’s fair value less estimated selling costs, and its value in use.

Recoverable amount is determined for assets individually, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Provisions Provisions are recognised when the following conditions have been met:• apresentlegalorconstructiveobligation,totransfereconomicbenefitsasaresultofpasteventsexists;and• areasonableestimateoftheobligationcanbemade.

A present obligation is considered to exist when there is no realistic alternative but to make the transfer of economic benefits. The amount recognised as a provision is the best estimate at the reporting date of the expenditure required to settle the obligation. Only expenditure related to the purpose for which the provision is raised is charged against the provision. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Environmental rehabilitation obligationThe estimated cost of rehabilitation, comprising liabilities for decommissioning and restoration, is based on current legal requirements and existing technology and is reassessed annually. Cost estimates are not reduced by the potential proceeds from the sale of assets.

Decommissioning The present value of estimated decommissioning obligations, being the cost to dismantle all structures and rehabilitate the land on which the mine is located is included in long-term provisions. The unwinding of the discount used in the calculation of the obligation is included in the statement of comprehensive income under finance costs. The initial related decommissioning asset is recognised in property, plant and equipment.

Restoration The present value of the estimated cost of restoration, being the cost to correct damage caused by ongoing mining operations, is included in long-term provisions. This estimate is revised annually and any movement is charged against income.

Expenditure on ongoing rehabilitation is charged against the statement of comprehensive income as incurred.

Environmental rehabilitation trust fundThe Group makes annual contributions to an environmental rehabilitation trust fund which was created to fund the estimated cost of pollution control, rehabilitation and mine closure at the end of the life of each of the Group’s mines. Annual contributions are determined on the basis of the estimated environmental obligation divided by the remaining life of a mine. Income earned on monies paid to the trust is accounted for as investment income in the trust. These contributions are made in accordance with the legal requirements, and with the approval, of the Department of Mineral Resources.

The rehabilitation cost relating to the alloy smelters are estimated annually and carried on the statement of financial position.

Contingent liabilities A contingent liability is a possible obligation that arises from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. These include present obligations that arise from past events, but are not recognised because it is not probable that outflows of resources embodying economic benefits will be required to settle the obligations, or the amounts of the obligations cannot be measured with sufficient reliability.

Revenue recognition Revenue is recognised when the risks and rewards of ownership have been transferred and when it is probable that the economic benefits associated with a transaction flow to the Group and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the amount received or receivable net of VAT, cash discounts and rebates.


The following specific criteria are taken into account in recognition of revenue:

SalesRevenue from the sale of mining and related products is recognised when the significant risk and rewards of ownership of the goods have passed to the buyer.

Interest Interest is recognised on a time-proportion basis that takes account of the effective yield on the asset and an appropriate accrual is made at each accounting reference date.

Rental income Rental income on investment properties is accounted for on a straight-line basis over the term of the lease.

Dividends Revenue is recognised when the right to receive the payments is established.

Cost of sales All costs directly related to the producing of products are included in cost of sales. Costs that cannot be directly linked are included separately or under other operating expenses.

When inventories are sold, the carrying amount is recognised in cost of sales. Any write-down, losses or reversals of previous write-downs or losses are recognised in cost of sales.

Exploration expenditure Costs related to property acquisitions and mineral and surface rights related to exploration are capitalised.

All exploration expenditures are expensed until they result in projects that are evaluated as being technically and commercially feasible and a future economic benefit is highly probable. In evaluating whether expenditures meet the criteria to be capitalised, the Company utilisesseveral different sources of information and also differentiates projects by levels of risks including:• degreeofcertaintyoverthemineralisationoftheorebody;• commercialrisksincludingbutlimitedtocountryrisks;and• priorexplorationknowledgeavailableaboutthetargetorebody.

Exploration expenditure on greenfield sites is expensed as incurred until a bankable feasibility study has been completed, after which the expenditure is capitalised.

Exploration expenditure on brownfield sites is only expensed as incurred until the Company has obtained sufficient information from all available sources by means of a pre-feasibility study that the future economic benefits are highly probable.

Exploration expenditure relating to extensions of mineral deposits which are already being mined or developed, including expenditure on the definition of mineralisation of such mineral deposits, is capitalised.

Activities in relation to evaluating the technical feasibility and commercial viability of mineral resources are treated as forming part of exploration expenditures.

Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or development of a qualifying asset, which require a substantial period of time to be prepared for its intended use are capitalised. Capitalisation of borrowing costs as part of the cost of a qualifying asset commence when:• expendituresfortheassetarebeingincurred;• borrowingcostsarebeingincurred;and• activitiesthatarenecessarytopreparetheassetforitsintendeduseorsaleareinprocess.

Capitalisation is suspended when the active development is interrupted and ceases when the activities necessary to prepare the asset for its use are complete.

Other borrowing costs are charged to finance costs in the statement of comprehensive income as incurred.

Foreign currency transactions and balances Transactions in foreign currencies are converted to South African Rand at the rate of exchange ruling at the date that the transaction is initially recorded.

Foreign denominated monetary assets and liabilities (including those linked to a forward exchange contract) are stated in South African Rand using the exchange rate at the reporting date with the resulting exchange differences being recognised in profit or loss.

Employee benefits Current service contributions in respect of defined contribution pension plans are expensed as incurred.

The Group also has unfunded liabilities in respect of post-retirement medical health care benefits for certain employees. The entitlement to these benefits is dependent upon the employee remaining in service until retirement age. These benefits have been provided for but are unfunded. The actuarially determined costs of providing these benefits are expensed as incurred and a corresponding liability is raised.

Actuarial gains and losses are expensed in the period in which they are determined.


TaxationCurrent income tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities within legislative periods. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred income tax Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:• wherethedeferredtaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliabilityinatransactionthatisnota

business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandinterestsinjointventures,where

the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, tothe extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forwardof unused tax credits and unused tax losses can be utilised except:• wherethedeferredtaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitialrecognitionofanassetorliability

in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• inrespectofdeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandinterestsinjointventures,deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Value added tax Revenues, expenses and assets are recognised net of the amount of value added tax except:• wherethevalueaddedtaxincurredonthepurchaseofgoodsorservicesisnotrecoverablefromthetaxationauthority,inwhichcase

the value added tax is recognised as part of the cost of the asset or as an expense item; and• receivablesandpayablesthatarestatedwiththeamountofvalueaddedtaxincluded.

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Mining royalty taxationProvision for mining royalties is made with reference to the conditions specified as contained in the Mining and Petroleum Royalty Act, for the transfer of refined and unrefined royalty mined resources, upon the date such transfer is effected. These costs are included in other expenses.

Set-off If a legally enforceable right exists to set off recognised amounts of financial assets and liabilities and the Group intends to settle on a net basis or to realise the asset and settle the liability simultaneously, all related financial effects are netted.

Definitions Cash and cash equivalents Cash and cash equivalents include cash on hand and call deposits as well as short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. For cash flow purposes overdrafts are excluded from cash and cash equivalents.

Cash restricted in use Cash which is subject to restrictions in its use is stated separately at the carrying value in the notes.

Fair value Where an active market is available it is used to determine fair value. Where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market of another instrument which is substantially the same, discounted cash flow analysis or other valuation models.



Notes

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Documents

ANNUAL REPORT - Assmang Proprietary Limited · 2 Assmang Limited Annual Report 2013 Group profile Assmang Limited (“Assmang” or “Company”), a company incorporated in the Republic