Profit and Loss Statements

Pasminco Annual Report 2000 Page 58

Notes Consolidated Consolidated Pasminco Ltd Pasminco LtdPasminco Limited and its controlled entities for the year ended 30 June 2000 2000 $m 1999 $m 2000 $m 1999 $m

Revenue from operating activities 2 1,984.0 1,596.1 100.7 20.0Revenue from outside the operating activities 2 33.0 204.0 – –Total revenue 2,017.0 1,800.1 100.7 20.0

Operating profit/(loss) before abnormal items and income tax 2,3 31.0 (8.5) 22.4 7.6Abnormal items before income tax 4(a) – – – (31.3)Operating profit/(loss) before income tax 31.0 (8.5) 22.4 (23.7)Income tax charge/(credit) attributable to operating profit/(loss) 5 (4.0) (0.2) 10.4 2.6Abnormal income tax charge 4(b) 11.6 – – –Operating profit/(loss) after income tax attributable to the members of Pasminco Limited 23.4 (8.3) 12.0 (26.3)

Retained profits/(Accumulated losses) at the beginning of the financial year (90.9) (87.2) 117.0 143.3Total available for appropriation (67.5) (95.5) 129.0 117.0

Transfer from capital reserve 24 – 4.6 – –Transfer from foreign currency translation reserve 24 11.5 – – –Retained profits/(Accumulated losses) at the end of the financial year (56.0) (90.9) 129.0 117.0

The above Profit and Loss Statements should be read in conjunction with the accompanying notes.

Profit and Loss Statements

Balance SheetsNotes Consolidated Consolidated Pasminco Ltd Pasminco Ltd

Pasminco Limited and its controlled entities as at 30 June 2000 2000 $m 1999 $m 2000 $m 1999 $m

Current AssetsCash 6 88.5 24.6 – –Receivables 7 276.8 542.7 319.3 319.1Inventories 8 436.9 366.1 – –Investments in Associates 9 57.7 70.7 – –Other 10 36.9 107.5 – –Total current assets 896.8 1,111.6 319.3 319.1

Non-current AssetsReceivables 11 2.4 0.4 850.0 822.2Investments 12(a) – – 1,224.7 1,042.6Mine property, property, plant and equipment 13 2,702.0 2,525.0 – –Future income tax benefit 5(b) 180.7 193.8 – –Intangibles 14 40.6 27.1 – –Other 15 67.1 31.0 – –Total non-current assets 2,992.8 2,777.3 2,074.7 1,864.8Total assets 3,889.6 3,888.9 2,394.0 2,183.9

Current LiabilitiesAccounts payable 16 240.3 292.5 – –Borrowings 17 119.8 189.3 367.2 342.5Provisions 18 147.8 235.1 – –Other 19 61.8 49.1 – –Total current liabilities 569.7 766.0 367.2 342.5

Non-current LiabilitiesAccounts payable 20 0.6 0.6 – –Borrowings 21 1,291.1 1,091.6 353.9 175.8Provisions 22 318.3 262.7 – 5.5Other 19 199.0 304.1 – –Total non-current liabilities 1,809.0 1,659.0 353.9 181.3Total liabilities 2,378.7 2,425.0 721.1 523.8Net assets 1,510.9 1,463.9 1,672.9 1,660.1

Shareholders’ EquityShare capital 23 1,543.9 1,543.1 1,543.9 1,543.1Reserves 24 23.0 11.7 – –Retained profits/(Accumulated losses) (56.0) (90.9) 129.0 117.0Total shareholders’ equity 1,510.9 1,463.9 1,672.9 1,660.1

The above Balance Sheets should be read in conjunction with the accompanying notes.


Statements of Cash FlowsNotes Consolidated Consolidated Pasminco Ltd Pasminco Ltd

Pasminco Limited and its controlled entities for the year ended 30 June 2000 2000 $m 1999 $m 2000 $m 1999 $m

Cash Flows from Operating ActivitiesReceipts from customers 1,887.9 1,870.5 – –Payments to suppliers and employees (1,591.7) (1,394.4) (0.1) –Net income taxes paid (11.5) (40.2) – –Net cash inflow/(outflow) from operating activities 38(a) 284.7 435.9 (0.1) –

Cash Flows from Investing ActivitiesInvestment in mine property, property, plant and equipment (492.2) (810.0) – –Investment in infrastructure assets – (183.6) – –Investment in Savage Resources Limited, net of cash acquired (3.0) (406.1) – –Payments for major maintenance and repairs 1(o) (3.2) (10.9) – –Proceeds from sale of property, plant and equipment 1.4 12.7 – –Proceeds from sale of infrastructure assets 216.6 20.4 – –Proceeds from sale of coal assets 69.0 – – –Proceeds from liquidation of controlled entity – – 61.3 –Payments for acquisition of controlled entity – – (244.4) –Net loans repaid by associate 11.8 3.4 – –Net loans repaid by controlled entities – – 155.7 37.4Net cash inflow/(outflow) from investing activities (199.6) (1,374.1) (27.4) 37.4

Cash Flows from Financing ActivitiesNet proceeds from share issues 0.8 – 0.8 –Proceeds from borrowings 1,219.9 1,909.6 – –Repayments of borrowings (1,188.6) (925.0) – –Repayments of lease liabilities (0.2) (0.3) – –Interest and finance charges paid 3 (62.0) (43.4) (12.7) (12.4)Interest received 3 10.7 8.0 39.4 20.0Dividends paid – (45.0) – (45.0)Net cash inflow/(outflow) from financing activities (19.4) 903.9 27.5 (37.4)Net increase/(decrease) in cash held 65.7 (34.3) – –Cash at the beginning of the reporting period 21.2 57.2 – –Effects of exchange rate changes on foreign currency denominated cash balances 1.4 (1.7) – –Cash at the end of the reporting period 1(r),6 88.3 21.2 – –

The above Statements of Cash Flows should be read in conjunction with the accompanying notes.

1 Summary of Significant Accounting PoliciesThis general purpose financial report has been prepared in accordance withAccounting Standards, other authoritative pronouncements of the AustralianAccounting Standards Board, Urgent Issues Group Consensus Views andthe Corporations Law. It is prepared in accordance with the historical costconvention, except for certain assets which, as noted, are at valuation.The accounting policies adopted are consistent with those of the previous year except where noted. Comparative information is reclassified whereappropriate to enhance comparability.

(a) Principles of ConsolidationThe consolidated accounts incorporate the assets and liabilities of all entitiescontrolled by Pasminco Limited (the chief entity) as at 30 June 2000, andthe results of all controlled entities during the year ended 30 June 2000.The effects of all transactions between entities in the consolidated entityare eliminated in full.Where control of an entity began or ceased during the financial year, its resultsare included only from the date on which control commenced or up to the date control ceased.Investments in associates are accounted for in the consolidated financialstatements using the equity method. Under this method, the consolidatedentity’s share of the profits or losses of associates is recognised as revenuein the consolidated profit and loss statement, and its share of movementsin reserves is recognised in consolidated reserves. Associates are thoseentities over which the consolidated entity exercises significant influence,but not control.A complete list of Pasminco Limited’s controlled entities is set out in note 12(c).The economic entity’s interest in joint ventures has been included in theeconomic entity’s accounts by taking up the economic entity’s share in each of the individual assets and liabilities of the joint ventures.

(b) Financial InstrumentsHedging is undertaken in order to avoid or minimise possible adverse financial or cash flow effects of movements in exchange rates and commodity prices.(i) Foreign Exchange

Refer note (c) Foreign Exchange(ii) Other

Gains and losses on derivatives used as hedges are accounted for on the same basis as the underlying physical exposures they are hedging.Accordingly, hedge gains and losses are included in the profit and lossstatement when the gains and losses arising on the related physicalexposures are recognised in the profit and loss statement. Gains and lossesrelated to qualifying hedges of firm commitments or anticipated transactionsare deferred and recognised in income as adjustments to the underlyinghedged transactions when they occur.

(c) Foreign ExchangeAmounts payable and receivable in foreign currencies have been translated into Australian currency at the rates of exchange ruling at balance date. Gainsand losses on unhedged balances are recognised in the result of the period.Costs arising from forward exchange contracts are deferred and amortised over the term of the contracts. Costs and gains or losses arising on the hedgingcontracts relating to sales commitments are deferred and included in themeasurement of the sales. All other transactions in foreign currencies during the year have been brought to account at the exchange rate ruling at the time of the transactions. Exchange gains and losses on designated borrowings,effectively hedging future revenues, are deferred and are recognised as theunderlying hedged transaction occurs. The accounts of self sustaining overseascontrolled entities are reported in Australian currency by translating assets andliabilities at the rates of exchange ruling at balance date and the revenue andexpense items at the average of rates ruling during the year. Translationdifferences arising are included in the foreign currency translation reserve.

(d) TaxationTax effect accounting procedures are followed whereby income tax is regardedas an expense and is matched with the accounting profit after allowing forpermanent differences. Provisions for current and future income tax arecalculated on earnings using the “liability” method. Certain items of expenditure,mainly depreciation and other provisions, may be deductible for income taxpurposes in years different from those in which they are charged againstearnings. The amount of the taxation difference due to such timing differences is classified as a deferred tax liability or future tax benefit. It is economic entitypolicy not to carry forward any part of future tax assets, arising from tax losses,including those arising as capital losses, unless their recovery is virtually certainthrough the economic entity’s ability to derive future assessable income or capital gains sufficient to enable the benefits to be realised, and for theeconomic entity to continue to comply with deductibility conditions imposed by law. Dividend withholding tax is provided on the economic entity’s portion of earnings of certain foreign subsidiaries where it is intended to repatriate those earnings to Australia as dividends.

(e) InventoriesStocks of ores, metals, concentrates and work in progress are valued at thelower of cost and net realisable value. Cost includes expenditure incurred inacquiring and bringing the stock to its existing condition and location andincludes an appropriate portion of fixed and variable overhead expenses,including depreciation and amortisation. Stores are valued at cost with dueallowance for obsolescence. In each case, cost is determined on an averagecost basis.

(f) InvestmentsShares in companies held as long-term investments, including controlledentities, have been stated at Directors’ valuation or cost. Controlled entities,joint ventures and associates are accounted for in the consolidated accounts as set out in note 1(a). Dividend income is brought to account as it becomesreceivable. Interest income is brought to account as it accrues on a daily basis.

(g) LeasesLeases of plant and equipment under which the economic entity assumessubstantially all the risks and benefits of ownership are classified as financeleases, whilst other leases are classified as operating leases. Finance leases are capitalised with a lease asset and liability equal to the present value of the minimum lease payments being recorded at the inception of the lease.Capitalised lease assets are amortised on a straight-line basis to their residualvalue over the term of the lease, or where it is likely that the economic entity will obtain ownership of the asset, the life of the asset. Lease payments madeunder operating leases are charged against profits in equal installments overthe accounting periods covered by the lease term.

(h) Mine Property, Property, Plant and EquipmentMine property, property, plant and equipment are carried at cost or at Directors’valuation. Any surplus on revaluation is credited directly to the asset revaluationreserve and excluded from the profit and loss statement. All items of mineproperty, property, plant and equipment, with the exception of freehold land, and certain mine freeholds and leaseholds, are depreciated over their estimatedremaining useful lives. Depreciation rates are reviewed regularly and reassessedin light of commercial and technological developments. The expected usefullives are as follows:Buildings 40 yearsPlant and Equipment 5-15 yearsCapital spares purchased for particular plant are capitalised and depreciated on the same basis as the plant to which they relate.

(i) Exploration and Evaluation ExpenditureExpenditure on exploration and evaluation of individual projects is written offagainst earnings as incurred except that, when a project reaches the stagewhere such expenditure is considered to be capable of being recouped throughdevelopment or sale, all subsequent expenditures are capitalised and amortisedagainst production from the area once mining commences.

Notes to the Financial Statements


1 Summary of Significant Accounting Policies (cont.)

(j) Research & Development ExpenditureExpenditure on research and development is written off against earnings asincurred, except that, when a project reaches the stage where suchexpenditure is considered capable of being recouped through development or sale, all subsequent expenditures are capitalised. Unamortised costs arereviewed at each balance date to determine the amount (if any) that is nolonger recoverable and any amount so identified is written off.

(k) Mine DevelopmentMine development expenditure for the initial establishment of access to mineralreserves, together with capitalised exploration, evaluation and commissioningexpenditure, and financing costs on borrowings for a project prior to thecommencement date of commercial production, are capitalised to the extentthat the expenditure results in significant future benefits. These amounts areamortised over the current estimated economic reserve of the mine on a unit of production output basis. This calculation includes consideration of appropriate estimates of the future costs to be incurred in developing the estimated economic reserve, which includes the proven and probablereserve, plus an estimate of the economic resource within the inferredcategory.

(l) Recoverable Amount of Non-Current AssetsThe values of assets are reviewed on an ongoing basis, and where necessarythe carrying amount of non-current assets are revalued downwards to theirrecoverable amount. Where net cash flows are derived from a group of assetsworking together, recoverable amount is determined on the basis of therelevant group of assets. The expected net cash flows included in determiningrecoverable amounts of non-current assets are discounted to their presentvalues using a market-determined, risk adjusted discount rate.

(m) Employee BenefitsProvision is made for expected benefits accruing to past and presentemployees in relation to such items as annual leave, long service leave, sickleave, medical benefits and workers’ compensation. These provisions areaccrued on at least the basis of statutory or contractual obligations. A numberof employee superannuation funds exist which provide benefits for employeesand their dependents on retirement, disability, resignation, retrenchment ordeath (refer note 33). The value of the employee share scheme described in note 39 is not being charged as an employee entitlement.

(n) Restoration Expenditure(i) Mining OperationsProvision is made for the anticipated costs of future restoration andrehabilitation of areas from which natural resources have been extracted. The provision is recognised on a gradual basis over the life of the mine asproduction occurs. The provision includes costs associated with reclamation,plant closure, waste site closure, monitoring, demolition and decontamination.These costs have been determined on an undiscounted current cost basis withreference to current legal requirements and current technology. The restorationprovision is separated into current (estimated costs arising within 12 months)and non-current components. Any change in the provision estimate is dealtwith on a prospective basis. The extent of the restoration provision is, in part,dependent upon the remaining life of each mine as calculated by reference to the economic reserve.(ii) Smelting Operations Provision is made for the anticipated costs of future restoration andrehabilitation of smelting sites to the extent that a legal obligation exists and that the anticipated expenditure is not capital in nature. The provisionincludes costs associated with reclamation, monitoring, water purification andcoverage and permanent storage of historical residues. The provision is basedupon current costs and has been determined on an undiscounted basis withreference to the current legal framework and current technology. Any change in the provision estimate is dealt with on a prospective basis. The restorationprovision is separated into current (estimated costs arising within 12 months)and non-current components.

(o) Major Maintenance and Repairs ExpenditureThe costs of major overhauls of operating plant are considered to constituteincreases in assets. Accordingly, the accounting treatment adopted is torecognise overhaul expenditure as an asset to be amortised over the period in which benefits are expected to arise (typically 3-4 years).

(p) Sales RevenueSales revenue is stated on a gross basis, with freight and realisation expensesincluded in the cost of sales. Sales revenue is stated net of the impact of gainsand losses arising on foreign exchange hedging contracts relating to salescommitments and designated borrowings effectively hedging future revenues.Sales of metals, concentrates, ores and by-products are recognised when theproduct passes out of the physical control of the selling company to externalcustomers pursuant to enforceable sales contracts. As the final value ofconcentrate sales can only be determined from weights, assays, prices andexchange rates applying after a shipment has arrived at its destination, salesof concentrates are recorded at estimated values pursuant to contract terms,with adjustments being subsequently recognised in the period when finalvalues are determined.

(q) Borrowing CostsBorrowing costs are recognised as expenses in the period in which they areincurred, except where they are included in the costs of qualifying assets. Tothe extent that additional funds have been borrowed for the purpose of, andare associated with the qualifying asset, the interest rate used is that applicableto those funds. The interest rate for any funds utilised in excess of specifiedborrowings is the weighted average for all other borrowings.Borrowing costs include:– interest on short-term and long-term borrowings– net debtors securitisation costs– amortisation of discounts or premiums relating to borrowings– amortisation of ancillary costs incurred in connection with the arrangement

of borrowings; and – exchange differences arising from specific foreign currency borrowing

hedge contracts.

(r) CashFor the purposes of the statement of cash flows, cash includes cash on handand deposits at call which are readily convertible to cash and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.

(s) Trade and Other CreditorsThese amounts represent liabilities for goods and services provided to theeconomic entity prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(t) Trade ReceivablesTrade receivables represent assets for goods and services supplied by theeconomic entity prior to the end of the financial year which remain unpaid. Theyarise from transactions in the normal operating activities of the economic entity.Trade receivables are carried at nominal amounts due less any provision fordoubtful debts. A provision for doubtful debts is recognised when collection of the full nominal amount is no longer probable.Under the terms of a receivables acquisition arrangement, eligible trade debtorsare sold on a continuous basis to a bank at a discount representing a financingcost. Under the conditions of the sales agreement, the bank is entitled to retaina percentage of the gross sales proceeds as a provision against default. Thisamount is recorded as a trade debtor and is paid to the economic entityfollowing the collection of trade debtor balances sold under this agreement(refer note 7).

(u) GoodwillOn acquisition of some or all, of the assets of another entity or, in the case of an investment in a controlled entity, on acquisition of some, or all, of theequity of that controlled entity, the identifiable net assets acquired are measuredat fair value. In determining the fair value of any identifiable exploration assetsacquired, and in allocating the cost of acquisition to them, all risks relating to such assets are considered. The excess of the fair value of the cost ofacquisition over the fair value of the identifiable net assets acquired, includingany liability for restructuring costs, is brought to account as goodwill andamortised on a straight line basis over twenty years, being the period duringwhich the benefits are expected to arise.


Consolidated Consolidated Pasminco Ltd Pasminco Ltd2000 $m 1999 $m 2000 $m 1999 $m

2 RevenueRevenue from operating activities(a) Sales revenue (note 1(p)) 1,878.3 1,564.4 – –(b) Other operating revenue

(i) Interest received/receivable (note 3) 10.7 8.0 39.4 20.0(ii) Proceeds from sale of coal assets 69.0 – – –(iii) Proceeds from sales of non-current assets 1.5 12.6 61.3 –(iv) Share of net profits of associates (note 9(b)) 2.8 1.9 – –(v) Insurance revenue receivable 15.8 2.1 – –(vi) Other 5.9 7.1 – –

Total Operating Revenue 1,984.0 1,596.1 100.7 20.0

Revenue from outside the operating activitiesProceeds from sales of infrastructure assets 33.0 204.0 – –Total Revenue 2,017.0 1,800.1 100.7 20.0

3 Operating Profit/(Loss)The operating profit/(loss) before abnormal items and income tax isarrived at after charging and crediting the following specific items:

ChargesAmortisation(a) Deferred expenditure 8.8 8.1 – –(b) Mine properties and development 77.8 42.7 – –(c) Leased plant and equipment – 0.1 – –(d) Goodwill 2.5 0.6 – –

89.1 51.5 – –Depreciation of property, plant and equipment 137.8 111.9 – –Less: Depreciation capitalised 3.4 5.1 – –Depreciation expensed 134.4 106.8 – –Borrowing costs (a) Interest paid/payable

(i) Controlled entities – – 12.7 12.4(ii) Other persons and/or corporations 86.0 58.1 – –

(b) Realised hedge losses on foreign currency borrowings/contracts 6.1 100.2 – –(c) Net debtors securitisation costs (note 1(t)) 1.0 – – –(d) Other finance charges 4.2 9.5 – –Total borrowing costs 97.3 167.8 12.7 12.4Less: borrowing costs capitalised 35.3 124.4 – –Borrowing costs expensed 62.0 43.4 12.7 12.4Rent expense relating to operating leases 31.3 15.3 – –Decrement in value of inventories 0.2 0.2 – –Exploration and evaluation expenditure 18.9 21.4 – –Research and development costs 6.7 7.1 – –Government mining royalties 15.4 5.7 – –Superannuation 21.2 16.9 – –Net foreign exchange loss 0.4 3.8 3.2 –Net loss on disposal of property, plant and equipment 0.3 1.0 – –Loss on liquidation of controlled entity – – 1.1 –Bad and doubtful debts written off/provided for 2.0 0.2 – –Provisions –(a) Employee entitlements 37.9 34.9 – –(b) Workers’ compensation 12.5 7.8 – –(c) Restoration 2.6 1.4 – –(d) Sundry 2.0 0.8 – –Provisions expensed 55.0 44.9 – –CreditsInterest received/receivable (a) Controlled entities – – 39.4 20.0(b) Other persons and/or corporations 10.7 8.0 – –

Net profit on disposal of coal assets 4.2 – – –Applicable income tax expense (4.2) – – –Net profit on disposal of coal assets (after tax) – – – –




4 Abnormal ItemsThe following abnormal items were charged in arriving at the operating profit/(loss) after tax:

(a) Accounting chargeProvision for diminution in investment in controlled entity* – – – (23.1)Provision for diminution in controlled entity receivable* – – – (8.2)Abnormal items before income tax – – – (31.3)Applicable income tax (charge)/credit – – – –Abnormal items after income tax – – – (31.3)

*Reduction in the carrying value of Pasminco Limited’s investment and intercompany receivable with Pasminco Pacific Pty Ltd.

(b) Income tax chargeCharge arising from the restatement of Australian deferred tax balances due to a reduction in the Australian tax rate. 11.6 – – –Legislation reducing the Australian company tax rate from 36% to 34% in respect of the 2000-2001 income tax year and then to 30% from the 2001-2002 income tax year was announced on 21 September 1999 and received Royal Assent on 10 December 1999. As a consequence, deferred tax balances which are expected to reverse in the 2000-2001 or a later income tax year have been remeasured using the appropriate new rates, depending on the timing oftheir reversal.

5 Income Tax(a) The prima facie tax payable on the operating profit/(loss) differs from

the income tax provided in the accounts and is reconciled as follows:Operating profit/(loss) before income tax 31.0 (8.5) 22.4 (23.7)Prima facie tax charge/(credit) at 36% 11.1 (3.0) 8.1 (8.5)Taxation charge/(credit) on profit/(loss) for the year (4.0) (0.2) 10.4 2.6Variation from prima facie tax (15.1) 2.8 2.3 11.1The following major items caused the charge/(credit) for income tax to varyfrom the prima facie tax charge/(credit) on reported profit/(loss):Permanent differences –Century mine development and other allowances (58.0) – – –Research and development allowance (1.6) (2.8) – –Non-allowable depreciation and amortisation 22.2 21.6 – –Non-assessable capital (profit)/loss 7.1 (0.8) – –Non-allowable demolition expenditure – 0.5 – –Loss on liquidation of controlled entity – – 1.1 –Non-assessable foreign exchange losses 2.1 – 5.1 –Provision against investment in controlled entity – – – 23.1Provision against receivable in controlled entity – – – 8.2Other (0.5) (3.2) – –Total permanent differences (28.7) 15.3 6.2 31.3Tax effect of these differences at 36% (10.3) 5.5 2.2 11.2Tax on overseas income at lower rates (0.6) (1.4) – –Overseas tax losses not brought to account 2.4 – – –Unbooked overseas tax losses now brought to account (7.2) – – –Under/(over) provision for previous years 0.6 (1.3) 0.1 (0.1)Consequent increase/(decrease) in tax charge (15.1) 2.8 2.3 11.1

(b) Analysis of future income tax benefits:Future income tax benefits arising from tax losses of controlled entities which have been brought to account amount to: 180.7 143.9 – –Future income tax benefits arising from timing differences amount to: – 49.9 – –Future income tax benefits recognised 180.7 193.8 – –Future income tax benefits arising from tax losses of controlled entities which have been offset against the provision for deferred income tax amount to: 122.1 84.6 – –

(c) Deferred income tax liability arising from timing differences net of the offset of future income tax benefit, amounts to: 65.1 86.8 – 5.5

(d) The Directors’ estimate that the potential future income tax benefit at 30 June 2000, in respect of tax revenue losses not brought to account is: 7.1 13.5 – –The benefit of these tax revenue losses will only be obtained if:(i) the economic entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses

to be realised;(ii) the economic entity continues to comply with the conditions for deductibility imposed by tax legislation; and(iii) no changes in tax legislation adversely affect the economic entity in realising the benefit from the deductions for the losses.



6 Current Assets – CashCash at bank and on hand 16.9 19.2 – –Short term deposits 71.6 4.0 – –Bank bills – 1.4 – –

88.5 24.6 – –The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows:Balances as above 88.5 24.6 – –Less Bank overdrafts (note 17) 0.2 3.4 – –Balances per statement of cash flows 88.3 21.2 – –

7 Current Assets – ReceivablesTrade debtors 146.7 235.9 – –Less provision for doubtful debts (a) 3.4 1.5 – –

143.3 234.4 – –Loan to associate – secured (note 9(b)) 99.8 104.6 – –Other debtors 33.7 203.7 – –Loans receivable from controlled entities – – 319.3 319.1

276.8 542.7 319.3 319.1During the year, Pasminco commenced arrangements to sell trade debtors to a limit of USD $150 million. As a result, at 30 June, the value of trade debtors wasreduced by AUD $107.5 million (refer note 1(t)).At 30 June 1999, other debtors includes $183.6 million of Century’s infrastructure assets sold to third parties during June and included in revenue from outside the operating activities (refer note 2).(a) Reconciliation of provision for doubtful debtsOpening balance 1.5 0.6 – –Translation difference 0.2 – – –Acquisition of Savage Resources Limited Group – 1.2 – –Doubtful debts previously provided for written back during the year – (0.1) – –Bad and doubtful debts provided for during the year 2.0 0.3 – –Bad debts written off against the provision (0.3) (0.5) – –Closing balance 3.4 1.5 – –

8 Current Assets – InventoriesRaw materials and stores (at cost) 179.7 102.8 – –Less provision for diminution in value 1.0 0.9 – –

178.7 101.9 – –Work in progressAt cost 156.1 102.4 – –At net realisable value 11.9 45.5 – –

168.0 147.9 – –Finished goodsAt cost 88.3 114.2 – –At net realisable value 1.9 2.1 – –

90.2 116.3 – –436.9 366.1 – –



9 Current Assets – Investments in AssociatesThe associated companies shown below were acquired as a result of the February 1999 acquisition of the Savage Resources Limited Group. The investment inErnest Henry Mining Pty Limited has been accounted for in the consolidated financial statements using the equity method of accounting. It is Pasminco’s intentionto sell its investment in Ernest Henry Mining Pty Limited therefore this investment has been shown as a current asset. The balance date of Ernest Henry Mining Pty Limited is 30 June 2000. Effective 1 July 1999, the remaining associated companies were sold to Glencore International AG.

Principal Consolidated ConsolidatedActivity Ownership Ownership

Interest Interest2000 % 1999 %

(a) Associated companiesErnest Henry Mining Pty Limited Copper/Gold Mining 49.0 49.0Liddell Power Generation Sales Pty Limited Dormant – 67.5Liddell Collieries Pty Limited Coal Mining – 67.5Liddell Coal Preparation Pty Limited Coal Preparation – 67.5Liddell Coal Marketing Pty Limited Coal Marketing – 67.5Liddell Tenements Pty Limited Tenement Holding – 67.5Liddell Southern Tenements Pty Limited Tenement Holding – 67.5Foybrook Tenements Pty Limited Tenement Holding – 67.5Glendell Tenements Pty Limited Tenement Holding – 67.5Togara Coal Sales Pty Limited Coal Marketing – 33.3

Consolidated ConsolidatedEquity Equity

Accounted AccountedAmount Amount

2000 $m 1999 $m(b) Equity InformationMovements in carrying amounts of investments in Ernest Henry Pty LimitedDirectors’ valuation at acquisition (note 12(b)) 68.8 68.8Acquisition fair value adjustment (note 9(d)) (15.8) –Directors’ value of investment 53.0 68.8Share of operating profits after income tax since acquisition 4.7 1.9Equity carrying amount at the end of the financial year 57.7 70.7Loan to associate (note 7) 99.8 104.6Carrying value at the end of the financial year 157.5 175.3

Results Attributable to AssociateOperating profits before income tax 4.1 3.1Income tax expense 1.3 1.2Operating profits after income tax (note 2(b)) 2.8 1.9

Accumulated (losses) attributable to associate at acquisition (2.6) (2.6)

Retained profits/(accumulated losses) attributable to associate at the end of the financial year 0.2 (0.7)

Summary of the Performance and Financial Position of AssociateThe consolidated entity’s share of the assets and liabilities of associate in aggregate are as follows:Current assets 41.3 29.0Non-current assets 151.8 160.2Current liabilities (20.9) (18.8)Non-current liabilities (46.0) (46.4)Net Assets 126.2 124.0The consolidated entity’s share of associate’s commitments and contingent liabilities are disclosed in notes 28 and 27 respectively.

(c) Transactions with Ernest HenryDuring the year a controlled entity purchased concentrates for $100.5 million (1999 - $52.2 million) from Ernest Henry at market prices. The loan to Ernest Henry is a USD denominated facility amortising over 7 years with a final maturity date of 30 June 2007. This loan is secured by a charge over 49% of the assets of Ernest Henry Mining Pty Limited.Net loan repayments made by Ernest Henry to a controlled entity totalled $11.8 million (1999 - $3.4 million). The total outstanding loan with Ernest Henry at 30 June 2000 is $99.8 million (1999 - $104.6 million). Interest charged on this loan for the financial year totalled $7.8 million (1999 - $3.1million). Interest is calculated using a market determined interest rate.

(d) Acquisition fair value adjustmentDuring the year, the fair value of the investment in Ernest Henry Mining Pty Limited at acquisition date was reviewed. As a result, a fair value adjustmentto write down the investment by $15.8 million was made. The goodwill recognised on acquisition was correspondingly increased by $15.8 million (note 14).


Country of Class of Investment of Investment ofNotes Incorporation Share Pasminco Ltd Pasminco Ltd

2000 ($’000) 1999 ($’000)

(c) Unquoted investments of the chief entity in controlled entities which are all wholly owned, except Pasminco Sogem LLC and Pasminco Taylor Chemicals, Inc.,which are 80% owned, SPC Nominees Pty Ltd (50% owned) and Lawn Hill and Riversleigh Pastoral Company Pty Ltd which is 51% owned, comprise thefollowing:American Zinc Company B USA OrdinaryBudel Management BV A Netherlands OrdinaryBudel Zink BV A Netherlands OrdinaryBudelco BV A Netherlands OrdinaryBuzifac BV A Netherlands OrdinaryBuzipon BV A Netherlands OrdinaryBuzisur BV A Netherlands OrdinaryLawn Hill and Riversleigh Pastoral Company Pty Ltd D Australia OrdinaryPasminco Australia Limited H Australia Ordinary 354,444 354,444Pasminco Broken Hill Mine Pty Limited H Australia Ordinary 105,027 105,027Pasminco Century Mine Limited H Australia Ordinary 172,985 172,985Pasminco Cockle Creek Smelter Pty Limited H Australia Ordinary 151,497 151,497Pasminco Europe Limited A,E UK Ordinary – 62,400Pasminco Europe (ISC Alloys) Limited A,E UK OrdinaryPasminco Europe (Smelting) Limited A,E UK OrdinaryPasminco Exploration (Canada) Limited E Canada Ordinary – ($1 only)Pasminco Exploration & Mining BV A Netherlands OrdinaryPasminco Exploration Private Limited A India OrdinaryPasminco Europe (UK) BV A,E UK OrdinaryPasminco Finance Limited H Australia Ordinary 20,000 20,000Pasminco Global Trading Pty Limited D Australia OrdinaryPasminco Hong Kong Limited A Hong Kong OrdinaryPasminco Incorporated B USA OrdinaryPasminco Insurance Private Limited A Singapore Ordinary 1,935 1,935Pasminco International Pty Limited Australia Ordinary 42,077 42,077Pasminco International (Holdings) Pty Limited Australia Ordinary 40 40Pasminco Investments Holdings Pty Limited H Australia Ordinary ($12 only) ($12 only)Pasminco Investments Pty Limited H Australia OrdinaryPasminco Metals Pty Limited H Australia Ordinary 2 2Pasminco Netherlands (Holdings) BV A Netherlands OrdinaryPasminco Pacific Pty Limited Australia Ordinary 23,101 23,101Pasminco Pakistan (Private) Limited A Pakistan OrdinaryPasminco Port Pirie Smelter Pty Limited H Australia Ordinary 129,265 129,265Pasminco Superannuation Pty Limited Australia Ordinary ($12 only) ($12 only)Pasminco UK (Holdings) Limited A UK OrdinaryPasminco UK Limited A UK OrdinaryPasminco Zinc Limited B,G Cayman Islands Ordinary 244,431 –PCML SPC Pty Limited D Australia OrdinarySPC Nominees Pty Limited Australia OrdinaryThe Emu Bay Railway Company Limited H Australia Ordinary 2,959 2,959Warmframe Limited A,E UK Ordinary

Savage Resources Group controlled entities acquiredGabume Pty Limited C,F Australia OrdinaryLiddell Coal Loader Pty Limited C,F Australia OrdinaryLiddell Coal Operations Pty Limited C,F Australia OrdinaryRamala Holdings Pty Limited C,H Australia OrdinarySavage Australian Exploration Pty Limited C Australia OrdinaryPasminco Canada Holdings, Inc. A,B,C USA OrdinarySavage Coal Pty Limited C,F Australia OrdinarySavage EHM Finance Pty Limited C,H Australia OrdinarySavage EHM Pty Limited C,H Australia PreferencePasminco International Exploration, Inc. A,B,C USA OrdinaryPasminco Marketing Company A,B,C USA OrdinarySavage Minerals Limited C,F Australia OrdinaryPasminco Resources Canada Company A,B,C Canada OrdinarySavage Resources Limited C,H Australia OrdinaryPasminco Resources (US), Inc. A,B,C USA OrdinaryPasminco Sogem LLC A,B,C USA OrdinaryPasminco South East Asian Ventures, Inc. A,B,C USA OrdinaryPasminco Taylor Chemicals, Inc. A,B,C USA OrdinarySavage Togara Coal Pty Limited C,F Australia OrdinaryPasminco Zinc, Inc. A,B,C USA OrdinarySavox Pigments Pty Limited C Australia Ordinary

1,247,763 1,065,732



10 Current Assets – OtherPrepayments 26.2 16.8 – –Deferred net option premiums 4.1 4.4 – –Deferred foreign exchange hedge loss (note 1(c)) 6.6 7.2 – –Land held for resale at written down value (a) – 4.1 – –Property, plant and equipment held for resale at written down value (b) – 60.0 – –Other – 15.0 – –

36.9 107.5 – –(a) Land held for resale

Cost of acquisition of the land – 4.1 – –Carrying value at 30 June – 4.1 – –(b) Property, plant and equipment held for resale

At cost and valuation – 71.8 – –Accumulated depreciation – 11.8 – –

Carrying value at 30 June – 60.0 – –

11 Non-current Assets – ReceivablesLoans receivable from controlled entities – – 858.2 830.4Less provision for diminution in value – – 8.2 8.2

– – 850.0 822.2Other receivables 2.4 0.4 – –

2.4 0.4 850.0 822.2

12 Non-current Assets – Investments(a) The investments include:

Unlisted investmentsShares in controlled entities (note 12(c)) – – 1,247.8 1,065.7Less provision for diminution in value – – 23.1 23.1

– – 1,224.7 1,042.6

(b) Effective 1 February 1999, Pasminco acquired 100% of the Savage Resources Limited Group. Details of the acquisition are as follows:

Fair Value of Identifiable Net Assets of Controlled Entities Acquired Cash and deposits 47.7Receivables 173.0Inventories 35.5Associated investments (note 9) 68.8Future income tax benefit 77.6Mine property, property, plant and equipment 355.8Other assets 16.1Provisions (140.9)Creditors and accruals (63.5)Borrowings (141.2)

428.9Goodwill on consolidation (note 14) 27.7Cash consideration paid/payable 456.6Outflow of cash to acquire the Savage Group net of cash acquiredCash consideration paid/payable 456.6Less: Cash balance acquired 47.7Outflow of cash 408.9Less: Acquisition costs accrued 2.8Outflow of cash as shown in the cashflow statement 406.1


12 Non-current Assets – Investments (continued)Notes(A) These controlled entities had other member firms of Ernst & Young International acting as their auditors.(B) The accounts of these controlled entities have been reviewed by the auditors for inclusion in the consolidated accounts as a statutory audit is not required

in the country of incorporation.(C) All companies were acquired as a result of the acquisition of the Savage Resources Limited Group in February 1999. Details of the acquisition are set out

in note 12(b).(D) These controlled entities were incorporated/acquired during the year.(E) These controlled entities were liquidated or deregistered during the year.(F) These controlled entities were sold with effect from 1 July 1999 to Glencore International AG. (G) As part of the restructure of the UK Group, Pasminco Zinc Limited was purchased by Pasminco Limited from Pasminco Europe Limited and Pasminco Europe

(Smelting) Limited during the year.(H) Pursuant to Class Order 98/1418, (as amended by Class Orders 98/2017 and 00/0321) issued by the Australian Securities and Investments Commission, relief

has been granted to these identified controlled entities of the parent entity from the Corporations Law requirements for preparation, audit and lodgement of its financial report. As a condition of the Class Order, the parent entity and the identified controlled entities, (the ‘Closed Group’), have entered into a deed of cross guarantee. Under the deed of cross guarantee, all of the named companies guarantee the debts of the other named companies. This guarantee is conditional upon the winding up of any companies which are a party to the deed. The Consolidated profit and loss statements and balance sheets of the entities which are members of the ‘Closed Group’ are as follows:

2000 $m 1999 $m

Operating (loss) before abnormal items and income tax (47.0) (33.1)Abnormal items before income tax – (31.3)Operating (loss) before income tax (47.0) (64.4)Income tax (credit) attributable to operating (loss) (25.2) (6.9)Abnormal tax item 11.3 –Operating (loss) after income tax (33.1) (57.5)Accumulated (losses) at the beginning of the financial year (310.8) (257.9)Total available for appropriation (343.9) (315.4)Aggregate of amounts transferred from reserves 7.5 4.6Accumulated (losses) at the end of the financial year (336.4) (310.8)

Current AssetsCash 75.2 14.2Receivables 545.0 676.2Inventories 310.9 281.5Investments in Associates 57.7 70.7Other 34.7 19.5

Total Current Assets 1,023.5 1,062.1

Non-current AssetsReceivables 216.4 231.4Investments 408.3 303.6Property, plant and equipment 1,080.3 709.8Mine properties & development 1,176.3 1,397.9Exploration expenditure 1.7 1.7Future income tax benefit 124.0 148.2Other 106.5 51.3

Total Non-current Assets 3,113.5 2,843.9Total Assets 4,137.0 3,906.0

Current LiabilitiesAccounts payable 370.1 451.7Borrowings 119.8 172.4Provisions 119.5 188.1Other 61.8 49.1

Total Current Liabilities 671.2 861.3

Non-current LiabilitiesBorrowings 1,274.6 1,091.6Accounts payable 627.7 291.3Provisions 157.9 126.2Other 199.0 304.1

Total Non-current Liabilities 2,259.2 1,813.2Total Liabilities 2,930.4 2,674.5Net Assets 1,206.6 1,231.5

EquityShare capital 1,543.9 1,543.1Reserves (0.9) (0.8)Accumulated (losses) (336.4) (310.8)

Total Equity 1,206.6 1,231.5




13 Non-current Assets – Mine Property, Property,Plant and Equipment

Freehold and leasehold land and buildings (13(a)) 81.1 132.5 – –Plant and equipment (13(b)) 1,329.7 765.6 – –Mine properties and development (13(c)) 1,205.2 1,418.8 – –Exploration expenditure (13(d)) 1.7 1.7 – –Construction in progress (at cost) 84.3 206.4 – –Total mine property, property, plant and equipment 2,702.0 2,525.0 – –

(a) Freehold and leasehold land and buildingsAt cost 98.0 151.8 – –Less: Accumulated depreciation 19.0 21.5 – –

79.0 130.3 – –At Directors’ valuation 1979 4.3 4.4 – –Less: Accumulated depreciation 2.2 2.2 – –

2.1 2.2 – –Total freehold and leasehold land and buildings 81.1 132.5 – –

(b) Plant and equipmentAt cost 2,190.6 1,514.3 – –Less: Accumulated depreciation 868.3 760.0 – –

1,322.3 754.3 – –At Directors’ valuation 1979 70.3 70.3 – –Less: Accumulated depreciation 67.4 66.4 – –

2.9 3.9 – –At Directors’ valuation 1992 27.8 27.8 – –Less: Accumulated depreciation 23.3 20.5 – –

4.5 7.3 – –Plant and equipment under finance lease – 0.2 – –Less: Accumulated amortisation – 0.1 – –

– 0.1 – –Total plant and equipment 1,329.7 765.6 – –

(c) Mine properties and development At cost 1,560.6 1,684.1 – –Less: Accumulated depreciation 367.6 278.7 – –

1,193.0 1,405.4 – –At Directors’ valuation 1992 23.0 23.0 – –Less: Accumulated depreciation 10.8 9.6 – –

12.2 13.4 – –Total mine properties and development 1,205.2 1,418.8 – –

(d) Capitalised Expenditure in the Exploration and Evaluation PhaseCost brought forward 1.7 29.7 – –Acquisition of Savage Resources Limited – 8.3 – –Expenditure incurred during current year 18.9 23.9 – –Less Expenditure written off during current year 18.9 21.4 – –Less Expenditure transferred to mine properties and development – 32.2 – –Less Expenditure transferred to property, plant and equipment held for resale – 6.6 – –Cost carried forward 1.7 1.7 – –

The market value of the economic entity’s operations is subject to cyclical variation because of changes in internationally determined metal prices and exchange rates. It is the economic entity’s policy to assess the recoverable amount of non-current assets using long-term metal price and exchange rate parameters. No assets are carried in excess of their recoverable amount.This basis of valuation is consistent with the existing use of the assets to the business as a going concern and does not purport to show the current market value of assets. Where this assessment indicates a loss in value of the assets of an operation, an appropriate write down is made.



14 Non-current Assets – IntangiblesGoodwill (note 12(b)) 43.7 27.7 – –Less: Accumulated amortisation 3.1 0.6 – –

40.6 27.1 – –

Reconciliation of movement in gross goodwillOpening balance 1 July 1999 27.7Ernest Henry fair value adjustment (note 9(d)) 15.8Additional acquisition costs 0.2Balance at 30 June 2000 43.7

15 Non-current Assets – OtherDeferred expenditure (note 1(o)) 43.6 40.1 – –Less: Accumulated amortisation 26.6 17.9 – –

17.0 22.2 – –Deferred foreign exchange hedge loss (note 1(c)) 44.8 – – –Deferred net option premiums 1.0 5.0 – –Other 4.3 3.8 – –

67.1 31.0 – –

16 Current Liabilities – Accounts PayableTrade creditors 232.3 274.9 – –Other creditors 8.0 17.6 – –

240.3 292.5 – –

17 Current Liabilities – BorrowingsBank overdrafts 0.2 3.4 – –Revolving bank credits 119.6 62.1 – –Transferable loan certificates – 123.5 – –Short term borrowings – controlled entities – – 367.2 342.5Lease liabilities – 0.3 – –

119.8 189.3 367.2 342.5

18 Current Liabilities – ProvisionsTaxation 5.2 11.4 – –Provision for deferred income tax – 7.3 – –Employee benefits 68.0 68.2 – –Restoration – mining operations 1.5 3.5 – –Restoration – smelting operations 5.3 12.2 – –Workers’ compensation 19.7 20.2 – –Acquisition hedge book (note 26(e)) 43.8 103.6 – –Sundry 4.3 8.7 – –

147.8 235.1 – –

19 Other LiabilitiesCurrent Deferred revenue 61.8 49.1 – –

Non-current Deferred revenue 199.0 256.5 – –Deferred foreign exchange hedge gain (note 1(c)) – 47.6 – –

199.0 304.1 – –

In May 1999, Pasminco Port Pirie Smelter (‘PPS’), a wholly owned entity of Pasminco Limited, entered into a five year forward silver sales agreement. PPS received gross proceeds of $US200m and in return is required to deliver silver on a quarterly basis over the term of the agreement. The deferred revenue represents the unfulfilled obligations to deliver silver under the terms of this forward sale agreement.




20 Non-current Liabilities – Accounts PayableSundry creditors 0.6 0.6 – –

21 Non-current Liabilities – BorrowingsTransferable loan certificates 179.3 – – –Long-term borrowings – controlled entities – – 353.9 175.8Revolving bank credits 1,006.8 1,006.5 – –Lease liabilities – 0.1 – –Bank bills 105.0 85.0 – –

1,291.1 1,091.6 353.9 175.8Summary of economic entity net debt positionThe economic entity’s net debt position may be summarised as follows:Bank overdrafts 0.2 3.4 – –Revolving bank credits 1,126.4 1,068.6 – –Bank bills 105.0 85.0 – –Transferable loan certificates 179.3 123.5 – –Lease liabilities – 0.4 – –Gross debt 1,410.9 1,280.9 – –Less: Cash (note 6) 88.5 24.6 – –Economic entity net debt at 30 June 1,322.4 1,256.3 – –Being: Current 119.8 189.3 – –

Non-current 1,291.1 1,091.6 – –Less: Cash (note 6) 88.5 24.6 – –Economic entity net debt at 30 June 1,322.4 1,256.3 – –

Financing arrangements

Total Facilities at Drawn at Undrawn at 30 June 30 June 30 June

2000 $m 1999 $m 2000 $m 1999 $m 2000 $m 1999 $mCurrent loan facilitiesLong-term 1,339 1,208 1,291 1,091 48 117Short-term 209 446 120 186 89 260

1,548 1,654 1,411 1,277 137 377These facilities comprise:(i) US dollar facilities–

Syndicated loan 725 909 725 818 - 91Transferable loan certificate facility 179 123 179 123 - -Revolving credit facilities 316 402 220 251 96 151

1,220 1,434 1,124 1,192 96 242(ii) Australian dollar facilities

Multi option facility 183 125 172 50 11 75Bank bill and cash facility 145 95 115 35 30 60

328 220 287 85 41 135

All borrowings, including bank overdrafts, are committed facilities secured by a negative pledge that imposes certain covenants on the economic entity. The negative pledge states that (subject to certain exceptions) the economic entity will not provide any other security over its assets and will ensure that the following financial ratios are met at 30 June:(a) the ratio of Current Assets to Current Liabilities will not fall below 110%; and (b) Total Liabilities will not exceed 65% of Total Tangible Assets.The syndicated loan facility is an amortising facility with a final maturity date of January 2008.The transferable loan certificates were fully drawn down with a maturity date of February 2003.All other facilities have varying maturity dates through to December 2002.



22 Non-current Liabilities – ProvisionsEmployee benefits 33.8 33.9 – –Deferred income tax 65.1 79.5 – 5.5Restoration – mining operations 22.7 17.4 – –Restoration – smelting operations 110.7 113.8 – –Workers’ compensation 19.5 17.7 – –Acquisition hedge book (note 26(e)) 66.1 – – –Sundry 0.4 0.4 – –

318.3 262.7 – 5.5

23 Shareholders’ Equity – Share Capital(a) Issued and fully paid up ordinary shares (1,125,157,999)

(1999 – 1,124,653,499) 1,543.9 1,543.1 1,543.9 1,543.1

(b) Employee share schemeOn 12 November 1999, 9,906,500 options at an exercise price of $1.58 were issued over ordinary shares (refer note 39).

(c) Shares issued during the yearAt 30 June 1999, in accordance with the Company Law Review Act 1998, the balance in the share premium reserve totalling $418.5 million was transferred to issued and paid up capital (refer note 24).During the year, 504,500 share options were exercised by Budel Zink BV employees and employees leaving the Group and in accordance with the specialprovisions of the employee share scheme (refer note 39).

24 Shareholders’ Equity – ReservesShare premium account – – – –Capital reserve – – – –Foreign currency translation 23.0 11.7 – –

23.0 11.7 – –Movements in reserves:Share premium accountBalance at the beginning of the financial year – 418.5 – 418.5Transfer to paid up share capital (note 23(c)) – (418.5) – (418.5)Balance at the end of the financial year – – – –Capital reserveBalance at the beginning of the financial year – 4.6 – –Transfer to retained profits – (4.6) – –Balance at the end of the financial year – – – –Foreign currency translationBalance at the beginning of the financial year 11.7 30.2 – –Transfer to retained profits (11.5) – – –Gain/(loss) on translation of overseas controlled entities 22.8 (18.5) – –Balance at the end of the financial year 23.0 11.7 – –




25 Receivables and Payables not Effectively Hedged(a) Current foreign exchange exposures – economic entity, at 30 June.

Of the $896.8 million current assets (1999 – $1,111.6 million) and $569.7 million current liabilities (1999 – $766.0 million) disclosed in the balance sheet, receivables and payables denominated in foreign currencies not effectively hedged are:(A$ equivalents)(i) Current assets UK pounds 2.4 0.7 – –US dollars 42.0 18.6 – –Other 26.6 24.2 – –

71.0 43.5 – –(ii) Current liabilities UK pounds 0.4 0.8 – –US dollars 5.4 8.8 – –Other 3.4 2.9 – –

9.2 12.5 – –(iii) Net current assets/(current liabilities) UK pounds 2.0 (0.1) – –US dollars 36.6 9.8 – –Other 23.2 21.3 – –

61.8 31.0 – –(b) Non-current foreign exchange exposure – economic entity, at 30 June.

There were no material non-current foreign exchange exposures as at 30 June 2000 or 30 June 1999. Hedging of the loans denominated in US dollars is undertaken by utilising the natural hedge afforded by the economic entity’s future US dollar denominated revenue stream arising from metal andconcentrate sales.

26 Financial InstrumentsDerivatives, including Off-balance Sheet RiskCurrency hedging is undertaken in order to avoid or minimise possible adverse effects of movements in exchange rates. Commodity hedging is primarilyundertaken to ensure Pasminco is exposed to a floating commodity price. The economic entity manages the exposures using a comprehensive set of policiesand procedures approved by the Board of Directors. Financial Risk is managed centrally, and no speculative trading has taken place throughout the current year.Instruments used by the economic entity to hedge exposures to exchange rates and commodity prices include forward foreign exchange contracts, currencyoptions and metal futures. Accounting for these instruments is outlined in notes 1(b) and 1(c).(a) Interest Rate Risk ManagementThe economic entity is exposed to interest rate volatility on deposits, borrowings and operating leases. In 1999, the acquisition of Savage Resources Limitedexposed Pasminco to fixed interest due to interest rate swaps whereby the economic entity agreed to pay interest on a fixed rate basis and receive interest ona floating rate basis. During the year, the economic entity restructured unmatured US$ interest rate swaps, acquired as a result of the takeover, leaving the economicentity exposed to floating rates of interest on US$ and a fixed interest rate on an insignificant portion of A$ borrowings. The positions at 30 June are included in thetables below.

Maturity date of transactions 12 months ending

30 June 2000 30/06/01 30/06/02 30/06/03 30/06/04 30/06/05 Total& beyond

Interest Rate Swap (A$m) 0.8 0.8 0.9 0.7 1.0 4.2Rate (%) 6.0 6.0 6.0 6.0 6.0

Maturity date of transactions 12 months ending

30 June 1999 30/06/00 30/06/01 30/06/02 30/06/03 30/06/04 Total& beyond

Interest Rate Swap (US$m) 14.0 14.0 14.0 14.0 7.0 63.0Rate (%) 7.2 7.2 7.2 7.2 7.2Interest Rate Swap (A$m) 0.7 0.8 0.8 0.9 1.7 4.9Rate (%) 6.0 6.0 6.0 6.0 6.0


26 Financial Instruments (continued)The economic entity’s exposure to interest rate risk and effective weighted average interest rate by maturity period is set out in the following table.

30 June 2000Interest rate risk exposures

Notes Floating Floating Non-interest Totalinterest rate % interest rate $m bearing $m $m

Financial AssetsCash 6 5.40 16.9 – 16.9Deposits 6 6.00 71.6 – 71.6Trade debtors 7 – 143.3 143.3Loan to associate 7 8.27 99.8 – 99.8Other debtors 7,11 – 36.1 36.1Investments in associates 9 – 57.7 57.7

188.3 237.1 425.4

Financial LiabilitiesTrade creditors 16 – 232.3 232.3Other creditors 16,20 – 8.6 8.6Bank overdrafts 17 9.25 0.2 – 0.2Other borrowings 17,21 7.31 1,410.7 – 1,410.7

1,410.9 240.9 1,651.8

Weighted average interest rate 7.33

Net financial assets/(liabilities) (1,222.6) (3.8) (1,226.4)

30 June 1999Interest rate risk exposures

Notes Floating Floating Non-interest Totalinterest rate % interest rate $m bearing $m $m

Financial AssetsCash 6 4.11 19.2 – 19.2Deposits 6 4.70 5.4 – 5.4Trade debtors 7 – 234.4 234.4Loan to associate 7 6.87 104.6 – 104.6Other debtors 7,11 – 204.1 204.1Investments in associates 9 – 70.7 70.7

129.2 509.2 638.4

Financial LiabilitiesTrade creditors 16 – 274.9 274.9Other creditors 16,20 – 18.2 18.2Bank overdrafts 17 8.00 3.4 – 3.4Other borrowings 17,21 5.97 1,277.5 – 1,277.5

1,280.9 293.1 1,574.0

Weighted average interest rate 5.93

Net financial assets/(liabilities) (1,151.7) 216.1 (935.6)

The weighted average interest rate received on financial assets and paid on financial liabilities was as follows:

Average Averageinterest rate % interest rate %

2000 1999

Financial AssetsCash and cash equivalents 5.64 4.82Loan to associate 7.62 6.58

Financial Liabilities

Borrowings 6.45 5.97




26 Financial Instruments (continued)

(b) Foreign Exchange Risk ManagementThe economic entity enters into forward exchange contracts and currency options to hedge capital obligations and expenses and revenues denominated inforeign currencies. The AUD/CAD and a significant portion of the AUD/USD forward foreign exchange contracts in existence at 30 June 1999 were restructuredinto options which comply with Board approved hedging policies during the year. The following table sets out at balance date the outstanding foreign currencycontracts and foreign currency options, the weighted average contracted exchange rates and settlement dates of outstanding contracts:

30 June 2000Forward Foreign Exchange Contracts

Maturity date of transactions 12 months endingAverage 30/06/01 30/06/02 30/06/03 30/06/04 TotalContract Price & beyond

A$m A$m A$m A$m A$mUSD/AUD 0.68 40.9 23.8 9.2 2.9 76.8USD/NLG 2.355 26.6 – – – 26.6USD/European currencies Various 26.8 0.5 – – 27.3

Currency OptionsMaturity date of transactions 12 months ending

30/06/01 30/06/02 30/06/03 30/06/04 Total& beyond

A$m A$m A$m A$m A$mAUD/USD purchased 698.2 646.6 769.9 1,155.7 3,270.4Average rate 0.6593 0.6551 0.6867 0.7051AUD/USD sold 773.8 697.5 799.7 1,200.1 3,471.1Average rate 0.5949 0.6073 0.6611 0.6858

30 June 1999Forward Foreign Exchange Contracts

Maturity date of transactions 12 months endingAverage 30/06/00 30/06/01 30/06/02 30/06/03 Total

Contract Price & beyondA$m A$m A$m A$m A$m

AUD/GBP 0.417 2.4 – – – 2.4USD/AUD 0.7087 264.0 83.1 65.0 267.5 679.6AUD/CHF 1.0127 0.1 – – – 0.1USD/CAD 1.3360 1.5 1.5 1.5 6.6 11.1USD/European currencies various 25.1 2.8 – – 27.9

Currency OptionsMaturity date of transactions 12 months ending

30/06/00 30/06/01 30/06/02 30/06/03 Total& beyond

A$m A$m A$m A$m A$mAUD/USD purchased 431.8 568.7 402.5 226.6 1,629.6Average rate 0.6837 0.6612 0.6360 0.6542AUD/USD sold 519.3 674.2 481.7 455.4 2,130.6Average rate 0.6172 0.5962 0.5855 0.6713



(c) Commodity Price Risk ManagementThe economic entity is exposed to commodity price volatility on commodity sales made by mines and smelters and raw materials purchased by the smelters.The economic entity enters into zinc, lead and silver futures and swap contracts to hedge commodity exposures with the objective of obtaining the relevantcommodity price existing at the date that the transaction is settled.Unlike previous years there are no lead futures as there have been no forward sales of lead at or beyond 30 June 2000.The gold and copper options/futures positions that were acquired last year as a part of the Savage Resources hedge book have now been closed-out.Aluminium is used by the Hobart smelter in the process of creating a zinc alloy known as EZDA. The aluminium purchase has been hedged using aluminium metal futures, to fix this element of EZDA production costs thus protecting against any adverse fluctuations in the aluminium price. The following outlines metals futures contracts entered into as at:

30 June 2000Metals Futures Contracts

Maturity date of transactions 6 months endingAverage Price 31/12/00 30/06/01 31/12/01 30/06/02 Total

& beyondUS$ per tonne A$m A$m A$m A$m A$m

ZincContracts purchased 1,121 62.5 18.8 18.1 – 99.4Contracts sold – – – – – –Net position 62.5 18.8 18.1 – 99.4Aluminium Contracts purchased 1,551 5.0 5.0 5.0 26.8 41.8Contracts sold – – – – – –Net position 5.0 5.0 5.0 26.8 41.8Silver US$ per ounceContracts purchased 5.20 1.7 – – – 1.7Contracts sold – – – – – –Net position 1.7 – – – 1.7

30 June 2000Commodity Swaps

Maturity date of transactions 12 months ending30/06/01 30/06/02 30/06/03 30/06/04

& beyond Total

Silver Swap (million ounces) 9.0 9.0 9.0 11.5 38.5US$ per ounce 5.47 5.47 5.47 5.47

30 June 1999Metals Futures Contracts

Maturity date of transactions 6 months endingAverage Price 31/12/99 30/06/00 31/12/00 30/06/01 Total

& beyondUS$ per tonne A$m A$m A$m A$m A$m

ZincContracts purchased 1,079 85.3 26.3 6.9 – 118.5Contracts sold 1,054 (21.5) – – – (21.5)Net position 63.8 26.3 6.9 – 97.0LeadContracts purchased 498 1.4 – – – 1.4Contracts sold – – – – – –Net position 1.4 – – – 1.4Silver US$ per ounceContracts purchased 5.08 0.5 – – – 0.5Contracts sold 5.25 (7.6) (7.6)Net position (7.1) – – – (7.1)Gold A$ per ounceContracts purchased – – – – – –Contracts sold 745 (4.5) (4.5) (4.5) (44.6) (58.1)Net position (4.5) (4.5) (4.5) (44.6) (58.1)




30 June 1999Commodity Swaps

Maturity date of transactions 12 months ending30/06/00 30/06/01 30/06/02 30/06/03 30/06/04 Total

& beyond

Silver Swap (million ounces) 6.8 9.0 9.0 9.0 11.5 45.3US$ per ounce 5.47 5.47 5.47 5.47 5.47Copper Forwards (tonnes) 2,050 – – – – 2,050USc/lb 92.7 – – – –Put Options Bought (tonnes) 3,000 – – – – 3,000USc/lb 92.0 – – – –Call Options Sold (tonnes) 5,050 – – – – 5,050USc/lb 102.1 – – – –

(d) Credit RiskCredit risk represents the loss that would be recognised if the counterparties to financial instruments fail to perform as contracted.The credit risk on financial assets of the economic entity which have been recognised on the balance sheet is generally the carrying amount, net of any provisionsfor doubtful debts. The economic entity minimises concentration of credit risk by undertaking transactions with a large number of customers in various countries.The economic entity is not materially exposed to any individual customer.Credit risk in trade receivables is also managed in the following ways:– payment terms are generally 30 days;– a regular risk assessment process is undertaken with credit limits imposed on customers;– export sales are predominantly covered by a letter of credit with approved financial institutions; and– credit insurance is obtained for export sales debtors on open terms.Credit risk arising from dealings in financial instruments and cash is controlled by a strict policy of credit approvals, limits and monitoring procedures. The economic entity has no significant concentration of credit risk with any single counterparty. Credit exposure of foreign currency and commodity derivatives is represented by the net fair value of the contracts, as disclosed.

(e) Net Fair ValueThe following methods and assumptions were used to estimate the net fair values.

Cash & Cash Equivalents, Debtors, Creditors, Dividends Payable and Short-term Borrowings. The carrying amounts of these financial instruments approximate net fair value because of their short maturity.

Long-term BorrowingsThe carrying amount of these financial instruments approximate their net fair value because interest is charged at the prevailing market rate.

Derivative Transactions (forward exchange contracts, currency options, commodity futures, options and swaps and interest rate swap transactions)The net fair value of all derivative transactions is measured using the marked to market valuation calculation as at 30 June 2000.As part of the acquisition of Savage Resources Limited, a provision was established to provide for expected losses associated with acquired derivativetransactions, which were restructured during the year in accordance with Board approved policy. At 30 June 2000, A$109.9m of this provision remainsand will be credited to the profit and loss over the next 5 years as the underlying derivative transactions mature.At balance date, the marked to market position of the transactions was represented as follows:

Consolidated Consolidated2000 $m 1999 $m

Foreign currency forward contracts – (26.1)Foreign currency options – (44.3)Metals futures and options contracts – 23.7Interest rate swaps – (2.5)

– (49.2)Off Balance SheetForeign currency forward contracts (4.5) (16.0)Foreign currency options (221.6) 61.8Metals futures contracts 1.7 (0.5)Interest rate swaps 0.2 –Commodity swaps (14.8) (15.1)

(239.0) 30.2The realised gains or losses on the off balance sheet foreign currency forward contracts will be brought to account when the underlying transaction occurs.In the case of capital expenditures the realised losses have been capitalised and are being amortised over the period of the project.Off balance sheet foreign currency options hedge revenue streams denominated in USD. The unrealised gain on these contracts will be realised and matchedagainst future revenue received. The options hedge a percentage of revenue from July 2000 to June 2005.

Liquidity RiskLiquidity risk arises from the possibility that a market for derivatives may not exist in some circumstances. To counter this risk, the economic entity only usesderivatives in highly liquid markets.

27 Contingent Liabilities

Guarantees

During the course of the 1994 financial year certain warranties and indemnities were issued by the entity in relation to the sale of UK based assets of the Group.Pasminco Limited has received a claim for approximately $0.3 million is respect of one of these indemnities. Liability has been denied and directors do not considerthere is a need to make a provision for this amount in the financial statements.Pasminco Australia Limited has guaranteed a residual value of $6.8 million (1999: $6.4 million) for a shiploader it is currently operating under lease.Pasminco Limited has, with certain exceptions, guaranteed all the obligations of Pasminco Finance Limited.Pasminco Limited has guaranteed the obligations of certain controlled entities in relation to Banker’s Undertakings provided by the Company’s bankers to the controlled entities’ respective Workers’ Compensation authorities.Pasminco Limited has guaranteed the obligations of Pasminco Zinc, Inc in relation to obligations under a loan facility.Pasminco Limited has guaranteed certain obligations of Port Pirie Smelter (PPS) in relation to a silver sale agreement between PPS and Pirie Silver Company Pty Ltd.Pasminco Limited has guaranteed all the obligations of Pasminco Metals Pty Ltd (PM) in relation to a sales agency agreement between PM and Pirie SilverCompany Pty Ltd.Pasminco Limited has guaranteed certain monetary liabilities and non-monetary obligations of Pasminco Century Mine Limited in relation to the sale and leaseback of the pipeline, port facility and transfer vessel operated by the Century mine.Pasminco Limited has guaranteed certain obligations of Budel Zink BV (BZBV) in relation to the receivables acquisition and servicing arrangement betweenPasminco Global Trading Pty Ltd, BZBV, Beach Capital and ANZ Capel Court Limited.

Pasminco Limited has undertaken to render continuing financial support to certain wholly owned controlled entities that have negative shareholders’ funds to enable maintenance of operations in the ensuing twelve months.In relation to the Pasminco Century Project, the following bank guarantees have been entered into:– a $0.7 million guarantee to the Queensland Department of Transport in relation to the security deposit under the Pipeline Corridor Licence (1999: $0.7 million);– a $0.25 million guarantee to the Gulf Aboriginal Development Corporation in relation to environmental management (1999: $0.25 million).Cross guarantees by Pasminco Limited and other Group companies are as described in note 12(c).

Legal ActionOn 12 May 2000, following the dismissal of similar proceedings in the Federal Court, legal proceedings were commenced against Pasminco Limited, PasmincoCockle Creek Smelter Pty Ltd and Pasminco Port Pirie Pty Ltd in the Victorian Supreme Court. The current litigation seeks to establish a class of all propertyowners and occupiers within a five kilometre radius of Cockle Creek and Port Pirie smelters who allege a diminution of property value and all persons who allegepersonal injuries as a consequence of emissions from those smelters. Liability is denied and a hearing to consider whether the matter should be struck out hasbeen set for 2 November 2000 in the Supreme Court of Victoria. Accordingly, the amount of the contingent liability which may arise in respect of the claims, if any, cannot be quantified and no provision has been made in the financial statements.

Associated CompaniesA $21 million Indemnity (1999: $21 million) has been provided by Ernest Henry Mining Pty Limited to the National Australia Bank for bank guarantees provided to the Department of Mines and Energy for Environmental Bonds. Pasminco’s 49% share of this indemnity is $10.3 million (1999: $10.3 million).

OtherThe NSW Department of Mineral Resources (DMR) has lodged two claims for additional royalties amounting to $9.2 million against Pasminco Broken Hill mine. The DMR’s claim is based on its interpretation of the non-deductibility of exploration expenditure in prior years where losses were incurred. Upon receipt of legaladvice, Pasminco Broken Hill Mine has lodged an appeal against these claims and has not taken up a liability in respect of this matter.

The economic entity has contingent liabilities in respect of termination benefits which may arise pursuant to agreements entered into with certain managementemployees. The maximum amount of contingent liability is dependent upon the circumstances in which the employment is terminated. Accordingly, no provisionhas been made in the financial statements.



Notes to the Financial StatementsConsolidated Consolidated Pasminco Ltd Pasminco Ltd

2000 $m 1999 $m 2000 $m 1999 $m

28 Commitments for Expenditure

Controlled entities

(a) Capital expenditure contracted for at balance date but not provided for is as follows:Payable not later than one year 28.1 57.4 – –Payable later than one year but not later than two years 0.1 0.2 – –

28.2 57.6 – –In the previous year the capital expenditure obligations predominantly related to contracts entered into for the construction and operation of the PasmincoCentury Project.

(b) Lease expenditure commitmentsNon-cancellable operating leases:Not later than one year 52.9 37.4 – –Later than one year and not later than five years 156.4 158.8 – –Later than five years 95.5 119.8 – –Aggregate lease expenditure contracted for at balance date but not provided for 304.8 316.0 – –

Associates(a) Non-cancellable operating leases:

Not later than one year 7.3 2.3 – –Later than one year and not later than five years 27.5 9.7 – –Later than five years 9.4 0.1 – –

44.2 12.1 – –(b) Other Commitments:

Infrastructure costsNot later than one year 15.1 15.5 – –Later than one year and not later than two years 15.2 15.5 – –Later than two years and not later than five years 61.7 62.0 – –Later than five years 86.5 104.0 – –

178.5 197.0 – –

Consolidated Consolidated Pasminco Ltd Pasminco Ltd2000 $’000 1999 $’000 2000 $’000 1999 $’000

29 Auditors’ Remuneration

Amounts received, or due and receivable by the auditors of Pasminco Limited for:

– an audit or review of the financial statements of the entity and any other entity in the economic entity 329 334 50 50

– other services in relation to the entity and any other entity in the economic entity 71 268 – –400 602 50 50

Amounts received or due and receivable by auditors other than the auditors of Pasminco Limited for:– an audit or review of the financial statements of the entity and any other entity

in the economic entity 151 146 – –551 748 50 50

30 Remuneration of Directors

(a) The cost of amounts paid or payable, or otherwise made available, in relation to all Directors of each entity in the economic entity, directly or indirectly, by the entities of which they are directors or any related party 1,293 1,822 – –

(b) The cost of amounts paid or payable, or otherwise made available, to Directors of Pasminco Limited, directly or indirectly, from the entity or any related party – – 1,293 1,822

(c) Number of Directors of Pasminco Limited whose total remuneration falls within the following bands:

50,000 – 59,999 5 5100,000 – 109,999 1 1430,000 – 439,999 – 1910,000 – 919,999 1 –

1,000,000 – 1,009,999 – 1(d) Details of options in Pasminco Limited shares granted to Directors during the year ended 30 June 2000 are set out in the Directors’ Report. Details

of the employee share scheme are set out in note 39. Refer note 31(c) for details on Manager Incentive Plan payments.


2000 $’000 1999 $’000 2000 $’000 1999 $’00031 Remuneration of Executives(a) The cost of amounts paid or payable to Executive Officers of the economic

entity and the Company whose remuneration is $100,000 or more from entities in the economic entities and related entities in connection with the management of the affairs of these entities. 10,332 8,367 3,504 3,561

(b) The number of Executive Officers of the economic entity and the Company whose remuneration was at least $100,000 is shown in the following bands:

110,000 – 119,999 2 – – –120,000 – 129,999 1 – – –130,000 – 139,999 1 1 – –140,000 – 149,999 2 – 1 –150,000 – 159,999 2 2 – –160,000 – 169,999 2 2 – –170,000 – 179,999 2 4 – –180,000 – 189,999 1 2 – –190,000 – 199,999 3 1 – –200,000 – 209,999 4 3 3 –210,000 – 219,999 2 2 – –220,000 – 229,999 2 1 – –230,000 – 239,999 – 2 – –240,000 – 249,999 1 1 – –250,000 – 259,999 3 2 – –260,000 – 269,999 – 2 – 1270,000 – 279,999 1 1 1 –280,000 – 289,999 – 1 – 1290,000 – 299,999 – 1 – 1300,000 – 309,999 1 – – –350,000 – 359,999 – 1 – 1370,000 – 379,999 1 1 1 1430,000 – 439,999 – 1 – 1520,000 – 529,999 – 1 – 1560,000 – 569,999 1 – 1 –690,000 – 699,999 1 – – –740,000 – 749,999 1 – 1 –910,000 – 919,999 1 – 1 –

1,000,000 – 1,009,999 – 1 – 11,170,000 – 1,179,999 1 – – –

(c) The above table excludes the remuneration of executives who work mainly outside of Australia.The 1999 Consolidated and Pasminco Limited amounts have been restated to include payments made under the 1998/1999 Manager Incentive Plan which.were not available at the time of publishing the previous disclosure.The 2000 Consolidated and Pasminco Limited amounts do not include potential payments available under the 1999/2000 Manager Incentive Plan as they arenot available at the time of publishing the disclosure.Remuneration is costed on a basis consistent with that used for Directors and the five highest paid officers, including, where appropriate, valuation for share options accepted by applicable executives.

(d) Executive Officers of the economic entity and the Company whose remuneration is $100,000 or more were granted 1,347,500 options (1999 – 1,650,000) over ordinary Pasminco Limited shares during the year ended 30 June 2000. Options exercised during the year totalled 310,000 (1999 – nil). Details of theemployee share scheme are set out in note 39.

Consolidated Consolidated2000 1999

32 Earnings per ShareBasic earnings per share – cents 2.1 (0.7)Basic earnings per share before abnormal items – cents 3.1 (0.7)Weighted average number of ordinary shares outstanding during the financial year – million 1,125.0 1,124.6

Diluted earnings per share is not materially different from basic earnings per share.



33 Superannuation Commitments

The commitments not provided for in the accounts of the economic entity as at 30 June 2000 are:

Economic entity companies participate in a number of superannuation and retirement benefit plans. The plans provide benefits on retirement, disablement, death,retrenchment or withdrawal from service, the principal types of benefits being lump sum defined benefits and lump sum accumulation benefits. Contributions are made by employees and the employing corporations as percentages of salary or wages or specified dollar amounts as required by the relevant trust deeds.The latest actuarial assessments for those plans subject to actuarial supervision were as follows:

Broken Hill Mine Employees’ Pension Fund, reviewed as at 30 June 1999 by R R Codron FIAA of William M Mercer Pty Ltd, Pasminco Superannuation Plan,reviewed as at 1 November 1999 by R R Codron FIAA of William M Mercer Pty Ltd, Sulphide Pensions Plan reviewed as at 31 December 1998 by R R CodronFIAA of William M Mercer Pty Ltd. Savage Zinc, Inc. (Pasminco) Hourly Employees’ Pension Plan; Savage Zinc, Inc. (Pasminco) Salaried Employees’ RetirementPlan; The Pension Plan of Savage Zinc, Inc. (Pasminco) for Bargaining Unit Employees; SZI/JC Pension Plan for Bargaining Unit Employees; and SZI SupplementalExecutive Retirement Plan, all had actuarial assessments performed as at 30 June 1999 by V.N. Williams FSA of Bryan, Pendleton, Swats & McAllister, LLC.

The last actuarial review of the Broken Hill Mine Employees’ Pension Fund indicated that there were sufficient assets to cover the vested benefits payable on voluntary termination of each and every employee member. In the unlikely event of the compulsory termination of each and every employee member at 30 June 1999 there would have existed a potential deficiency of Fund assets of $4.8 million. Other than in the event of the closure of mining operations and the resultant compulsory termination of each and every employee member, no contingent liability would have arisen had the Fund been terminated as at 30 June 1999. The Company has raised its contributions to compensate for the known increased level of compulsory terminations over recent years and to finance future prospective liabilities.The liabilities in respect of members of the BHAS Employees Superannuation Fund were crystallised into accumulation balances as at 30 June 2000. The Company made a special contribution of $600,000 to meet the shortfall between the net assets of the Fund and the total of the members’ “fully preserved benefits”. These amounts were then transferred to the industry fund, C+BUS which is an accumulation fund.The assets and liabilities of the Pasminco Superannuation Fund were transferred to the Pasminco Superannuation Plan on 30 November 1999. The PasmincoSuperannuation Plan is a sub-plan under the Mercer Retirement Trust. The last actuarial review of the Pasminco Superannuation Plan’s financial position carriedout as at 1 November 1999 indicated that the Plan’s assets were sufficient to satisfy all benefits that would have been vested under the Plan in the event of:termination of the Plan; voluntary termination of the employment of each employee on the initiative of that employee; and compulsory termination of theemployment of each employee by the employer.

The last actuarial review of the Sulphide Pensions Fund as at 31 December 1998 indicated that the Fund’s assets were sufficient to satisfy all benefits that wouldhave been vested under the Fund in the event of: termination of the Pasminco Superannuation Plan; voluntary termination of the employment of each employeeon the initiative of that employee; and compulsory termination of the employment of each employee by the employer. The most recent actuarial assessments of theSavage Zinc plans were as at 30 June 1999. These assessments showed the plans had a surplus of funds of A$5.261 million (US$3.472 million) at 30 June 1999.

With the exception of the contribution obligations in respect of those members of the Pasminco Superannuation Plan who were members of the CRA StaffProvident Fund immediately prior to joining the Pasminco Superannuation Plan, the contribution obligations to the respective plans are legally enforceable only up to the date upon which any such obligation is terminated by appropriate action pursuant to the relevant trust deed, subject to the terms of any relevant awardagreement. In respect of the ex-members of the CRA Staff Provident Fund, the obligation to contribute is enforceable to the extent necessary to finance thedefined benefits provided under the Rules of the Pasminco Superannuation Plan in relevant circumstances.

The accrued benefits and Fund assets at net market value at the previous actuarial review dates, together with the Fund assets at net market value and the vestedbenefits disclosed in the Fund’s most recently available statements, are as follows:

Broken Hill Pasminco Sulphide SavageMine Employees’ Superannuation Pensions Zinc

Pension Fund Plan Fund Plans

Fund assets at net market value at actuarial review date 44,746 145,858 16,365 28,326Accrued benefits at actuarial review date 47,839 143,080 13,947 23,065Excess of Fund assets over accrued benefits (3,093) 2,778 2,418 5,261Date of most recent actuarial review 30/06/99 01/11/99 31/12/98 30/06/99Fund assets at net market value at most recently available year end 44,746 145,858 17,330 32,683Vested benefits at most recently available year end 41,473 140,523 14,718 20,001Date of most recent year end 30/06/99 01/11/99 31/12/99 31/12/99

Notes:1. Accrued benefits have been determined based on the amounts calculated by the Fund’s actuary at the most recent actuarial review. These amounts represent the present value

of the benefits which the Fund is presently obliged to pay at some future date as a result of membership of the Fund as at the date of the actuarial review.2. Vested benefits are benefits which are not conditional upon the continued membership of the Fund or any factor other than resignation from the Fund.3. The value of the accrued benefits at the last actuarial reviews did not make any specific allowance for retrenchment benefits with the exception of the Broken Hill Mine Employees’

Pension Fund where the value of the accrued retrenchment benefits is included owing to the announced closure of the mine.4. United States dollar denominated amounts relating to Savage Zinc Plans at the most recent year end have been converted to Australian currency at A$1 = US$0.6022

(1999 $A1=US$0.66).


34 Segment Information

Industry segments Zinc & Lead Other Intersegment TotalEliminations

2000 1999 2000 1999 2000 1999 2000 1999$m $m $m $m $m $m $m $m

External sales 1,777.8 1,487.9 100.5 76.5 – – 1,878.3 1,564.4Intersegment sales – – – – – – – –Other revenue 128.1 233.9 20.0 6.9 (9.4) (5.1) 138.7 235.7Total Revenue 1,905.9 1,721.8 120.5 83.4 (9.4) (5.1) 2,017.0 1,800.1Segment result before income tax 26.9 (14.3) 4.1 10.8 – (5.0) 31.0 (8.5)Segment assets 3,732.1 3,583.3 157.5 305.6 – – 3,889.6 3,888.9

The principal activity of the economic entity comprises the conduct of an integrated lead and zinc business, including exploration for and mining of ores,concentrating to saleable concentrates, smelting of metals and marketing in a primary form. The other industry segment relates to the Copper and Coal operations acquired as part of the February 1999 acquisition of the Savage Resources Limited Group. The coal operations were sold on 1 July 1999.

Geographical segments Australia Europe USA Intersegment TotalEliminations

2000 1999 2000 1999 2000 1999 2000 1999 2000 1999$m $m $m $m $m $m $m $m $m $m

External sales 1,184.5 1,074.2 440.3 391.3 253.5 98.9 – – 1,878.3 1,564.4Intersegment sales 88.3 10.8 16.1 19.9 – – (104.4) (30.7) – –Other revenue 163.0 240.1 12.1 33.4 1.3 0.2 (37.7) (38.0) 138.7 235.7Total Revenue 1,435.8 1,325.1 468.5 444.6 254.8 99.1 (142.1) (68.7) 2,017.0 1,800.1Segment result before income tax (23.0) (61.3) 56.7 48.1 2.4 4.7 (5.1) – 31.0 (8.5)Segment assets 3,217.1 3,240.6 280.5 269.4 395.4 378.9 (3.4) – 3,889.6 3,888.9

Compilation of segment information:The division of the economic entity’s results and assets into geographical and industry segments has been ascertained by reference to direct identification of assets and revenue/cost centres and where interrelated segment costs exist, an allocation has been calculated on a pro-rata basis of the identifiable assets and/or costs. Intersegment pricing is on an arms-length market basis. Segment results reflect the allocation of the economic entity’s net external finance charges apportioned on the basis of total assets employed (intra group interest has been eliminated).

35 Franked Dividends Consolidated Consolidated Pasminco Ltd Pasminco Ltd

2000 1999 2000 1999$m $m $m $m

(a) The franked portion of dividends paid during the year – – – –(b) Amount of dividends provided for in the current year. – – – –(c) Franking account balance at 30 June franked @ 36 cents 0.3 0.3 – –

The above amounts represent the balances of the franking accounts as at the end of the financial year, adjusted for:(a) franking credits that will arise from the payment of income tax payable as at the end of the year,(b) franking debits that will arise from the payment of dividends proposed as at the end of the year, and(c) franking credits that may be prevented from being distributed in the subsequent year.



36 Related PartiesRelated parties of Pasminco Limited (ultimate parent entity) fall into the following categories:

Controlled EntitiesTransactions with entities in the wholly owned Group during the year included sales on a commercial basis, interest charged/earned on a commercial basis, dividends paid and received, hedging transactions, asset sales, borrowings on a commercial basis and tax loss transfers.

DirectorsThe names of persons who were Directors of the chief entity as at the date of this report are set out in the Directors’ Report. Bryan Davis, Executive Director –Mining, retired on 30 June 1999. There have been no changes in Directors since 30 June 1999.

Transactions of Directors and Director Related Entities Concerning Shares or OptionsThe aggregate number of shares acquired by Directors of the Company and their Director related entities in the Company was 71,371 (1999 – nil ) fully paid ordinary shares and 300,000 (1999 – 400,000) options under the Pasminco Limited Employee Option Plan. There were nil shares and options disposed of by Directors and their Director related entities in the Company. The aggregate number of shares and share options held directly, indirectly or beneficially by Directors and their Director related entities in the Company at balance date was 146,745 (1999 – 80,374) fully paid ordinary shares, and 1,250,000 (1999 – 1,300,000) options under the Pasminco Limited Employee Option Plan.Information on the remuneration of Directors is set out in note 30.

Superannuation FundInformation in respect of the entity’s superannuation funds is set out in note 33.

37 Joint VenturesA controlled entity, Pasminco Port Pirie Smelter Pty Limited, participates in the Australian Refined Alloys (ARA) joint venture to produce and market lead alloys ex-secondary materials. Pasminco Port Pirie Smelter Pty Limited has a 50% interest in the assets, liabilities and output of this joint venture. The share of assets employed in the ARA joint venture is included in the economic entity balance sheet under the following classifications.

Consolidated Consolidated 2000 $m 1999 $m

Non-current assets – property, plant and equipment 3.5 3.3Current assets – receivables 2.6 1.2Current assets – inventories 1.5 1.9Share of assets employed in the ARA joint ventures 7.6 6.4Output representing the economic entity’s share of the ARA joint venture’s value of production 12.0 10.8Profit contribution to the economic entity result (before tax) 1.9 2.7

In the previous year, Pasminco held an interest in the following joint ventures as a result of the acquisition of the Savage Resources Limited Group.Joint Venture Ownership Principal

Interest % ActivityLiddell 67.5 Coal miningFoybrook 67.5 Coal miningGlendell 67.5 Coal mine developmentTogara North 33.33 Coal explorationFor the year ended 30 June 1999, the above joint ventures contributed a pre tax profit of $3.4 million. The value of Pasminco’s share of the coal mined since the acquisition date was $24.3 million. Effective 1 July 1999, these coal joint ventures were sold.Included in the assets and liabilities of the economic entity in the previous year are the following items which represent the economic entity’s interests in the assets and liabilities employed in the coal joint ventures. As the coal joint ventures were sold with effect from 1 July 1999 all of the assets and liabilities were shown as current.

Current AssetsCash – 0.2Receivables – 10.3Inventories – 6.0Land held for resale – 4.1Mine property, property, plant and equipment held for resale – 58.9Other – 14.7

– 94.2Current LiabilitiesAccounts payable – 15.9Borrowings – 0.2Provisions – 9.9

– 26.0


2000 $m 1999 $m 2000 $m 1999 $m38 Statement of Cash Flows(a) Reconciliation of operating profit/(loss) after tax to net cash provided by operating activities

Operating profit/(loss) after tax and abnormal items 23.4 (8.3) 12.0 (26.3)Depreciation and amortisation 223.5 158.3 – –Bad debt provision 2.0 0.2 – –Provision for diminution in investment in controlled entity – – – 23.1Provision for diminution in controlled entity receivable – – – 8.2Interest and finance charges paid 62.0 43.4 12.7 12.4Interest received (10.7) (8.0) (39.4) (20.0)Share of profits of associates not received as dividends (2.8) (1.9) – –Net (profit)/loss on disposal of non-current assets 0.3 1.0 – –Net exchange differences 2.0 22.5 3.2 –Loss on liquidation of controlled entity – – 1.1 –Change in assets and liabilities

Receivables – current 65.2 (2.8) 15.9 4.2Receivables – non-current 0.8 (8.2) – –Payables – current 54.8 28.5 – –Payables – non-current – (0.1) – –Other liabilities – current 12.7 49.1 – –Other liabilities – non-current (57.5) 256.5 – –Inventories (75.4) (20.2) – –Provisions 8.0 (37.0) – –Prepayments (9.2) 5.0 – –Income tax payable (6.3) (19.9) – (2.5)Deferred income tax (21.7) (16.9) (5.5) 0.9Future income tax benefit 13.2 (5.8) – –Other 0.4 0.5 (0.1) –

Net cash provided by operating activities 284.7 435.9 (0.1) –

39 Employee Share SchemeAfter shareholder approval was obtained at the 1995 Annual General Meeting, the Pasminco Limited Employee Option Plan was established where all full-time or permanent part-time employees of the Pasminco Group (including Executive Directors but excluding Non-Executive Directors) were offered options over ordinary shares of Pasminco Limited. The options, issued for nil consideration, are issued in accordance with the guidelines established by the Directors of Pasminco Limited pursuant to the approved Plan. The options cannot be transferred and will not be quoted on the Australian Stock Exchange. At 30 June 2000, options over shares pursuant to the Pasminco Limited Employee Option Plan are as follows:

No. of Options Year of issue Exercise Price Expiry Date3,533,000 1995 $1.67 10 Nov 20004,819,500 1996 $2.07 8 Nov 2001

10,585,000 1997 $1.84 14 Nov 200210,007,000 1998 $1.49 13 Nov 20039,861,000 1999 $1.58 12 Nov 2004

The total number of options outstanding as at 30 June 2000 was 38,805,500 which is equivalent to 3.4% of the total issued ordinary shares in the Company.During the financial year, options over the shares of the Company have been exercised as follows:

Year of issue No. of Options1995 178,0001996 –1997 12,0001998 314,5001999 –

During the financial year, 9,906,500 options were granted on the basis that each option can, under most circumstances, be converted to one ordinary share in the Company, after a two year period from the date of issue, by the holder subscribing $1.58 per share, being 10% above the weighted average sale price of Pasminco Limited shares on the Australian Stock Exchange over the five business days immediately before 12 November 1999. For employees other than those at Budel Zink BV, options can be exercised after 12 November 2001 and on or before 12 November 2004. Employees of Budel Zink BV can exerciseoptions at any time on or before 12 November 2004. Under certain circumstances, such as redundancy, retirement or death, options may be exercised byAustralian employees prior to 12 November 2001. Under the terms of the Plan, participants may, upon exercise of their options, participate in any issue ofadditional shares or bonus shares to shareholders.The market value of ordinary Pasminco Limited shares closed at $0.89 on Friday 30 June 2000 (the last trading day of the financial year). No other equities in any of the entities within the economic entity were acquired by or issued to employees during the year in relation to any other ownership-basedremuneration scheme.


In accordance with a resolution of the Directors of Pasminco Limited, we state that:

(1) In the opinion of the Directors:

(a) the financial statements and notes of the Company and of the consolidated entity are in accordance with the Corporations Law, including:

(i) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2000 and of their performance for the year ended on that date; and

(ii) complying with Accounting Standards and Corporations Regulations; and

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

(2) In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in note 12(c) will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the Deed of Cross Guarantee.

On behalf of the Board.

M R Rayner

Chairman

D M Stewart

Managing Director and CEOMelbourne30 August 2000

Directors’ Declaration

To the members of Pasminco Limited

Scope

We have audited the financial report of Pasminco Limited for the financial year ended 30 June 2000, as set out on pages 58 to 86, including the Directors’Declaration. The financial report includes the financial statements of Pasminco Limited, and the consolidated financial statements of the consolidated entitycomprising the Company and the entities it controlled at year’s end or from time to time during the financial year. The Company’s directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the Company.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of materialmisstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and theevaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects,the financial report is presented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and statutory requirements so as to present a view which is consistent with our understanding of the Company’s and the consolidated entity’s financial position and performance asrepresented by the results of their operations and their cash flows.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of Pasminco Limited is in accordance with:

a) the Corporations Law including:

(i) giving a true and fair view of the Company’s and the consolidated entity’s financial position as at 30 June 2000 and of their performance for the year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations; and

b) other mandatory professional reporting requirements.

Ernst & Young

Alan I Beckett

PartnerMelbourne30 August 2000

Independent Audit Report

Documents

Profit and Loss Statements