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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tharisa Plc | LSE:THS | London | Ordinary Share | CY0103562118 | ORD USD0.001 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 68.00 | 67.00 | 69.00 | 68.00 | 68.00 | 68.00 | 36,078 | 08:00:28 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Metal Ores,nec | 649.89M | 82.24M | 0.2743 | 2.52 | 206.86M |
From Apr 2019 to Apr 2024
TIDMTHS
RNS Number : 9163X
Tharisa PLC
30 November 2017
THARISA PLC
Incorporated in the Republic of Cyprus with limited liability
Registration number: HE223412
JSE share code: THA
LSE share code: THS
ISIN: CY0103562118
THARISA 2017
CONSOLIDATED ANNUAL RESULTS
HIGHLIGHTS
ROM MINED UP 3.9% 5.0 Mt
(2016: 4.8 Mt)
PGM PRODUCTION
UP 8.3% (5PGE + Au) 143.6 koz
(2016: 132.6 koz)
CHROME CONCENTRATE PRODUCTION
UP 7.0% 1.3 Mt
(2016: 1.2 Mt)
REVENUE
UP 59.1% US$349.4m
(2016: US$219.6m)
OPERATING PROFIT
UP 198.4% US$95.9m
(2016: US$32.1m)
EBITDA
UP 168.7% US$115.6m
(2016: US$43.0m)
PROFIT BEFORE TAX
UP 314.2% US$91.0m
(2016: US$22.0m)
HEADLINE EARNINGS PER SHARE
UP 266.7% US$ 22 cents
(2016: US$ 6 cents)
PROPOSED DIVID OF
US$ 5 CENT PER SHARE
(2016: US$ 1 cents)
LEADERSHIP REVIEW
financial year ended 30 September 2017
Executive Chairman Loucas Pouroulis, Chief Executive Officer Phoevos Pouroulis and Chief Finance Officer
Michael Jones.
Dear Stakeholder
In compiling this report we have been guided by materiality so that we report concisely on those issues most
material to our stakeholders and our ongoing ability to create value. More detailed information is available on
our website, www.tharisa.com.
FY2017 was a year of record production and profitability notwithstanding the muted PGM basket price and
volatility of spot chrome concentrate prices. It was also a year of leveraging the business model with third party
agency and trading activities.
Tharisa Minerals Proprietary Limited ("Tharisa Minerals") mined 5.0 Mt of ore during the year, exceeding the
required mining call rate for the nameplate capacity of our processing plants. This resulted in PGM production
of 143.6 koz of contained PGMs and production of 1.3 Mt of chrome concentrates. Of the chrome concentrates,
323.1 kt comprised high value specialty grade products.
PGM prices remained muted during the year showing a marginal increase of US$50 per PGM basket ounce
despite the rally in the palladium price, which has recently surpassed and maintained levels above the prevailing
platinum price. Tharisa witnessed history in the first half of FY2017 with record prices for metallurgical chrome
concentrates being achieved at approximately US$390/t. There was however limited liquidity and an
underestimated global supply side response which displaced a large portion of South Africa's market share. Prices
subsequently declined to levels as low as US$130/t mainly on the back of accumulated inventory levels. Post the
half-year Tharisa saw a recovery in the spot metallurgical grade chrome prices delivered to China due to
increased demand for stainless steel and excess inventories being absorbed in the normal course. The average
metallurgical chrome contract price achieved was US$200/t CIF China for FY2017.
Operating profit for the year amounted to US$95.9 million (2016: US$32.1 million), with a net profit after tax of
US$67.7 million (US$15.8 million) generating HEPS of US$ 22 cents (US$ 6 cents).
In the year under review, Tharisa initiated the transition to owner mining. Towards the latter part of the year,
the business was further expanded to include third party plant operation and sales thereby improving profitably
through further economies of scale.
It is the Group's policy to pay a minimum of 10% of its consolidated net profit after tax as a dividend, and the
directors are pleased to announce that based on the improved earnings, subject to the necessary shareholder
approvals, the Board has proposed a dividend to shareholders of US$ 5 cents per share (2016: capital distribution
of US$ 1 cent) equating to 19.2% of its consolidated net profit after tax.
Furthermore, Tharisa is pleased to notify its shareholders that the dividend policy for FY2018 will be changed to
provide for a payout of at least 15% of consolidated net profit after tax, an increase from the previous stated
dividend policy of at least 10% of consolidated net profit after tax. The Company also intends to introduce the
payment of an interim dividend.
The Company's dividend policy takes into consideration various factors, including overall market and economic
conditions, the Group's financial position, capital investment plans as well as earnings growth.
SAFETY
Safety remains a priority at Tharisa which achieved a fatality free year and, at 30 September 2017, our LTIFR per
200 000 hours worked at the mine was 0.07.
Tharisa is pleased to advise that no safety related stoppages were incurred in the year highlighting our emphasis
on safety as well as our improved relationship with the DMR inspectorate.
The Group continues to strive for a zero harm work environment and in line with the DMR's drive to minimise all
injuries within the South African mining industry, the Group remains committed to ensuring a safer workplace.
To that end it is pleasing to report that Tharisa Minerals was awarded three safety awards in 2017. These include
the Best Safety Performance and Best Improved Performance awards at Mine Safe 2017, and an award from the
Mine Health and Safety Council's for 2 000 fatality free production shifts.
OPERATIONAL OVERVIEW
A number of milestones were achieved during the financial year including:
- 5.0 Mt reef mined, an increase of 3.9% - 4.9 Mt milled, an increase of 5.6% - 143.6 koz 5PGE+Au contained PGM production, up by 8.3% - 79.7% overall PGM recovery, an increase of 14.0% - 1.3 Mt production of chrome concentrates, up by 7.0% - 64.1% chrome recovery, an increase of 2.2% - 323.1 kt specialty grade chrome production, an increase of 19.9%
MINING
Reef mined exceeded the volumes required to meet production targets in FY2017. Mining focused on extracting
the optimal reef horizon mix for feed into the plants with particular attention on the feed grades. In addition,
overburden exposed by the planned pit extension following the road diversion was mined. It is planned that the
stripping ratio will normalise to above the LOM stripping ratio of 9.6 m 3:m3 in FY2018 from the 7.5 m3:m3
achieved in the current year.
A total of 5.0 Mt of reef was mined ensuring a constant feed of material into the plants while increasing the run
of mine (ROM) ore stockpile ahead of the plants to 307.7 kt thereby further derisking the operations. The
intention is to increase the ROM ore stockpile to at least one month of plant throughput (400 kt). During the
financial year Tharisa Minerals acquired a drilling sub-contractor's business to start in sourcing the drilling
operations and, as an owner operator, focus on improving ROM grades and fragmentation.
Subsequent to the financial year end, Tharisa Minerals acquired the mining fleet from its mining contractor and
successfully transitioned from a contractor mining model to an owner mining model.
PROCESSING
Plant throughput at 4.9 Mt, exceeded nameplate capacity for the first time and is attributable to consistent feed
and preventative maintenance resulting in improved plant availability and utilisation. A high energy PGM
flotation circuit was integrated into the Genesis Plant to further increase recoveries. The circuit was
commissioned in August 2017 and followed the successful integration of a high energy PGM flotation circuit at
the Voyager Plant.
With a PGM rougher feed grade of 1.56 g/t and recoveries improving to 79.7% (target of 80%), PGM production
(5E + Au) at 143.6 koz improved 8.3%. Chrome feed grade was 17.8% and with chrome recoveries improving to
64.1% (target 65%), chrome concentrate production increased by 7.0% to 1.3 Mt. The production of specialty
grade chrome concentrates of 323.1 kt increased 19.9% and constitutes approximately 24.3% of total chrome
concentrate production. Specialty grade chrome concentrates continue to command on average a US$50/t
premium on a CIF China equivalent basis over standard metallurgical grade chrome concentrates.
Arxo Metals Proprietary Limited ("Arxo Metals") entered into an operating, sales and marketing agreement with
Western Platinum Limited, a subsidiary of Lonmin plc ("Lonmin"), to operate their K3 UG2 chrome concentrator
plant. The handover date was 28 August 2017 and during the short time under the Group's control 20 kt of
chrome concentrate was produced.
Commodity markets and sales
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30 September 30 September
-------------------------------------------- ----------- -------------- -------------- ----------
2017 2016 Change %
-------------------------------------------- ----------- -------------- -------------- ----------
PGM basket price US$/oz 786 736 6.8
-------------------------------------------- ----------- -------------- -------------- ----------
PGM basket price ZAR/oz 10 492 10 881 (3.6)
-------------------------------------------- ----------- -------------- -------------- ----------
42% metallurgical grade chrome concentrate
-------------------------------------------- ----------- -------------- -------------- ----------
contract price US$/tonne 200 120 66.7
-------------------------------------------- ----------- -------------- -------------- ----------
42% metallurgical grade chrome concentrate
-------------------------------------------- ----------- -------------- -------------- ----------
contract price ZAR/tonne 2 667 1 751 52.3
-------------------------------------------- ----------- -------------- -------------- ----------
Exchange rate (average) ZAR:US$ 13.4 14.8 9.5 -------------------------------------------- ----------- -------------- -------------- ----------
Tharisa Minerals continues to supply the majority of its PGM concentrate to Impala Platinum in terms of its off-
take agreement with the balance of the PGM concentrates to be processed in the 1MW research and
development furnace that was recently commissioned by Arxo Metals and then sold to Lonmin.
A total of 143.5 koz of contained PGMs (on a 5PGE + Au basis) was sold during the year. This is an increase of
8.3% over the previous year's sales of 132.9 koz of contained PGMs (on a 5PGE + Au basis).
The PGM prill split by mass is as follows:
30 30
----------- ------------- ----------
September September
----------- ------------- ----------
2017 2016
----------- ------------- ----------
Platinum 55.2% 55.9%
----------- ------------- ----------
Palladium 16.1% 16.1%
----------- ------------- ----------
Rhodium 9.5% 9.4%
----------- ------------- ----------
Gold 0.2% 0.2%
----------- ------------- ----------
Ruthenium 14.3% 13.9%
----------- ------------- ----------
Iridium 4.7% 4.5%
----------- ------------- ----------
Tharisa Minerals is paid a variable percentage of the market value of the contained PGMs in terms of an agreed
formula. The PGM basket price improved with the average PGM basket price per ounce increasing by 6.8% to
US$786/oz (2016: US$736/oz) for the financial year.
Chrome concentrate sales totalled 1.3 Mt, 321.5 kt of which was higher value-add specialty chemical and foundry
grade chrome concentrates with the bulk of the sales being metallurgical grade chrome concentrate. The average
price for metallurgical grade chrome concentrate on a CIF main ports China basis increased to US$200/t.
Chemical and foundry grade chrome concentrates produced by Tharisa Minerals and Arxo Metals are sold to
Rand York Minerals in terms of an off-take agreement which provides for a joint marketing arrangement of
the product.
LOGISTICS
30 30 Change
--------------------------------------------------- ---------- ---------- -------
September September %
--------------------------------------------------- ---------- ---------- -------
2017 2016
--------------------------------------------------- ---------- ---------- -------
Average transport cost per tonne of US$/tonne 52 42 23.8
--------------------------------------- ----------- ---------- ---------- -------
chrome concentrate - CIF China basis
---------------------------------------------------- ---------- ---------- -------
Chrome concentrates shipped kt 995.8 923.1 7.9
--------------------------------------- ----------- ---------- ---------- -------
The chrome concentrates destined for main ports China were shipped either in bulk from the Richards Bay Dry
Bulk Terminal or via containers and transported from Johannesburg by road to Durban from where it was
shipped. The economies of scale and in-house expertise have ensured that our transport costs, a major cost of
the group, remain competitive.
Arxo Logistics has sufficient storage capacity at both the Richards Bay Dry Bulk Terminal and the Durban container
port to manage Tharisa Minerals' full production capacity.
A total of 995.8 kt (2016: 923.1 kt) of chrome concentrates was shipped by Arxo Logistics in FY2017 mostly to
main ports in China. Of this, 98% was shipped in bulk, with bulk shipments being preferred by customers due to
ease of handling and reduced port charges, as well as reduced levels of administration.
Arxo Logistics provided third-party logistics services during the period under review and is planning to expand
this service offering in the year ahead.
Negotiations regarding a planned public-private partnership for an on-site railway siding at the Tharisa Mine are
continuing and final commercial terms are still to be agreed. This will not only improve efficiencies and costs, but
will also improve safety and alleviate environmental impacts by reducing road freight haulage.
LABOUR RELATIONS
Labour relations at the Tharisa Mine remained stable during the year. Tharisa's employees have traditionally
been represented by the NUM with 56% of the employees in the bargaining unit represented by them. Post the
year end, approximately 900 employees were transferred from the mine's former contractor, bringing Tharisa
Minerals' total staff complement to approximately 1 700.
SUSTAINABILITY
Sustainability is at the heart of the business model. The Company is proud of its track record in minimising the
environmental impact and, while striving to improve further, takes pride in the mature and mutually beneficial
relationships with the communities that border the Tharisa Mine.
The Tharisa Mine not only understands its obligations to create social capital as enshrined in the MPRDA, but
strives to achieve these obligations in ways that create ongoing sustainable social capital. Its commitment to the
neighbouring communities is evidenced in all aspects of the business, not only from the corporate social
initiatives and local economic development plans but also underpinned by equity ownership by the community
in Tharisa Minerals.
Tharisa has policies in place to ensure that neither it nor its suppliers participate in any form of human rights
violation, including human trafficking and modern slavery.
Tharisa acts ethically and with integrity in all business dealings and is committed to ensuring systems and controls
are in place to safeguard against corruption.
Sustainability aspects Tharisa's sustainability framework
----------------------- ------------------------------------------
Environment - EIAs, EMP and compliance reports
----------------------- ------------------------------------------
- Environmental measures
----------------------- ------------------------------------------
Employees - Gender equality (women represent 18%
----------------------- ------------------------------------------
of workforce)
----------------------- ------------------------------------------
- Health and safety policies and training
----------------------- ------------------------------------------
- Trade union recognition
----------------------- ------------------------------------------
Social - Community ownership in mine
----------------------- ------------------------------------------
- Community forums
----------------------- ------------------------------------------
- CSI
----------------------- ------------------------------------------
Human rights - Policy on the human rights trafficking
----------------------- ------------------------------------------
and modern slavery
----------------------- ------------------------------------------
- Monitoring of suppliers
----------------------- ------------------------------------------
Anticorruption - Policy on bribery and corruption
----------------------- ------------------------------------------
- Ethics hotline
----------------------- ------------------------------------------
FINANCIAL OVERVIEW
The financial results of the Group were characterised by two key financial trends, the first being the volatility in
the metallurgical grade chrome concentrate market with an average price per tonne of US$200 being achieved
(on a CIF main ports China basis) being a 66.7% increase compared to the prior period and secondly the
strengthening of the ZAR by 9.5% impacting on the cost base of the Group which, other than for freight costs, is
largely ZAR denominated.
Group revenue totalled US$349.4 million (2016: US$219.6 million), an increase of 59.1% relative to the prior
year. The increase in revenue is mainly attributable to the chrome segment with the metallurgical grade chrome
concentrate price increasing by 66.7% from an average of US$120/t to US$200/t, with the speciality grade
chrome concentrates continuing to trade at a premium of at least US$50/t on a CIF China equivalent basis.
On a segmental basis the increase in revenue is as a result of:
- An increase in the unit sales of PGMs by 7.4% from 132.9 koz to 143.5 koz with an increase in the PGM
basket price by 6.8% from US$736/oz to US$786/oz
- an increase in the unit sales of metallurgical grade chrome concentrates by 7.9% from 923.1 kt to 995.8 kt
with an increase in the metallurgical grade chrome concentrate price of 66.7%
- an increase in the unit sales of speciality grade chrome concentrates (24.3% of production) by 17.9% from
272.7 kt to 321.5 kt
- the introduction of third party trading and logistics businesses building on the existing platforms which
contributed US$5.7 million to revenue
Gross profit amounted to US$122.7 million (2016: US$54.5 million) with a gross profit margin of 35.1% (2016: 24.8%).
The segmental contribution to revenue and gross profit from the respective segments is summarised below:
30 September 2017 30 September 2016
--------------------- ------------------------------------------ ----------------------------------
US$ million PGM Chrome Agency Total PGM Chrome Total
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
and
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
trading
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Revenue 90.9 252.9 5.6 349.4 81.5 138.1 219.6
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Cost of sales 54.7 166.7 5.3 226.7 57.3 107.8 165.1
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Cost of sales
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
excluding selling
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
costs 54.3 107.6 4.2 166.1 57.1 64.7 121.8
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Selling costs 0.4 59.1 1.1 60.6 0.2 43.1 43.3
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Gross profit
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
contribution 36.2 86.2 0.3 122.7 24.2 30.3 54.5
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Gross profit margin 39.8% 34.1% 5.4% 35.1% 29.7% 21.9% 24.8%
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Sales volumes 143.5 koz 1 317.3 kt 132.9 koz 1 196.2 kt
--------------------- ----------- ----------- -------- ------ ----------- ------------ -------
Shared costs of production are based on revenue contribution on an FCA basis, allocated 35% to the PGM
segment and 65% to the chrome segment. The comparable period allocation was on an equal basis.
The PGM segment gross margin of 39.8% (2016: 29.7%) was higher than the previous year, mainly due to the
revised basis of allocating shared costs. The gross margin also improved with a reduction in the overall unit cost
of sales with increased units sold following improved recoveries being achieved.
The chrome segment gross margin of 34.1% (2016: 21.9%) was higher than the year before largely due to the
increased chrome concentrate price notwithstanding the increased cost of sales based on the increased
allocation of the shared production costs. Freight costs for bulk shipments of chrome concentrates, a significant
component of the cost of chrome sales, increased by 40.0% from US$10/t to US$14/t, coupled with a 9.5%
strengthening of the ZAR against the US$, resulted in the average transport cost per chrome tonne increasing
from US$42 to US$52.
On a unit cost basis, the mining cost per reef tonne mined increased by 11.9% from US$16.8/t to US$18.8/t. This
cost per reef tonne was incurred on a stripping ratio of 7.5 (m(3) waste : m(3) reef). On a per cube mined basis i.e.
including both waste and reef, the cost increased by 16.5% from US$6.72/m(3) to US$7.83/m(3) (the prior year
stripping ratio was 7.3).
An above inflation increase was agreed with MCC Contracts Proprietary Limited ("MCC") for the mining
contractor work due to historical under recoveries based on the mine plan. In addition, there was an appreciation
in the ZAR of approximately 9.5%. During the transition to the owner mining model, additional costs were also
incurred in anticipation of the transition such as employment of additional technical management and sourcing
of supplementary mining equipment.
The consolidated cash cost per tonne milled (i.e. including mining but excluding transport and freight) increased
by 9.4% from US$31.9/t to US$34.9/t.
After accounting for administrative expenses of US$26.9 million (an increase of 18.1% over the comparable
period), the Group achieved an operating profit of US$95.9 million.
EBITDA amounted to US$115.6 million (2016: US$43.0 million).
Finance costs (totalling US$7.7 million) principally relate to the balance owing on the senior debt facility due by
Tharisa Minerals for the construction of the Voyager Plant and the trade finance facilities of Arxo Resources on
the discounting of the letters of credit on chrome concentrate contracted sales as well as the limited recourse
discounting of the PGM receivables.
With the strong performance in the commodity markets during the financial year, the Group recorded a
substantial improvement in profitability, generating a profit before tax of US$91.0 million compared to the
comparable period of US$22.0 million.
The tax charge amounted to US$23.3 million, an effective charge of 25.6%.
Foreign currency translation differences for foreign operations, arising where the Company has funded the
underlying subsidiaries with US$ denominated funding and the reporting currency of the underlying subsidiary
is not in US$ was nominal, against the prior year's gain of US$4.2 million.
Basic and diluted profit per share for the year amounted to US$ 22 cents (2016: US$ 5 cents) with headline
earnings per share of US$ 22 cents (2016: US$ 6 cents).
As approved by shareholders at the annual general meeting and following the obtaining of the requisite court
approvals, the Company reduced its share premium account in the amount of US$179.2 million and applied the
reduction in the first instance to the revenue reserves of the Company and in the second instance by returning
to shareholders, in cash, an amount of US$2.6 million (US$ 1 cent per share).
The total debt amounted to US$54.2 million, resulting in a debt to total equity ratio of 19.9%. Offsetting the debt
service reserve account amount of US$4.5 million, resulted in a debt to equity ratio of 18.2%. The long-term
targeted debt to equity ratio is 15%. Tharisa had cash and cash equivalent of US$49.7 million at year end resulting
in a nominal net debt to total equity ratio.
With effect from 1 October 2017, Tharisa Minerals purchased certain mining equipment from MCC Contracts
and purchased additional mining equipment to supplement the fleet. The cash consideration paid for this fleet
amounted to ZAR279 million (US$20.6 million) and was debt funded through a bridge loan facility, original
equipment manufacturer finance and asset backed finance. If the purchases had taken place on 30 September
2017, the pro forma total debt, offsetting the debt service reserve account, would have amounted to
US$70.2 million with a pro forma debt to total equity ratio of 25.8%.
The current capex spend focused on stay in business capex, mining fleet additions during the transition phase
and ongoing projects aimed at improving recoveries of both PGMs and chrome concentrates. Additions to
property, plant and equipment for the year amounted to US$26.4 million of which US$7.1 million related to
additions to the mining fleet. The depreciation charge amounted to US$16.9 million (2016: US$10.3 million).
The Group generated net cash from operations of US$73.2 million (2016: US$22.2 million). Cash on hand
amounted to US$49.7 million. In addition, the Group held US$4.5 million in a debt service reserve account.
OUTLOOK
The PGM basket price in US$ has improved on the back of the rally in spot palladium and rhodium prices and
with the recovery in chrome concentrate prices, underpinned by demand, the Group's margins remain robust.
The free cash flow for FY2018 and EBITDA margins should grow considerably supported by solid operational
performance and a more favourable commodity outlook.
The transition to owner mining has progressed well and the benefits of closer management of the in-pit grades
and improved blending ahead of the plants are being realised.
The maturation of the business beyond the development stage has positioned the group for its next phase of
growth. Not only is the focus on continuous improvements in feed grade and recoveries, but on expanding the
business through the operation of third party plants and the marketing of these commodities.
The production outlook for FY2018 is 150 koz of PGMs and 1.4 Mt of chrome concentrates, of which 350 kt will
be specialty grade chrome concentrates. Our vision for 2020 is to produce 200 koz of PGMs and 2 Mt of chrome.
The management team is positive about the prospects for the year ahead and believes that with the direct
control of our mining operations and a strong focus on ROM quality further economies of scale will be
demonstrated through reduced unit costs and increasing operating margins and profitability.
The achievement of our stated objectives has had a material boost in the morale within the Group and it is this
commitment and dedication to achieving these goals that has made the difference in FY2017. We will continue
to leverage off of this momentum and look to continue implementing our strategy as we move towards achieving
our vision for 2020.
We thank our Board, management, employees, customers, suppliers and partners who have assisted the
Company during this profitable year.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
30 September 2016
Preparation and approval of condensed consolidated financial statements
The condensed consolidated financial statements for the year ended 30 September 2017 have been
extracted from the audited financial statements of the Group, but have not been audited. The
auditor's report on the audited financial statements does not report on all of the information
contained herein. Shareholders are therefore advised that in order to obtain a full understanding of
the financial position and results of the Group, these condensed consolidated financial statements
should be read together with the full audited financial statements and full audit report.
These condensed consolidated financial statements and the audited financial statements, together
with the audit report, are available on the Company's website, www.tharisa.com and are available
for inspection at the registered address of the Company.
The directors take full responsibility for the preparation of this report and the correct extraction of
the financial information from the underlying financial statements.
The directors of the Company are responsible for the maintenance of adequate accounting records
and the preparation of the financial statements and related information in a manner that fairly
presents the state of the affairs of the Company. These financial statements are prepared in
accordance with International Financial Reporting Standards and incorporate full and responsible
disclosure in line with the accounting policies of the Group which are supported by prudent
judgements and estimates.
The directors are also responsible for the maintenance of effective systems of internal control which
are based on established organisational structure and procedures. These systems are designed to
provide reasonable assurance as to the reliability of the financial statements, and to prevent and
detect material misstatement and loss.
The consolidated financial statements have been reported on without qualification by KPMG Limited.
The preparation of these condensed results was supervised by the Chief Finance Officer,
Michael Jones, a Chartered Accountant (SA).
The condensed consolidated financial statements have been prepared on a going concern basis as
the directors believe that the Company and Group will continue to be in operation in the foreseeable future.
The consolidated Annual Financial Statements have been approved by the Board on 28 November 2017.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 30 September 2017
2017 2016
-------------------------------------------------------------------------------- ------ ----------- ---------
Notes US$'000 US$'000
-------------------------------------------------------------------------------- ------ ----------- ---------
Revenue 4 349 443 219 653
-------------------------------------------------------------------------------- ------ ----------- ---------
Cost of sales
(165 177) 5 (226 789)
-------------------------------------------------------------------------------- ------ ----------- ---------
Gross profit 122 654 54 476
-------------------------------------------------------------------------------- ------ ----------- ---------
Other income 160 438
-------------------------------------------------------------------------------- ------ ----------- ---------
Administrative expenses 6 (26 903) (22 775)
-------------------------------------------------------------------------------- ------ ----------- ---------
Results from operating activities 95 911 32 139
-------------------------------------------------------------------------------- ------ ----------- ---------
Finance income 3 580 770
-------------------------------------------------------------------------------- ------ ----------- ---------
Finance costs (7 689) (11 815)
-------------------------------------------------------------------------------- ------ ----------- ---------
Changes in fair value of financial assets at fair value through profit or loss (813) 503
-------------------------------------------------------------------------------- ------ ----------- ---------
Changes in fair value of financial liabilities at fair value through profit
-------------------------------------------------------------------------------- ------ ----------- ---------
or loss - 368
-------------------------------------------------------------------------------- ------ ----------- ---------
Net finance costs (4 922) (10 174)
-------------------------------------------------------------------------------- ------ ----------- ---------
Profit before tax 90 989 21 965
-------------------------------------------------------------------------------- ------ ----------- ---------
Tax 7 (23 316) (6 172)
-------------------------------------------------------------------------------- ------ ----------- ---------
Profit for the year 67 673 15 793
-------------------------------------------------------------------------------- ------ ----------- ---------
Other comprehensive income
-------------------------------------------------------------------------------- ------ ----------- ---------
Items that may be classified subsequently to profit or loss:
-------------------------------------------------------------------------------- ------ ----------- ---------
Foreign currency translation differences for foreign operations, net of tax (387) 4 212
-------------------------------------------------------------------------------- ------ ----------- ---------
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 30 September 2017
Other comprehensive income, net of tax (387) 4 212
---------------------------------------------------------- ----- -------- -------
Total comprehensive income for the year 67 286 20 005
---------------------------------------------------------- ----- -------- -------
Profit for the year attributable to:
---------------------------------------------------------- ----- -------- -------
Owners of the company 57 601 13 809
---------------------------------------------------------- ----- -------- -------
Non-controlling interest 10 072 1 984
---------------------------------------------------------- ----- -------- -------
67 673 15 793
---------------------------------------------------------- ----- -------- -------
Total comprehensive income for the year attributable to:
---------------------------------------------------------- ----- -------- -------
Owners of the company 57 451 17 103
---------------------------------------------------------- ----- -------- -------
Non-controlling interest 9 835 2 902
---------------------------------------------------------- ----- -------- -------
67 286 20 005
---------------------------------------------------------- ----- -------- -------
Earnings per share
---------------------------------------------------------- ----- -------- -------
Basic and diluted earnings per share (US$ cents) 8 22 5
---------------------------------------------------------- ----- -------- -------
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2017
2017 2016
---------------------------------------------- ------ --------- ----------
Notes US$'000 US$'000
---------------------------------------------- ------ --------- ----------
Assets
---------------------------------------------- ------ --------- ----------
Non-current assets
---------------------------------------------- ------ --------- ----------
Property, plant and equipment 9 232 559 220 534
---------------------------------------------- ------ --------- ----------
Goodwill 838 883
---------------------------------------------- ------ --------- ----------
Long term deposits 10 4 505 9 846
---------------------------------------------- ------ --------- ----------
Other financial assets 3 767 2 585
---------------------------------------------- ------ --------- ----------
Deferred tax assets 11 1 952 1 397
---------------------------------------------- ------ --------- ----------
Total non-current assets 243 621 235 245
---------------------------------------------- ------ --------- ----------
Current assets
---------------------------------------------- ------ --------- ----------
Inventories 12 20 802 15 767
---------------------------------------------- ------ --------- ----------
Trade and other receivables 13 70 374 51 184
---------------------------------------------- ------ --------- ----------
Other financial assets 49 1 176
---------------------------------------------- ------ --------- ----------
Current taxation 132 134
---------------------------------------------- ------ --------- ----------
Cash and cash equivalents 14 49 742 15 826
---------------------------------------------- ------ --------- ----------
Total current assets 141 099 84 087
---------------------------------------------- ------ --------- ----------
Total assets 384 720 319 332
---------------------------------------------- ------ --------- ----------
Equity and liabilities
---------------------------------------------- ------ --------- ----------
Share capital 15 260 257
---------------------------------------------- ------ --------- ----------
Share premium 15 280 082 456 181
---------------------------------------------- ------ --------- ----------
Other reserve 47 245 47 245
---------------------------------------------- ------ --------- ----------
Foreign currency translation reserve (73 561) (73 411)
---------------------------------------------- ------ --------- ----------
Retained earnings 42 877 (193 521)
---------------------------------------------- ------ --------- ----------
Equity attributable to owners of the Company 296 903 236 751
---------------------------------------------- ------ --------- ----------
Non-controlling interests (25 057) (34 892)
---------------------------------------------- ------ --------- ----------
Total equity 271 846 201 859
---------------------------------------------- ------ --------- ----------
Non-current liabilities
---------------------------------------------- ------ --------- ----------
Provisions 6 923 4 607
---------------------------------------------- ------ --------- ----------
Borrowings 16 4 375 24 008
---------------------------------------------- ------ --------- ----------
Deferred tax liabilities 23 823 5 275
---------------------------------------------- ------ --------- ----------
Total non-current liabilities 35 121 33 890
---------------------------------------------- ------ --------- ----------
Current liabilities
---------------------------------------------- ------ --------- ----------
Borrowings 16 45 026 38 408
---------------------------------------------- ------ --------- ----------
Other financial liabilities 599 -
---------------------------------------------- ------ --------- ----------
Current taxation 212 54
---------------------------------------------- ------ --------- ----------
Trade and other payables 31 916 45 121
---------------------------------------------- ------ --------- ----------
Total current liabilities 77 753 83 583
---------------------------------------------- ------ --------- ----------
Total liabilities 112 874 117 473
---------------------------------------------- ------ --------- ----------
Total equity and liabilities 384 720 319 332
---------------------------------------------- ------ --------- ----------
The consolidated financial statements were authorised for issue by the Board of Directors on 28 November 2017.
Phoevos Pouroulis Michael Jones ------------------ ------------------ Director Director ------------------ ------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2017
Attributable to owners of the Company
--------------------- ----- ----------------------------------------------------------------------------------------
Foreign
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ----------------------
currency Non-
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Share Share Other translation Retained controlling Total
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
capital premium reserve reserve earnings Total interest equity
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
US$'000 Note US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Balance at 30
September 2015 256 452 512 47 245 (76 705) (206 566) 216 742 (37 794) 178 948
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Total comprehensive
income for the year
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Profit for the year - - - - 13 809 13 809 1 984 15 793
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Other comprehensive
income:
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Foreign currency
translation
differences - - - 3 294 - 3 294 918 4 212
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Total comprehensive
income for the year - - - 3 294 13 809 17 103 2 902 20 005
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Transactions with
owners of the
Company
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Contributions by and
distributions to
owners
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Equity-settled share
based payments - - - - (1 045) (1 045) - (1 045)
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Issue of ordinary
shares 15 1 3 669 - - 281 3 951 - 3 951
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
Contributions by
owners of the
Company 1 3 669 - - (764) 2 906 - 2 906
--------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ -------- Total transactions with owners of the Company 1 3 669 - - (764) 2 906 - 2 906 --------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ -------- Balance at 30 September 2016 257 456 181 47 245 (73 411) (193 521) 236 751 (34 892) 201 859 --------------------- ----- -------- -------- -------- ------------ ---------- -------- ------------ --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2017
Attributable to owners of the Company
--------------------- ------ ---------------------------------------------------------------------------------------
Foreign
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
currency Non-
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Share Share Other translation Retained controlling Total
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
capital premium reserve reserve earnings Total interest equity
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Balance at 30 456 47 (73 (193 236 (34 201
September 2016 257 181 245 411) 521) 751 892) 859
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Total comprehensive
income for the
year
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Profit for the 57 57 10 67
year - - - - 601 601 072 673
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Other comprehensive
income:
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Foreign currency
translation
differences - - - (150) - (150) (237) (387)
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Total comprehensive
income for the 57 57 67
year - - - (150) 601 451 9 835 286
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Transactions
with owners
of the Company
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Contributions
by and distributions
to owners
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
(179 179
Capital reduction 15 - 175) - - 175 - - -
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
(2 (2 (2
Capital distribution 15 - - - - 570) 570) - 570)
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Equity-settled
share based
payments - - - - 2 192 2 192 - 2 192
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Issue of ordinary
shares 15 3 3 076 - - - 3 079 - 3 079
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Contributions
by owners of (176 178
the Company 3 099) - - 797 2 701 - 2 701
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Total transactions
with owners 176 178
of the Company 3 099) - - 797 2 701 - 2 701
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Balance at 30 280 47 (73 42 296 (25 271
September 2017 260 082 245 561) 877 903 057) 846
--------------------- ------ -------- -------- -------- ------------ --------- -------- ------------ --------
Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the Republic Law,
during the two years after the end of the year of assessment to which the profits refer, will be deemed to have distributed this amount
as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent that the ultimate shareholders
at the end date of the period of two years from the end of the year of assessment to which the profits refer are both Cypriot tax residents
and Cypriot domiciled entities. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the profits
of the relevant year at any time. This special contribution for defence is paid by the company for the account of the shareholders.
These provisions do not apply for ultimate beneficial owners that are non-Cypriot tax resident individuals. Retained earnings is the
only reserve that is available for distribution.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 September 2017
2017 2016
--------------------------------------------- ------ ---------- ---------
Notes US$'000 US$'000
--------------------------------------------- ------ ---------- ---------
Cash flows from operating activities
--------------------------------------------- ------ ---------- ---------
Profit for the year 67 673 15 793
--------------------------------------------- ------ ---------- ---------
Adjustments for:
--------------------------------------------- ------ ---------- ---------
Depreciation of property, plant and
equipment 9 16 929 10 167
--------------------------------------------- ------ ---------- ---------
Loss on disposal of property, plant
and equipment 6 196 584
--------------------------------------------- ------ ---------- ---------
Impairment losses on goodwill 57 51
--------------------------------------------- ------ ---------- ---------
Impairment losses on inventory 12 24 15
--------------------------------------------- ------ ---------- ---------
Impairment losses on other financial
assets - 12
--------------------------------------------- ------ ---------- ---------
Changes in fair value of financial
assets at fair value through profit
or loss 813 (503)
--------------------------------------------- ------ ---------- ---------
Changes in fair value of financial
liabilities at fair value through profit
--------------------------------------------- ------ ---------- ---------
or loss - (368)
--------------------------------------------- ------ ---------- ---------
Interest income (1 122) (770)
--------------------------------------------- ------ ---------- ---------
Interest expense 7 689 10 287
--------------------------------------------- ------ ---------- ---------
Tax 7 23 316 6 172
--------------------------------------------- ------ ---------- ---------
Equity-settled share based payments 4 342 2 542
--------------------------------------------- ------ ---------- ---------
119
917 43 982
--------------------------------------------- ------ ---------- ---------
Changes in:
--------------------------------------------- ------ ---------- ---------
Inventories (5 063) (4 634)
--------------------------------------------- ------ ---------- ---------
(21
Trade and other receivables 839) (12 657)
--------------------------------------------- ------ ---------- ---------
(15
Trade and other payables 068) (4 100)
--------------------------------------------- ------ ---------- ---------
Provisions 1 792 71
--------------------------------------------- ------ ---------- ---------
Cash from operations 79 739 22 662
--------------------------------------------- ------ ---------- ---------
Capital reduction (2 570) -
--------------------------------------------- ------ ---------- ---------
Income tax paid (3 990) (472)
--------------------------------------------- ------ ---------- ---------
Net cash flows from operating activities 73 179 22 190
--------------------------------------------- ------ ---------- ---------
Cash flows from investing activities
--------------------------------------------- ------ ---------- ---------
Interest received 708 892
--------------------------------------------- ------ ---------- ---------
(26
Additions to property, plant and equipment 9 398) (12 307)
--------------------------------------------- ------ ---------- ---------
Proceeds from disposal of property,
plant and equipment - 124
--------------------------------------------- ------ ---------- ---------
Additions of other financial assets (925) (700)
--------------------------------------------- ------ ---------- ---------
(26
Net cash flows used in investing activities 615) (11 991)
--------------------------------------------- ------ ---------- ---------
Cash flows from financing activities
--------------------------------------------- ------ ---------- ---------
Refund of long term deposits 5 726 1 369
--------------------------------------------- ------ ---------- ---------
Proceeds from bank credit facilities 6 073 1 648
--------------------------------------------- ------ ---------- ---------
Net proceeds under obligations under
new loan - 2 310
--------------------------------------------- ------ ---------- ---------
Repayment of secured bank borrowings (17
and loan to third party 917) (19 166)
--------------------------------------------- ------ ---------- ---------
Interest paid (6 371) (4 371)
--------------------------------------------- ------ ---------- ---------
(12
Net cash flows used in financing activities 489) (18 210)
--------------------------------------------- ------ ---------- ---------
Net increase in cash and cash equivalents 34 075 (8 011)
--------------------------------------------- ------ ---------- ---------
Cash and cash equivalents at the beginning
of the year 15 826 24 265
--------------------------------------------- ------ ---------- ---------
Effect of exchange rate fluctuations
on cash held (159) (428)
--------------------------------------------- ------ ---------- ---------
Cash and cash equivalents at the end
of the year 14 49 742 15 826
--------------------------------------------- ------ ---------- ---------
1. REPORTING ENTITY
Tharisa plc (the Company) is a company domiciled in Cyprus. These condensed consolidated financial statements
of the Company for the year ended 30 September 2017 comprise the Company and its subsidiaries (together
referred to as the Group). The Group is primarily involved in platinum group metals (PGM) and chrome mining,
processing, trading and the associated logistics. The Company is listed on the main board of the Johannesburg
Stock Exchange and has a secondary standard listing on the main board of the London Stock Exchange.
2. BASIS OF PREPARATION
Statement of compliance
These condensed consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS), International Accounting Standards, IAS34 Interim Financial Reporting, the
Listings Requirements of the Johannesburg Stock Exchange and the Cyprus Companies Law, Cap. 113. Selected
explanatory notes are included to explain events and transactions that are significant to an understanding of the
changes in financial position and performance of the Group since the last consolidated financial statements at
and for the year ended 30 September 2016. These condensed consolidated financial statements do not include
all the information required for full consolidated financial statements prepared in accordance with IFRS.
These condensed consolidated financial statements were approved by the Board of Directors on 28 November 2017.
Use of estimates and judgements
Preparing the condensed consolidated financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets
and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing these condensed consolidated financial statements, significant judgements made by management
in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those
applied to the consolidated financial statements at and for the year ended 30 September 2016.
Functional and presentation currency
The condensed consolidated financial statements are presented in United States Dollars (US$) which is the
Company's functional currency and amounts are rounded to the nearest thousand.
Going concern
After making enquiries which include reviews of current cash resources, forecasts and budgets, timing of cash
flows, borrowing facilities and sensitivity analyses and considering the associated uncertainties to the Group's
operations, the Directors have a reasonable expectation that the Group has adequate financial resources to
continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the consolidated financial statements and the condensed consolidated financial
statements, which assumes that the Group will be able to meet its liabilities as they fall due for the
foreseeable future.
New and revised International Financial Reporting Standards and Interpretations
The Group has not early adopted any standards and interpretations, which are not yet effective for the financial
year ended 30 September 2017.
The following Standards and Interpretations have been issued but are not yet effective for annual periods
beginning on or after 1 October 2016. Those that are relevant to the Group are presented below.
IFRIC 23 - Uncertainty over Income Tax Treatment
IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2018)
IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019)
IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2018)
The Group will adopt these Standards and Interpretations for the financial year ending 30 September 2018.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in these condensed consolidated financial statement are the
same as those applied by the Group in its audited consolidated financial statements at and for the year
ended 30 September 2017.
4. OPERATING SEGMENTS
Segmental performance is measured based on segment revenue, cost of sales and gross profit or loss, as
included in the internal management reports that are reviewed by the Group's management.
Agency
and
---------------------------------- --------- --------- ----------- ---------
PGM Chrome trading Total
---------------------------------- --------- --------- ----------- ---------
US$'000 US$'000 US$'000 US$'000
---------------------------------- --------- --------- ----------- ---------
2017
---------------------------------- --------- --------- ----------- ---------
90
Revenue 924 252 869 5 650 349 443
---------------------------------- --------- --------- ----------- ---------
Cost of sales
---------------------------------- --------- --------- ----------- ---------
Cost of sales excluding selling (54 (107 (166
costs 336) 634) (4 241) 211)
---------------------------------- --------- --------- ----------- ---------
Selling costs (366) (59 068) (1 144) (60 578)
---------------------------------- --------- --------- ----------- ---------
(54 (166 (226
702) 702) (5 385) 789)
---------------------------------- --------- --------- ----------- ---------
36
Gross profit 222 86 167 265 122 654
---------------------------------- --------- --------- ----------- ---------
2016
---------------------------------- --------- --------- ----------- ---------
81
Revenue 514 138 139 - 219 65
---------------------------------- --------- --------- ----------- ---------
Cost of sales
---------------------------------- --------- --------- ----------- ---------
Cost of sales excluding selling (57 (121
costs 135) (64 710) - 845)
---------------------------------- --------- --------- ----------- ---------
Selling costs (218) (43 114) - (43 332)
---------------------------------- --------- --------- ----------- ---------
(57 (107 (165
353) 824) - 177)
---------------------------------- --------- --------- ----------- ---------
24
Gross profit 161 30 315 - 54 476
---------------------------------- --------- --------- ----------- ---------
The shared costs relating to the manufacturing of the PGM and the chrome concentrates are allocated to
the relevant operating segments based on the relative sales value per product on an ex-works basis. During
the year ended 30 September 2017, the relative sales value of chrome concentrates increased compared to
the relative sales value of PGM concentrate and consequently the allocation basis of shared costs was
amended to 65.0% (chrome concentrates) and 35.0% (PGM concentrate) respectively. The shared costs were
allocated equally between the PGM and chrome segments in the comparative period.
During the year the Group entered into an agreement to operate a chrome plant owned by a third party and
also to market and sell the chrome concentrate produced from this plant. The Group also intends to further
expand its third-party logistics offering and third-party trading operations in the year ahead. These
transactions are reported separately and are included in the Agency and trading segment.
Geographical information
The following table sets out information about the geographical location of the Group's revenue from
external customers.
The geographical location analysis of revenue from external customers is based on the country of
establishment of each customer.
2017 2016
----------------- ---------- ----------
US$'000 US$'000
----------------- ---------- ----------
China 86 035 37 392
----------------- ---------- ----------
South Africa 151 886 110 698
----------------- ---------- ----------
Singapore 13 961 13 670
----------------- ---------- ----------
Hong Kong 94 866 55 045
----------------- ---------- ----------
South Korea - 1 523
----------------- ---------- ----------
Other countries 2 695 1 325
----------------- ---------- ----------
349 443 219 653
----------------- ---------- ----------
5. COST OF SALES
2017 2016
---------------------------------------------- ------------ -----------
US$'000 US$'000
---------------------------------------------- ------------ -----------
Mining 96 005 77 773
---------------------------------------------- ------------ -----------
Salaries and wages 12 467 9 248
---------------------------------------------- ------------ -----------
Utilities 9 495 7 885
---------------------------------------------- ------------ -----------
Diesel 705 114
---------------------------------------------- ------------ -----------
Materials and consumables 8 274 7 406
---------------------------------------------- ------------ -----------
Re-agents 3 653 3 327
---------------------------------------------- ------------ -----------
Steel balls 6 757 4 864
---------------------------------------------- ------------ -----------
Overhead 8 055 5 854
---------------------------------------------- ------------ -----------
State royalties 1 665 832
---------------------------------------------- ------------ -----------
Depreciation - property, plant and equipment 16 476 9 847
---------------------------------------------- ------------ -----------
Agency and trading 4 241 -
---------------------------------------------- ------------ -----------
Change in inventories - finished products
and ore stockpile (1 582) (5 305)
---------------------------------------------- ------------ -----------
Total cost of sales excluding selling
costs 166 211 121 845
---------------------------------------------- ------------ -----------
Selling costs 60 578 43 332
---------------------------------------------- ------------ -----------
Cost of sales 226 789 165 177
---------------------------------------------- ------------ -----------
6. ADMINISTRATIVE EXPENSES
2017 2016
---------------------------------------------------------- ------------ ----------
US$'000 US$'000
---------------------------------------------------------- ------------ ----------
Directors and staff costs
---------------------------------------------------------- ------------ ----------
Non-Executive Directors 536 499
---------------------------------------------------------- ------------ ----------
Employees: salaries 9 213 7 328
---------------------------------------------------------- ------------ ----------
bonuses 1 339 649
---------------------------------------------------------- ------------ ----------
pension fund and medical aid contributions 1 405 2 249
---------------------------------------------------------- ------------ ----------
12 493 10 725
---------------------------------------------------------- ------------ ----------
Audit - external audit services 429 384
---------------------------------------------------------- ------------ ----------
Consulting 2 773 1 737
---------------------------------------------------------- ------------ ----------
Corporate and social investment 73 108
---------------------------------------------------------- ------------ ----------
Depreciation 453 320
---------------------------------------------------------- ------------ ----------
Discount facility and related fees 516 457
---------------------------------------------------------- ------------ ----------
Equity-settled share based payment expense 4 342 2 542
---------------------------------------------------------- ------------ ----------
Listing fees 260 942
---------------------------------------------------------- ------------ ----------
Health and safety 300 236
---------------------------------------------------------- ------------ ----------
Impairment losses - 63
---------------------------------------------------------- ------------ ----------
Insurance 914 781
---------------------------------------------------------- ------------ ----------
Legal and professional 873 186
---------------------------------------------------------- ------------ ----------
Loss on disposal of property, plant and
equipment 196 584
---------------------------------------------------------- ------------ ----------
Rent and utilities 660 697
---------------------------------------------------------- ------------ ----------
Security 828 930
---------------------------------------------------------- ------------ ----------
Telecommunications and IT related 719 645
---------------------------------------------------------- ------------ ----------
Training 313 465
---------------------------------------------------------- ------------ ----------
Travelling and accommodation 358 285
---------------------------------------------------------- ------------ ----------
Sundry 403 688
---------------------------------------------------------- ------------ ----------
26 903 22 775
---------------------------------------------------------- ------------ ----------
7. TAX
2017 2016
-------------------------------------------- ---------- -----------
US$'000 US$'000
-------------------------------------------- ---------- -----------
Corporate income tax for the year
-------------------------------------------- ---------- -----------
Cyprus 1 554 309
-------------------------------------------- ---------- -----------
South Africa 2 596 128
-------------------------------------------- ---------- -----------
4 150 437
-------------------------------------------- ---------- -----------
Special contribution for defence in Cyprus 4 4
-------------------------------------------- ---------- -----------
Deferred tax
-------------------------------------------- ---------- -----------
Originating and reversal of temporary
differences 19 162 5 731
-------------------------------------------- ---------- -----------
Tax charge 23 316 6 172
-------------------------------------------- ---------- -----------
The Group's consolidated effective tax rate for the year ended 30 September 2017 was 25.6% (2016: 28.1%).
The corporation tax rate is 12.5% in Cyprus, 0% in Guernsey and 28.0% in South Africa.
Special contribution for defence is provided in Cyprus on certain interest income at the rate of 30%. 100% of
such interest income is treated as non taxable in the computation of chargeable income for corporation tax purposes.
No provision for tax in other jurisdictions was made as these entities either sustained losses for taxation
purposes or did not earn any assessable profits.
8. EARNINGS PER SHARE
Basic and diluted earnings per share
The calculation of basic and diluted earnings per share has been based on the following profit attributable to
the ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding.
2017 2016
---------------------------------------------- ---------- ----------
Profit for the year attributable to ordinary
shareholders (US$'000) 57 601 13 809
---------------------------------------------- ---------- ----------
Weighted average number of ordinary shares
at 30 September ('000) 257 393 256 178
---------------------------------------------- ---------- ----------
Basic and diluted earnings per share (US$
cents) 22 5
---------------------------------------------- ---------- ----------
LTIP and SARS awards were excluded from the diluted weighted average number of ordinary shares
calculation because their effect would have been anti-dilutive. The average market value of the Company's
shares for the purposes of calculating the potential dilutive effect of SARS was based on quoted market prices
for the year during which the options were outstanding.
Headline and diluted headline earnings per share
The calculation of headline and diluted headline earnings per share has been based on the following headline
earnings attributable to the ordinary shareholders and the weighted average number of ordinary
shares outstanding.
2017 2016
--------------------------------------------- ----------- ----------
Headline earnings for the year attributable
to ordinary shareholders
--------------------------------------------- ----------- ----------
(US$'000) 57 799 14 281
--------------------------------------------- ----------- ----------
Weighted average number of ordinary shares
at 30 September ('000) 257 393 256 178
--------------------------------------------- ----------- ----------
Headline and diluted headline earnings
per share (US$ cents) 22 6
--------------------------------------------- ----------- ----------
Reconciliation of profit to headline earnings
2017 2016
--------------------------------- -------------------- -------------------
Gross Net Gross Net
--------------------------------- ---------- -------- -------- ---------
US$'000 US$'000 US$'000 US$'000
--------------------------------- ---------- -------- -------- ---------
Profit attributable to ordinary
shareholders 57 601 13 809
--------------------------------- ---------- -------- -------- ---------
Adjustments:
--------------------------------- ---------- -------- -------- ---------
Impairment losses on goodwill 57 57 51 51
--------------------------------- ---------- -------- -------- ---------
Loss on disposal of property,
plant and
--------------------------------- ---------- -------- -------- ---------
equipment 196 141 584 421
--------------------------------- ---------- -------- -------- ---------
Headline earnings 57 799 14 281
--------------------------------- ---------- -------- -------- ---------
9. PROPERTY, PLANT AND EQUIPMENT
30 30
------------------------------------ ----------- ----------
September September
------------------------------------ ----------- ----------
2017 2016
------------------------------------ ----------- ----------
US$'000 US$'000
------------------------------------ ----------- ----------
Total cost 295 555 266 368
------------------------------------ ----------- ----------
Total accumulated depreciation (62 996) (45 834)
------------------------------------ ----------- ----------
Net book value 232 559 220 534
------------------------------------ ----------- ----------
Reconciliation of net book value
------------------------------------ ----------- ----------
Opening net book value 220 534 214 518
------------------------------------ ----------- ----------
Additions 26 398 12 307
------------------------------------ ----------- ----------
Disposals (196) (708)
------------------------------------ ----------- ----------
Depreciation (16 929) (10 167)
------------------------------------ ----------- ----------
Exchange adjustment on translation 2 752 4 584
------------------------------------ ----------- ----------
Closing net book value 232 559 220 534
------------------------------------ ----------- ----------
There were no additions to the deferred stripping asset (2016: US$2.4 million) during the year ended
30 September 2017. The deferred stripping asset is included in mining assets and infrastructure.
During the year the Group acquired mining fleet of US$1.2 million (2016: equipment of US$0.6 million) under
a finance lease. The leased equipment secures lease obligations. At 30 September 2017 the carrying amount
of the leased equipment amounted to US$1.1 million.
Tharisa Minerals Proprietary Limited acquired the assets of a sub-contractor, BMI Drilling Proprietary Limited,
during the year. The total consideration for the assets was ZAR24.1 million and these are included in additions.
Included in mining assets and infrastructure are projects under construction of US$9.0 million (2016: US$13.4 million).
The estimated economically recoverable proved and probable mineral reserve was reassessed during the year
which gave rise to a change in accounting estimate. The remaining reserve that management had previously
assessed was 106.4 Mt at 31 December 2015 and at 1 October 2016 was assessed to be 100.3 Mt. As a result,
the expected useful life of the plant decreased. The effect of the change on the actual depreciation expense,
included in cost of sales, is an additional US$0.4 million. The change was recognised prospectively.
Freehold land and buildings comprises various portions of the farms Elandsdrift 467 JQ and 342 JQ, North West
Province, South Africa. All land is freehold.
Property, plant and equipment, with the exception of motor vehicles, is insured at approximate cost of
replacement. Motor vehicles are insured at market value. Land is not insured.
At 30 September 2017, an amount of US$213.5 million (2016: US$200.8 million) of the carrying amount of the
Group's tangible property, plant and equipment is pledged as security against bank and third party borrowings
(note 16).
At 30 September 2017, the Group's capital commitments for contracts to purchase property, plant and
equipment amounted to US$6.5 million (2016: US$1.8 million).
10. LONG-TERM DEPOSITS
2017 2016
-------------------- -------- --------
US$'000 US$'000
-------------------- -------- --------
Long-term deposits 4 505 9 846
-------------------- -------- --------
The long-term deposits represent restricted cash which is designated as a "debt service reserve account" as
required by the terms of the Common Terms Agreement for the senior debt facility of Tharisa Minerals
Proprietary Limited as disclosed in note 16.
Effective 31 March 2017, the Common Terms Agreement was amended by reducing the amount of restricted
cash required as a debt service reserve account. The released funds were utilised as a mandatory prepayment
on the outstanding capital, reducing the repayment term of the senior debt facility (refer to note 16).
The long-term deposits are deposited with major financial institutions of high-quality credit standing
predominantly within South Africa and Hong Kong of which US$2.2 million (2016: US$6.6 million) bears interest
at 5.5% pa (2016: 5.6% pa) and US$2.3 million (2016: US$3.3 million) bears interest at 0.01% pa (2016: 0.01% pa).
11. DEFERRED TAX
2017 2016
---------------------------- ---------- --------
US$'000 US$'000
---------------------------- ---------- --------
Deferred tax assets 1 952 1 397
---------------------------- ---------- --------
Deferred tax liabilities (23 823) (5 275)
---------------------------- ---------- --------
Net deferred tax liability (21 871) (3 878)
---------------------------- ---------- --------
Deferred tax assets and deferred tax liabilities are not offset unless the Group has a legally enforceable right
to offset such assets and liabilities.
All of the above amounts have used the currently enacted income taxation rates of the respective tax
jurisdictions the Group operates in. South African taxation losses normally expire within 12 months of the
respective entities not trading. The deductible temporary timing differences do not expire under current
taxation legislation. Deferred tax assets have only been recognised in terms of these items when it is probable
that taxable profit will be available in the immediate future against which the respective entities can utilise the
benefits therefrom.
The estimates used to assess the recoverability of recognised deferred tax assets include a forecast of the
future taxable income and future cash flow projections based on a three year period. The Group did not have
tax losses and temporary differences for which deferred tax was not recognised.
12. INVENTORIES
2017 2016
--------------------------- ------------ ------------
US$'000 US$'000
--------------------------- ------------ ------------
Finished products 6 620 6 116
--------------------------- ------------ ------------
Ore stockpile 5 807 4 729
--------------------------- ------------ ------------
Consumables 8 399 4 937
--------------------------- ------------ ------------
20 826 15 782
--------------------------- ------------ ------------
Impairment of consumables (24) (15)
--------------------------- ------------ ------------
Total carrying amount 20 802 15 767
--------------------------- ------------ ------------
Inventories are stated at the lower of cost or net realisable value. The Group impaired certain consumables
and spares as the operational use became doubtful with no anticipated recoverable amount or value in use.
The impaired consumables are allocated 35.0% and 65.0% respectively to the PGM and chrome operating
segments (2016: equally allocated). There were no write-downs to net realisable value during the year
(2016: no write downs).
Inventories are subject to a general notarial bond in favour of the lenders of the senior debt facility as referred
to in note 16.
13. TRADE AND OTHER RECEIVABLES
2017 2016
--------------------------------------------- ------------ -----------
US$'000 US$'000
--------------------------------------------- ------------ -----------
Trade receivables 55 602 44 856
--------------------------------------------- ------------ -----------
Other receivables - related parties (note
18) 59 61
--------------------------------------------- ------------ -----------
Deposits, prepayments and other receivables 1 081 1 267
--------------------------------------------- ------------ -----------
Accrued income 3 167 1 187
--------------------------------------------- ------------ -----------
Value added tax receivable (VAT) 9 327 3 813
--------------------------------------------- ------------ -----------
Provision for royalty tax 1 138 -
--------------------------------------------- ------------ -----------
70 374 51 184
--------------------------------------------- ------------ -----------
Trade and other receivables of the Group are expected to be recoverable within one year from each reporting date.
Trade and other receivables, which are less than 90 days past due are not considered to be impaired. Trade
and other receivables which are more than 90 days past due are assessed for recoverability with reference to
past default experience of the counterparty's current financial position.
Included in VAT is an amount of ZAR79.5 million which relates to diesel rebates receivable from the South
African Revenue Service (SARS) in respect of the mining operations. The Group received a letter of intent from
SARS disputing the refundability of this amount. The Group is strongly of the view that it fully complies with all
the regulations to be entitled to this refund and is opposing SARS's intent not to pay out this claim. The Group
will take the necessary legal action to recover the amount due.
Based on past experience, management believes that no impairment allowance (2016: no impairment allowance)
is required in respect of the trade and other receivables as there has not been a significant change
in credit quality and the balances are still considered fully recoverable. The Group does not hold any collateral
over these balances.
14. CASH AND CASH EQUIVALENTS
2017 2016
-------------------------- --------- --------
US$'000 US$'000
-------------------------- --------- --------
Bank balances 39 983 15 490
-------------------------- --------- --------
Short-term bank deposits 9 759 336
-------------------------- --------- --------
49 742 15 826
-------------------------- --------- --------
The amounts reflected above approximate fair value.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are
generally call deposit accounts and earn interest at the respective short-term deposit rates.
At 30 September 2017, an amount of US$1.7 million (2016: US$1.6 million) was provided as security for a bank
guarantee issued in favour of a trade creditor of a subsidiary of the Group and US$0.3 million (2016: US$0.3 million)
was provided as security against certain credit facilities of the Group.
15. SHARE CAPITAL AND RESERVES
Share capital
30 September 30 September
2017 2016
------------------------------ -------------------------- ----------------------------------
Number Number
of of
------------------------------ -------------- ---------- ------------ --------------------
Shares Shares
------------------------------ -------------- ---------- ------------ --------------------
'000 US$'000 '000 US$'000
------------------------------ -------------- ---------- ------------ --------------------
Authorised - ordinary shares
of US$0.001
------------------------------ -------------- ---------- ------------ --------------------
each
------------------------------ -------------- ---------- ------------ --------------------
10 000 10 000
As at 30 September 000 10 000 000 10 000
------------------------------ -------------- ---------- ------------ --------------------
Authorised - convertible
redeemable
------------------------------ -------------- ---------- ------------ --------------------
preference shares of US$1
each
------------------------------ -------------- ---------- ------------ --------------------
As at 30 September 1 051 1 1 051 1
------------------------------ -------------- ---------- ------------ --------------------
Issued and fully paid
------------------------------ -------------- ---------- ------------ --------------------
Ordinary shares
------------------------------ -------------- ---------- ------------ --------------------
Balance at the beginning 256 981 255 891
of the year 571 257 886 256
------------------------------ -------------- ---------- ------------ --------------------
Shares issued as part of
management share
------------------------------ -------------- ---------- ------------ --------------------
4 018 1 089
incentive schemes 429 4 685 1
------------------------------ -------------- ---------- ------------ --------------------
(987
Less: Treasury shares 274) (1) - -
------------------------------ -------------- ---------- ------------ --------------------
Balance at the end of the 260 012 256 981
year 726 260 571 257
------------------------------ -------------- ---------- ------------ --------------------
Share premium
------------------------------ -------------- ---------- ------------ --------------------
Balance at the beginning 256 981 255 891
of the year 571 456 181 886 452 512
------------------------------ -------------- ---------- ------------ --------------------
Capital reduction - (179 - -
175)
------------------------------ -------------- ---------- ------------ --------------------
Shares issued as part of
management share
------------------------------ -------------- ---------- ------------ --------------------
4 018 1 089
incentive schemes 429 4 078 685 3 669
------------------------------ -------------- ---------- ------------ --------------------
(987
Less: Treasury shares 274) (1 002) - -
------------------------------ -------------- ---------- ------------ --------------------
Balance at the end of the 260 012 256 981
year 726 280 082 571 456 181
------------------------------ -------------- ---------- ------------ --------------------
Allotments during the year were in respect of the award of 2 984 853 ordinary shares granted in terms of the
Share Award Scheme (Conditional Awards) and 1 033 576 ordinary shares issued as treasury shares to satisfy the
potential future settlement of Appreciation Rights of the participants' of the Tharisa Share Award Plan.
During the year ended 30 September 2017, 46 302 ordinary shares were transferred from treasury shares to
satisfy the exercise of Appreciation Rights by the participants of the Tharisa Share Award Scheme.
At 30 September 2017, 987 274 ordinary shares were held in treasury.
Allotments during the previous year were in respect of the award of 1 089 685 ordinary shares granted in terms
of the Share Award Scheme (Conditional Awards).
All shares rank equally with regard to the Company's residual assets. The holders of ordinary shares, other than
treasury shares, are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company.
Share premium
The share premium represents the excess of the issue price of ordinary shares over their nominal value, to the
extent that it is registered at the Registrar of Companies in Cyprus, less share issue costs. The share premium is
not distributable for dividend purposes.
During the year ended 30 September 2017, the share premium account was reduced by US$179.2 million with
a corresponding increase in the retained earnings to reduce the accumulated losses to US$nil. The required Court
Order was obtained on 8 March 2017 and filed at the Registrar of Companies on 9 March 2017.
The distribution of US$2.6 million (US$1 cent per share) (2016: no distribution) was approved by way of a Special
Resolution on 1 February 2017. The Special Resolution was ratified by the Court Order on 8 March 2017.
During the years ended 30 September 2017 and 30 September 2016, the increases in the share premium account
related to the issue and allotment of ordinary shares granted in terms of the Share Award Schemes.
2017 2016
------------------------------- ----------- ----------
US$'000 US$'000
------------------------------- ----------- ----------
16. BORROWINGS
------------------------------- ----------- ----------
Non-current
------------------------------- ----------- ----------
Secured bank borrowings 2 878 22 103
------------------------------- ----------- ----------
Finance leases 1 497 246
------------------------------- ----------- ----------
Deferred supplier - 1 659
------------------------------- ----------- ----------
4 375 24 008
------------------------------- ----------- ----------
Current
------------------------------- ----------- ----------
Secured bank borrowings 14 876 14 443
------------------------------- ----------- ----------
Finance leases 847 677
------------------------------- ----------- ----------
Bank credit facilities 29 072 23 012
------------------------------- ----------- ----------
Guardrisk loan 231 169
------------------------------- ----------- ----------
Loan payable to related party - 107
------------------------------- ----------- ----------
45 026 38 408
------------------------------- ----------- ----------
Secured bank borrowings
The secured bank borrowings relate to financing of ZAR1 billion obtained from a consortium of banks in South
Africa during the year ended 30 September 2012. The financing was obtained by Tharisa Minerals Proprietary
Limited, a subsidiary of the Group, and was for a period of seven years repayable in twenty two equal quarterly
instalments with the first repayment date at 31 December 2013.
Repayments are subject to a cash sweep which will reduce the repayment period to a minimum of five years.
Tharisa Minerals Proprietary Limited is required to maintain funds in a debt service reserve account (refer to
note 10). Effective 31 March 2017, the financing terms were amended to reduce the required amount of the
debt service reserve balance. The released funds from the debt service reserve balance were utilised as a
mandatory prepayment on the outstanding capital, reducing the repayment term of the senior debt facility. At
30 September 2017, the estimated remaining term is equal to five quarterly instalments.
The financing bears interest at 3 month JIBAR plus 4.9% pa until achievement of project completion on
14 November 2016 whereafter the interest rate reduced to JIBAR plus 3.4% pa.
The loan contains the following financial covenants:
- Debt service cover ratio ("DSCR") at a level greater than 1.4 times
- Loan life cover ratio at a level greater than 1.6 times
- Debt/equity ratio at a level greater than 1.5 times
- Reserve tail ratio at a level of 30.0% or greater.
At 30 September 2017 and 30 September 2016, Tharisa Minerals Proprietary Limited complied with all covenant
ratios. Project completion was achieved on 14 November 2016. In the prior year, Tharisa Minerals Proprietary
Limited hedged a portion of the facility for interest rate risk via an interest rate cap.
Finance leases
The Group entered into finance lease arrangement for the purchase of mining fleet. The average lease term
was 41 months and at 30 September 2017 the finance lease obligation was ZAR28.4 million. The average
effective borrowing rate is the South African prime rate. The interest rate was fixed at the contract date. No
arrangements have been entered into for contingent rent.
During the previous year the Group purchased equipment of ZAR22.9 million under a finance lease. The leased
equipment secures lease obligations. The lease term was 24 months and the average effective borrowing rate
was South African prime rate plus 3.0% pa. The lease obligation at 30 September 2017 was ZAR3.4 million
(2016: ZAR12.7 million). The interest rate was fixed at the contract date. No arrangements have been entered
into for contingent rent.
2017 2016
----------------------------------------- ----------- -----------
US$'000 US$'000
----------------------------------------- ----------- -----------
Minimum lease payments due:
----------------------------------------- ----------- -----------
Within one year 1 046 760
----------------------------------------- ----------- -----------
Two to five years 1 620 253
----------------------------------------- ----------- -----------
2 666 1 013
----------------------------------------- ----------- -----------
Less future finance charges (322) (90)
----------------------------------------- ----------- -----------
Present value of minimum lease payments
due 2 344 923
----------------------------------------- ----------- -----------
Present value of minimum lease payments
due:
----------------------------------------- ----------- -----------
Within one year 847 677
----------------------------------------- ----------- -----------
Two to five years 1 497 246
----------------------------------------- ----------- -----------
2 344 923
----------------------------------------- ----------- -----------
Deferred supplier
The balance relates to a trade payable of which payment had been deferred. The amount payable was
unsecured and interest was calculated at the South African prime rate. During the year ended 30 September 2017,
an agreement was reached with the deferred supplier and the outstanding balance was settled in full.
Guardrisk loan
The loan from Guardrisk Insurance Company Limited bears interest at 9.06% (2016: 8.72%) pa, compounded
monthly and is repayable in twelve monthly instalments commencing 1 December 2016. The loan is guaranteed
by the Company for an amount of ZAR14.0 million. The final instalment is due on 1 November 2017.
Bank credit facilities
The bank credit facilities relate to the discounting of the letters of credit by the Group's banks following
performance of the letter of credit conditions by the Group, which results in funds being received in advance
of the normal payment date. Interest on these facilities at the reporting date was US Libor plus 1.6% pa
(2016: US Libor plus 1.6% pa).
17. FINANCIAL INSTRUMENTS
2017 2016
--------------------------------------------- --------- --------
US$'000 US$'000
--------------------------------------------- --------- --------
Financial assets - carrying amount
--------------------------------------------- --------- --------
Loans and receivables 58 828 46 104
--------------------------------------------- --------- --------
Long-term deposits 4 505 9 846
--------------------------------------------- --------- --------
Cash and cash equivalents 49 742 15 826
--------------------------------------------- --------- --------
Investments at fair value through profit
or loss * 49 43
--------------------------------------------- --------- --------
Financial instruments at fair value through
profit or loss ** 3 767 3 718
--------------------------------------------- --------- --------
116 891 75 537
--------------------------------------------- --------- --------
Financial liabilities - carrying amount
--------------------------------------------- --------- --------
Borrowings 49 401 62 416
--------------------------------------------- --------- --------
Trade payables 25 003 35 513
--------------------------------------------- --------- --------
Discount facility ** 449 -
--------------------------------------------- --------- --------
Forward exchange contracts** 150 -
--------------------------------------------- --------- --------
Income received in advance - 3 102
--------------------------------------------- --------- --------
Other payables 4 750 4 703
--------------------------------------------- --------- --------
79 753 105 734
--------------------------------------------- --------- --------
* Level 1 of the fair value hierarchy - quoted prices in active markets for the same instrument
** Level 2 of the fair value hierarchy - significant inputs are based on observable market data for similar
financial instruments
The Board of Directors considers that the fair values of financial assets and liabilities approximate their
carrying values at each reporting date.
18. RELATED PARTY TRANSACTIONS
Related party transactions exist between shareholders, subsidiaries within the Group and its company
directors and key management personnel.
These transactions are concluded at arm's length in the normal course of the business. All intergroup
transactions have been eliminated on consolidation.
2017 2016
---------------------------------------------- -------- --------
US$'000 US$'000
---------------------------------------------- -------- --------
Transactions and balances with related
parties:
---------------------------------------------- -------- --------
Trade and other receivables (note 13)
---------------------------------------------- -------- --------
The Tharisa Community Trust 5 5
---------------------------------------------- -------- --------
Rocasize Proprietary Limited 54 54
---------------------------------------------- -------- --------
Keaton Administrative and Technical Services
Proprietary Limited - 2
---------------------------------------------- -------- --------
59 61
---------------------------------------------- -------- --------
The amounts above are unsecured, interest
free with no fixed repayment terms.
---------------------------------------------- -------- --------
Loan payable to related party (note 16)
---------------------------------------------- -------- --------
Langa Trust - 107
---------------------------------------------- -------- --------
The loan payable to the Langa Trust was settled in full during the year ended 30 September 2017.
2017 2016
----------------------------------------------- --------- -----------
US$'000 US$'000
----------------------------------------------- --------- -----------
Amounts due to Directors and former Directors
----------------------------------------------- --------- -----------
A Djakouris 21 22
----------------------------------------------- --------- -----------
JD Salter 30 30
----------------------------------------------- --------- -----------
O Kamal 16 16
----------------------------------------------- --------- -----------
C Bell 26 24
----------------------------------------------- --------- -----------
R Davey 19 -
----------------------------------------------- --------- -----------
J Ka Ki Chen 11 -
----------------------------------------------- --------- -----------
B Chi Ming Cheng - 11
----------------------------------------------- --------- -----------
123 103
----------------------------------------------- --------- -----------
Interest bearing - accrued dividends
to related parties
----------------------------------------------- --------- -----------
Arti Trust 2 486 2 459
----------------------------------------------- --------- -----------
Ditodi Trust 214 210
----------------------------------------------- --------- -----------
Makhaye Trust 214 210
----------------------------------------------- --------- -----------
The Phax Trust 425 418
----------------------------------------------- --------- -----------
The Rowad Trust 213 210
----------------------------------------------- --------- -----------
MJ Jacquet-Briner 213 210
----------------------------------------------- --------- -----------
3 765 3 717
----------------------------------------------- --------- -----------
2017 2016
------------------- ----------- ----------
US$'000 US$'000
------------------- ----------- ----------
Interest expense
------------------- ----------- ----------
Langa Trust 3 183
------------------- ----------- ----------
Arti Trust 262 253
------------------- ----------- ----------
Ditodi Trust 27 22
------------------- ----------- ----------
Makhaye Trust 27 22
------------------- ----------- ----------
The Phax Trust 53 43
------------------- ----------- ----------
The Rowad Trust 27 22
------------------- ----------- ----------
MJ Jacquet-Briner 27 22
------------------- ----------- ----------
426 567
------------------- ----------- ----------
Compensation to key management:
Salary Expense Share Provident
and
------------------------- ----------- ------------ --------- ---------- -------- --------
fees allowances based fund
and
------------------------- ----------- ------------ --------- ---------- -------- --------
payments risk
------------------------- ----------- ------------ --------- ---------- -------- --------
benefits Bonus Total
------------------------- ----------- ------------ --------- ---------- -------- --------
2017 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------- ----------- ------------ --------- ---------- -------- --------
Non-Executive Directors 536 - - - - 536
------------------------- ----------- ------------ --------- ---------- -------- --------
Executives Directors 1 333 9 821 73 143 2 379
------------------------- ----------- ------------ --------- ---------- -------- --------
Other key management 865 27 518 95 117 1 622
------------------------- ----------- ------------ --------- ---------- -------- --------
2 734 36 1 339 168 260 4 537
------------------------- ----------- ------------ --------- ---------- -------- --------
Salary Expense Share Provident
and
------------------------- ---------- ------------ --------- ---------- --------- --------
fees allowances based fund
and
------------------------- ---------- ------------ --------- ---------- --------- --------
payments risk
------------------------- ---------- ------------ --------- ---------- --------- --------
benefits Bonus Total
------------------------- ---------- ------------ --------- ---------- --------- --------
2016 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------- ---------- ------------ --------- ---------- --------- --------
Non-Executive Directors 499 - - - - 499
------------------------- ---------- ------------ --------- ---------- --------- --------
Executives Directors 1 067 8 123 59 10 1 267
------------------------- ---------- ------------ --------- ---------- --------- --------
Other key management 746 23 66 75 20 930
------------------------- ---------- ------------ --------- ---------- --------- --------
2 312 31 189 134 30 2 696
------------------------- ---------- ------------ --------- ---------- --------- --------
Share-based awards to the executive directors and other key management during the year ended 30 September
2017 were as follows:
2017 Ordinary shares
Opening
---------------------------- ---------- ---------- --------- -----------
balance
---------------------------- ---------- ---------- --------- -----------
Allocated Vested Total
---------------------------- ---------- ---------- --------- -----------
1 723 842 (757 1 808
LTIP - executive directors 522 682 888) 316
---------------------------- ---------- ---------- --------- -----------
1 115 564 (477 1 202
LTIP - other key 106 792 745) 153
---------------------------- ---------- ---------- --------- -----------
management
---------------------------- ---------- ---------- --------- -----------
2016 Ordinary shares
---------------------------- ---------- ---------- --------- -----------
822 1 066 (165 1 723
LTIP - executive directors 915 563 956) 522
---------------------------- ---------- ---------- --------- -----------
476 727 1 115
LTIP - other key 362 779 (89 035) 106
---------------------------- ---------- ---------- --------- -----------
management
---------------------------- ---------- ---------- --------- -----------
2017 Ordinary shares
Opening
---------------------------- ---------- ---------- ---------- -------------
balance Allocated Vested Total
---------------------------- ---------- ---------- ---------- -------------
1 243 842 (724 1 362
SARS - executive directors 870 682 225) 327
---------------------------- ---------- ---------- ---------- -------------
885 564 (526
SARS - other key 344 792 000) 924 136
---------------------------- ---------- ---------- ---------- -------------
management
---------------------------- ---------- ---------- ---------- -------------
2016 Ordinary shares
---------------------------- ---------- ---------- ---------- -------------
308 1 039 (104 1 243
SARS - executive directors 591 291 012) 870
---------------------------- ---------- ---------- ---------- -------------
249 718
SARS - other key 628 689 (82 973) 885 344
---------------------------- ---------- ---------- ---------- -------------
management
---------------------------- ---------- ---------- ---------- -------------
Non-executive directors are not entitled to participate in the Group's share award schemes.
Relationships between parties:
Keaton Administrative and Technical Services Proprietary Limited
Two of the directors of the holding company of Keaton Administrative and Technical Services Proprietary
Limited were also directors of the Company during the year.
The Tharisa Community Trust and Rocasize Proprietary Limited
The Tharisa Community Trust is a shareholder of Tharisa Minerals Proprietary Limited and owns 100% of the
issued ordinary share capital of Rocasize Proprietary Limited.
Langa Trust, Arti Trust, Phax Trust and Rowad Trust
A Director of the Company is a beneficiary of these trusts.
Ditodi Trust and Makhaye Trust
Certain of the non-controlling shareholders of Tharisa Minerals Proprietary Limited are beneficiaries of these trusts.
MJ Jaquet-Briner
MJ Jaquet-Briner is a director of Tharisa Minerals Proprietary Limited and is a shareholder in the non-
controlling interest of Tharisa Minerals Proprietary Limited.
19. CONTINGENT LIABILITIES
As at 30 September 2017, there is no litigation (2016: no litigation), current or pending, which is considered
likely to have a material adverse effect on the Group.
20. EVENTS AFTER THE REPORTING PERIOD
Effective 1 October 2017 Tharisa Minerals Proprietary Limited transitioned from a contractor mining model to
an owner mining model with the acquisition of mining equipment, spares and consumables from MCC
Contracts Proprietary Limited (MCC), the previous mining contractors of Tharisa Minerals Proprietary Limited,
and includes the transfer of the employment of 876 personnel of MCC. In addition, Tharisa Minerals Proprietary
Limited took cession and assignment of certain leases entered into by MCC.
The following summarises the assets acquired and liabilities assumed at the acquisition date:
Property, plant and equipment
Inventory
Employee related liabilities
Finance lease liabilities
The fair value of assets acquired and liabilities assumed has not yet been determined. Management is currently
in the process of finalising the asset valuations, identifying all assets in terms of the contracts and assessing any
liabilities that need to be recognised. Additionally, the goodwill/gain on bargain purchase cannot be
determined as yet.
The total cash consideration paid for the acquisition was ZAR279 million. No deferred consideration or
contingent consideration exists.
The purchase consideration was funded by a bridge loan from ABSA Bank Limited and an original equipment
manufacturer finance facility from Caterpillar Financial Services Corporation.
Other than the above, the Board of Directors are not aware of any matter or circumstance arising since the end
of the financial year that will impact these financial results.
21. CAPITAL DISTRIBUTION AND DIVIDENDS
A distribution of US$2.6 million (US$ 1 cent per share) (2016: no distribution) was declared on 1 February 2017
as a reduction of share premium.
No dividends have been declared during the year (2016: no dividends).
The full audited Annual Financial Statements and the results presentation will be available for
download in the Investor Relations section of the website on 30 November 2016.
For any questions regarding the results, please contact our Investor Relations Manager, Sherilee
Lakmidas at slakmidas@tharisa.com.
Further details about the distribution to shareholders will be announced in due course via SENS/RNS.
CORPORATE INFORMATION
REGISTERED ADDRESS
Office 108 - 110
S. Pittokopitis Business Centre
17 Neophytou Nicolaides and Kilkis Streets
8011 Paphos
Cyprus
POSTAL ADDRESS
PO Box 62425
8064 Paphos
Cyprus
DIRECTORS OF THARISA
Loucas Christos Pouroulis (Executive Chairman)
Phoevos Pouroulis (Chief Executive Officer)
Michael Gifford Jones (Chief Finance Officer)
John David Salter (Lead independent non-executive director)
Antonios Djakouris (Independent non-executive director)
Omar Marwan Kamal (Non-executive director)
Carol Bell (Independent non-executive director)
Roger Davey (Independent non-executive director)
Joanna Ka Ki Cheng (Non-executive director)
JOINT COMPANY SECRETARIES
Lysandros Lysandrides
26 Vyronos Avenue
1096 Nicosia
Cyprus
Sanet de Witt
2nd Floor, The Crossing,
372 Main Road
Bryanston Johannesburg 2021
South Africa
Email: secretarial@tharisa.com
INVESTOR RELATIONS
Sherilee Lakmidas
Eland House, The Braes
3 Eaton Avenue Bryanston Johannesburg 2021
South Africa
Email: ir@tharisa.com
TRANSFER SECRETARIES
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
Rosebank Towers, 15 Biermann Avenue,
Rosebank, Johannesburg, 2196
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFFEILALAFID
(END) Dow Jones Newswires
November 30, 2017 02:01 ET (07:01 GMT)
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