Financial statements
Consolidated financial statements
- Approval of the annual financial
- Certificate by company secretary
- Independent auditors' report to the members of Assore Limited
- Directors' report
- Consolidated statement of financial position
- Consolidated income statement
- Consolidated statement of comprehensive income
- Consolidated statement of cash flow
- Consolidated statement of changes in equity
- Notes to the consolidated financial statements
Company financial statements
- Company statement of financial position
- Company income statement
- Company statement of comprehensive income
- Company statement of cash flow
- Company statement of changes in equity
- Notes to the company financial statements
Directors’ report
for the year ended 30 June 2012
Nature of business
Assore Limited was incorporated in South Africa in 1950 and is a mining holding company principally engaged in ventures involving base minerals and metals. The company’s shares are listed on the JSE Limited (the JSE) under “Assore” in the general mining sector and its ultimate holding company is Oresteel Investments Proprietary Limited.
The group’s principal investment is a 50% (2011: 50%) interest in Assmang Limited (Assmang) which it controls jointly with African Rainbow Minerals Limited (ARM) which is also listed on the JSE. Assmang mines iron, manganese and chrome ores and produces manganese and chrome alloys. In addition, the group mines Wonderstone (a type of pyrophyllite), a portion of which is beneficiated to produce high-precision components, and wear and acid-resistant tiles, which are installed in various mining and industrial applications.
The group, through its wholly owned subsidiary, Ore & Metal Company Limited, is responsible for marketing all products produced by its joint-venture entity and subsidiary companies, the bulk of which is exported and the remainder either used in the group’s beneficiation processes or sold locally. Details of the group’s activities are set out, by activity, in the operational review and commentary.
Financial results
The financial position of the group and company and their results for the year ended 30 June 2012 are set out in the annual financial statements of the group (refer here) and company (refer here) included in this report (the financial statements).
The financial results of the group for the year ended 30 June 2012 are summarised below:
2012 | 2011 | |
---|---|---|
R’000 | R’000 | |
Turnover | 12 947 766 | 10 547 806 |
Profit for the year | 4 047 034 | 3 249 686 |
Attributable to: | ||
Shareholders of the holding company | 4 033 013 | 3 219 754 |
14 021 | 29 932 | |
As above | 4 047 034 | 3 249 686 |
Profit attributable to the shareholders of the holding company as above | 4 033 013 | 3 219 754 |
Dividends relating to the group’s activities for the year under review (refer dividends) | 567 639 | 538 522 |
Interim dividend No 110 of 250 cents (2011: 200 cents) per share – declared on 16 April 2012 | 349 018 | 279 214 |
Final dividend No 111 of 300 cents (2011: 250 cents) per share – declared on 31 August 2012 | 418 821 | 349 018 |
Less: Dividends attributable to treasury shares | (200 200) | (89 710) |
Profit for the year after dividends | 3 465 374 | 2 681 232 |
The attributable interest of the company in the aggregate net profit and losses after taxation of group companies was as follows: | ||
Jointly controlled entity – 50% (2011: 50%) share | ||
– Profit for the year | 2 429 520 | 1 880 714 |
Subsidiary companies | ||
– Profit | 283 691 | 284 456 |
– Losses | (299 210) | (11 395) |
Control over financial reporting
The directors of the company are responsible for the preparation and fair presentation of the financial statements and related financial information included in this report. The external auditors, Ernst & Young Inc., whose report appears here, are responsible for expressing an opinion on the financial statements based on their audit.
The financial statements included in this report are based on judgements and estimates which are intended to be both reasonable and prudent and have been prepared by management in accordance with International Financial Reporting Standards (IFRS) based on appropriate accounting policies which, unless otherwise indicated, have been applied consistently with the previous year.
The financial statements have been prepared on a going-concern basis and the directors have no reason to believe that any of the businesses in the group, except for the synthetic diamond operation, Xertech, will not be a going concern in the year ahead. With regard to the valuation of assets, the directors are of the opinion that the carrying amounts of all assets included on the statement of financial position are appropriately valued.
In order to discharge their responsibilities with regard to the financial statements, the directors ensure, through the group’s duly appointed Audit and Risk Committee, that management maintains adequate accounting records and systems of internal control which are developed and reviewed for effectiveness on an ongoing basis. The systems of internal control are based on established organisational structures, policies and procedures, including budgeting and forecasting disciplines and are managed and controlled by suitably trained personnel who are organised in structures with appropriate segregation of authorities and duties. While internal controls are intended to adequately safeguard the group’s assets and prevent and detect material misstatement and loss, these systems can only be expected to provide reasonable, and not absolute, assurance as to the reliability of the financial information included in this report.
Jointly controlled entity – Assmang
The group owns 50% (2011: 50%) of the ordinary share capital of Assmang. In accordance with IFRS, the results of Assmang are accounted for by Assore using the proportionate consolidation method and the financial information set out below has been extracted from the audited financial statements of Assmang and its subsidiary companies for the year ended 30 June 2012. With effect from the 2014 financial year, the board is aware that, in order to comply with changes to IFRS, Assmang’s results will have to be equity accounted (refer here).
The calculation of profit for consolidation purposes was based on the profit of Assmang for the year ended 30 June 2012 and dividends declared during that period, and the financial statements are presented in summarised format below:
2012 | 2011 | |
---|---|---|
R’000 | R’000 | |
Abridged consolidated income statement of Assmang for the year ended 30 June | ||
Turnover | 23 688 390 | 19 074 942 |
Profit before taxation | 9 468 517 | 8 560 999 |
Taxation | 2 584 529 | 2 774 192 |
Earnings | 6 883 988 | 5 786 807 |
Dividends declared during the year | 2 000 000 | 2 000 000 |
Profit for the year after dividends paid | 4 883 988 | 3 786 807 |
2012 | 2011 | |
R’000 | R’000 | |
Abridged consolidated statement of financial position of Assmang at 30 June | ||
Assets | ||
17 937 554 | 14 765 942 | |
Current assets | 12 269 155 | 9 647 584 |
Total assets | 30 206 709 | 24 413 526 |
Equity and liabilities | ||
Total equity | 22 391 314 | 17 507 225 |
5 121 923 | 4 387 812 | |
Current liabilities | ||
– |
– | 4 717 |
– |
2 693 472 | 2 513 772 |
Total equity and liabilities | 30 206 709 | 24 413 526 |
Capital expenditure | 4 517 412 | 4 097 432 |
Capital commitments | 6 669 108 | 5 373 626 |
Directors’ emoluments
Contributions | Other fringe | ||||||||||||||
Fees | Salaries | Bonuses | to pension | benefits | |||||||||||
(refer note 1) | (refer note 2) | scheme | (refer note 3) | Total | |||||||||||
R’000 | R’000 | R’000 | R’000 | R’000 | R’000 | ||||||||||
2012 | |||||||||||||||
Executive | |||||||||||||||
Desmond Sacco (Chairman) | 110 | 4 264 | 355 | – | 582 | 5 311 | |||||||||
CJ Cory (Chief Executive Officer) | 96 | 4 196 | 14 894 | 1 078 | 359 | 20 623 | |||||||||
PC Crous (Technical and Operations) | 96 | 3 688 | 14 422 | 947 | 231 | 19 384 | |||||||||
EM Southey (Deputy Chairman and lead | |||||||||||||||
independent director) | 300 | 300 | |||||||||||||
RJ Carpenter | 150 | 150 | |||||||||||||
ZP Manase (appointed 7 October 2011/resigned | |||||||||||||||
1 November 2011) | 11 | 11 | |||||||||||||
DMJ Ncube (resigned 3 May 2012) | 125 | 125 | |||||||||||||
MC Ramaphosa (resigned 19 August 2011) | 20 | 20 | |||||||||||||
WF Urmson | 200 | 200 | |||||||||||||
Dr JC van der Horst (resigned 31 December 2011) | 75 | 75 | |||||||||||||
Alternate | |||||||||||||||
PE Sacco | 36 | 1 426 | 6 277 | 351 | 232 | 8 322 | |||||||||
RM Smith (resigned 19 August 2011) | – | – | |||||||||||||
AD Stalker (appointed 14 October 2011) | 36 | 1 730 | 8 503 | 444 | 243 | 10 956 | |||||||||
BH van Aswegen (appointed 14 October 2011) | – | 1 669 | 8 468 | 423 | 259 | 10 819 | |||||||||
1 255 | 16 973 | 52 919 | 3 243 | 1 906 | 76 296 | ||||||||||
2011 | |||||||||||||||
Executive | |||||||||||||||
Desmond Sacco (Chairman) | 110 | 4 264 | 355 | – | 543 | 5 272 | |||||||||
CJ Cory (Chief Executive Officer) | 96 | 3 886 | 12 809 | 969 | 307 | 18 067 | |||||||||
PC Crous (Technical and Operations) |
96 | 3 414 | 12 589 | 851 | 226 | 17 176 | |||||||||
EM Southey (appointed Deputy Chairman and lead independent director 10 November 2011) | 217 | 217 | |||||||||||||
RJ Carpenter (retired as executive director | |||||||||||||||
28 February 2011) | 114 | 2 838 | 11 355 | 697 | 17 077 | 32 081 | |||||||||
BM Hawksworth (resigned 27 August 2010) | 27 | 27 | |||||||||||||
DMJ Ncube (appointed 3 May 2011) | 25 | 25 | |||||||||||||
MC Ramaphosa | 150 | 150 | |||||||||||||
WF Urmson (appointed 1 October 2010) | 113 | 113 | |||||||||||||
Dr JC van der Horst | 150 | 150 | |||||||||||||
Alternate | |||||||||||||||
NG Sacco (resigned 8 March 2011) | – | 858 | 45 | 72 | 119 | 1 094 | |||||||||
PE Sacco | 36 | 1 024 | 514 | 244 | 179 | 1 997 | |||||||||
RM Smith | – | – | |||||||||||||
1 134 | 16 284 | 37 667 | 2 833 | 18 451 | 76 369 | ||||||||||
|
Directors’ interests in shares of the company
Interests of the directors in the ordinary shares of the company at 30 June 2012 are set out in the table below. There have been no material changes in these interests between year-end and the date of this report.
Direct beneficial | Indirect beneficial | |||
Number of shares | Number of shares | |||
2012 | 2011 | 2012 | 2011 | |
Executive directors | ||||
Desmond Sacco | 868 500 | 868 500 | 32 430 490 | 32 430 490 |
CJ Cory | 50 000 | 50 000 | – | – |
PC Crous | 16 000 | 16 000 | – | – |
EM Southey | – | – | – | – |
RJ Carpenter | 25 000 | 112 000 | – | – |
ZP Manase | – | – | – | – |
DMJ Ncube | – | – | – | – |
MC Ramaphosa | – | – | – | 5 054 585 |
WF Urmson | – | – | – | – |
Dr JC van der Horst | – | – | – | – |
Alternate directors | ||||
NG Sacco | – | 192 250 | – | – |
PE Sacco | 198 750 | 198 750 | – | – |
RM Smith | – | – | – | – |
AD Stalker | – | – | – | – |
BH van Aswegen | 4 505 | – | – | – |
1 162 755 | 1 437 500 | 32 430 490 | 37 485 075 |
Directorate and secretary
The names of the directors, at the date of this report, and details of the company secretary, including its business and postal addresses, are set out here in this report.
Subsequent to the date of the previous annual report and up to the date of this report the following changes were made to the Assore board:
- 1 November 2011 – Ms ZP Manase resigned as an independent non-executive director;
- 31 December 2011 – Dr JC (Johannes) van der Horst resigned, after serving on the board for 17 years;
- 3 May 2012 – Mr DMJ Ncube resigned as an independent non-executive director;
- 31 August 2012 – Mr PC (Phil) Crous resigned as Group Technical and Operations Director, after serving on the board for 19 years;
- 1 September 2012 – Mr AD (Alastair) Stalker was appointed to the board as Group Marketing Director, and Mr BH (Tiaan) van Aswegen was appointed as Group Technical and Operations Director, both of whom had been appointed as alternate directors on 14 October 2011; and
- 15 October 2012 – Mr S (Sydney) Mhlarhi was appointed as an independent non-executive director and as a member of the Audit and Risk Committee.
In terms of the Memorandum of Incorporation (MOI), Messrs EM Southey and RJ Carpenter are required to retire by rotation at the forthcoming Annual General Meeting (AGM). Messrs S Mhlarhi, AD Stalker and BH van Aswegen were appointed subsequent to the previous AGM and in terms of section 68(3) of the Companies Act are required to be re-appointed at the next AGM. All of the aforementioned directors, being eligible, offer themselves for re-election and a brief curriculum vitae for each of these directors is included in the notice of the AGM which was sent to members by registered mail on 29 October 2012.
Analysis of shareholding
The following analysis of shareholders, in accordance with the JSE Listings Requirements, has been established, based on an examination of the company’s share register at 30 June 2012. The directors are not aware of any material changes to this analysis between the year-end and the date of this report.
2012 | 2011 | |
---|---|---|
% | % | |
Shareholder spread | ||
Shares held by the public/non-public | ||
Non-public* | ||
– Holders in excess of 10% of the share capital | 75,23 | 75,23 |
– Directors of the company | 0,83 | 0,89 |
76,06 | 76,12 | |
Public 2 108 (2011: 1 008) shareholders | 23,94 | 23,88 |
100,00 | 100,00 | |
* As defined by Rule 4.25 of the JSE Listings Requirements. | ||
Major shareholders | ||
Oresteel Investments Proprietary Limited | 52,43 | 52,43 |
Main Street 460 Proprietary Limited (RF) | 11,01 | 11,01 |
Main Street 904 Proprietary Limited (RF) (held 51% and 49% by the Fricker Road Trust and the Assore Employee Trust respectively) | 11,79 | – |
Main Street 343 Proprietary (RF) Limited (a wholly owned subsidiary of Shanduka Resources Proprietary Limited) | – | 11,79 |
75,23 | 75,23 | |
Others – less than 5% | 24,77 | 24,77 |
100,00 | 100,00 | |
Dividends | ||
Earnings for the year were at record levels which enabled the board to increase dividends for the current year as follows: | ||
2012 | 2011 | |
R’000 | R’000 | |
Dividends recognised in the financial results | ||
Final dividend No 109 of 250 cents (2011: 240 cents) per share – declared on 9 September 2011 | 349 018 | 335 057 |
Interim dividend No 110 of 250 cents (2011: 200 cents) per share – declared on 16 April 2012 | 349 018 | 279 214 |
Less: Dividends attributable to treasury shares | (182 000) | (87 716) |
516 036 | 526 555 | |
Dividends relating to activities for the year under review | ||
Interim dividend No 110 of 250 cents (2011: 200 cents) per share – declared on 16 April 2012 | 349 018 | 279 214 |
Final dividend No 111 of 300 cents (2011: 250 cents) per share – declared on 31 August 2012 | 418 821 | 349 018 |
Less: Dividends attributable to treasury shares | (200 200) | (89 710) |
567 639 | 538 522 |
Special resolutions
The following special resolutions were passed during the year under review:
- 10 August 2011 – pursuant to the first phase of the third empowerment transaction (refer “Black economic empowerment status report”) that the company provide financial assistance to Main Street 904 Proprietary Limited (RF) (MS 904) for the purpose of the acquisition by MS 904 of 16 464 450 of the company’s ordinary shares (the sale shares) from Main Street 343 Proprietary Limited (RF) (MS343);
- 13 January 2012 – pursuant to the second phase of the third empowerment transaction:
- that the company provide financial assistance to MS 904 for the purpose of the acquisition by MS 904 of the sale shares from MS 343;
- that the company cancel the previous unissued par value preference shares;
- that the company create no par value preference shares in the share capital of the company;
- that the company’s Memorandum of Incorporation be altered to record the alterations to its share capital, and that the company’s Memorandum of Incorporation incorporates the rights, terms and privileges of the no par value preference shares; and
- that the board be authorised to provide financial assistance to any special-purpose company in relation to the no par value preference shares in favour of the Standard Bank of South Africa Limited.
Event after the reporting period
On 31 August 2012, the board declared a final dividend of 300 cents per share amounting to R418,8 million, which was paid to shareholders on 1 October 2012.