report profile This annual report covers the period 1 July 2004 to 30 June 2005. Statistical information has been provided for comparative purposes for five years (FY2001 to FY2005) while information relating to the metals markets has been provided per calendar year. Additional statistics going back to FY1997 are provided on the company’s website at www.implats.co.za In the interests of good disclosure and to improve communication with shareholders, Implats publishes its Corporate Responsibility Report which should be read in conjunction with the group’s annual report. This year both reports are published simultaneously in August 2005. • The 2005 Annual Report is made available to all shareholders at the time of the release of results for the year ended June 2005. The annual report is also available in interactive HTML and downloadable pdf versions on the company’s website, www.implats.co.za. • The Corporate Responsibility Report, which aims to provide stakeholders with insight into the economic, environmental and social dimensions of Implats’ activities, products and services, is also available on the company’s website. It will be posted to those shareholders who elect to receive a copy (a request form is provided at the back of the annual report). The annual financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice, International Financial Reporting Standards, the requirements of the South African Companies Act and in line with the regulations of the JSE Limited (JSE). This report and the Corporate Responsibility Report have taken into account the guidelines of the King Report 2002, the JSE Social Responsibility Index and the Global Reporting Initiative (GRI), particularly those applicable to Implats’ direct economic impact, and environmental and human capital performance. No significant changes have occurred in terms of the size, structure and operation of the group during the year under review, other than the finalisation of the transaction for the sale of a significant strategic interest (Implats’ stake in Western Platinum Limited and Eastern Platinum Limited, collectively known as Lonplats). The Two Rivers project in which the company has invested has been given the go-ahead and an investment is being considered in the Ambatovy nickel project in Madagascar. Reporting of resources and reserves is in accordance with each company’s listing requirements. Mineral Resources and Mineral Reserves for Implats’ South African operations are reported in accordance with the principles and guidelines of the South African Code for Reporting of Mineral Resources and Mineral Reserves (SAMREC Code). Both Zimplats and Mimosa report Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code). Competent persons defined by both the SAMREC and JORC codes have prepared, reviewed and signed off the Mineral Resources and Mineral Reserves reported in this publication. Additional information on the group may be found on the company’s website or obtained from the contact persons listed on page 176. Dollar, or $, refers to US dollars unless specified. Numbers given in both South African rands and dollars have been converted at the average exchange rate for the year under review or at year-end rates when relating to closing balances. Two years ago, Implats commissioned a well–known brand strategist to research and develop a strategy for the Implats brand. In this process, a number of people – internal and external to the company – were interviewed. The outcomes included the following: • the Implats brand was recognised and known among key target audiences; • the “impala” in the logo had a degree of equity; and • the brand depended to a large degree on the people within the organisation and the perception of those people (as forward-thinking, innovative and team-orientated). It was also recognised that Implats has been determinedly low key – it had not sought high-profile publicity and did not engage in advertising. At the same time, in scanning the market, an opportunity was identified for Implats to “own” the platinum brand as this position had not been “taken” by the other significant players. So, while the logo would be preserved (with some touch-ups to make it simpler and more modern), it seemed that what was needed next was a descriptor, much like the Nike “Just do it”. For this to work, it had to be plausible to external audiences and aspirational for internal audiences. The pay-off line selected – DISTINCTLY PLATINUM – hits that note. It says that: • Implats aspires to be the measure against which all others are judged – the platinum benchmark. • Implats is primarily a platinum company and that everything else that the company does is in support of this. • In everything it does, from safety to productivity, as an employer or as a community member, Implats aspires to be the best. • As far as the investor is concerned, Implats is (or aspires to be) the platinum investment of choice. And so, the line Distinctly Platinum was born. This is used only in conjunction with the holding company, Implats. At the same time the other logos, Impala, Marula, and IRS have been updated and the Implats “family” has also been extended to include Zimplats. In typical Implats fashion, the logo has not been splashed around in a high-cost advertising campaign. Rather, it has been adopted – inside and out – and will be communicated through the company’s actions, its words and deeds. implats and distinctly platinum key performance safety best ever safety performance headline platinum production up 5% to 1.815 million ounces production – Impala Platinum increased by 2% to 1.115 million ounces sales revenue rose by 6% to R12.5 billion equivalent to $2.0 billion gross margin – group steady at 34% gross margin – Impala Platinum maintained at 42% capital expenditure R2.0 billion headline earnings per share up by 10% to R43.25 total dividend R23.00 per share or $3.72 per share The 2005 financial year was characterised by excellent operational performance, particularly at Impala Platinum. total revenue (R million) total revenue ($ million) oz production highlights FY2005 FY2004 % change group refined platinum production (000 oz) 1,848 1,961 (6) refined PGM production (000 oz) 3,549 3,725 (5) headline platinum production (000 oz) 1,815 1,729 5 Impala Platinum refined platinum production (000 oz) 1,115 1,090 2 refined PGM production (000 oz) 2,062 1,976 4 R financial highlights FY2005 FY2004 % change sales (Rm) 12,541 11,809 6 gross profit (Rm) 4,223 4,260 (1) profit before tax (Rm) 6,334 4,100 54 profit (Rm) 5,254 2,959 78 headline earnings per share (cps) 4,325 3,934 10 dividends per share (proposed basis) (cps) 2,300 2,100 10 cash net of short-term debt (Rm) 3,981 636 526 sales revenue per platinum ounce sold (R/oz) 7,930 7,678 3 average rand exchange rate achieved (R/$) 6.20 6.88 (10) $ financial highlights FY2005 FY2004 % change sales ($m) 2,023 1,716 18 gross profit ($m) 679 616 10 profit before tax ($m) 1,020 593 72 profit ($m) 845 427 98 headline earnings per share (cps) 693 567 22 dividends per share (proposed basis) (cps) 372 306 22 cash net of short-term debt ($m) 598 103 481 sales revenue per platinum ounce sold ($/oz) 1,279 1,116 15 highlights 2005 ANNUAL REPORT INTRODUCTION contents organisational profile P5 history of Implats P8 pgms and their application P10 chairman’s letter P12 chief executive’s review P14 group value-added statement P25 five-year statistics P26 ACCOUNTABILITY management P31 the board P32 corporate governance P34 REVIEW OF 2005 financial review P47 market review P51 review of operations and interests: P55 P3 impala P56 marula P64 zimplats P68 mimosa P72 two rivers P75 impala refining services P76 investments P79 exploration review P82 mineral reserves and mineral resources P84 glossary of terms P99 ANNUAL FINANCIAL STATEMENTS contents P101 approval by directors P102 group secretary’s statement P102 approval by auditors P103 directors’ report P104 annual financial statements P116 ADMINISTRATION shareholders’ information P172 notice to shareholders, proxy and voting instruction form P173 contact details and administration P176 vision to be the world’s best platinum producing company, delivering superior returns to shareholders relative to our peers P4 values safeguarding the health and safety of our employees, and caring for the environment in which we operate acting with integrity and openness in all that we do and fostering a workplace in which honest and open communication thrives being a responsible employer, developing people to the best of their abilities and fostering a culture of mutual respect amongst employees promoting and rewarding teamwork, innovation, continuous improvement and the application of best practice being accountable and responsible for our actions as a company and as individuals improving our performance continuously and creating sustainable value being a good corporate citizen to the communities in which we live and work P5 Impala Platinum Holdings Limited (Implats) produced 1.85 million ounces of platinum and 3.55 million ounces of platinum group metals (PGMs) in FY2005, making it one of the most significant platinum producers globally. The group’s operations on the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe give it an attributable reserve and resource base of 215 million ounces of platinum. Implats also has offshore exploration projects in Australia, Brazil and the United States. Implats employs approximately 31,000 people across its operations and is one of the most efficient and lowest cost primary platinum producers in the world. Implats’ primary listing (IMP) is on the JSE Limited (JSE) with a secondary listing (IPLA) on the London Stock Exchange.