Integrated Annual Report

Transcription

1 Integrated Annual Report 2015

2 Inside this year s report About this Integrated Annual Report 1 Group overview 2 Leadership review 3 Operational review 4 Financial performance review 5 Page 2 Page 4 Page 24 Page 32 Page 68 Scope and boundaries 2 Salient features 6 Group overview 8 Geographical footprint 9 Key milestones 10 Corporate structure 12 Leadership review 26 Safety and health 34 Environment 37 Vanggatfontein Colliery 42 Vaalkrantz Colliery 44 Pipeline project 46 Financial performance and value creation 70 Five-year financial performance 76 Value created and distributed 77 Our assets in a snapshot 14 Strategy scorecard 16 Strategic objectives 21 How we create value 22 Coal Resource and Reserve Statement 50 Our people 60 Social investment 64 Investment case Coal remains the major energy source for electricity production worldwide Long-life Vanggatfontein Colliery Development of long-life Moabsvelden Strong internal pipeline of projects Long-term off-take contracts for existing production Notable safety record Excellent labour relations record Strong balance sheet Healthy margins Strong management team Efficient and effective decision-making Ability to capitalise on high growth opportunities Agile and continually seeking new revenue streams

3 Page 1 \ Keaton Energy \ INTEGRATED ANNUAL REPORT 2015 Our operating context COPY TO BE SUPPLIED 6 Governance 7 Group and company Annual Financial Statements 8 Shareholders information 9 Administration and contact details 10 Page 78 Page 84 Page 98 Page 182 Our operating context 80 Risks and opportunities 81 Board of Directors 86 Corporate governance 88 Remuneration Committee Report 92 Directors responsibility for the Annual Financial Statements 100 Declaration by the Company Secretary 100 Analysis of shareholders 184 Shareholders diary 184 Notice of Annual General Meeting 185 Administration and contact details Found on inside back cover Social and Ethics Committee report 96 Risk Committee Report 97 Directors Report 101 Report of the Audit Committee 104 Form of proxy 195 Notes to the form of proxy 196 Independent Auditor s Report 106 Statements of profit or loss and other comprehensive income 108 Statements of financial position 109 Statements of changes in equity 110 Statements of cash flows 112 Notes to the financial statements 113 Annexure 1 Definitions and abbreviations 197 Annexure 2 Responsibility statement and disclaimer 200 Annexure 3 Board and Committee meeting attendance 201 Annexure 4 King III application 202

4 Page 2 \ Keaton Energy \ INTEGRATED ANNUAL REPORT 2015 About this Integrated Annual Report Scope and boundaries Our 2015 Integrated Annual Report presents a concise, integrated overview of the financial, operational and ESG performance of the group for the year 1 April 2014 to 31 March 2015, and follows our Integrated Annual Report for the previous year published in August The report covers the holding company, Keaton Energy, and all of its operations and subsidiaries as illustrated in the group structure on pages 12 and 13. There was no change to any measurement techniques nor were there any re-statements of previously reported information. Reporting approach In compiling the report we were guided by international and South African reporting guidelines including King III and the International Integrated Reporting Framework (issued in December 2013), as well as best practice. In addition, we comply with the disclosure requirements of South African legislation including the Companies Act, JSE Listings Requirements, and SAICA Financial Reporting Guides as issued by the Accounting Practices Committee as well as with IFRS. The statement of Coal Resources and Coal Reserves has been prepared in compliance with the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code, 2009). The sustainability information has been compiled with reference to the GRI G4 guidelines based on a self-declared core compliance. The GRI index is available on the website at We have determined materiality based on the following criteria: issues that are critical to achieving our strategic objectives and therefore the sustainability of our business; key risks identified by our risk management process; and feedback from our key stakeholders. Feedback on report We welcome your feedback on this report. Please your comments to investors@keatonenergy.co.za. Key company data Keaton Energy Holdings Limited (Incorporated in the Republic of South Africa) (Registration number: 2006/011090/06 ISIN: ZAE JSE Main Board sector: Coal Share code: KEH Listing date: 2008 Shares in issue: (at 31 March 2015) The group s Executive Directors are Mandi Glad (CEO) and Jacques Rossouw (CFO). They can be contacted at the registered office of the company (see page 205). Obtaining your Keaton Energy reports Download these in PDF format from: or request your printed copies from: Keaton Energy Holdings Limited Ground Floor, Eland House The Braes, 3 Eaton Road, Bryanston, 2191 South Africa Tel: +27 (0) Fax: +27 (0) Learn more about Keaton Energy The company s contact details are disclosed on page 205. Additional web information This icon denotes additional information on a particular subject discussed in the Integrated Annual Report, that can be found on the website Sustainability theme discussed This icon denotes a sustainability theme discussed in a particular section of the Integrated Annual Report.

5 Page 3 \ Keaton Energy \ INTEGRATED ANNUAL REPORT 2015 The matters below have accordingly been determined as material, and we endeavour to discuss these in detail in this report: Safety Zero harm to our people is our number one priority. Detailed information regarding our safety programmes and statistics is provided on pages 34 to 36. Labour Our employees are a key enabler of our success and we operate in a volatile labour market which poses a considerable risk. Information regarding our management of the workforce in this context appears on pages 60 to 63. Production The majority of our coal production is sold to Eskom, with the balance being exported into the Brazilian iron ore pelletising market and sold locally into the domestic metallurgical industry. A new 32-Ash product market was developed and the product is currently being sold into the export metallurgical market. More details on our business model and production plans appear on pages 16 to 23. Management of Coal Resources and Coal Reserves The Coal Resources and Coal Reserves which the company holds through its Mining and/or Prospecting Rights represent the foundation of our strategy and the reason for our continued existence. Understanding and managing this natural resource is fundamental to the long-term success of our collieries and our sustainable development strategy. Read more about our Coal Resources and Coal Reserves on pages 50 to 59 and in the full report on www. keatonenergy.co.za. Assurance Keaton Energy s external auditors, KPMG Inc., have independently audited the financial statements for the year ended 31 March Their unqualified audit report is set out on pages 106 and 107. The scope of their audit is limited to the information set out in the financial statements on pages 108 to 181. Compliance Mining in South Africa is subject to an array of legislative obligations, including compliance with the Mining Charter, health and safety, labour and environmental laws. Our compliance is addressed throughout this report as well as in supplementary information provided on David Salter Non-Executive Chairman Mandi Glad Chief Executive Officer Stakeholder engagement Critical to maintaining the group s social licence to operate, we must identify, understand and respond appropriately to issues and concerns raised by a broad stakeholder base. More information regarding our stakeholder engagement activities is provided on page 80. Jacques Rossouw Chief Financial Officer Environmental best practice We operate in a high-impact industry and minimising our environmental impact is key to our operational integrity and sustainability. Details of our environmental impacts and our efforts to mitigate these are provided on pages 37 to 41.