Foskor AFS 2011

Annual Report 2011
2
Foskor embraced the theme, Be the Change.
Reviewing every aspect of the company to ensure the
unlocking of economic value for all shareholders,
while preserving the environment and
equitably empowering our
communities.
PEP2, new wet milling
circuit at Extension 8

PART ONE ANNUAL REVIEW
Introduction .................................................... 1
Financial and non-nancial highlights ......................... 2
Company prole ................................................................ 3
Group structure ........................................................................ 6
Conceptual business model ............................................................. 7
Board of directors .................................................................................... 8
Executive management .................................................................................. 12
Review of the year
Five-year review and key ratios ....................................................................................... 14
Economic value added statement .......................................................................................... 19
Review of the years performance
Chairmans statement ......................................................................................................................... 20
From the CEOs desk ................................................................................................................................ 26
CFOs report .................................................................................................................................................. 34
Operations report
Mining Division: Phalaborwa ...................................................................................................................................... 40
Acid Division: Richards Bay ............................................................................................................................................ 51
Review of mineral resources and ore reserves ..................................................................................................................... 57
Mine site Rehabilitation and Closure ........................................................................................................................................ 62
Enterprise risk management ........................................................................................................................................................ 64
Corporate governance .................................................................................................................................................................... 67
Board and sub-committees .................................................................................................................................................................. 68
Board Audit and Risk Committee Report .................................................................................................................................................. 69
Internal audit ................................................................................................................................................................................................. 73
Sustainability review ................................................................................................................................................................................ 81
Nurturing and developing our people ...................................................................................................................................................... 83
Corporate Social Investment ................................................................................................................................................................ 87
G3.1 Key performance indicators .................................................................................................................................................... 90
PART TWO ANNUAL FINANCIAL STATEMENTS
Annual Financial Statements
Directors declaration ........................................................................................................................................................... 93
Independent Auditors Report ........................................................................................................................................... 95
Directors report ............................................................................................................................................................. 97
Principal statements .................................................................................................................................................... 101
Notes to the nancial statements .............................................................................................................................. 105
Other Information
Notice of the Annual General Meeting ................................................................................................................ 161
Glossary ........................................................................................................................................................... 162
Administration ................................................................................................................................................ 168
Proxy Form .................................................................................................................................................. 169
Contents
2
Financial and non-nancial highlights
Financial highlights
Revenue by 33% to R4,611 million 2010: R3,465 m||||on}
Operat|ng proft to R514 million 2010: R6 m||||on |oss}
Proft before tax by 992% to R535 million 2010: R49 m||||on}
Non-nancial highlights
Safety - |ong-term |njury free rate of 0,25, be|ow |ndustry standard of 1,0
OSl spend |ncreased from R7,8 m||||on to R12,6 m||||on
Env|ronmenta| - E|ght env|ronmenta| projects under way at the Ac|d D|v|s|on
Reta|ned DEKRA F|ve Sh|e|ds status
Pyroxen|te Expans|on Projects comp|eted on t|me and w|th|n budget
F|na||sat|on of B-BBEE empowerment dea|
Foskor Annua| Report 2011
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Foskor Pty} ||m|ted |s a proud|y South Afr|can producer of phosphates and phosphor|c ac|d w|th |nternat|ona| exposure.
Foskor un|ocks shareho|der va|ue through the proftab|e, respons|b|e and susta|nab|e benefc|at|on of phosphate rock |nto
e|ther phosphor|c ac|d or phosphate-based granu|ar fert|||sers so|d g|oba||y.
Products
Phosphate rock |s m|ned and produced |n Pha|aborwa. Foskor |mports su|phur from Oanada and the M|dd|e East to
produce su|phur|c ac|d, a raw mater|a| used |n the product|on of phosphor|c ac|d. Foskor manufactures granu|ar fert|||sers,
name|y coated and uncoated d|ammon|um phosphates DAP}, monoammon|um phosphates MAP} and monoammon|um
phosphates w|th z|nc MAP
zn
}. Foskor a|so se||s magnet|te, a by-product of phosphate rock benefc|at|on.
Markets
Foskor |s one of the |argest supp||ers of phosphor|c ac|d to lnd|a, known to
be the wor|d`s |argest phosphor|c ac|d market. Domest|ca||y, Foskor |s the
|ead|ng supp||er of granu|ar fert|||sers |.e. d|ammon|um phosphates DAP} and
monoammon|um phosphates MAP} and var|at|ons thereof. The phosphate
rock concentrate |s so|d |oca||y to other fert|||ser producers and used as a raw
mater|a| to produce phosphor|c ac|d, the |atter of wh|ch |s exported to lnd|a,
Japan, the Nether|ands, Bang|adesh, Duba| and Mex|co.
Geographic scope
Foskor |s one of the wor|d`s few vert|ca||y |ntegrated compan|es. The M|n|ng
D|v|s|on |n Pha|aborwa m|nes and benefc|ates phosphate rock concentrate
from phosphate-bear|ng ores. The rock |s then ra||ed to the Ac|d D|v|s|on |n
R|chards Bay where the phosphate rock concentrate |s used to manufacture
phosphor|c ac|d and phosphate-based granu|ar fert|||sers. The head offce |s
|ocated |n Johannesburg. Foskor has no |nternat|ona| operat|ons.
Strategic business partners
lndustr|a| Deve|opment Oorporat|on ho|ds the contro|||ng stake |n Foskor, w|th 59% ownersh|p,
The Manyoro Oonsort|um, Foskor`s b|ack econom|c empowerment partner, has a 15% |nterest |n the company,
Ooromande| lnternat|ona| ||m|ted |n lnd|a |s a bus|ness partner w|th 14% ownersh|p of Foskor,
lnd|a`s Sun lnternat|ona| Group has a 1% stake |n Foskor,
The Foskor Group owns 29,9% of Foskor Z|rcon|a, hav|ng so|d a 51% stake to Oarborundum n|versa| ||m|ted |n 2008,
Phosphert Mar|ne and Phosphate Sh|pp|ng are 100% owned by the Foskor Group, and
Odjfe|| Makana |s contracted by Foskor for the group`s lnd|a sh|pp|ng requ|rements.
Material governance structures
The Board has estab||shed the fo||ow|ng sub-comm|ttees to ass|st |n the d|scharge of |ts dut|es: Board Aud|t and R|sk,
Techn|ca| and Human Resources.
Company prole
Gideon Skhosana with Indian customers
4
Loaded phosphate rock trains dispatched in Phalaborwa
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Company prole cont.
Assurance
Foskor`s fnanc|a| report|ng and the |nterna| contro|s over the fnanc|a| report|ng processes are aud|ted and assessed by an
externa| aud|tor jo|nt aud|tors PWO and Ngubane & Oo}. The aud|tor acts |n the |nterests of shareho|ders and reports any
s|gn|fcant |nterna| contro| defc|enc|es v|a the Aud|t and R|sk Oomm|ttee to the Board.
lnterna| aud|t
Foskor`s centra||sed |ndependent aud|t|ng funct|on |s known as Foskor Group Aud|t Serv|ces FGAS}. FGAS` funct|ons are
d|scussed |n further deta|| |n the Governance sect|on. The |nterna| aud|t funct|on prov|des |nterna| assurance to the Board
and coord|nates the Oomb|ned Assurance P|an.
Management has rev|ewed the fnanc|a| statements w|th the Board Aud|t and R|sk Oomm|ttee and the externa| aud|tors. The
qua||ty and appropr|ateness of the account|ng po||c|es were rev|ewed by the externa| aud|tors. The Board Aud|t and R|sk
Oomm|ttee cons|ders the annua| fnanc|a| statements of Foskor Pty} ||m|ted and |ts subs|d|ar|es to be a fa|r representat|on
of |ts fnanc|a| pos|t|on, resu|ts of operat|ons and cash fow |nformat|on for the year ended 31 March 2011.
lnterna| contro|
Foskor`s Board of D|rectors |s respons|b|e for |nterna| contro|, wh||e the management team |mp|ements and ma|nta|ns the
|nterna| contro| framework.
The d|rectors are a|so respons|b|e for the company`s systems of |nterna| fnanc|a| contro|. These are des|gned to prov|de
reasonab|e, but not abso|ute assurance as to the re||ab|||ty of the fnanc|a| statements, and to adequate|y safeguard, ver|fy
and ma|nta|n accountab|||ty of the assets and to prevent and detect m|sstatement and |oss. Based on the resu|ts of the forma|
documented rev|ew of the company`s system of |nterna| contro|s and r|sk management, |nc|ud|ng the des|gn, |mp|ementat|on
and effect|veness of |nterna| fnanc|a| contro|s conducted by the |nterna| and externa| aud|tors dur|ng the 2010/2011 fnanc|a|
year, cons|der|ng |nformat|on and exp|anat|ons g|ven by management and d|scuss|ons w|th the externa| aud|tor on the
resu|ts of the externa| aud|t, assessed by the Aud|t and R|sk Oomm|ttee, the Board |s of the op|n|on that the company`s
system of |nterna| contro|s and r|sk management |s effect|ve and that the |nterna| fnanc|a| contro|s form a sound bas|s for
the preparat|on of re||ab|e fnanc|a| statements. The Board`s op|n|on |s supported by the Board Aud|t and R|sk Oomm|ttee.
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Company prole cont.
Verications
APEX (Occupational Health & Hygiene) - Two-year|y hyg|ene surveys on stressors, hazardous chem|ca|s and b|o|og|ca|
agents and other,
Allison Lees Attorneys - |ega| comp||ance aud|t,
DEKRA Norisko & DEKRA Certication - Th|rd party safety, hea|th, env|ronment and qua||ty SHEO} comp||ance aud|ts,
Dr Ockie Fourie - Tox|co|ogy on a|| |mpacts,
AGRILASA/SABS |aboratory profc|ency test|ng on water},
ASPC |aboratory profc|ency test|ng and rock ana|yses},
NECSA rad|oact|v|ty comp||ance to |eg|s|at|on},
Golder & Associates - Env|ronmenta| standards, water comp||ance, geohydro|ogy and geotechn|ca|,
Knight Piesold - Ta|||ngs dam stab|||ty,
Levego - lsokenet|c stack em|ss|on comp||ance ver|fcat|on,
Moore Spence Jones - Gypsum dam stab|||ty report, November 2009,
Moore Spence Jones (MSJ) - Groundwater and surface water management consu|tants,
Monsanto (MECS) or Haldo Topso - Pegasus or Top Gun aud|ts for cond|t|on of cata|yst and heat exchangers at
su|phur|c ac|d p|ant,
Prayon Technologies - Techn|ca| aud|t on phosphor|c ac|d p|ant, September 2004,
Prayon Technologies - Benchmark|ng of phosphor|c ac|d p|ants us|ng Pa|fos rock, Apr|| 2005,
PWC and Ngubane & Co - jo|nt|y aud|t the annua| fnanc|a| statements and ver|fy the content |n the Annua| Report before
pub||sh|ng,
Snowden - Ore Resources and Reserves Oompetent Persons Report, and
SRK - S|ope stab|||ty, geohydro|ogy and geotechn|ca| stud|es.
North
Pyroxenite
Pit
Mining
Division
100%
Phosphert
Marine
100%
Phosphate
Shipping
100%
Foskor
Zirconia
29%
Acid
Division
100%
South
Pyroxenite
Pit
Ext 8 / PEP2
E-Stream
F-Stream
PMC Tolling
Process/ D Stream
Granulation
Sulphuric
Acid
Phosphoric
Acid
Foskor
Group
Group structure
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Conceptual business model
Foskor Business Model Current
External customers
local and export
lnternal Richards
Bay
External customers
Rock
P
2
O
5
Granulation
Foskor products
Phalaborwa Richards Bay
2,6 m tons
Phosphate rock
643 k tons of P
2
O
5
332 k tons of
granulation
Foskor
operations
Foskor value
proposition
Foskor unlocks shareholder
value through protable,
responsible and sustainable
beneciation of phosphate
rock into phosphoric acid or
phosphate based granular
fertilisers sold globally
Foskor
markets
Imports
|a|e| - P
2
O
5

export to Coromandel
Far East
United States
Europe
lndia
South Africa
> 2,8b r |c|
P|cp|a|e |c:|
> /20 | |c|
c| P
2
O
5
Foskor
operations
Rc:|
P|cp|c||: a:|d
|AP & OAP
Oe1cu|||a|ed
acid
\P|
Produce
and sell
Foskor value
proposition
Foskor unlocks share-
holder value through the
protable, responsible
and sustainable ben-
eciation of phosphate
rock into phosphate-
based products sold
globally
Far East
United States
Europe
South Africa
Foskor Business Model Future Vision Short Term
Phalaborwa
Richards Bay
Processing
with others
Trading
]pur
|a|e|||e
Su|p|u|
Arrc||a
U|ea
Foskor
Products
Foskor
markets
South America
lndia
Japan
New Zealand
sub-Saharan
Africa
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Board of Directors
Seated from left:
Ms JM Modise: Board Human Resources (BHR)
Chairperson, Mr SP Ngwenya
Standing from left:
Ms A Albck: Board Audit and Risk (BARC) Chairperson,
Dr DS Phaho: Board Technical Committee (BTC) Chairperson,
Mr G van Wyk, Mr MG Qhena: Board Chairperson
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Standing from left: Mr MA Pitse: President/CEO,
Ms SS Ngoma, Mr F Madavo and Mr A Vellayan
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Mr MG Qhena
Board Chairperson,
non-executive director and
BHR member
AGE 45 years
LENGTH OF SERVICE
Since 19 June 2006
QUALIFICATIONS
BCompt (Hons), CA (SA),
SEP, Adv Tax Cert
EXPERIENCE
CEO of the lDC
BOARD INVOLVEMENT
Number of Board meetings
attended: 4/4
Board committees served: 1
Number of Board sub-com-
mittee meetings attended: 4
OTHER DIRECTORSHIPS HELD
lDC
Findevco
Acerinox SA
Mr A Vellayan
Non-executive director and
BHR member
AGE 58 years
LENGTH OF SERVICE
Since 22 June 2005
QUALIFICATIONS
BCom, lnd Admin, MBS
EXPERIENCE
Chairperson of the Murugap-
pa Group, Coromandel lnter-
national Limited and ElD-Par-
ry Limited; Co-Chairperson of
lndia's Fertiliser Association
and an lndian Overseas Bank
Board member
BOARD INVOLVEMENT
attended: 3/4
Holds 16 other directorships,
details available from the
Company Secretary
on request
Mr MA Pitse
Executive director
and President / CEO

AGE 56 years
LENGTH OF SERVICE
Since June 2003
QUALIFICATIONS
BCompt (Hons), MBL, CA(SA)
EXPERIENCE
President and CEO of Foskor;
former CEO of Prilla and lDC
Head of Finance Department.
Former President of Fertiliser
Society and South African
representative of the lnterna-
tional Fertiliser Association
BOARD INVOLVEMENT
attended: 4/4
Prilla
Foskor Zirconia
Mr G Van Wyk
Non-executive director,
BARC and BHR member

AGE 51 years
LENGTH OF SERVICE
Since 17 August 2004
QUALIFICATIONS
BCom (Hons), MCom, MBL,
AMP (lNSEADj
EXPERIENCE
Chief Risk Offcer at lDC since
2004; former Executive vice-
President for new economy
sector corporate fnance divi-
sion at lDC and former Chief
Economist of lDC
BOARD INVOLVEMENT
attended: 3/4
Crossley
SAFYR
iBurst (Africaj
Ms SS Ngoma
BARC member

AGE 35 years
LENGTH OF SERVICE
Since 16 July 2007
QUALIFICATIONS
BCom (Hons), CA (SA)
EXPERIENCE
Head of lnternal Audit at lDC
since 2006; former Senior
Accounts Manager in metals
business unit at lDC
BOARD INVOLVEMENT
attended: 4/4
Alexcor
Board of Directors
6 10 5 7 8
ttees served: 1
oard sub-com-
gs attended: 4
TORSSH S IPS HELLD L
nia
Ale exco xc xcor
3
4
1
6
5
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Mr SP Ngwenya
Non-executive director
and BTC member

AGE 58 years
LENGTH OF SERVICE
Since 24 March 2011
QUALIFICATIONS
BCom (Hons)
EXPERIENCE
Mr Ngwenya is currently the
Executive Chairman and
founder of Makana lnvest-
ment Corporation (Ptyj Ltd.
Before joining the Makana
lnvestment Corporation, Mr
Ngwenya served as a Hu-
man Resource Manager at
Engen Petroleum (until 1995),
whereafter he joined the
team at SAB as Corporate
Affairs Manager Department
(until 1997j. At the time, Mr
Ngwenya was responsible
for the management of all
stakeholders. Mr Ngwenya
currently chairs the Board
of Airlink and also serves on
the oards of various other
companies
BOARD INVOLVEMENT
attended: 1/4
Board committees served:
1
OTHER DIRECTORSHIPS
HELD
Holds 54 directorships,
details available from the
Company Secretary on
request
Ms A Albck
Independent non-executive
director and BARC
Chairperson
AGE 37 years
LENGTH OF SERVICE
Since 9 December 2010
QUALIFICATIONS
BCompt (Hons), Diploma in
Auditing, CA (SAj, vodacom
Advanced Executive Pro-
gramme
EXPERIENCE
Consultant to vodacom on
lntegrated Reporting. Prior
to this she was the Chief Fi-
nancial Offcer at Spescom;
Executive Head of Financial
Control at vodacom Group
and Senior Manager of Pas-
senger Revenue Accounting
at SAA
BOARD INVOLVEMENT
attended: 1/4
Adcorp Holdings Board
Adcorp Holdings Audit
Committee
Mr F Madavo
Independent non-executive
director and BTC member

AGE 51 years
LENGTH OF SERVICE
Since 1 January 2008
QUALIFICATIONS
BSc (Hons) Chem Eng, MSc,
lEDP
EXPERIENCE
Resource Portfolio Manager
at the Public lnvestment
Corporation and former vice-
President of Metals and Min-
ing at Citigroup
BOARD INVOLVEMENT
attended: 3/4
None
Dr D S Phaho
Independent non-
executive director and BTC
Chairperson
AGE 43 years
LENGTH OF SERVICE
Since 12 July 2005
QUALIFICATIONS
BSc (Hons), MSc, PhD
EXPERIENCE
CEO of Tshumisano Trust (a
Department of Science and
Technology agencyj; Chair of
Council at vaal University of
Technology and former Re-
search Group Leader at Sasol
Technology
BOARD INVOLVEMENT
attended: 4/4
Pikitup
Ms J Modise
BHR Chairperson

AGE 48 years
LENGTH OF SERVICE
Since 22 April 2008
QUALIFICATIONS
BCom, MDP, SEP, MBL
EXPERIENCE
Executive Divisional at lDC;
former Human Resources
Director and Executive at
Hewlett Packard, SAP Africa,
Mutual and Federal and Sappi
BOARD INVOLVEMENT
attended: 4/4
Cordustex
Kismet
1 4 9 3 2
Board committe
Num Num umber of Board
mitteee e meetings
OTHE HE H R DIRECTOR
Pikitu uppp
OTHER DIRECTORSSH SS IPS HHELD
Corrrddus d tex ex ex
Kissssmet
2
10
8
7
9
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Mr MA Pitse
Executive director and President /
Chief Executive Ofcer

AGE 56
QUALIFICATIONS
BCOMPT (HONS), MBL, CA (SA)
Mr P|tse |s an execut|ve d|rector and |s current|y Pres|-
dent and Oh|ef Execut|ve Offcer OEO} of Foskor. Pr|or
to jo|n|ng the Foskor Group |n June 2003, he was OEO
of Pr|||a 2000 Pty} ||m|ted, a South Afr|can text||e man-
ufacturer, from January 2002 to June 2003, where he
|s the Oha|rman. Pr|or to that, Mr P|tse worked for the
lDO as Head of the F|nance Department and was re-
spons|b|e for the lDO`s |nterna| fnanc|a| report|ng and
p|ann|ng funct|on.
Mr P|tse was the e|ected Pres|dent of the Fert|||ser
Soc|ety of South Afr|ca FSSA} from 2005-2007 and
current|y serves as the e|ected v|ce Pres|dent of the
FSSA. He a|so serves as the v|ce Pres|dent of the
lnternat|ona| Fert|||ser Assoc|at|on, represent|ng South
Afr|ca and as the Pres|dent of the Afr|ca Forum of the
lnternat|ona| Fert|||ser Assoc|at|on.
Executive management
Mr JW Horn
Vice President: Mining

AGE 40
QUALIFICATIONS
BENG, PRENG, MSAllE
(HONS), BB&A, MBA
Mr Horn |s the v|ce Pres|dent
respons|b|e for ensur|ng the sus-
ta|nab|e and proftab|e manage-
ment of the Pha|aborwa opera-
t|ons. He has he|d an execut|ve
management pos|t|on for the past
e|ght of h|s 17 years at Foskor.
He |s respons|b|e for the deve|op-
ment and |mp|ementat|on of op-
erat|ona| strateg|es, po||c|es and
procedures for the m|n|ng and
benefc|at|on operat|ons and the
comp|et|on of the strateg|c Pyrox-
en|te Expans|on Projects PEP}.
Mr Horn |s a|so a d|rector of Fos-
kor Z|rcon|a Pty} |td, the Oha|r-
person of Foskor`s Env|ronmenta|
Rehab|||tat|on Trust and a trustee
of Foskor`s Soc|a| Respons|b|||ty
Trust.
Mr G Skhosana
Vice President:
Marketing and Sales

AGE 54
QUALIFICATIONS
BCOM, MDPD, ASMPD
Mr Skhosana has been v|ce Pres|-
dent of Market|ng and Sa|es of
Foskor s|nce 2004 and has the
task of estab||sh|ng and ma|nta|n-
|ng strateg|c bus|ness a|||ances,
and deve|op|ng and |mp|ement|ng
a market|ng and sa|es strategy. He
sets targets for both |oca| sa|es
and exports. He has more than
25 years` exper|ence |n sa|es and
market|ng of consumer goods
and more than fve years` exper|-
ence |n sa|es and market|ng of
phosphates and other fert|||sers.
Mr TJ Koekemoer
Chief Financial Ofcer

AGE 60
QUALIFICATIONS
BCOM (HONS), CA (SA),
AEP
Mr Koekemoer has been Oh|ef
F|nanc|a| Offcer of Foskor s|nce
2002 and |s respons|b|e for deve|-
op|ng and |mp|ement|ng fnanc|a|
strateg|es, po||c|es and proce-
dures |n the report|ng funct|on
of the group. H|s ro|e |nc|udes
ensur|ng comp||ance w|th lFRS
and statutory requ|rements. ln ad-
d|t|on, Mr Koekemoer |s |n charge
of prov|d|ng strateg|c recommen-
dat|ons and gu|dance to sen|or
management on a|| fnanc|a| mat-
ters. H|s pr|mary respons|b|||t|es
a|so |nc|ude the management
of budget process, tax, r|sk and
treasury matters.
Foskor Annua| Report 2011 Foskor Annua| Report 2011
13
Ms XS Luthuli
Vice President:
Human Capital

AGE 37
QUALIFICATIONS
BSOCSCl, PDPM, lEP
(lNSEADj
Ms |uthu|| has been the v|ce
Pres|dent of Human Oap|ta|
s|nce November 2006. Ms |u-
thu|| |s respons|b|e for the group`s
recru|tment, strateg|c ta|ent
management, tra|n|ng, emp|oyee
re|at|ons and remunerat|on. She
oversees var|ous human cap|ta|
projects |nc|ud|ng organ|sat|ona|
deve|opment and change man-
agement.
Mr SS Sibisi
Vice President:
Corporate Affairs

AGE 46
QUALIFICATIONS
BA, LLB, AMP (lNSEADj
Mr S|b|s| has been the v|ce-
Pres|dent of Oorporate Affa|rs
s|nce Apr|| 2009, respons|b|e
for the |ega|, R|sk Manage-
ment, Oorporate Oommun|ca-
t|ons, Oompany Secretar|at and
Stakeho|der Re|at|ons funct|ons
at Foskor. Before jo|n|ng Foskor
he was the Genera| Oounse| at
the lDO for four years, respon-
s|b|e for the |ega|, lnternat|ona|
F|nance and lnvestment Mon|tor-
|ng Departments.
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Mr NV Nkomzwayo
Vice President: Acid

AGE 39
QUALIFICATIONS
BSC ENG, PDP
Mr Nkomzwayo has been Act-
|ng v|ce Pres|dent of the Ac|d
D|v|s|on s|nce December 2010
and |s respons|b|e for manag|ng
the su|phur|c, phosphor|c and
granu|at|on operat|ons at the
R|chards Bay p|ant and ensur-
|ng cont|nued operat|ons and
opt|ma| proftab|||ty. He |s a|so
respons|b|e for the coord|nated
deve|opment and |mp|ementa-
t|on of operat|ona| strateg|es,
po||c|es and procedures, and
manag|ng performance of the
product|on, techn|ca| serv|ces,
SHREO, human resources, pro-
curement, and fnance funct|ons
at the R|chards Bay p|ant.
Mr MP Mosweu
Vice President:
Strategy and New
Business Development
AGE 48
QUALIFICATIONS
NHD ELEC ENG, GCC,
MAP, MBA
Mr Mosweu has been the v|ce
Pres|dent of Strategy and New
Bus|ness Deve|opment s|nce
February 2009. He |s respons|-
b|e for the deve|opment and |m-
p|ementat|on of Foskor`s growth
strategy. He manages strateg|c
bus|ness deve|opment projects,
|dent|fes new opportun|t|es for
the group and prov|des strateg|c
|nput towards the advancement
of the bus|ness. He has more
than 22 years of exper|ence |n
eng|neer|ng, project manage-
ment, new bus|ness deve|op-
ment and strateg|c formu|at|on
and |mp|ementat|on |n var|ous
|ndustr|es.
Mr KM Cele
Vice President:
Logistics and
Procurement
AGE 39
QUALIFICATIONS
BCOM (HONSj, DlP BUS
TAX, EDP, lEP (lNSEADj
Mr Oe|e |s v|ce Pres|dent of |o-
g|st|cs and Procurement and |s
respons|b|e for the company`s
procurement of both strateg|c
mater|a|s and operat|ons` re-
qu|rements. He |s ma|n|y respon-
s|b|e for effect|ve|y deve|op|ng
and |mp|ement|ng procurement
and |og|st|cs strateg|es. Th|s func-
t|on |nc|udes the management
of onshore and offshore |og|st|cs
and the negot|at|on of pr|ce and
other agreements perta|n|ng to
procurement act|v|t|es. Further,
Mr Oe|e |s |n charge of the es-
tab||shment and ma|ntenance
of strateg|c bus|ness a|||ances
|n respect of procurement and
|og|st|cs. He |s a|so respons|b|e
to enhance and dr|ve the trans-
format|on agenda |n re|at|on to
B-BBEE procurement and enter-
pr|se deve|opment.
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Chairmans Statement cont.
14
Five-year review and key ratios
R million 2011 2010 2009 2008 2007 2010-2011
% change
STATEMENT OF FINANCIAL POSITION
Non-current assets 3,677 3,182 2,110 2,397 1,875 16
Ourrent assets 2,101 1,613 2,561 3,264 2,427 30
Total assets 5,778 4,795 4,671 5,661 4,302 20
Non-current ||ab|||t|es 1,121 816 666 554 721 37
Ourrent ||ab|||t|es 710 497 849 2,462 553 43
Total liabilities 1,831 1,313 1,515 3,016 1,274 39
Equity 3,947 3,482 3,156 2,645 3,028 13
INCOME STATEMENT
Revenue 4,611 3,465 10,159 3,869 2,950 33
Operat|ng proft 514 6} 2,747 1,102 351 8667
Earn|ngs before |nterest and tax EBlT} 511 7} 2,808 1,185 351 7400
Net fnance |ncome (3) 28 199 18} 187 -111
Net fore|gn exchange proft/|oss} 27 28 294} 44} 19 -4
Proft before tax 535 49 2,713 1,123 558 992
Taxat|on (158) 107} 795} 283} 23 48
Prot after tax 377 58} 1,919 840 581 750
EBITDA 723 167 2,972 1,309 460 333
CASH FLOW STATEMENT
Oash generated from operat|ons 375 982 1,085 994 451 -62
Oap|ta| expend|ture 596 824 489 360 150 -28
Free cash fows (218) 155 631 640 219 -241
Revenue (Rmj
2007 2008 2009 2010 2011
15,000
12,250
10,000
7,500
5,000
2,500
0
Cash generated from operations (Rmj
1,500
1,225
1,000
750
500
250
0
2007 2008 2009 2010 2011
2,950
3,869
10,159
3,465
4,611
451
994
1,085
982
375
Operating proft margin (%j
2007 2008 2009 2010 2011
30
25
20
15
10
5
0
-5
11,9
28,5
27,0
11,1
-0,2
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MAUREEN GENIS
Public Relations Offcer
"Foskor - Forever
changing to reach
perfection"
16
Sales drivers
2011 2010 2009 2008 2007 2010-2011
% change
Average exchange rate ZAR/SD 7.16 7.84 8.71 7.09 7.02 -9
Phosphate rock FOR sa|es pr|ce $/ton} 114 110 188 72 58 4
Phosphate rock sa|es vo|umes '000 tons} 2,055 2,243 2,529 2,911 2,911 -8
P
2
0
5
OFR sa|es pr|ce $/ton} 794 583 1,595 607 462 33
P
2
0
5
sa|es vo|umes '000 tons} 459 459 565 557 498 0
Granu|at|on FOB sa|es pr|ce /ton} 588 416 1,076 544 307 41
Granu|at|on sa|es vo|umes '000 tons} 360 292 149 261 164 23
Average exchange rate ZAR/USD
2007 2008 2009 2010 2011
9.00
8.50
8.00
7.50
7.00
6.50
6.00
Phosphate rock FOR sales price ($/ton)
2007 2008 2009 2010 2011
210
180
150
120
90
60
30
P
2
0
5
CFR sales price ($/ton)
2007 2008 2009 2010 2011
1,800
1,500
1,200
900
600
300
0
Granulation FOB sales price ($/ton)
2007 2008 2009 2010 2011
1,200
1,000
800
600
400
200
0
7.84
7.02 7.09
8.71
7.16
58
72
188
110
114
462
607
1,595
775
583
307
544
1,076
588
416
Production and cost drivers
2011 2010 2009 2008 2007 2010-2011
% change
Su|phur OFR purchase pr|ce $/ton} 121 68 540 175 83 78
Ammon|a OFR purchase pr|ce $/ton} 425 310 704 324 341 37
Phosphate rock product|on vo|umes '000/tons} 2,602 2,190 2,415 2,382 2,670 19
P
2
0
5
product|on vo|umes '000 tons} 647 622 659 692 529 4
Granu|at|on product|on vo|umes '000 tons} 351 307 163 261 137 14
17
Sulphur CFR purchase price ($/ton)
2007 2008 2009 2010 2011
600
500
400
300
200
100
0
Phosphate rock production volumes (000/ton)
2007 2008 2009 2010 2011
3000
2800
2600
2400
2200
2000
0
P
2
0
5
production volumes (000/tons)
2007 2008 2009 2010 2011
750
700
650
600
550
500
450

2007 2008 2009 2010 2011
400
350
300
250
200
150
100
83
121
540
175
68
2,670
2,382
2,415
2,180
2,602
529
692
622
659
647
137
261
163
307
351
Granulation production volumes (000 tons)
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2011 2010 2009 2008 2007 2010-2011
% change
Protability margins
Operat|ng marg|n %} 11,1 0,2} 18,9 28,5 11,9 5650
Pre-tax marg|n %} 11,6 18,9 18,9 18,9 18,9 (39)
Shareholder returns
Return on assets 6,5 -1,2 41,1 14,8 13,5 (641)
Return on equ|ty 9,6 -1,7 60,8 31,8 19,2 665
Solvency and liquidity
Ourrent rat|o t|mes} 2.96 3.25 3.02 1.33 4.39 (9)
Debt to equ|ty rat|o %} 0.03 - - - - 100
Environmental and social
Number of emp|oyees at year-end 1,803 1,753 1,723 1,805 1,799 3
HDSA |n management %} 71 70 60 65 61 2
Staff turnover %} 6 7 8 13 8 14)
Oorporate soc|a| |nvestment R m||||on} 12.6 7.8 1.6 1.4 0.9 62
Fata||t|es 1 0 1 0 0 100
DlFR 0.25 0.30 0.22 0.44 0.73 (17)
Water consumpt|on Mega||tres} 13,305 14,219 12,801 12,469 13,515 -6
Energy consumt|ons MW '000} 586 563 610 649 648 4
Key ratios nancial and non-nancial
2011

11,1
11,6
6,5
9,6
2.96
0.03
1,803
71
6
12.6
1
0.25
13,305
586
19
Economic value added
R million 2011 % 2010 %
Revenue 4,611 3,465
|ess: cost of sa|es (3,078) 2,276}
va|ue added from trad|ng operat|ons 1,533 96 1,189 96
Other |ncome 63 4 44 4
Tota| va|ue added 1,596 100 1,233 100
Distributed as follows:
Execut|ve management 43 3 27 2
Emp|oyees 650 41 577 47
Prov|ders of equ|ty 75 5 - 0
Prov|ders of fund|ng 28 2 48 4
Government 158 10 107 9
Total distributions (R millions) 954 60 759 62
Retained in the business (R millions) 642 40 474 38
Tota| d|str|but|ons 954 759
Number of emp|oyees 1,803 1,753
va|ue created per emp|oyee R`000} 885,19 703,37
Number of shares 9,157,647 9,157,647
va|ue created per share R`000} 0,17 0,13
for the year ended 31 March 2011
Distribution of value added - 2011 (%)
Execut|ve management
Emp|oyees
Prov|ders of equ|ty
Prov|ders of fund|ng
Government
Reta|ned |n the bus|ness
Distribution of value added - 2010 (%)
2
38
9
47
4
41
5
3
2
10
40
0
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Foskor |s |n a turnaround
strategy w|th |ts mantra
for 2010 and 2011 be|ng
Be the Change. ln terms
of the rev|sed strateg|c
goa|s, Foskor a|ms to dr|ve
proftab|e growth to revenue
of c|rca R10 b||||on by 2016.
Mr MG Qhena: Board Oha|rman
20
Chairmans statement
21
Macro-economic outlook: the global economy
The lnternat|ona| Monetary Fund had forecast pos|t|ve, but |ow growth |n advanced econom|es and fast growth |n emerg|ng
econom|es for 2010/11, and that |s a|most prec|se|y how the year turned out. The two-speed recovery, |ow |n advanced
countr|es and fast |n emerg|ng market countr|es, was str|k|ng and |ts features are |ncreas|ng|y stark. Emerg|ng market
countr|es were affected by the cr|s|s through both the|r trad|ng act|v|t|es and fnanc|a| markets. A|though trade has not yet fu||y
recovered, most emerg|ng markets have been ab|e to |ncrease domest|c demand so as to return to h|gh growth. ln turn, the|r
good performance attracted strong cap|ta| |nfows. For many emerg|ng markets, the cha||enges now are avo|d|ng econom|c
overheat|ng and manag|ng cap|ta| fows.
ln many advanced econom|es, however, the |mpact of the cr|s|s was much deeper. The fnanc|a| system suffered severe
damage and secur|t|sat|on of debt had to be re|nvented. ln many deve|oped countr|es, markets st||| d|strust the hea|th
of banks and fnanc|a| |ntermed|at|on |s not work|ng as we|| as |t used to. Th|s, comb|ned w|th the need to correct past
m|stakes rang|ng from |ow sav|ngs to excess|ve hous|ng |nvestments, has resu|ted |n a very s|ow recovery that bare|y dents
unemp|oyment. H|stor|ca| ev|dence has proven that recover|es from fnanc|a| cr|ses are |engthy and measured.
G|oba| uncerta|nty |ncreased aga|n ear|y March 2011 when a devastat|ng earthquake and tsunam| struck Japan. Short|y after
the natura| d|sasters the Japanese government sa|d there were new s|gns of rad|oact|ve contam|nat|on |n some agr|cu|tura|
produce and ||vestock, desp|te workers` efforts |n stab|||s|ng the s|tuat|on at the cr|pp|ed Fukush|ma Da||ch| nuc|ear p|ant. lf
the |osses for Japan were to be quant|fed |n do||ars and ||ves, as much as S$300 b||||on was |ost and 28,000 persons are
e|ther dead or st||| m|ss|ng.
When the lnd|an Ocean tsunam| h|t across lndones|a, Sr| |anka, lnd|a, Tha||and and the Ma|d|ves |n 2004 about S$14
b||||on was |ost and more than 226,000 deaths were recorded. lt |s est|mated that on|y about 1% of the three m||||on peop|e
||v|ng a|ong the north-eastern coast of Japan was affected by the tsunam|. To have the Japanese |ose on|y" 1% due to a
M9 earthquake and then a rough|y 10-metre tsunam| arr|v|ng as soon as 14 m|nutes after the earthquake} was a strong
test|mony to show the state of preparedness of the Japanese. Japan |s the |argest |mporter of ||quefed natura| gas, and as |t
searches for energy to rep|ace a fractured nuc|ear gr|d, ana|ysts expect these pr|ces to r|se as we||. lf Japanese compan|es
and |nvestors retrench, se|||ng some treasur|es and |nvest|ng fewer yen overseas, Amer|ca`s worst unemp|oyment s|tuat|on
|n near|y a century may degenerate further.
Econom|c uncerta|nty seems to have been the order of the day for the past fnanc|a| year, that was marred not on|y by
tsunam|s and rad|oact|ve p|umes, but a|so saw M|dd|e East revo|ut|ons, po||t|ca| unrest, a new round of the European debt
cr|ses and weak recover|es |n the n|ted States, Europe and Japan. ln ||bya, NATO m|ss||es are st||| fy|ng as Gaddaf refuses
to g|ve up more than four decades of ru||ng power and some of the o|| we||s stand s||ent. O|| pr|ces have r|sen near|y 11% |n
2011. Saud| troops have marched |nto Bahra|n, across the Pers|an Gu|f from lran. ln Europe, fnance m|n|sters have warned
that hundreds of banks st||| carry b||||ons of do||ars |n bad |oans. A recent survey by The International Economy magaz|ne
found that a major|ty of prom|nent econom|sts th|nk |t |s ||ke|y that some comb|nat|on of Greece, lre|and and Portuga| w|||
defau|t on sovere|gn debt and force bond |nvestors to take heavy |osses.
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Phosphoric Acid Plant: Acid Division, Richards Bay
23
The status of agriculture
Oh|na, now the wor|d`s second |argest economy after overtak|ng Japan, |s a dom|nant p|ayer |n the fert|||ser |ndustry. ln 2010
Oh|na exported four m||||on metr|c tons mt} DAP to the rest of the wor|d, a|most doub|e the 2,1 m||||on metr|c tons that |t so|d |n
2009. MAP exports |ncreased by 88% from about 496,000 mt |n 2009 to 935,000 |n 2010. Oh|na`s phosphate rock exports |n
2010 amounted to about 880,000 mt |.e. 131% above the 380,000 mt so|d |n 2009. Oh|na exports such s|gn|fcant quant|t|es
of fert|||ser desp|te an export quota of 1,5 m||||on mt for phosphate rock and a 35% export tar|ff and the fact that |t may on|y
trade |nternat|ona||y dur|ng |ts export w|ndow that runs from June to September.
For the per|od under rev|ew, many major fert|||ser supp||ers across the g|obe exper|enced a range of product|on or supp|y
prob|ems for var|ous reasons. A few examp|es are as fo||ows:
ln Tun|s|a, a so|ut|on to the |abour unrest d|scussed ear||er that |ed to c|v|| unrest has st||| not been found. As such, DAP
and tr|p|e super phosphates TSP} product|on at GOT has not yet resumed and |t |s not known when operat|ons w|||
commence. GOT produces 110,000 mt DAP and 70,000 mt TSP per month.
Pak|stan`s Fauj|`s Karachn| DAP p|ant |s runn|ng c|ose to max|mum capac|ty s|nce 7 February 2011, after |t was shut down
|n January ow|ng to a cut |n gas supp|y. The outage resu|ted |n a |oss of 50,000 mt DAP product|on.
Oh|na`s |arge phosphate producers: YTH, Wengfu and Ka|||n have ramped up to 90% ut|||sat|on capac|ty after they were
forced to cut product|on |n January and February 2011 ow|ng to co|d weather cond|t|ons that caused power cutbacks
and d|srupt|on at phosphate rock m|nes and ra||ways.
The Saud| Arab|an M|n|ng Oompany, Ma`aden schedu|ed start to produce DAP by year-end 2010 was postponed to O2
2011 due to de|ays |n the start-up of the su|phur|c ac|d un|ts.
Yara evacuated |ts 1,200 workers at |ts ammon|a-urea jo|nt venture |n ||bya and operat|ons have been suspended unt||
further not|ce. The p|ant exports about 10,000 mt per month of ammon|a to Europe.
lmportant deve|opments |n the fert|||ser |ndustry over the past fnanc|a| year |nc|ude the fo||ow|ng:
lnd|a and Syr|a`s government-owned Genera| Oompany for Phosphate and M|nes Gecopham} announc|ng that they w|||
set up a one m||||on ton DAP fac|||ty. Syr|a has a 100-year phosphate rock reserve.
Jordan Phosphate M|nes Oompany JPMO} has conc|uded jo|nt venture dea|s w|th major As|an fert|||ser consumers
such as lFFOO and lndones|an frms that w||| a||ow |t to process greater rock reserves. Th|s dea| a||ows JPMO to ra|se
product|on from s|x to n|ne m||||on tons per annum and |ts exports to four m||||on tons. The S$640 m||||on project w|th
lFFOO w||| secure 500,000 tons of phosphor|c ac|d annua||y to lnd|a and w||| be comm|ss|oned |n November 2013.
JPMO`s product|on fac|||ty w|th some lndones|an compan|es w||| be comp|eted |n 2014 at a cost of S$200 m||||on. JPMO
p|anned phosphate output |n 2010 was 6,2 m||||on tons, up from 5,9 m||||on tons |n 2009.
EuroOhem, one of Russ|a`s top 10 n|trogen and phosphate m|nes, |s cons|der|ng var|ous fund|ng opt|ons to deve|op potass|um
sa|t depos|ts. The company wants to produce 4,6 m||||on tons of potash by 2016. (Sourced from Reuters Knowledge.)
South Africa
The fu|| effects of the 2010 FlFA Wor|d Oup on the South Afr|can economy have st||| to be quant|fed. Preparat|ons for the
FlFA Wor|d Oup were a key dr|ver of econom|c growth. The pub||c sector made substant|a| |nvestment |n |nfrastructure,
spark|ng a boom |n the construct|on, transport and property |ndustr|es, w|th the prom|se of wea|th creat|on sp||||ng over
|nto other sectors such as tour|sm. A|though many Afro-pess|m|sts were p|easant|y surpr|sed w|th the advancement and
Chairmans statement cont.
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Employees engaged in the Be the Change initiative
25
Chairmans statement cont.
soph|st|cat|on of some parts of South Afr|ca, many under|y|ng econom|c fundamenta|s st||| rema|n a concern to potent|a|
|nvestors. Shareho|ders are st||| show|ng a preference for short-term secur|t|es such as bonds, wh||e gross fxed cap|ta|
format|on by the pr|vate sector seems to have sta||ed.
|ong-term |nvestors, espec|a||y |n the m|n|ng sector are d|vest|ng |oca| assets, deferr|ng cap|ta| |nvestments or transferr|ng cap|ta|
expend|ture to projects beyond South Afr|ca`s borders. Th|s |s part|y because of South Afr|can m|nes becom|ng |ess compet|t|ve
am|dst an apprec|at|ng currency, r|s|ng |abour costs and dec||n|ng product|v|ty. Furthermore, a|though South Afr|ca |s often
congratu|ated on |ts trans|t|on |nto the new d|spensat|on and |ts stab|e po||t|ca| and regu|atory framework, |nvestors are uneasy
about the nat|ona||sat|on debate, desp|te reassurances from the M|n|ster of M|nera| Resources.
Foskors sustainable business development
Foskor |s |n |ts 60th year of operat|on and |t |s therefore not surpr|s|ng that the company had to recons|der |ts modus operand|
and seek new and more |nnovat|ve ways of do|ng bus|ness. Foskor |s a|most |n a turnaround strategy w|th |ts mantra for
2010 and 2011 be|ng Be the Change. ln terms of the rev|sed strateg|c goa|s, Foskor a|ms to dr|ve proftab|e growth to
revenue of c|rca R10 b||||on by 2016. To make th|s poss|b|e, the company`s phosphate rock m|n|ng capac|ty w||| have to be
ra|sed to about four m||||on tons per annum, and the phosphor|c ac|d and granu|at|on p|ants` capac|t|es w||| each have to be
augmented to one m||||on tons per annum. Furthermore, Foskor`s |og|st|cs capac|ty w||| have to be ramped up to 80,000 tons
per week. The add|t|ona| revenues w||| be generated from new product streams that w||| be deve|oped over the next two to
fve years that w||| requ|re greater market penetrat|on. Foskor`s management |s exc|ted by these cha||enges and the Board
w||| cont|nue to steer them to meet|ng the|r stretched targets.
Changes to the Board of Directors
Over the past year, we have had to b|d Mr M Boo|, an |ndependent non-execut|ve d|rector, farewe||, as he res|gned from the
Board to pursue persona| |nterests. We w|sh h|m success |n h|s endeavours. Mr Boo| has been rep|aced by Mrs A A|bck,
effect|ve December 2010. Furthermore, Mr SP Ngwenya, the current OEO of Makana lnvestments and the Oha|rman of
Manyoro Oonsort|um, jo|ned the Board as a non-execut|ve d|rector |n March 2011.
Acknowledgements
F|na||y, l wou|d ||ke to extend my s|ncere grat|tude to the rest of the Board for the|r cont|nued support, |oya|ty and comm|tment
to Foskor. l`d a|so ||ke to acknow|edgee Foskor`s management and the|r ded|cated teams for the|r comm|tment to cont|nuous
change and |mprovement. On beha|f of the Board, l wou|d a|so ||ke to w|sh Foskor a happy 60th b|rthday. l be||eve that Foskor
has the r|ght strateg|es |n p|ace that w||| ma|nta|n |ts proftab|||ty for the next 60 years.
MR MG QHENA: Non-execut|ve d|rector
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Ourrent|y, the out|ook for
the g|oba| fert|||ser market |s
very pos|t|ve. The demand
for fert|||ser, and hence the
pr|ces, |s |arge|y dr|ven by
p|ant|ng seasons |n Russ|a,
Europe, North Amer|ca and
As|a. Fert|||ser demand |s
pos|t|ve|y |nfuenced by the
r|se |n farm|ng proftab|||ty
determ|ned by the surge |n
gra|n pr|ces.
Mr MA Pitse: Oh|ef Execut|ve Offcer
27
From the CEOs desk
A|though the 2010/11 fnanc|a| year got off to a nervous start w|th market d|rect|on and pr|ce movements be|ng both uncerta|n
and vo|at||e |n the beg|nn|ng, |t turned out to be a sat|sfactory year after a||. The |mpacts of the g|oba| fnanc|a| cr|s|s were
st||| fresh |n our m|nds and those of many bus|ness partners, and forced us to reth|nk Foskor`s bus|ness mode| and strategy.
The g|oba| recess|on has brought a new awareness as to how |nterconnected the wor|d |s and how eas||y a company, even
one w|th a 60-year h|story of surv|va|, can fo|d |f |t |s not geared to the susta|nab|e and |ong-term growth of a|| |ts facu|t|es.
As such, Foskor has embraced the theme, Be the Ohange you want to see |n the wor|d} as |ts mantra for 2010 and 2011. By
rev|ew|ng and scrut|n|s|ng every aspect of the company, the team has redefned |ts top pr|or|t|es, to ensure that we un|ock
econom|c va|ue for a|| shareho|ders, wh||e preserv|ng the env|ronment and empower|ng the commun|t|es where we operate.
Foskors top 10 strategic thrusts
After exhaust|ve consu|tat|on w|th shareho|ders, the Board, adv|sors,
emp|oyees, customers and supp||ers, Foskor has renewed |ts
comm|tment to the fo||ow|ng pr|or|t|es:
Environment Der|v|ng va|ue from recyc||ng waste such as gypsum,
fuos|||c|c ac|d and magnet|te.
Financial stability Oonta|n|ng cost |ncrements and reduc|ng the
average cost per un|t of product|on.
Governance ldent|fy|ng, measur|ng and m|t|gat|ng r|sks to ascerta|n
the opportun|t|es born of these r|sks.
Health Promot|ng occupat|ona| hea|th and safety standards,
manag|ng rad|oact|v|ty, extend|ng our wor|d-c|ass Hlv/A|ds pro-
gramme to those affected and |nfected, and promot|ng emp|oyee
we||-be|ng through the Emp|oyee Ass|stance Programmes.
Market diversication F|nd|ng new markets for our end products.
People Support|ng transformat|on, empowerment, tra|n|ng and
sk|||s deve|opment, human r|ghts, and serv|ng the commun|t|es where we
operate through targeted corporate soc|a| |nvestments.
Product diversication Broaden|ng the product range away from merchant grade phosphor|c ac|d to produce other
comp|ex and water so|ub|e fert|||sers.
Production M|n|ng and benefc|at|ng a m|n|mum of three m||||on tons by 2014 of phosphate rock and subsequent|y produc|ng
690,000 tons of P
2
O
5
and 400,000 tons of granu|ar fert|||ser per annum, wh||e ra|s|ng effc|enc|es and operat|ona| capac|t|es,
Quality Offer|ng qua||ty serv|ces and products to stakeho|ders.
Safety Ma|nta|n|ng the d|sab||ng |njury frequency rate be|ow the acceptab|e standard of one and the company`s |nterna|
target of 0,8, and ach|ev|ng zero fata||t|es.
Emergency services, Acid Division
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From the CEOs desk cont.
The companys performance against the material issues: successes and challenges
Financial stability
Foskor`s earn|ngs before |nterest and tax for the fnanc|a| year ended 31 March 2011 was R511 m||||on. The better than
expected fnanc|a| performance was |arge|y due to strong commod|ty pr|ces that somewhat m|t|gated the rand`s strength.
Foskor`s Auster|ty Measures Task Force`s a|so contr|buted by rema|n|ng comm|tted to scrut|n|s|ng d|scret|onary spend|ng
and curta|||ng unnecessary expend|ture.
Production
The M|n|ng D|v|s|on produced 2,6 m||||on tons of phosphate rock aga|nst the budget of 2,638,000 tons, a mere 1,4% beh|nd
the or|g|na| budget. Foskor p|ans to ach|eve 2,95 m||||on tons of phosphate rock product|on per annum by 2013.
The Ac|d D|v|s|on produced 645,000 tons of phosphor|c ac|d
aga|nst the budget of 690,000 tons. lf the unava||ab|||ty of rock
from September to November as a resu|t of the dera||ment
1
|s
accounted for, the Ac|d D|v|s|on cou|d have produced 676,000 tons
of phosphor|c ac|d compared w|th the prev|ous year`s product|on of
622,000 tons. l am pos|t|ve that we w||| meet our target of 690,000
tons next year and ra|se th|s to 720,000 tons by 2013.
People
The Ac|d D|v|s|on has had a change of |eadersh|p, w|th the former
v|ce Pres|dent, Mr Johan Potg|eter, hav|ng |eft the company |n
November 2010. The genera| manager, Mr Nath| v Nkomzwayo,
was recent|y promoted |nto the pos|t|on.
l am proud to say that Foskor`s Tra|n|ng Oentre |n Pha|aborwa was
fu||y accred|ted by the M|n|ng Oua||fcat|ons Author|ty on 18 June
2010. The Ac|d D|v|s|on atta|ned fu|| accred|tat|on equ|va|ent to the
Nat|ona| Oert|fcate |n Ohem|ca| Operat|ons for NOF |eve|s three
and four. The Ac|d D|v|s|on current|y has 49 |earners |n tra|n|ng, of
wh|ch 29 are fu||y emp|oyed.
Foskor`s transformat|on and empowerment status to date |s that 73,6% of a|| top, sen|or, profess|ona| and m|dd|e-management
comes from prev|ous|y d|sadvantaged commun|t|es. Of these, top management compr|ses 14% fema|es, compared w|th
28% |n sen|or management and 20% |n the profess|ona| and m|dd|e management category. As at 31 March 2011, 12
emp|oyees or 0,7% of the tota| workforce were d|sab|ed.
World Cup Soccer celebrations in Midrand
1 The dera||ment |s d|scussed |n the Operat|ons Report
29
For the per|od under rev|ew, Foskor d|sbursed about R6,5 m||||on to var|ous projects |n the commun|t|es where we operate
under our corporate soc|a| |nvestment p|an
2
. These range from bu||d|ng homes for orphans and w|dows to deve|op|ng
sports, e-|earn|ng and arts and cu|ture |n schoo|s. Foskor comm|tted approx|mate|y R13 m||||on |n orders to |oca| econom|c
deve|opment as part of the Ba-Pha|aborwa Mun|c|pa||ty`s lntegrated Deve|opment P|an |n terms of the company`s soc|a| and
|abour p|an
3
.
The Human Oap|ta| D|v|s|on, Oorporate Affa|rs D|v|s|on and an externa| consu|tancy, ||nkage, embarked on a jo|nt brand|ng and
cu|ture change |n|t|at|ve |n March 2010 to assess the organ|sat|on`s c||mate and to |dent|fy key transformat|on |evers necessary
for enhanc|ng emp|oyee mora|e. Foskor engages staff through var|ous forums such as the month|y trade un|on meet|ngs,
rout|ne month|y br|efngs between managers and trade un|ons, genera| br|efng sess|ons w|th a|| staff and a|so through the
centra| barga|n|ng un|t. The company has effect|ve commun|cat|ons channe|s |n p|ace |nc|ud|ng suggest|on boxes and not|ce
boards on the s|tes, the |ntranet, a commun|cat|ons desk where staff can vo|ce the|r gr|evances anonymous|y, and te|ev|s|on
sets on s|te that rep|ay messages to staff who may have m|ssed br|efng sess|ons because of sh|ft work. The cu|ture change
or Be the Change ln|t|at|ve w||| run unt|| October 2011, at wh|ch po|nt |mprovements |n the organ|sat|on`s performance |n cr|t|ca|
areas such as product|v|ty, |nnovat|on, waste management, sa|es and emp|oyee management shou|d be measurab|e.
Foskor reta|ned |ts |eve| 5 b|ack econom|c empowerment BEE} rat|ng, hav|ng scored n|ne po|nts more than |n the prev|ous
ver|fcat|on done by Emex. Notab|y, Foskor |mproved |ts preferent|a| procurement, enterpr|se deve|opment and emp|oyment
equ|ty scores. For the per|od under rev|ew, preferent|a| procurement was focused on compe|||ng supp||ers to comp|y w|th
BEE requ|rements, and about R800,000 was spent on capac|tat|ng b|ack-owned ent|t|es do|ng bus|ness w|th Foskor. Th|s
w||| cont|nue |nto the new fnanc|a| year and enterpr|se deve|opment spend|ng |s expected to reach R1,5 m||||on |n 2011/12.
Environment
Foskor has enjoyed lSO14001 accred|tat|on s|nce 2007. The M|n|ng D|v|s|on engages stakeho|ders concerned about the
m|ne`s |mpact on the env|ronment through the fo||ow|ng forums: the Pha|aborwa Env|ronmenta| Oomm|ttee |ed by the
Department of Env|ronmenta| Affa|rs, lnter Oompany Water and Waste Management |ed by the Department of Water Affa|rs,
the A||en P|ant Oomm|ttee and the Kruger Nat|ona| Park Env|ronmenta| Management Forum.
Env|ronmenta| management |s a pr|or|ty, espec|a||y at the Ac|d D|v|s|on where a|r em|ss|ons, stormwater dra|nage systems and
rad|oact|ve waste management are str|ngent|y mon|tored and contro||ed. Dur|ng the year there were no reportab|e |nc|dents
to the author|t|es. The Ac|d D|v|s|on`s engagement extends to the fo||ow|ng forums: the R|chards Bay O|ean A|r Assoc|at|on,
the uMh|atuze P|pe||ne, Transnet`s Env|ronmenta| Management P|an for Port Operat|ons and uMh|atuze Emergency P|ann|ng.
Governance
Foskor`s governance systems were further strengthened by the |mp|ementat|on of the lsometr|x E|ectron|c Management
System |n June 2010 to accurate|y record |nc|dents and document SHEO r|sk management. Foskor`s strateg|c a||gnment to
comp|y w|th the K|ng lll codes |s d|scussed |n deta|| |n the corporate governance sect|on of th|s annua| report.
2 Deta||s of Foskor`s OSl can be found on www.foskor.co.za
3 Deta||s on the |oca| Econom|c Deve|opment Expend|ture can be found on www.foskor.co.za
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Health and safety
Foskor has reta|ned |ts OHSAS 18001 status for Occupat|ona| Hea|th and Safety s|nce 2006. The O||n|x Hea|th group offers
occupat|ona| hea|th serv|ces to a|| emp|oyees and a|so conducts med|ca| ftness exam|nat|ons and annua| staff check-ups.
An aud|t was conducted by the Nat|ona| Nuc|ear Regu|ator NNR} w|th reference to the phys|ca| secur|ty of the staff and no
dev|at|ons were found. A|| Rad|at|on Oodes of Pract|ce were updated and approved by the NNR.
Foskor was the second company, after Ang|o Amer|can to rece|ve SANS16001 accred|tat|on for |ts Hlv/A|ds management.
Severa| programmes form part of the Hlv/A|ds |n|t|at|ve, |nc|ud|ng prevent|on aga|nst |nfect|on through ongo|ng peer educat|on
and awareness campa|gns, offer|ng vo|untary counse|||ng and test|ng, treatment of staff, contractors and spouses, supp|y|ng
nutr|t|ona| supp|ements, encourag|ng commun|ty |nvo|vement and prov|d|ng home-based care for med|ca||y boarded
emp|oyees. For the per|od under rev|ew, 43 emp|oyees and the|r fam|||es benefted from the Hlv/A|ds treatment programme
and 722 emp|oyees engaged |n the nutr|t|on programme at a cost of R2,6 m||||on.
Market diversication
Foskor`s strategy |s to |ncrease revenues between 15% and 20% by 2014. ln the med|um term Foskor env|sages sa|es to
sub-Saharan Afr|ca, the Far East and South Amer|ca.
Product diversication
Foskor p|ans to pursue organ|c growth, wh||e dr|v|ng |ts product and market d|vers|fcat|on strateg|es. Ourrent|y the company
uses phosphate rock to produce merchant grade ac|d w|th 54% phosphor|c ac|d content, wh|ch |s e|ther so|d or used as
an |nput for granu|ar fert|||sers MAP and DAP}. The company p|ans to benefc|ate downstream products to produce NPKs,
defuor|nated ac|d and water so|ub|e fert|||sers. Furthermore, waste streams w||| be benefc|ated as var|ous opt|ons w||| be
exp|ored for uses of magnet|te, a|um|n|um tr|fuor|de, phosphogypsum and fuos|||c|c ac|d. New products shou|d compr|se
at |east 5% of revenue by 2013.
Foskors Product Portofolio Current
MAP and DAP produced
and sold as a swing
capacity
Final product sold locally
Supplied as raw material to
the MGA plant
Small percentage exported
to Japan, Europe and
South Africa
MAP
DAP
MGA produced at 54%
P
2
0
5
in Richards Bay
Just over 50% of the
product exported to lndia
P
2
0
5
Phosphate
Rock
31
Foskor Product Portfolio Medium to long-term
NPKs
Phosphate
Rock
Water-
soluble
fertilisers
P
2
0
5
MAP & DAP
Deuori-
nated Acid
Ammonia
Biuoride
ATF
Silica
AHF
Processing with Others
Trading
Urea
Complex
fertilisers
Sulphur
Ammonia
Potash
p
Quality
Foskor has reta|ned |ts lSO9001 status for qua||ty s|nce 1998. The M|n|ng and Ac|d D|v|s|ons are both |mp|ement|ng |mproved
processes for product|on, ma|ntenance, cap|ta| dep|oyment, and water and energy usage. ln November 2010, DEKRA once
aga|n awarded Foskor go|d status for |ts 95,7% comp||ance w|th the lSO standards for safety, hea|th, env|ronment, qua||ty
and Hlv/A|ds management, known as the Dekra F|ve Sh|e|ds.
Safety
Between Apr|| 2010 and February 2011, the Ac|d D|v|s|on reported two d|sab||ng |njur|es Dls}. The d|sab||ng |njury frequency
rate DlFR}, ca|cu|ated as the number of d|sab||ng |njur|es per m||||on hours worked, was 0,28. The Ac|d D|v|s|on worked for
1,875 m||||on hours w|thout a d|sab||ng |njury, a new record for the D|v|s|on. The M|n|ng D|v|s|on |n Pha|aborwa ach|eved a
|ong-term |njury free rate |TlFR} of 0,22, br|ng|ng the company`s average to 0,25. Pha|aborwa had s|x |ost t|me |njur|es and
worked for 2,011 m||||on hours w|thout a Dl. nfortunate|y, the M|n|ng D|v|s|on had one fata||ty on 17 February 2011 that
resu|ted |n a Sect|on 54 c|osure unt|| 21 February 2011. Th|s was Foskor`s th|rd fata||ty |n 13 years.
Magnetite
Gypsum
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Risks associated with day-to-day production and nancial performance
Foskor`s performance |s subject to the assoc|ated r|sks of ord|nary bus|ness pract|ces, wh|ch are the fo||ow|ng:
New market entrants target|ng a ||m|ted customer base.
Dump|ng.
|ack of base nutr|ent d|vers|fcat|on.
Exchange rate vo|at|||ty.
Oommod|ty pr|ce fuctuat|ons espec|a||y those of n|trogen ammon|a, urea, AN} and ka||um potash, potass|um, MOP, SOP}.
Raw mater|a| pr|ces: r|s|ng su|phur and ammon|a pr|ces |mpact|ng DAP/MAP proft marg|ns.
Orop pr|ces, p|anted acres and nutr|ent app||cat|ons by farmers.
Taxes, tar|ffs and |mport dut|es.
Product|v|ty and |ndustr|a| act|on.
Adverse weather and farm|ng cond|t|ons.
Domest|c fert|||ser consumpt|on patterns.
Ohanges |n government po||cy |n key agr|cu|tura| markets.
So|| and env|ronmenta| degradat|on.
lncorrect app||cat|on or storage of fert|||sers.
Operat|ng |n a chang|ng po||t|ca| and regu|atory framework.
Opportunities arising from identied risks
Foskor can take advantage of the fo||ow|ng threats to the g|oba| fert|||ser |ndustry:
Foskor`s phosphate rock`s cadm|um |eve|s are be|ow the European n|on`s thresho|d where a|| cadm|um-based
phosphate products are banned.
Russ|an compan|es, h|stor|ca||y very dom|nant, are cutt|ng back on phosphate rock exports.
The Oh|nese export w|ndow has been reduced from s|x to four months of the year.
The h|gh va|ue end markets for the products |nto wh|ch Foskor p|ans to d|vers|fy are |n more stab|e econom|es that are
|ess pr|ce sens|t|ve.
The |ncrease |n g|oba| b|ofue| projects exacerbates food secur|ty concerns.
The shortage of arab|e |and |n deve|oped countr|es means that agr|cu|ture sh|fts to sub-Saharan Afr|ca w||| cont|nue to
grow as food secur|ty concerns r|se. As a South Afr|can company, Foskor has both po||t|ca| and geograph|ca| compet|t|ve
advantages.
Outlook
Ourrent|y, the out|ook for the g|oba| fert|||ser market |s very pos|t|ve. The demand for fert|||ser, and hence the pr|ces, |s |arge|y
dr|ven by p|ant|ng seasons |n Russ|a, Europe, North Amer|ca and As|a. Fert|||ser demand |s pos|t|ve|y |nfuenced by the r|se |n
farm|ng proftab|||ty determ|ned by the surge |n gra|n pr|ces. Demand |s a|so strong|y dr|ven by the shortages resu|t|ng from
po||t|ca| |nstab|||ty |n many of the key fert|||ser produc|ng countr|es. The curta|||ng of Oh|na`s export w|ndow from s|x to four
months w||| further reduce g|oba| supp|y and so exert upward pressure on fert|||ser pr|ces.
33
ln emerg|ng markets, deve|opments |n the fert|||ser |ndustry centre on food secur|ty. Trends show greater |nvo|vement by government
and donor agenc|es |n d|str|but|ng seeds and fert|||ser d|rect|y to farmers. Recent examp|es of th|s trend |nc|ude the fo||ow|ng:
ln Pak|stan, the government |s d|str|but|ng free wheat seeds and fert|||sers to the 1,450 farmers affected by the foods.
The government |s a|so offer|ng subs|d|es to embatt|ed farmers.
Amp|e monsoon ra|ns and h|gher pr|ces of farm goods ||fted lnd|an fert|||ser demand |n 2010/11. When water ava||ab|||ty
|s good, farmers max|m|se acreage espec|a||y s|nce there are no |rr|gat|on fac|||t|es. Farmers sw|tch to cash crops such
as cotton and cane that requ|re add|t|ona| fert|||sers.
The SA, Br|ta|n, Japan and France donated S$165 m||||on for wheat and fert|||ser to d|str|bute to 360,000 farmers |n
Afghan|stan`s 34 prov|nces.
The Zamb|an government a||ocated 30,000 tons of fert|||ser and 1,000 tons of ma|ze seeds to farmers for the 2010/11
p|ant|ng season.
Mosanto commenced |ts fe|d tr|a| of genet|ca||y eng|neered ma|ze |n ganda. Th|s water-effc|ent ma|ze var|ety |s
ab|e to grow |n dry cond|t|ons w|th ||m|ted quant|t|es of fert|||ser. lf successfu|, th|s ma|ze w||| a|so be p|anted |n Kenya,
Mozamb|que, Tanzan|a and South Afr|ca.
l frm|y be||eve that |ndustry fundamenta|s w||| rema|n strong |n the short and med|um term. Agr|cu|tura| fundamenta|s rema|n
pos|t|ve because of cont|nued g|oba| demand for food, feed and fue|. The overa|| food secur|ty story rema|ns unchanged,
econom|c deve|opments, |mprov|ng d|ets, weather and po||t|ca| |nstab|||ty w||| cont|nue to stress the g|oba| food supp|y cha|n.
To meet |ncreas|ng food and fue| demands, gra|n product|on w||| need to r|se accord|ng|y. lmproved farm|ng pract|ces,
|nc|ud|ng adequate app||cat|on of crop nutr|ents, |s v|ta| to grow the food that the wor|d requ|res. lt |s est|mated that the
comb|ned effect of popu|at|on growth and acreage shortages w||| dr|ve g|oba| demand for phosphates at an annua|
compounded rate of between 2% and 5% per annum.
On a persona| note, l wou|d ||ke to adv|se you that l have been re-e|ected as an lnternat|ona| Fert|||ser Assoc|at|on lFA} execut|ve
and w||| cont|nue to represent Afr|ca. Th|s year, l w||| a|so serve as Oha|rman of the lFA Afr|ca Forum, whose key focus |s on food
secur|ty and poverty a||ev|at|on through se|f-suffc|ency and proper nutr|ent usage and app||cat|on |n farm|ng.
F|na||y, l wou|d ||ke to extend a word of grat|tude to the Board on beha|f of Foskor`s management. We apprec|ate the adv|ce
and strateg|c d|rect|on you offer to ach|eve the company`s m|ss|on and v|s|on.
MR MA PITSE: Oh|ef Execut|ve Offcer
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The FY2012 |ooks set to
cont|nue to be proftab|e for
Foskor as pr|ces are ant|c|pated
to rema|n at the current and
h|gher |eve|s desp|te the strong
rand forecasts. The demand
for Foskor`s products rema|ns
strong and w||| stretch the
company`s product|on output.
Mr TJ Koekemoer: Oh|ef F|nanc|a| Offcer
to rema|n at the current
h|gher |eve|s desp|te the st
rraanndd ffoorreeccaassttss. TThhee ddeemm
for Foskor`s products rem
strong and w||| stretch
company`s product|on ou
Mr TJ Koekemoer: Oh|ef F|nanc|a|
Income statement
R million
Revenues
Cost of sales
Gross prot
Operating prot
Earnings before interest and tax
Net nance income and foreign exchange
Prot before tax
Taxation
Prot after tax
35
CFOs report
Introduction
The s|gn|fcant |mprovement |n Foskor`s performance for the year ended 31 March 2011 was |arge|y due to strong commod|ty
pr|ces of phosphor|c ac|d and granu|ar fert|||sers, desp|te the strengthen|ng of the rand aga|nst the S do||ar. Foskor`s
earn|ngs are h|gh|y suscept|b|e to commod|ty pr|ce and exchange rate fuctuat|ons. Dur|ng the per|od under rev|ew, the
Pyroxen|te Expans|on Project PEP2}, or the Debott|eneck|ng of Extens|on 8 was comp|eted, where R295 m||||on of the
cap|ta| expend|ture of R596 m||||on for the per|od was spent on the PEP projects. A h|gh||ght of the year was the fna||sat|on
of the B-BBEE ownersh|p dea| transact|on |n September 2010, wh|ch has |ed to a 26% change |n ownersh|p of Foskor.
Earnings
Foskor`s earn|ngs |mproved from the pr|or year pr|mar||y as a resu|t of |ncreased commod|ty pr|ces. The |oss before |nterest
and tax |n FY2010 was due to the share-based payment expense of R327 m||||on re|ated to the B-BBEE ownersh|p dea|.
There was a|so an |mpa|rment reversa| of R323 m||||on |n the prev|ous year.
Cash generated from operating activities (Rm)
1,200
1,000
800
600
400
200
0
2007 2008 2009 2010 2011
451
994
1,085
982
375
Operating prot margin (%)
2007 2008 2009 2010 2011
30
25
20
15
10
5
0
-5
11,9
28,5
27,0
11,1
-0,2
2011 2010 % change
4,611 3,465 33
(3,078) 2,276} 35
1,533 1,189 29
514 6} 8667
511 7} 7400
24 56 -57
535 49 992
(158) 107} 48
377 58} 750
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CFOs report cont.
Revenue
Revenue |ncreased by 33% |n FY2011 to R4,6 b||||on ma|n|y due to pr|ce |ncreases for phosphor|c ac|d and granu|ar fert|||sers.
The |ncrease |n fert|||ser pr|ces tracked g|oba| commod|t|es as |nvestors cont|nued to seek safe haven |nvestments, wh||e
|nternat|ona| markets were try|ng to stab|||se after the fnanc|a| cr|s|s of 2008. The strong rand resu|ted |n a negat|ve effect
of R430 m||||on compared to the prev|ous year`s revenue. ln an attempt to m|n|m|se the effect of exchange rate vo|at|||ty on
earn|ngs, the company used forward exchange contracts and opt|ons for wh|ch a proft of R27 m||||on was earned dur|ng
the year. Revenue der|ved from exports |n the per|od under rev|ew rema|ned v|rtua||y unchanged at 55% compared to the
prev|ous year as shown |n the graphs be|ow. Roya|ty tax payments on revenue amounted to R9 m||||on.
Operating prot
The operat|ng proft |ncreased from a |oss of R6 m||||on |n the prev|ous year to a proft of R514 m||||on |n the current year.
Product|on cost of phosphate rock rema|ned v|rtua||y unchanged at R630 per ton from the prev|ous year. Tota| cost of product|on
of phosphate rock |ncreased by 18% to c|rca R1,6 b||||on ma|n|y due to above-|nfat|onary cost |ncreases of 33% |n e|ectr|c|ty,
12% |n water tar|ffs, fue| and ma|ntenance, as we|| as a s|gn|fcant |ncrementa| deprec|at|on expense brought about by the
comm|ss|on|ng of PEP1 South P|t M|ne} and PEP2 Debott|eneck|ng Extens|on 8} amount|ng to R1 b||||on. Operat|ona| m|n|ng
costs |ncreased by R25 m||||on because of the greater d|stance from the new south p|t m|ne w|th the resu|tant necess|ty for
mov|ng mater|a|s from the m|ne to the product|on s|te. Th|s tota| cost |ncrease was offset by |mproved output and better y|e|ds
w|th product|on of phosphate rock |ncreas|ng by 19% 2,6 m||||on tons compared to 2,2 m||||on tons |n the prev|ous year}.
The convers|on cost from phosphate rock to phosphor|c ac|d |ncreased by 10% to R1,080 per ton. The above |nfat|on
|ncreases |n e|ectr|c|ty, water, deprec|at|on and ma|ntenance was offset by h|gher product|on. The product|on vo|umes were
up by 4% to 647,000 tons and 14% to 351,000 tons year-on-year for phosphor|c ac|d and granu|ar fert|||sers respect|ve|y.
Output at the Ac|d D|v|s|on was |ower than the targeted 690,000 tons of phosphor|c ac|d. The p|ant reduced product|on |n
||ne w|th |ow rock ava||ab|||ty resu|t|ng from the 10-week Brakspru|t Br|dge dera||ment on the Pha|aborwa-R|chards Bay ra||
||ne |n September 2010. The |oss |ncurred by the company for the |ncreased cost of work|ng, |oss |n ac|d product|on and
assoc|ated sa|es amounted to R60 m||||on, of wh|ch R26 m||||on was recovered from the |nsurers.
Raw mater|a| |nput costs |n ac|d and granu|at|on product|on |ncreased by 78% to S$121 per ton for su|phur year-on-year
and 37% to $425 per ton for ammon|a. The negat|ve |mpact of th|s approx|mates R250 m||||on.
The strong rand resu|ted |n a negat|ve effect of R320 m||||on at the operat|ng proft |eve|.
Geographical revenue segmentation 2011 (%) Geographical revenue segmentation 2010 (%)
lnd|a
South Afr|ca
Europe
Far East
n|ted States
Other
lnd|a
South Afr|ca
Europe
M|dd|e East
Far East
n|ted States
Other
2.4
37.6
44.9
3.5
2.9
7.5
1.2
2.7
3.2
3.5
44.3
42.9
3.4
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Non-core transactions included in operating margin
An |mpa|rment reversa| of R323 m||||on was |nc|uded |n operat|ng marg|n |n the pr|or year. ln the current year, there was no
|mpa|rment reversa| or charge to the |ncome statement. A share-based payment expense of R327 m||||on was charged to the
|ncome statement |n FY2010 and R25 m||||on |n the current year for the cash-sett|ed share-based payment.
Foskor has a defned beneft pens|on scheme, as we|| as a post-emp|oyment med|ca| ob||gat|on for wh|ch R14 m||||on has
been charged to the |ncome statement |n FY2011 due to changes |n the va|uat|on assumpt|ons of these post-emp|oyment
ob||gat|ons.
Working capital
The work|ng cap|ta| requ|rements of the group |ncreased from R676 m||||on |n FY2010 to R1 b||||on for FY2011. The |ncrease
was ma|n|y |n |nventory and rece|vab|es ba|ances.
Working capital
R million
Inventory
Receivables and prepayments
Payables and accrued expenses
Working capital requirement
Cash and cash equivalents
Long-term nancing
Net book value of property, plant and equipment
The add|t|ona| |nventory resu|ts from a stock bu||d-up at the M|n|ng D|v|s|on, brought about by the |ncrease |n product|on
vo|umes, the dera||ment |n September 2010 and the c|osure of the former Saso| N|tro p|ant |n Pha|aborwa, a major customer
for phosphate rock. The rock stockp||e at March 2011 was 581,000 tons compared to 172,000 tons at March 2010,
account|ng for R246 m||||on of the |ncrease |n |nventory. P|ans are under way to estab||sh a|ternat|ve corr|dors for ra|||ng rock
from Pha|aborwa to e|ther R|chards Bay or Maputo to reduce the h|gh stock |eve|s. lt |s a|so ant|c|pated that the former Saso|
N|tro P|ant w||| reopen under new ownersh|p dur|ng FY2012, |ncreas|ng the offtake for rock.
The R220 m||||on r|se |n rece|vab|es and repayments was due to the average |ncrease of 37% |n the se|||ng pr|ces for
phosphor|c ac|d and granu|ar fert|||ser.
The work|ng cap|ta| requ|rement was fnanced by cash on hand and a short-term overn|ght fac|||ty of R200 m||||on from
the commerc|a| banks that was fu||y pa|d up at year-end. A |ong-term fnanc|ng fac|||ty of R1 b||||on was obta|ned from the
lndustr|a| Deve|opment Oorporat|on lDO} under commerc|a| terms |n 2010, of wh|ch R107 m||||on had been ut|||sed |n the
year under rev|ew to fnance the expans|on project. The short-term R200 m||||on} and |ong-term R1 b||||on} fac|||t|es are st|||
ava||ab|e for FY2012 w|th the |ong-term fac|||ty be|ng repayab|e from Apr|| 2012 over fve years.
The |ncrease |n net fxed assets was due to the R295 m||||on |nvestment |n the m|ne expans|on project |n FY2011 and
cap|ta||s|ng the project after comm|ss|on|ng. The cash fow for cap|ta| expend|ture |nvestment |n FY2011 was R596 m||||on
compared to R824 m||||on |n the prev|ous year.
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2011 2010 % change
1,078 753 43
561 341 65
(603) 418} 44
1,036 676 53
404 518 -22
(107) - 100
3,325 2,933 13
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CFOs report cont.
Cash ow
Oash generated from operat|ng act|v|t|es amounted to R375 m||||on at 31 March 2011 compared to R982 m||||on at March
2010. The cash on hand ba|ance reduced from R518 m||||on at March 2010 to R404 m||||on at the end of the year under rev|ew.
Shareholders
The lDO`s shareho|d|ng of 85% was reduced to 59% at March 2011 as a resu|t of the fna||sat|on of the B-BBEE equ|ty dea|.
The 26% b|ack ownersh|p compr|ses the Manyoro Oonsort|um 15%}, the Pha|aborwa and R|chards Bay Oommun|t|es 5%}
and the Emp|oyee Share Ownersh|p Trust 6%}. There has been no change |n the number of |ssued ord|nary share cap|ta|
of 9,157,647 shares.
Dur|ng the year under rev|ew the Board approved a d|v|dend gu|de||ne to d|str|bute 20% of the year`s profts as d|v|dends
subject to performance, affordab|||ty and Board approva|. The |ast d|v|dend pa|d was for 141,96 cents per share |n February
2009, amount|ng to R1,3 b||||on.
Mine closure costs
The schedu|ed m|ne c|osure costs have |ncreased from R362 m||||on at March 2010 to R377 m||||on as a resu|t of the
expans|on project. The ||ab|||ty |n the ba|ance sheet has |ncreased to R230 m||||on from R214 m||||on |n the pr|or year and the
unschedu|ed m|ne c|osure costs amounted to R486 m||||on at year-end from R420 m||||on at March 2010. The assets |n the
Env|ronmenta| Rehab|||tat|on Trust have |ncreased from R85 m||||on to R100 m||||on, and a cash |nvestment of R8 m||||on was
made by the company dur|ng the year.
Change in accounting policies and estimates
There were no changes |n account|ng po||c|es and est|mates dur|ng the current year. A project was carr|ed out by an
|ndependent frm dur|ng the year under rev|ew to assess the res|dua| va|ues and usefu| ||ves of the fxed assets w|th coverage
of 90% of the ba|ance sheet va|ue. The d|fferences were found to be |mmater|a| and the company dec|ded not to change the
res|dua| va|ues and the usefu| ||ves of assets.
Conclusion
The FY2012 |ooks set to cont|nue to be proftab|e for Foskor as pr|ces are ant|c|pated to rema|n at the current and h|gher
|eve|s desp|te the strong rand forecasts. The demand for Foskor`s products rema|ns strong and w||| stretch the company`s
product|on output.
MR TJ KOEKEMOER: Oh|ef F|nanc|a| Offcer
39
SINDISIWE NGWENYA
Personal assistant
"The essence of
wisdom is using
what we know
and confessing
to what we don't
know"
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Foskor`s M|n|ng D|v|s|on
has successfu||y comp|eted
the pyroxen|te expans|on
project, wh|ch ensures sus-
ta|nab|e product|on for at
|east another 70 years.
Mr Johan Horn: v|ce-pres|dent: M|n|ng
Foskor`s M|n|ng D|v|s|o
has successfu||y comp|eted
tthhe pyroxen||tte expans||o
pprroojjeecctt, wwhh||cchh eennssuurreess ssuuss
ta|nab|e product|on for a
|east another 70 years.
Mr Johan Horn: v|ce-pres|dent: M|n|n
41
Mining Division: Phalaborwa
Key achievements in 2010/11 were the following:
Successfu| comm|ss|on|ng of the PEP1 crusher and over|and conveyor.
Successfu| comm|ss|on|ng of the PEP2 or Extens|on 8 Debott|eneck|ng Project.
Reduct|on of the |ost-t|me |njury frequency rate from 0,32 |n 2009/10 to 0,22 |n 2010/11.
Retent|on of a|| lSO cert|fcat|ons 14001, 9001, 18001 and SANS 16001.
lncreased product|on by 19% from 2,189,905 tons |n 2009/10 to 2,601,502 tons |n 2010/11.
Oonta|n|ng the product|on cost per ton w|th|n the budgeted range |.e. R621 per ton versus
R623 per ton.
Southern
Pyroxenite Pit
Northern
Pyroxenite Pit
Drill and blast
Load and haul
Drill and blast
Load and haul
Crushing
Stockpiling
Milling
Crushing
Stockpiling
Milling
Toll @ PMC
Crushing
(Primary)
Milling
Flotation
C&D Bank
Crushing
(Secondary)
Stockpiling
Milling
Crushing
(Secondary)
Stockpiling
Milling
Flotation
F Bank
Flotation
E Bank
Flotation
Extension 8
22%
37%
20%
21%
Filtration and Stock
Slurry Pumps
Farmer's World
Exports Domestic Sales
Drying and Dispatch
82-83BPL
60%
40%
Conceptual production model
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New PEP1 Primary crusher being installed
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Overview of the Mining Divisions performance
Tota| phosphate rock product|on rose by 19% from 2,189,000 tons to 2,6 m||||on tons, w|th a|| four product|on streams
|ncreas|ng output compared w|th the prev|ous fnanc|a| year. Th|s can be attr|buted to |ncreased re||ab|||ty of the process|ng
p|ants, |mproved effc|enc|es |.e. overa|| P
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recover|es} and h|gher run of m|ne feed-grades.
Dev|at|ons from the 2010/11 budget were due to three major events: excess|ve ra|nfa|| |n December 2010 and January 2011,
two Sect|on 54 not|ces from the Department of M|nera| Resources |n February 2011, and a major breakdown on the Pa|abora
M|n|ng Oompany`s crusher |n terms of the PMO to|||ng agreement}. These |nc|dents resu|ted |n d|rect product|on |osses of
15,000 tons, 24,000 tons and 26,000 tons respect|ve|y.
Ourrent cha||enges to |mprov|ng the 2010/11 product|on performance ||e |n dewater|ng the South Pyroxen|te m|ne, remov|ng
waste from the North Pyroxen|te m|ne due to the short-term h|gh str|pp|ng rat|os, and the re||ance on PMO to crush and gr|nd
mater|a| emanat|ng from the South Pyroxen|te m|ne.
A North Pyroxen|te Push Back project was approved by the Board to un|ock current resources and subsequent|y reduce
the overa|| str|pp|ng rat|o |n the North Pyroxen|te p|t. Th|s wou|d extend the o|d m|ne`s ||fe by a further 30 years. Foskor`s
m|ne management |s |n constant negot|at|ons w|th PMO to |mprove the PMO/Foskor to|||ng agreement and |s seek|ng new
so|ut|ons to |ncrease crush|ng and m||||ng throughput.
The Pyroxen|te Expans|on Project PEP} was successfu||y comp|eted |n February 2011, fo||owed by hot comm|ss|on|ng.
M|nor teeth|ng prob|ems were reso|ved by the end of Apr|| 2011. PEP2, the Debott|eneck|ng of Extens|on 8 Project, adds a
further 1,4 m||||on tons of process|ng capac|ty or an equ|va|ent of 200,000 tons per year of fna| product at the Extens|on 8
process|ng p|ant. Th|s makes the annua| product|on of 2,8 m||||on tons of P
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poss|b|e.
A tota| of 2,163,616 tons budget: 2,228,500 tons} of phosphate rock concentrate was d|spatched dur|ng the 2011 fnanc|a|
year. The ma|n contr|but|ng factor to the 3% defc|t |n d|spatches was Transnet Fre|ght Ra||`s TFR} str|ke |n May 2010 and the
catastroph|c dera||ment of a TFR tra|n at the Brakspru|t Br|dge |n September 2010 that damaged the br|dge and rendered |t
non-operat|ona| for 10 weeks. Furthermore, a dryer debott|eneck|ng project k|cked off |n March 2011 to ra|se dryer ut|||sat|on,
resu|t|ng |n more cons|stent week|y d|spatches.
Mining Division: Phalaborwa cont.
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Stream % P
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Actual weighted
production
Budgeted weighted
production
Actual performance
against budget (tons)
F-Bank concentrate tons 36,71 1,073,935 949,638 124,297
E-Bank concentrate tons 37,25 617,220 584,357 32,863
Ext 8 concentrate tons 38,04 364,396 447,686 (83,290)
PMC concentrate tons 36,97 530,873 606,722 (75,849)
Palfos R 32,52 7,893 50,154 (42,261)
Total Palfos B 37,16 2,594,317 2,638,557 (44,240)
Palfos recovered 7,246 - 7,246
Total production 37,13 2,601,563 2,638,557 (36,994)
Monthly phosphate rock production
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Actual 204 179 177 247 199 280 225 202 253 198 171 246
Budget 210 195 198 218 198 253 207 197 258 206 218 274
290,000
270,000
250,000
230,000
210,000
190,000
170,000
150,000
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The shortfa|| |n budget was due to:
PMCs underperformance
The PMO-stream produced 75,849 tons concentrate be|ow the budget. The unre||ab|||ty of the PMO p|ant, equ|pment
stoppages and unschedu|ed down t|mes resu|ted |n 1,306 hours of |ost product|on t|me. The down t|mes were ma|n|y as a
resu|t of the fo||ow|ng:
Fa||ure of the auto m||| substat|on pane|s at PMO stopped Foskor`s to|||ng streams for approx|mate|y seven days equ|va|ent
to about 11,176 tons of |ost concentrate}.
The unre||ab|||ty of the export ||nes espec|a||y from Apr|| to June 2010 ended |n 224 hours downt|me or 16,592 tons |ost
concentrate. Downt|me at the h|-phos pump|ng system, or transfer from m|||s to export, resu|ted |n an add|t|ona| 112,5
hours downt|me or 8,947 tons |ost concentrate.
Stoppages of the pr|mary and secondary crushers contr|buted 510,8 hours to product|on |osses 41,789 tons concentrate}.
Extension 8s performance
Extens|on 8 produced 364,396 tons of concentrate compared to the budget of 447,686 tons defc|t: 82,291 tons}. The
underperformance was due to the fo||ow|ng:
The |ncorrect |nsta||at|on of the feed chute dur|ng the shutdown resu|ted |n m||| downt|me of 56,87 hours to rect|fy the
|nsta||at|on.
On 6 May 2010, the c|ass|fer bear|ng assemb|y se|zed due to |nsuffc|ent |ubr|cat|on. Product|on t|me of 66,57 hours was
|ost to rep|ace the bear|ng cartr|dge.
On 1 June 2010, a ro||er tyre came |oose as a resu|t of a fa||ure of bo|t protect|on covers. Due to the unava||ab|||ty of a
spare ro||er, the m||| operated on on|y two ro||ers unt|| the un|t was repa|red. Product|on throughput was therefore reduced
from 520 tons per hour tph} to 380 tph.
Dur|ng the frst week |n Ju|y 2010, 32 hours of product|on was |ost dur|ng the rep|acement of the refurb|shed ro||er.
The m||| stood st||| for 247 hours ow|ng to ore shortages. The |nstab|||ty of ore supp|y a|so contr|buted to fotat|on downt|me
caused by the chok|ng of fotat|on ce||s. Ore supp|y from the p|t was supp|emented w|th PP&v that contr|buted to |ower
recover|es and |nstab|||ty |n the fotat|on process.
Two power fa||ures and two outages resu|ted |n p|ant downt|me of 34,79 and 57 hours respect|ve|y |n September 2010.
Three further power outages |n October and November 2010 caused down t|me of 10,35 hours at the fotat|on c|rcu|t.
lnstrumentat|on fa||ures resu|ted |n downt|me of 67 hours.
The ab|||ty of the m||| to ||berate h|gh do|or|t|c ore to spec|fcat|on reduced throughput from 480 tons per hour tph} to 390
tph dur|ng December 2010 and March 2011.
The unava||ab|||ty of ta|||ngs pumps contr|buted to 94 hours` stand|ng t|me. H|gh operat|ng pressure on the system put
the ta|||ngs system at r|sk.
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Measuring efciencies in the phosphate ore streams
Monthly phosphate rock production
69
67
65
63
61
59
57
55
YTD Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Actua| Budget
Palfos R
Pa|fos R`s fna| product|on for the year was 7,893 tons. The major|ty of the feed and supp|y prob|ems have been reso|ved and
product|on |mproved to around 50 tons per day v|a the f|ter press s|nce the th|rd week of December 2010. Th|s was, however,
st||| substant|a||y |ower than the budgeted |eve|s. Tota| product|on of Pa|fos R |s 42,261 tons be|ow the budget of 50,154 tons
f|tered}.
F-stream
The F-stream produced 1,073,935 tons concentrate for the year under rev|ew, 215,338 tons more than the prev|ous year
and 13,1% above budget. The |mproved performance was due ma|n|y to the better qua||ty South p|t mater|a|, |mproved p|ant
re||ab|||ty, h|gher recover|es and h|gher feed grades.
Pyroxenite stream
The Pyroxen|te stream ended the fnanc|a| year at 32,863 tons above the budget and 83,088 tons concentrate above the
prev|ous year, ma|n|y due to a substant|a| reduct|on |n down t|me on the stream around four t|mes |ower than the prev|ous
year. Recover|es and feed grade were a|so above budget.
Drying and dispatch
Stock at Pha|aborwa |ncreased from 171,000 tons at the beg|nn|ng of Apr|| 2010 to 581,000 tons at the end of March 2011.
Better product|on performances and |ower d|spatches due to the TFR str|ke |n May, the Brakspru|t dera||ment and Saso|
N|tro`s p|ant c|osure contr|buted to |ncreased stock |eve|s.
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A tota| of 252,640 tons of magnet|te were d|spatched for the per|od under rev|ew. Magnet|te d|spatches were negat|ve|y
|mpacted by the unava||ab|||ty of wagons and the dera||ment at the Brakspru|t Br|dge dur|ng September 2010. The magnet|te
|oad|ng stat|on |s current|y |n operat|on. D|ffcu|ty |s be|ng exper|enced |n the ach|evement of the 12-hour |oad|ng t|me as
a resu|t of excess|ve shunt|ng. A proposa| to |nsta|| an |n-mot|on we|ghbr|dge |s be|ng rev|ewed as a so|ut|on to m|n|m|se
shunt|ng dur|ng the we|gh|ng of wagons.
Waste disposal
The ta|||ngs sect|on exper|enced no ma|ntenance-re|ated p|ant stoppages for the per|od under rev|ew. The h|gh pressure
pump on ||ne 4 was comm|ss|oned successfu||y, a||ow|ng the pump|ng of ta|||ngs to the far south wa|| of the Se|at| Dam. The
|nsta||at|on of the h|gh pressure pump on ||ne 1 w||| be comm|ss|oned
by the end of June 2011.
The water |eve|s on both the Se|at| and Southern Ta|||ngs Dams
are w|th|n safe operat|ng marg|ns and the freeboard |s more than
adequate. The f|ter dra|ns are funct|on|ng we||. The p|ezo meter
read|ng |s we|| w|th|n spec|fcat|ons and no seepages are not|ced
at toe |eve|s. The outer wa||s are |n good cond|t|on and the overa||
cond|t|on of the dam |s good. A subs|dence above an o|d decant of
the Se|at| Dam was detected |n November 2010. Spec|a||st adv|ce
was obta|ned and the correct|ve measures were |mp|emented,
show|ng exce||ent resu|ts. Th|s s|tuat|on |s c|ose|y mon|tored on
a constant bas|s and the dam`s status |s confrmed by Fraser
A|exander to be green. The bu||d|ng of the |ast ||ft on the Southern
Dam |s progress|ng we|| and Extens|on 8 Ta|||ngs w||| be d|verted to
the Se|at| Dam by October 2012.
Rehabilitation
A fve hectare test area has been rehab|||tated on the Se|at| Dam after
consu|tat|on w|th rehab|||tat|on experts. Seed||ngs have surv|ved the
above norma| temperatures |n March 2011 w|th fa|r|y good growth |n some areas. lnd|cat|ons are that p|ant|ng grass on the
dormant beaches w||| be extreme|y d|ffcu|t and a|ternat|ve dust suppress|on methods such as screens and |rr|gat|on w|||
have to be cons|dered |n the future. A||en p|ants are removed on a contract bas|s and the team was congratu|ated by the
|oca| author|t|es for the|r efforts |n protect|ng |nd|genous spec|es. Excess|ve ra|nfa|| dur|ng December 2010 and January 2011
de|ayed the capp|ng of s|opes unt|| May 2011. The rehab|||tat|on on the Southern Dam |s up to date w|th the capp|ng of the
new wa||s w|th topso|| runn|ng para||e| w|th the construct|on of the |ast ||ft on the Southern Dam.
Tailings disposal into tailings dam, Phalaborwa
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Dryer No. 5: Mining Division, Phalaborwa
49
Energy optimisation
A programme compr|s|ng computer screens |nsta||ed |n key areas that g|ves |nstant usage fgures was |n|t|ated to show
users of e|ectr|c|ty the|r consumpt|on per hour. Other energy opt|m|sat|on projects at an est|mated cost of R4,8 m||||on are
progress|ng very we||. Energy opt|m|sat|on projects |nc|ude the fo||ow|ng:
A smoke or gas ana|yser was |nsta||ed |n March 2011.
An a|r management system for the compressors was |nsta||ed and a rev|ew show|ng sav|ngs w||| be done |n due course.
Power watch |s effect|ve and system stab|||sat|on |s |n progress.
An energy team was formed to carry out an |n-house energy aud|t and to |dent|fy new projects. An |n-depth report on the
energy sav|ng projects was d|scussed |n deta|| by the Oont|nuous lmprovement Task Force.
Air quality
The M|n|ng D|v|s|on`s a|r qua||ty focuses on amb|ent dust em|ss|ons due to the ta|||ngs dams and the surround|ng commun|t|es
who ||ve c|ose to the m|ne. Month|y a|r qua||ty meet|ngs are he|d w|th the consu|tant who mon|tors the amb|ent dust. Persona|
dust mon|tor|ng |s carr|ed out to protect emp|oyees from exposure to nu|sance dust and regu|ar reports are comp||ed and
subm|tted to the DMR.
Water conservation
A|| process water |s recyc|ed to the ma|n p|ant from the van Ryssen Dam, the catchment dam for a|| process waters.
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ln the de||very of our r|sk
management strategy we
cont|nue to protect our
shareho|ders and stakeho|der
|nterests as pr|nc|pa| cus-
tomers to our bus|ness by
safeguard|ng the|r |nvestments
and the company`s assets.
Mr NV Nkomzwayo: v|ce-pres|dent: Ac|d
cont|nue to protect ou
shareho|ders and stakeho|de
||nntteerreessttss aass pprr||nncc||ppaa|| ccuuss
tomers to our bus|ness by
saffeguardd||ngtthhe||r||nvesttmentts
and the company`s assets
Mr NV Nkomzwayo: v|ce-pres|dent: Ac|d
51
Acid Division: Richards Bay
Production
The Ac|d D|v|s|on`s or|g|na| budget of 690,000 tons was rev|sed
downwards to 645,000 tons as a resu|t of the dera||ment on
19 September 2010. Transnet Fre|ght Ra|| |n|t|a||y reported that the
Brakspru|t Br|dge wou|d be non-operat|ona| for four to s|x weeks, but
after jo|nt |nspect|ons th|s was rev|sed to e|ght to 10 weeks. W|th|n
s|x days of the dera||ment, a new ra|| |oad|ng s|te was estab||shed
at the dormant M|ca Stat|on and an average of 4,012 tons per
day of phosphate rock were ra||ed from M|ca about 50km from
Pha|aborwa} to R|chards Bay. The fnanc|a| |mpact of the dera||ment
|s est|mated at R60 m||||on.
Due to the phosphate rock shortages from September to November 2010, the p|ants had to run at m|n|ma| rates to ba|ance
the product|on of ac|d and steam aga|nst rock ava||ab|||ty. Each of the p|ants was shut |n turn an opportun|ty ma|ntenance
was carr|ed out on a|| three p|ants, |.e. su|phur|c ac|d, phosphor|c ac|d and granu|at|on, such that they were ab|e to run above
des|gn capac|ty.
Sulphuric acid plant
The fnanc|a| year commenced w|th a p|anned shutdown on the O-p|ant dur|ng Apr|| 2010 where the co|d heat exchanger was
exchanged, the converter cata|yst screened and the fna| absorpt|on tower m|st e||m|nators rep|aced. Prob|ems exper|enced
w|th the co|d heat exchanger |nsta||at|on extended the shutdown by a week. Post shutdown, the p|ant`s throughput due to
h|gh SO
2
em|ss|ons was ||m|ted. The gas bo||er was run extens|ve|y from September to November 2010 to supp|ement steam
product|on needed to manage the h|gh su|phur|c ac|d stocks dur|ng th|s per|od. For the frst t|me s|nce comm|ss|on|ng |n
2002, the O-p|ant produced |n excess of 3,000 tons per day for s|x consecut|ve days.
The phosphoric acid plant
The unava||ab|||ty of phosphate rock for 10 weeks as a resu|t of the Brakspru|t Br|dge dera||ment, forced the phosphor|c ac|d
p|ant to reduce product|on rates and operate as per ava||ab|||ty of phosphate rock de||vered.
The fo||ow|ng major jobs were undertaken dur|ng the ma|ntenance shutdown |n Apr|| and May 2010:
The o|d p|ant reactor number 4 compartment ag|tator was changed to a new des|gn for better ag|tat|on.
Two ma|n carr|er be|ts were changed |n number 1 and 2 be|t f|ter. The second ma|n be|t was rep|aced |n-house except for
sp||c|ng.
The gypsum pumps to sea were changed from rubber-||ned vo|ute, wh|ch regu|ar|y fa||ed, to sta|n|ess stee| vo|ute.
The refurb|shment of the o|d p|ant coo||ng towers commenced.
Two heat exchangers p|ugged tubes were changed |n the o|d concentrat|on p|ant to |ncrease capac|ty.
A|| seven o|d p|ant concentrat|on un|ts torpedoes |n||ne pumps} m||d stee| rubber ||n|ngs were rep|aced by sta|n|ess stee|
||n|ngs.
Sulphuric
Acid
Phosphoric
Acid
Granulation
Acid
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Acid Division: Richards Bay cont.
Granulation plant
The granu|at|on p|ant`s shutdown was comp|eted on t|me and w|th|n budget, w|th the focus on the dryer and the
granu|ator. Rep|acements were a|so carr|ed out on the tyres and trun|ons dress|ng, drum bear|ngs and feed end sea|s.
The cracks on the drums and tyre support cha|rs were we|ded and |aser a||gnment of the dr|ve systems was done.
Add|t|ona| |mprovements on the p|ant wh|ch resu|ted |n reduced down t|me |nc|ude:
Recyc|e we|gher conveyor - |nsta||at|on of speed
screw mechan|ca| sp||c|ng.
Product conveyor be|t rep|acement.
Overhau||ng of drag f|ght conveyor.
Rep|acement of boot sect|on of granu|at|on feed
e|evator.
Rep|acement of rotors and ||ners and ba|anc|ng of the
cage m|||s.
Rep|acement of so||d feed drag f|ght w|th a be|t
conveyor.
The |mprovements, coup|ed w|th the mod|fcat|on
of cyc|ones, opt|mum operat|on of the scrubbers,
cont|nuous rev|ew of cr|t|ca| process parameters and
approach towards prob|em-so|v|ng techn|ques, resu|ted
|n the steady and stab|e operat|on of the p|ant. For the
per|od under rev|ew, the granu|at|on p|ant recorded
the h|ghest ever product|on s|nce |ts |ncept|on. sage
factors of major raw mater|a|s and ut|||t|es were we||
be|ow budget.
Environmental projects
1. Dense efuent diffuser replacement project - lnsta||at|on of a second p|pe||ne w|th a ded|cated pump stat|on,
as we|| as the refurb|shment of the or|g|na| p|pe||ne for d|sposa| of gypsum at sea, was comp|eted |n Ju|y 2010. The
R158 m||||on project w||| not on|y ensure the safe d|sposa| of gypsum at sea but a|so remed|ate the r|sk of product|on
|nterrupt|on. The two p|pe||nes w||| be operated |nterchangeab|y, a||ow|ng for ma|ntenance.
2. South plant project - The upgrad|ng of roads, stormwater systems and waste storage areas on the p|ant cont|nued
throughout the year. The project was undertaken |n three phases, w|th Phase one comp|ete and Phases two and
three due for comp|et|on |n the second quarter of 2011. The refurb|shment has resu|ted |n the estab||shment of
roads capab|e of carry|ng heavy traffc, |mproved stormwater hand||ng and prevent|on of groundwater po||ut|on from
storage and hand||ng of waste on s|te.
3. Seawater supply project - E||m|nates fou| odours from the p|ant and |mproves the d|sso|ut|on of gypsum at sea by
subst|tut|ng |ndustr|a| waste water w|th seawater.
Granular fertiliser
53
4. Potable water surge tank project - A 4,95 mega||tre surge tank was constructed |n the th|rd quarter of 2010 to prevent
surges |n the mun|c|pa| potab|e water r|ng feed system as we|| as to ensure un|nterrupted supp|y of potab|e water to the
p|ant.
5. Rock store roof sheeting replacement project - The asbestos roof of the phosphate rock store, constructed |n 1976,
was rep|aced w|th fbre cement sheet|ng |n the frst quarter of 2010 to comp|y w|th regu|at|ons.
6. Fertiliser store roof sheeting replacement project - A project |s under way to rep|ace the a|um|n|um roof sheet|ng
of the fert|||ser store w|th fbre cement sheet|ng to
prevent ra|n |eaks from spo|||ng stored fert|||ser. The
rep|acement of sheet|ng and repa|rs to the stee|
structure commenced |n the fna| quarter of 2010 and
|s est|mated to take two years unt|| comp|et|on.
7. Phosphoric acid pipeline for rail loading - The
|ncreased demand for |oad|ng merchant grade
phosphor|c ac|d on ra|| tankers requ|red the construct|on
of a ded|cated p|pe||ne and pump|ng system to route
phosphor|c ac|d from the export ac|d tank farm to the
ra|| |oad|ng system.
8. Groundwater remediation project - Oontam|nated
groundwater has been |ntercepted on s|te and the
contam|nated p|ume prevented from advanc|ng off-s|te
by a ser|es of subso|| dra|ns s|nce the th|rd quarter of
2010. The project w||| be executed |n three stages w|th
comp|et|on est|mated |n the |ast quarter of 2012.
Major technical improvement and cost-
saving initiatives
1. Old phosphoric plant cooling tower revamp - The
effc|ency of the o|d phosphor|c ac|d p|ant coo||ng tower
dropped s|gn|fcant|y ow|ng to severe sca||ng accumu|ated over the years. The refurb|shment project amount|ng to
R26 m||||on w||| enab|e effc|ent coo||ng and |mproved product|v|ty of the o|d p|ant`s concentrat|on un|ts.
2. Stormwater recycled to plant - Any water sp|||ages or ra|n water are channe||ed |nto the stormwater dam and d|sposa|
of th|s ac|d|c effuent water resu|ts |n |osses of P
2
O
5
. For the year under rev|ew 189,262m
3
of effuent water was recyc|ed to
the phosphor|c ac|d p|ant. Th|s has e||m|nated the potent|a| |oss of 7,445 metr|c tons P
2
O
5
worth more than S$5 m||||on.
A ded|cated pump |s be|ng |nsta||ed to ensure max|mum effuent recover|es.
3. Power saving - P|p|ng mod|fcat|on |n the coo||ng water return ||ne |n the o|d phosphor|c ac|d concentrate sect|on
rep|aced mechan|ca| pump|ng. Th|s resu|ted |n a power cost reduct|on of R250,000 per annum.
4. Gypsum sludge handling project - S|udge sp|||ages on the foor damaged the concrete foor and nearby equ|pment.
The gypsum s|udge s|urry system proposed by SNO |ava||n w||| a||ow for a more effc|ent and manageab|e way of
recyc||ng or d|spos|ng the s|udge from the tank farms. The des|gn and cost of the project was comp|eted |n Apr|| 2011.
Groundwater remediation
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Cooling towers at sulphuric acid plants: Acid Division, Richards Bay
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Acid Division: Richards Bay cont.
5. Reutilisation of gland condenser water in A & B sulphuric acid plants - The A and B p|ant turb|nes each have a
g|and condenser that uses approx|mate|y 46m
3
of potab|e water per hour. The g|and condenser out|et was rerouted to
reduce potab|e water consumpt|on by 90m
3
per hour and supp||es a s|m||ar amount of raw water to the coo||ng tower. The
d|fferent|a| cost of potab|e and raw water w||| save over R3,0 m||||on a year. Th|s project was |mp|emented |n November
2010.
6. Hillside water recovery project - Raw water purchases from the mun|c|pa||ty were reduced by 323,275m
3
|n th|s
fnanc|a| year, resu|t|ng |n sav|ngs of R481,463.
7. Raw water ltration project - Rep|acement of potab|e water w|th f|tered raw water |n the su|phur|c ac|d p|ant has
reduced potab|e water consumpt|on by 945,273m
3
|n the 2011 fnanc|a| year, a sav|ng of more than R4 m||||on on the
d|fferent|a| pr|ce potab|e water cost|ng four t|mes more than raw water}.
8. Stack emissions reduction in sulphuric acid plants - A study to opt|m|se product|on capac|ty and stack em|ss|on
reduct|ons |n su|phur|c ac|d p|ants was |n|t|ated to comp|y w|th forthcom|ng env|ronmenta| |eg|s|at|on effect|ve 2014.
Air quality
A|r qua||ty perm|t cond|t|ons measur|ng em|ss|ons were 100% comp||ant and ver|fed by an externa| consu|tant, who used the
lsokenet|c Stack Oomp||ance ver|fcat|on method.
Waste disposal
The Ac|d D|v|s|on has succeeded |n obta|n|ng |ts waste perm|t from the Department of Env|ronmenta| Affa|rs and has
undertaken var|ous waste recyc||ng |n|t|at|ves to m|n|m|se waste d|sposa|. A new sort|ng yard or rad|at|on waste and bunker
fac|||ty, for |mproved bu|k hand||ng of hazardous waste, has reduced the d|sposa| of construct|on demo||t|on and hazardous
waste. A|| hazardous waste that cannot be recyc|ed |s d|sposed of to an approved and author|sed |andf|| s|te by an accred|ted
waste contractor.
The Ac|d D|v|s|on hosted |ts Wor|d Env|ronment and Safety, Hea|th, Rad|at|on, Env|ronment and Oua||ty SHREO} Awards
Day |n June 2010 at the Foskor c|ub |n R|chards Bay and the message that promot|ng safety, hea|th and preserv|ng the
env|ronment |s everyone`s respons|b|||ty was commun|cated to emp|oyees through a|| channe|s. Guest speakers |nc|uded
thungu|u`s Mayor and the D|rector from KwaZu|u-Nata|`s Department of Agr|cu|ture and Env|ronmenta| Affa|rs and Rura|
Deve|opment. Art|sts part|c|pat|ng |n the programme a|so stressed the |mportance of SHE management at the workp|ace.
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Komatsu PC 5500 hydraulic face shovel in North Pyroxenite Pit, Mining Division: Phalaborwa
57
Review of mineral resources and ore reserves
The Pha|aborwa lgneous Oomp|ex, s|tuated south of Pha|aborwa |n the ||mpopo prov|nce, compr|ses 14 d|st|nct rock types,
each w|th a spec|fc m|nera| compos|t|on, as |||ustrated |n F|gure 2. lt |s a vert|ca| vo|can|c p|pe, rough|y k|dney-shaped and
measur|ng between 1,5 and 3,5km |n w|dth and 6,5km |n |ength. The comp|ex cons|sts of three conjo|ned |obes - name|y the
North Pyroxen|te, |oo|ekop and South Pyroxen|te areas.
Apat|te |s the on|y phosphate-bear|ng m|nera| |n the |gneous comp|ex. A|though |t |s somet|mes present |n on|y very sma||
amounts, |t |s never comp|ete|y absent and often fgures as an abundant m|nera| const|tuent |n the pyroxen|te and foskor|te
rock types. Oopper and magnet|te are present |n the |oo|ekop |obe and are exc|us|ve|y assoc|ated w|th foskor|te and
carbonat|te rock types.
As a resu|t of exp|orat|on dr||||ng, h|gher concentrat|ons of apat|te m|nera||sat|on, expressed as a percentage of P
2
O
5
, were
found |n the |oo|ekop foskor|te and pyroxen|te rock types, as we|| as |n the pyroxen|te rock types of the north-west corner
of the North Pyroxen|te |obe and the South Pyroxen|te |obe. There are four m|nes current|y operat|ng |n the Pha|aborwa
lgneous Oomp|ex. Pa|abora M|n|ng Oompany PMO} operates a copper m|ne |n the centra| port|on of the comp|ex, as we||
as a verm|cu||te m|ne |n the southern port|on of the comp|ex. Foskor operates two phosphate rock m|n|ng operat|ons, one
s|tuated |n the North Pyroxen|te area and another |n the South Pyroxen|te area.
Foskor Pty} |td has subm|tted a|| app||cat|ons as requ|red |n terms of the M|nera| and Petro|eum Resources Deve|opments
Act No. 28 of 2002}, re|ated to m|nera|s and reserves. Subm|ss|ons were made for four new m|n|ng r|ghts, three of wh|ch
have a|ready been granted w|th the fourth |n the process of be|ng rev|ewed. Two subm|ss|ons were made for the convers|on
of o|d order used r|ghts to new m|n|ng r|ghts.
The m|n|ng r|ghts a|ready granted are:
New M|n|ng R|ght - South Pyroxen|te |P30/5/1/2/2/09 MR},
New M|n|ng R|ght - North Pyroxen|te Extens|on |P30/5/1/2/2/03 MR}, and
New M|n|ng R|ght - Str|pp|ng Area |P30/5/1/2/2/22 MR}.
M|n|ng r|ght app||cat|ons subm|tted and under rev|ew are:
Northern Pyroxen|te - North-west Oorner |P30/5/2/2/126 MR}.
App||cat|ons for convers|on of o|d order used r|ghts to new m|n|ng r|ghts subm|tted and under rev|ew are:
O|d Order sed R|ght - North Pyroxen|te |P30/5/1/2/2/124 OMR}, and
Oonvers|on of rema|nder of a|| ex|st|ng stockp||es |P 30/5/1/2/2/125}.
Management |s confdent that the outstand|ng app||cat|ons w||| be fna||sed and approved by the Department of M|nera|
Resources.
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Review of mineral resources and ore reserves cont.
Geological exploration
From 1950 onwards, numerous dr||| tests have been
performed on the phosphate depos|ts, w|th the most recent
dr||||ng comp|eted |n 2006. A tota| of 100,544 metres were
dr|||ed to demarcate m|nera| resources |n the North and
South Pyroxen|te p|ts. Dr||||ng was a|so performed |n PMO`s
act|ve ta|||ngs dam to eva|uate poss|b|e m|nera| resources.
Samp|es acqu|red from the defned dr||| ho|es were assessed at Foskor`s chem|ca| |aboratory. Foskor |s not current|y
undertak|ng any new exp|orat|on projects.
Resource estimation
Geostat|st|ca| ana|ys|s of the dr||||ng |nformat|on was used to bu||d 3-d|mens|ona| geo|og|ca| b|ock mode|s show|ng phosphate
m|nera| d|str|but|on. The b|ock mode|s for the two m|n|ng areas and the ta|||ngs dam were va||dated by corre|at|ng the or|g|na|
dr|||-ho|e assay resu|ts w|th the est|mated va|ues determ|ned by the geostat|st|ca| methods.
M|nera| resources were c|ass|fed as e|ther measured, |nd|cated or |nferred, based on dr|||-ho|e dens|t|es, kr|g|ng effc|ency
parameters and the cumu|at|ve know|edge and exper|ence of Foskor`s geo|og|sts.
Figure 1: Areas of interest with regard to mineral resources and
reserve
Figure 2: The geology of the Phalaborwa Igneous Complex
Do|er|te
Transgress|ve carbon|te
Banded carbon|te
Foskor|te
Syen|te
Fen|te
Ph|ogop|te-pyroxeme-apat|te pegmato|d
G||mmer|te
Apat|te-r|ch ph|ogoph|te pyroxen|te
Fe|dspath|c pyroxen|te
Ph|ogop|te-pyroxene pegmato|d
Apat|te poor ph|ogoph|te pyroxen|te
Ma|n pyroxen|te
Serpent|ne-ph|ogop|te pegmato|d
Gran|te and gne|ss
59
Mineral resources and reserves
The m|nera| resources and reserves were c|ass|fed accord|ng to the South Afr|can M|nera| Resource Oomm|ttee SAMREO}
Oode. SAMREO defnes a m|nera| resource as: 'a concentrat|on or occurrence of mater|a| of econom|c |nterest |n or on
the earth`s crust |n such form, qua||ty and quant|ty that there are reasonab|e and rea||st|c prospects for eventua| econom|c
extract|on`.
ln terms of the Oode: 'the |ocat|on, quant|ty, grade,
cont|nu|ty and other geo|og|ca| character|st|cs of a m|nera|
resource are known, or est|mated from spec|fc geo|og|ca|
ev|dence, samp||ng and know|edge |nterpreted from an
appropr|ate|y constra|ned and portrayed geo|og|ca| mode|.
M|nera| resources are subd|v|ded, and must be so reported,
|n order of |ncreas|ng confdence |n respect of geo sc|ent|fc
ev|dence, |nto |nferred, |nd|cated or measured categor|es`.
To e|aborate, a m|nera| reserve |s the econom|ca||y m|neab|e
mater|a| der|ved from e|ther a measured or an |nd|cated
m|nera| source. lt |nc|udes d||uted and contam|nated
mater|a|s and a||ows for m|n|ng |osses. At m|n|mum, an
appropr|ate assessment for a project shou|d be a pre-
feas|b|||ty study. A|ternat|ve|y, a ||fe of M|ne P|an - deta|||ng
cons|derat|ons, mod|fcat|ons, rea||st|ca||y assumed m|n|ng,
and a|| other mod|fy|ng factors such as the meta||urg|ca|,
econom|c, market|ng, |ega|, env|ronmenta|, soc|a| and
governmenta| |mpacts - shou|d be drawn up.
The cut-off feed grade to econom|ca||y produce a sa|eab|e
36,5% P
2
O
5
} phosphate rock concentrate was ca|cu|ated
us|ng methods or|g|na||y made famous by |ead|ng
mathemat|c|an and m|n|ng consu|tant Kenneth |ane}. The cut-off grade current|y used for the North and South m|nera|
reserves |s 5,5% P
2
O
5
, w|th mater|a| w|th a grade of between 4% and 5,5% P
2
O
5
c|ass|fed as marg|na| ore.
North Pyroxenite deposit
Foskor commenced m|n|ng phosphate-bear|ng ore from the North Pyroxen|te depos|t, s|tuated |n the north-western part of
the Pha|aborwa lgneous Oomp|ex, |n 1966. From 1961 to 1977, a|most 150 dr||| ho|es or 24,377 metres were dr|||ed. Between
1980 and 1984, an add|t|ona| 55 ho|es were dr|||ed around the ex|st|ng p|t, add|ng a further 23,200 metres.
North Pyroxenite Pit
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The ||tho|og|ca| rock c|ass|fcat|on} |nformat|on from these ho|es was |nterpreted to bu||d a resource m|nera||sat|on mode|.
On th|s bas|s, the m|nera| resources were est|mated and categor|sed as e|ther measured, |nd|cated or |nferred. Des|gn of
the open p|t m|ne was based on opt|m|sat|on runs us|ng the Wh|tt|e Opt|m|sat|on Programme |.e. a g|oba| open p|t m|ne
des|gn system used to max|m|se net present va|ues, and to ba|ance schedu|es, b|ends and stockp||es}. The North Pyroxen|te
m|nera| reserves were est|mated w|th mod|fy|ng factors at 425,8 m||||on metr|c tons as at 31 March 2011.
South Pyroxenite deposit
Dr||||ng |n the South Pyroxen|te area began |n the |ate 1950s and cont|nued |nto the 1960s. ln the 1990s an |nf|| dr||||ng
programme was term|nated premature|y, due to fnanc|a| cons|derat|ons, but was comp|eted dur|ng 2005/06. ln tota|, 143
dr||| ho|es or 49,584 metres were dr|||ed. Bu|k and trench samp||ng were a|so done |n the South Pyroxen|te area.
The geo|og|ca| and resource mode|s for the South Pyroxen|te area were based on the exp|orat|on campa|gns. The geo|og|ca|
contacts were |nterpreted from the dr||||ng data. Ord|nary kr|g|ng was used to est|mate the P
2
O
5
b|ock mode| va|ues, wh|ch
were fna||y va||dated through compar|sons aga|nst the or|g|na| dr||| ho|e data.
M|nera| resources |n the South Pyroxen|te area were aud|ted by Snowden M|n|ng lndustry Oonsu|t|ng |n 2008. As at 31 March
2011, the reserves were est|mated at 983,7 m||||on metr|c tons.
Central area: PMC active tailings dam
Phosphate-r|ch ta|||ngs have been depos|ted |n the PMO act|ve ta|||ngs dam s|nce the |ate 1970s. Foskor owns the r|ghts
to the apat|te |n the ta|||ngs even though the dam |s |ocated on PMO`s prem|ses. A resource of approx|mate|y 297 m||||on
metr|c tons w|th an |n s|tu |.e. pr|or to process|ng} grade of 6,6% P
2
O
5
was de||neated through dr||||ng and samp||ng dur|ng
the 1990s.
The data co||ected dur|ng exp|orat|on was eva|uated for geostat|st|ca| app||cat|on. An or|ented b|ock mode| was then created
and ord|nary kr|g|ng was app||ed to est|mate the grade d|str|but|on throughout the dam. The resources were categor|sed as
measured, |nd|cated or |nferred.
ln 2003, a feas|b|||ty study carr|ed out w|th ass|stance from Snowden M|n|ng lndustry Oonsu|tants and R|o T|nto Techn|ca|
Serv|ces} to rec|a|m the ta|||ngs revea|ed that the p|anned cap|ta| and operat|ng costs wou|d exceed actua| benefts. The
project was aborted and PMO`s use of the ta|||ngs dam cont|nued.
Stockpiles
The carbonat|te |ntrus|on |n the centre of the |gneous comp|ex |s surrounded by apat|te-bear|ng foskor|te and pyroxene
pegmato|d rock types. PMO used to m|ne and stockp||e the foskor|te and pyroxene pegmato|d rock as a by-product of m|n|ng
the copper-bear|ng carbonat|te. PMO se|ect|ve|y m|ned and stockp||ed rock accord|ng to the Extens|on 100F Agreement
between Foskor and PMO. The agreement gave PMO the r|ght to process rocks w|th a |ess than an agreed P
2
O
5
grade, and
to reta|n every m|nera| except phosphate.
Review of mineral resources and ore reserves cont.
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The r|ghts to the rocks m|ned by PMO were determ|ned by convent|ona| grade contro| pract|ces by PMO and mon|tored
by Foskor. PMO commenced m|n|ng |n 1965, and |n 2002 the opencast m|ne reached |ts max|mum p|anned depth of 750
metres, after wh|ch PMO deve|oped an underground m|ne |n the same ore body be|ow the opencast m|ne. The foskor|te and
apat|te-r|ch pegmato|d m|ned by PMO conta|n|ng more than 6% P
2
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was stockp||ed as foskor|te stockp||es for Foskor. The
major|ty of these stockp||es have been m|ned and processed dur|ng the year under rev|ew, w|th the rema|nder accounted for
|n the m|nera| resources and reserves statement.
Phalaborwa phosphate and vermiculite tailings
Ourrent|y, PMO operates an opencast verm|cu||te m|ne |n the South Pyroxen|te area, produc|ng verm|cu||te concentrate from
a nearby p|ant. PMO transports the h|gh P
2
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5
ta|||ngs from th|s p|ant to a stockp||e c|ose to Foskor`s East Orusher. Foskor
has rec|a|med h|gh phosphate ta|||ngs from th|s stockp||e s|nce 2006.
Responsible persons
The est|mated m|nera| resources and reserves reported here were rev|ewed and endorsed by the fo||ow|ng competent persons:
Mr H Ooetzee, BSc Geo|ogy}, 24 years` exper|ence, M|ne Geo|og|st.
Mr J Maepa, BSc M|n|ng}, BSc Ohem|stry, MB|, 15 years` exper|ence |n m|n|ng, reg|stered w|th EOSA as a profess|ona|
Eng|neer, Super|ntendent M|ne Serv|ces.
Mr O Terb|anche, BSc M|n|ng}, BOomm, MBA, 13 years` m|n|ng exper|ence, Sen|or M|ne Eng|neer.
Mr N R|chardson, NHD M|ne Survey}, Government M|ne Surveyor Oert|fcate of Oompetence, Oh|ef Surveyor.
Snowden Oonsu|t|ng was appo|nted to act as competent person |n the va||dat|on of the or|g|na| report comp||ed |n 2009.
Table 1: Proved and probable mineral reserves, as at
31 March 2010*
Mineral reserves, as at 31 March 2010*
Geological
Area
Resource
category
Reserves % P
2
O
5
% Cu
North
Pyroxenite pit
Proved 426.0 7,04 0
Probab|e 98.0 6,56 0
South
Pyroxenite pit
Proved 984.0 6,91
Probab|e 64.3 6,56
Table 2: Proved mineral resources as at 31 March 2010
Mineral reserves, as at 31 March 2010*
Geological
Area
Resource
category
Reserves % P
2
0
5
% Cu
North
Pyroxenite pit
Measured 670.0 7,21 0
lnd|cated 509.0 7,07 0
lnferred 296.0 6,77
South
Pyroxenite pit
Measured 2,260.0 6,70
lnd|cated 1,148.0 6,30
lnferred 1,491.0 6,26
PMC active
tailings dam
Measured 238.3 6,70
lnd|cated 48.8 6,60
lnferred 9.9 6,40
Stockpiles
Measured
Area 6 11.0 4,35 0,19
Area 2 0.50 6,90 0,05
*Most recent offc|a| ore reserve ca|cu|at|ons.
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Mine site rehabilitation and closure
Foskor |s cogn|sant of the |ncreas|ng emphas|s on env|ronmenta| account|ng and accountab|||ty. Management |s cont|nua||y
assess|ng and mon|tor|ng the var|ous env|ronmenta| |ssues fac|ng the group. An env|ronmenta| assessment was performed
at the end of March 2011 by Go|der Assoc|ates Afr|ca, an |nternat|ona||y recogn|sed and respected company.
Foskor prov|des for env|ronmenta| rehab|||tat|on based on a two-t|er strategy: schedu|ed end-of-m|ne c|osure |s prov|ded
for by depos|ts |nto and growth of the spec|a| purpose Sect|on 37A Env|ronmenta| Rehab|||tat|on Trust, wh||e unschedu|ed
or premature m|ne c|osure |s prov|ded for by means of bank guarantees for the d|fference. Based on a M|ne Rehab|||tat|on
and O|osure Oost Assessment performed |n March 2011, the cont|ngent ||ab|||ty has been recogn|sed for the |ssu|ng of
guarantees to the Department of M|nera| Resources DMR} |n terms of Regu|at|on 542} of the Regu|at|ons promu|gated |n
terms of the M|nera|s and Petro|eum Resources Department Act, 2003 No 28 of 2004}.
The est|mated tota| schedu|ed rehab|||tat|on ||ab|||ty |ncreased from R214 m||||on |n the prev|ous year to R230 m||||on |n the
year under rev|ew, after tak|ng |nto account the fo||ow|ng assumpt|ons refer to Note 18 to the annua| fnanc|a| statements}:
Table 3: Scheduled rehabilitation assumptions
Cost of closing the mine R377 million
Est|mated esca|at|on per annum 6,31%
D|scount per|od 20 years
R|sk-free rate government bonds c|osure costs d|scounted to present va|ue} 8,97%
The env|ronmenta| rehab|||tat|on ||ab|||ty of R230 m||||on, cons|dered together w|th the va|ue of the Env|ronmenta| Rehab|||tat|on
Trust amount|ng to R100 m||||on, resu|ts |n an unfunded port|on of the ||ab|||ty of R130 m||||on refer to Notes 8 and 18 to the
annua| fnanc|a| statements}.
The est|mated unschedu|ed rehab|||tat|on ||ab|||ty amounts to R486 m||||on.
Table 4: Unscheduled rehabilitation net shortfall
Net shortfall at this stage Rm
Recommended m|ne c|osure cost 486
Assets he|d |n Env|ronmenta| Rehab|||tat|on Trust 100
Net shortfa|| after rea||s|ng assets he|d |n Env|ronmenta| Rehab|||tat|on Trust 386
A cont|ngent ||ab|||ty has been recogn|sed for the |ssu|ng of guarantees to the DMR as fo||ows refer to Note 31 to the annua|
fnanc|a| statements}:
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Table 5: Guarantees issued for mine rehabilitation
Guarantee issue date Rm
Ju|y 2007 100
March 2009 115
March 2010 150
Guarantees obta|ned to date 365
A comm|tment has been made to the DMR w|th respect to the phased-|n de||very of
guarantees for premature m|ne c|osure prov|s|on.
Foskor Environmental Rehabilitation Trust (Phalaborwa mine)
Deta||s of contr|but|ons to the Env|ronmenta| Rehab|||tat|on Trust are as fo||ows refer to
Note 8 to the annua| fnanc|a| statements}:
Table 6: Contributions to the Environmental Rehabilitation Trust
Date R000
nt|| March 2006 24,767
March 2007 10,000
March 2009 8,000
March 2010 8,000
March 2011 8,000
Oontr|but|ons to date 58,767
The current market va|ue of the assets |n the Env|ronmenta| Rehab|||tat|on Trust |s
c|rca R100 m||||on, wh|ch |s regarded as adequate at th|s po|nt when cons|der|ng the
rema|n|ng ||fe of the Pha|aborwa m|ne.
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Enterprise risk management
Effect|ve r|sk management |s |ntegra| to Foskor`s bus|ness. For the year under rev|ew Foskor has enhanced |ts r|sk management
pract|ces through the rev|ew of the r|sk management framework and |ook at estab||sh|ng |ts r|sk appet|te and to|erance |eve|s.
The Foskor`s r|sk management strategy and process |s a focus area |n the organ|sat|on. R|sks and opportun|t|es, aga|nst
bus|ness object|ves, are |dent|fed dur|ng r|sk assessments throughout the organ|sat|on.
ln order to fac|||tate the process of embedd|ng r|sk management w|th|n the organ|sat|on, the r|sk management department
manages the pr|nc|pa| r|sks faced by the company on a day-to-day- bas|s. R|sks are |dent|fed and managed at three d|fferent
|eve|s w|th|n the organ|sat|on, name|y at operat|ona|, tact|ca| and strateg|c |eve|s. These r|sks are per|od|ca||y rev|ewed and
updated |n our ORA database system. The matur|ty |eve|s of r|sk management were assessed and r|sk management |s
progress|ve|y embedded |n the organ|sat|on, w|th bus|ness tak|ng the |ead |n manag|ng emerg|ng r|sks |n a vo|at||e env|ronment.
These processes are geared to de||ver the best poss|b|e outcome for the safety of our staff |n mak|ng sure that we de||ver a
wor|d-c|ass product. ln the de||very of our r|sk management strategy we cont|nue to protect our shareho|ders and stakeho|ders
|nterest as pr|nc|pa| customers to our bus|ness by safeguard|ng the|r |nvestments and the company`s assets. Foskor cont|nues
to a||gn |tse|f w|th the recommendat|ons of K|ng lll and the lnst|tute of R|sk Management South Afr|ca Oode of Pract|ce.
As |t re|ates to the strateg|c r|sks, a f|ter|ng and report|ng process ensures that the re|evant r|sks are reported to the Execut|ve
Management Oomm|ttee, Board Aud|t and R|sk Oomm|ttee and rev|ewed by the Board of D|rectors.
The major conso||dated key strateg|c r|sks |dent|fed dur|ng the year under rev|ew were as fo||ows:
Table 7: Foskors strategic risks
Risk Category
Responsible
person
Strategic risk
description
Actions to mitigate risk Probability Impact
New market
entry
New
Bus|ness
Deve|opment
Mr P Mosweu:
vP Strategy and
New Bus|ness
Deve|opment
Entry |nto sub-
Saharan markets may
be d|ffcu|t w|thout an
understand|ng of the
Afr|can market
1. Oomprehens|ve due d|||gence |n
respect of each market to understand
the r|sks and the|r potent|a| |mpact
2. Government: obta|n government guarantees
3. Oompany: comp|ete due d|||gence
of Foskor`s supp||ers
4. Deve|op strateg|c re|at|onsh|ps
w|th compan|es w|th presence
|n the reg|ons to be entered
5. Purchase po||t|ca| r|sk and other |nsurances
where r|sks are cons|dered h|gh
Med|um Med|um
Customer
concentration
Oustomers Mr G Skhosana:
vP Market|ng
and Sa|es
70% of exports
dest|ned for lnd|a
6. D|vers|fy customer base
7. Broaden product m|x
H|gh H|gh
Unsustainable
customer
relationships
vP Market|ng
and Sa|es
nsusta|nab|e
customer
re|at|onsh|ps damage
the bottom ||ne
8. Focus on proftab|e customers
9. New market penetrat|on
Med|um Med|um
Sale of
Sasol Nitros
Phalaborwa
PhosAcid
Plant
vP Market|ng
and Sa|es
||m|ted domest|c
phosphate rock market
|eads to excess|ve
stockp|||ng
10. Mon|tor Saso| N|tro p|ant re-open|ng
11. Market d|vers|fcat|on
H|gh H|gh
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Risk Category
Responsible
person
Strategic risk
description
Actions to mitigate risk Probability Impact
Over reliance on
Transnet Freight
Rail
|og|st|cs Mr K Oe|e:
vP Procurement
and |og|st|cs
Foskor |s 100%
dependent on
Transnet Fre|ght Ra||
12. lmprove stakeho|der re|at|ons v|a Steer|ng
Oomm|ttee
13. Seek a|ternate transport routes, eg.
Maputo Oorr|dor or p|pe||nes
14. Exp|ore partnersh|ps w|th TFR and a th|rd
party
H|gh H|gh
PMC perfor-
mance
Operat|ons Mr JW Horn:
vP M|n|ng
lncons|stent and
|rregu|ar supp|y of
s|urry
15. lmprove stakeho|der re|at|ons/product|on
meet|ngs
H|gh Med|um
PMC tolling
agreement
Operat|ons Mr JW Horn:
vP M|n|ng
The PMO to|||ng
agreement has a
24-month not|ce per|od
16. Rep|acement des|gn conceptua||y
des|gned
17. Appo|nted product|on meta||urg|st to
oversee product|ons
18. Work|ng re|at|onsh|p w|th new PMO MD
|ow Med|um
Plant breakdown Operat|ons Mr JW Horn:
vP M|n|ng
Extens|on 8`s
unre||ab|e performance
19. Ma|ntenance to ra|se effc|enc|es |ow Med|um
Attraction
of skills
Operat|ons Ms S |uthu||:
vP Human Oap|ta|
Scarce eng|neer|ng
sk|||s |n SA
20. ESOP |mp|emented
21. Sk|||s shar|ng w|th shareho|der v|a
Techn|ca| Ass|stance Agreement
22. Oompet|t|ve packages and |ncent|ves
offered
23. Ta|ent management strategy
|ow Med|um
Exchange
rate
F|nance Mr TJ Koekemoer:
Oh|ef F|nanc|a|
Offcer
Exchange rate
vo|at|||t|es prob|emat|c
for budget|ng purposes
24. Forward cover and zero cost co||ars
25. Ourrency hedg|ng
Med|um H|gh
Safety SHEO Mr Nv Nkomzwayo:
Act|ng vP Ac|d
Groundwater
remed|at|on
26. Groundwater mon|tor|ng
27. lnfrastructure rep|acement projects
28. lntegrated water management p|an
H|gh H|gh
Act|ng vP Ac|d
Ammon|a |eakages 29. Ear|y detect|on system
30. Th|rd party ver|fcat|on and test|ng
31. Regu|ar ma|ntenance
|ow H|gh
Act|ng vP Ac|d
Groundwater
contam|nat|on
damag|ng
|nfrastructure
32. Equ|pment and structura| rep|acement
programme
33. Oorros|on protect|on
34. Regu|ar ma|ntenance
35. lntegr|ty test|ng
H|gh H|gh
Act|ng vP Ac|d
Su|phur fres 36. SO
2
detect|on systems
37. F|re protect|on systems
38. Regu|ar test|ng of safety equ|pment
Med|um Med|um
Act|ng vP Ac|d
Dense effuent
d|ffuser
39. Bathymetr|c survey
40. Emergency generators
41. Mon|tor|ng and ma|ntenance
H|gh H|gh
Safety SHEO Mr JW Horn: vP
M|n|ng
Breaches of safety and
hea|th regu|at|ons
42. OHS and m|ne, hea|th and safety tra|n|ng
43. Awareness campa|gns
H|gh H|gh
Liquidity F|nance Mr TJ Koekemoer:
Oh|ef F|nanc|a|
Offcer
Access|ng reasonab|y
pr|ced cred|t fac|||t|es
or fund|ng
44. Roadshows to fnanc|ng |nst|tut|ons Med|um Med|um
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LAWRENCE NDIMANDE
General manager
"Zazi ukabaluleka
kwakho noshintsho
olulethwa ukuba
khona kwakho
eningini"
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Governance |nvo|ves the estab||shment of the structures and processes, w|th appropr|ate checks and ba|ances, that enab|e
d|rectors to d|scharge the|r |ega| respons|b|||t|es and oversee comp||ance w|th |eg|s|at|on.
Foskor Pty} |td |s comm|tted to upho|d|ng the corporate governance standards of K|ng lll. Foskor, however, recogn|ses
that s|nce the |ntroduct|on of K|ng lll |n March 2010, not a|| |ts governance structures have been a||gned to sat|sfy the K|ng lll
pr|nc|p|es. Dev|at|ons from the recommended pract|ces are tab|ed be|ow and w||| be addressed over t|me.
Table 8: Foskors exception to King III Codes
Governance element Recommended practice Foskor practice
Ro|e and funct|on of the
Board
The Oha|rperson of the Board shou|d be an
|ndependent non-execut|ve d|rector
The Oha|rperson |s not |ndependent, but rather the
OEO of the ma|n shareho|d|ng company
Board compos|t|on The major|ty of the Board shou|d compr|se
|ndependent non-execut|ve d|rectors
On|y three of the n|ne non-execut|ve d|rectors are
|ndependent. The others represent shareho|ders
Board compos|t|on Every Board shou|d have a m|n|mum of two
execut|ve d|rectors, of wh|ch one shou|d be the
OEO and the other the d|rector respons|b|e for
fnance
The Board has on|y one execut|ve d|rector. The OFO
|s not a Board member
Board compos|t|on At |east one th|rd of the non-execut|ve d|rectors
shou|d rotate every year
There |s no rotat|on po||cy for non-execut|ve d|rectors
Board compos|t|on The Board shou|d be perm|tted to remove any
d|rector w|thout shareho|der approva|
The major|ty of the d|rectors represent shareho|ders
Performance assessment Year|y eva|uat|ons shou|d be performed by an
|ndependent prov|der
Ourrent|y no Board assessments are conducted
Board comm|ttees Oomm|ttees shou|d compr|se non-execut|ve
d|rectors, the major|ty be|ng |ndependent
The major|ty of the non-execut|ve d|rectors are not
|ndependent
Board`s respons|b|||ty of
r|sk governance
The R|sk and Eth|cs Oomm|ttees shou|d ass|st the
Board |n carry|ng out |ts respons|b|||t|es
Foskor has a comb|ned Board Aud|t and R|sk
Oomm|ttee. The Eth|cs Oomm|ttee |s st||| to be
formed
Corporate governance
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Board and Board sub-committees
The Board of D|rectors |s accountab|e to shareho|ders for the performance of the company. lts ro|e |nc|udes the estab||shment,
rev|ew and mon|tor|ng of strateg|c object|ves, approva| of major acqu|s|t|ons, d|sposa|s and cap|ta| expend|ture and oversee|ng
the group`s systems of |nterna| contro|, governance and r|sk management.
The company has a un|tary Board |n order to ach|eve the des|red |eve| of object|v|ty |n Board de||berat|ons and dec|s|on-
mak|ng.
A|| d|rectors have un||m|ted access to the adv|ce and serv|ces of the Group Secretary, who |s respons|b|e to the Board for
ensur|ng that Board procedures are adequate|y fo||owed.
The Board has estab||shed the fo||ow|ng sub-comm|ttees to ass|st |n the d|scharge of |ts dut|es:
Board Aud|t and R|sk.
Techn|ca|.
Human Resources.
The Board has adopted a comprehens|ve de|egat|on matr|x a|med at c|ar|fy|ng the var|ous ||m|ts of author|ty |n p|ace w|th|n
Foskor. The matr|x has a||owed the Board to ensure effect|ve contro| of Foskor.
The Board reta|ns fu|| and effect|ve contro| over the company by mon|tor|ng the execut|ve |n |mp|ement|ng Board po||c|es and
strateg|es, as we|| as by sett|ng targets and by measur|ng the company's performance on an annua| bas|s.
Table 9: Foskor Board and committee attendance record
Number of meetings attended
Director Board Board Human Resources Board Audit and Risk Board Technical
Mr MG Ohena 4/4 4/4 - -
Mr MA P|tse 4/4 4/4 4/5 3/3
Mr A ve||ayan 3/4 3/4 - -
Mr G van Wyk 3/4 3/4 5/5 -
Ms SS Ngoma 4/4 - 5/5 -
Mr F Madavo 3/4 - - 3/3
Dr DS Phaho 4/4 - - 3/3
Mr M Boo| * 1/1 - 2/5 -
Ms JM Mod|se 4/4 4/4 - -
Ms A A|bck ** 1/1 - 1/1 -
Mr SP Ngwenya *** 1/1 - - -

*Res|gned 02 September 2010
** Appo|nted 09 December 2010
*** Appo|nted 24 March 2011
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Th|s report |s prov|ded by the Board Aud|t and R|sk Oomm|ttee Aud|t Oomm|ttee} |n respect of the 2011 fnanc|a| year of
Foskor Pty} |td |n comp||ance w|th Sect|on 270A of the Oompan|es Act, 1973 as amended the Act}. The Aud|t Oomm|ttee's
operat|on |s gu|ded by a deta||ed charter that |s |nformed by the Act and K|ng lll and approved by the Board.
Membership
The Aud|t Oomm|ttee was appo|nted by the Board of D|rectors |n respect of the 2011 fnanc|a| year. Shareho|ders w||| be
requested to approve the appo|ntment of the members of the Aud|t Oomm|ttee for the 2011 fnanc|a| year at the annua|
genera| meet|ng schedu|ed for 24 June 2011. lt compr|ses three non-execut|ve d|rectors of wh|ch one |s |ndependent.
The members are:
Ms Amanda A|bck Oha|rperson} - lndependent,
Mr Gerr|t van Wyk, and
Ms S|mange|e Ngoma
Purpose
The purpose of the Aud|t Oomm|ttee |s:
To ass|st the Board |n d|scharg|ng |ts dut|es re|at|ng to the safeguard|ng of assets, the operat|on of adequate systems,
contro| and report|ng processes, and the preparat|on of accurate report|ng and fnanc|a| statements |n comp||ance w|th
the app||cab|e |ega| requ|rements and account|ng standards.
To prov|de the Oh|ef F|nanc|a| Offcer, externa| aud|tors and the head of |nterna| aud|t access to the Oha|rperson of the
Aud|t Oomm|ttee or any other member of the Aud|t Oomm|ttee as |s requ|red |n re|at|on to any matter fa|||ng w|th|n the
rem|t of the Aud|t Oomm|ttee.
To meet w|th the externa| aud|tors at |east on an annua| bas|s.
To prov|de a forum for d|scuss|ng bus|ness r|sk and contro| |ssues and deve|op|ng recommendat|ons for cons|derat|on
by the Board.
To mon|tor enterpr|se-w|de, operat|ona| and market, regu|atory, safety and other r|sks, as we|| as to ensure adequate
m|t|gat|on thereof by way of mon|tor|ng contro|s that have been |mp|emented to curta|| and m|n|m|se r|sk.
To rev|ew the ho|d|ng and group company fnanc|a| statements and reports and reports from subs|d|ary company where
app||cab|e.
To oversee the act|v|t|es of and ensure coord|nat|on between the act|v|t|es of |nterna| and externa| aud|t.
To perform dut|es that are ass|gned to |t by the Act, as amended, and as governed by other |eg|s|at|ve requ|rements,
|nc|ud|ng the statutory Aud|t Oomm|ttee funct|ons requ|red for subs|d|ary compan|es.
To rece|ve and dea| w|th any comp|a|nts concern|ng the account|ng pract|ces, |nterna| aud|t or the content and aud|t of
|ts fnanc|a| statements or re|ated matters.
To conduct annua| rev|ews of the Aud|t Oomm|ttee's work and terms of reference and make recommendat|ons to the
Board to ensure that the Aud|t Oomm|ttee operates at max|mum effect|veness.
Board Audit and Risk Committee report
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Board Audit and Risk Committee report cont.
Execution of functions
The Aud|t Oomm|ttee has executed |ts dut|es and respons|b|||t|es dur|ng the fnanc|a| year |n accordance w|th |ts terms of
reference as they re|ate to the group's account|ng, |nterna| aud|t|ng, |nterna| contro| and fnanc|a| report|ng pract|ces.
Dur|ng the year under rev|ew:
ln respect of the externa| aud|tor and the externa| aud|t, the comm|ttee amongst other matters:
Recommended the appo|ntment of PWO and Ngubane & Oo. as the jo|nt externa| aud|tor and des|gnated aud|tor
respect|ve|y to the shareho|ders for appo|ntment as aud|tor for the fnanc|a| year ended 31 March 2011, and ensured that
the appo|ntment comp||ed w|th a|| app||cab|e |ega| and regu|atory requ|rements for the appo|ntment of an aud|tor. The
Aud|t Oomm|ttee confrms that the aud|tor and the des|gnated aud|tor are accred|ted.
Approved the externa| aud|t engagement |etter, the p|an and the budgeted aud|t fees payab|e to the externa| aud|tor.
Rev|ewed the aud|t, eva|uated the effect|veness of the aud|tor and |ts |ndependence and eva|uated the externa| aud|tor's
|nterna| qua||ty contro| procedures.
Obta|ned an annua| wr|tten statement from the aud|tor that |ts |ndependence was not |mpa|red.
Determ|ned the nature and extent of a|| non-aud|t serv|ces prov|ded by the externa| aud|tor and approved a|| non-aud|t
serv|ces undertaken.
Obta|ned assurance that no member of the externa| aud|t team was h|red by the company or |ts subs|d|ar|es dur|ng the
year.
Obta|ned assurances from the externa| aud|tor that adequate account|ng records were be|ng ma|nta|ned.
Oons|dered whether any reportab|e |rregu|ar|t|es were |dent|fed and reported by the externa| aud|tors |n terms of the
Aud|t|ng Profess|on Act, 2005, and determ|ned that there were none.
Nom|nated the externa| aud|tor and the des|gnated |ndependent aud|tor for each of the South Afr|can subs|d|ary
compan|es.
ln respect of the fnanc|a| statements, the comm|ttee amongst other matters:
Oonfrmed the go|ng concern as the bas|s of preparat|on of the |nter|m and annua| fnanc|a| statements.
Rev|ewed comp||ance w|th the fnanc|a| cond|t|ons of |oan covenants and determ|ned that the cap|ta| of the company was
adequate.
Exam|ned and rev|ewed the |nter|m and annua| fnanc|a| statements, as we|| as a|| fnanc|a| |nformat|on d|sc|osed to the
pub||c pr|or to subm|ss|on and approva| by the Board.
Ensured that the annua| fnanc|a| statements fa|r|y present the fnanc|a| pos|t|on of the company and of the group as at
the end of the fnanc|a| year and the resu|ts of operat|ons and cash fows for the fnanc|a| year and cons|dered the bas|s
on wh|ch the company and the group was determ|ned to be a go|ng concern.
Oons|dered account|ng treatments, s|gn|fcant unusua| transact|ons and account|ng judgements.
Oons|dered the appropr|ateness of the account|ng po||c|es adopted and changes thereto.
Rev|ewed the externa| aud|tor`s aud|t report.
Rev|ewed the representat|on |etter re|at|ng to the group fnanc|a| statements wh|ch was s|gned by management.
Oons|dered any prob|ems |dent|fed and rev|ewed any s|gn|fcant |ega| and tax matters that cou|d have a mater|a| |mpact
on the fnanc|a| statements.
Has schedu|ed a date to meet separate|y w|th externa| aud|t and |nterna| aud|t.
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ln respect of |nterna| contro| and |nterna| aud|t, |nc|ud|ng forens|c aud|t, the Aud|t Oomm|ttee amongst other matters:
Rev|ewed and approved the annua| |nterna| aud|t charter and aud|t p|an and eva|uated the |ndependence and effect|veness
of the |nterna| aud|t department and comp||ance w|th |ts charter.
Oons|dered the reports of the |nterna| aud|tor and externa| aud|tor on the group's systems of |nterna| contro| |nc|ud|ng
fnanc|a| contro|s, bus|ness r|sk management and ma|ntenance of effect|ve |nterna| contro| systems.
Rece|ved assurance that proper and adequate account|ng records were ma|nta|ned and that the systems safeguarded
the assets aga|nst unauthor|sed use or d|sposa| thereof.
Rev|ewed s|gn|fcant |ssues ra|sed by the |nterna| and forens|c aud|t processes and the adequacy of correct|ve act|on |n
response to s|gn|fcant |nterna| and forens|c aud|t fnd|ngs.
Based on the above, the Aud|t Oomm|ttee formed the op|n|on that there were no mater|a| breakdowns |n |nterna| contro|,
|nc|ud|ng fnanc|a| contro|s, bus|ness r|sk management and ma|nta|n|ng effect|ve mater|a| contro| systems.
ln respect of r|sk management and |nformat|on techno|ogy, the Aud|t Oomm|ttee, |nsofar as re|evant to |ts funct|ons:
Rev|ewed the group's po||c|es on r|sk assessment and r|sk management, |nc|ud|ng fraud r|sks and |nformat|on techno|ogy
r|sks as they perta|n to fnanc|a| report|ng and the go|ng concern assessment, and found them to be sound.
Oons|dered and rev|ewed the fnd|ngs and recommendat|ons of the lnterna| Aud|t and R|sk Oomm|ttee.
Mon|tored and eva|uated s|gn|fcant lT |nvestments, de||very of serv|ces and the management of lT.
ln respect of susta|nab|||ty |ssues conta|ned |n the susta|nab|e deve|opment report, the Aud|t Oomm|ttee has:
Overseen the |mp|ementat|on process of susta|nab|||ty report|ng.
Met w|th sen|or management and the |nterna| aud|tors to make appropr|ate enqu|r|es from management and has, through
th|s process, rece|ved the necessary assurances that mater|a| d|sc|osures are re||ab|e and do not conf|ct w|th the fnanc|a|
|nformat|on.
ln respect of |ega| and regu|atory requ|rements to the extent that they may have an |mpact on the fnanc|a| statements, the
Aud|t Oomm|ttee:
Rev|ewed w|th management |ega| matters that cou|d have a mater|a| |mpact on the group.
Rev|ewed w|th the company's |nterna| |ega| team the adequacy and effect|veness of the group's procedures to ensure
comp||ance w|th |ega| and regu|atory respons|b|||t|es.
Mon|tored comp|a|nts rece|ved v|a the group's eth|cs ||ne, |nc|ud|ng comp|a|nts or concerns regard|ng account|ng
matters, |nterna| aud|t, |nterna| account|ng contro|s, content of the fnanc|a| statements, potent|a| v|o|at|ons of the |aw and
quest|onab|e account|ng or aud|t|ng matters.
ln respect of the coord|nat|on of assurance act|v|t|es, the Aud|t Oomm|ttee rev|ewed the p|ans and work outputs of the externa|
and |nterna| aud|tors and conc|uded that these were adequate to address a|| s|gn|fcant fnanc|a| r|sks fac|ng the bus|ness.
Oons|dered the expert|se, resources and exper|ence of the fnance funct|on and conc|uded that these were appropr|ate, and
cons|dered the appropr|ateness of the exper|ence and expert|se of the Oh|ef F|nanc|a| Offcer and conc|uded that these were
appropr|ate.
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Independence of external auditor
The Aud|t and R|sk Oomm|ttee |s sat|sfed that PWO and Ngubane & Oo. are |ndependent of the group after tak|ng the
fo||ow|ng factors |nto account:
Representat|ons made by the Aud|tor to the Board Aud|t and R|sk Oomm|ttee.
The Aud|tor does not, except as externa| aud|tor or |n render|ng perm|tted non-aud|t serv|ces, rece|ve any remunerat|on
or other beneft from the company.
The Aud|tor's |ndependence was not |mpa|red by any consu|tancy, adv|sory or other work undertaken by the aud|tor.
The Aud|tor's |ndependence was not prejud|ced as a resu|t of any prev|ous appo|ntment as Aud|tor.
The cr|ter|a spec|fed for |ndependence by the lndependent Regu|atory Board for Aud|tors and |nternat|ona| regu|atory
bod|es.
Annual nancial statements
Fo||ow|ng the rev|ew by the Board Aud|t and R|sk Oomm|ttee of the annua| fnanc|a| statements of Foskor Pty} |td for the year
ended 31 March 2011, the comm|ttee |s of the v|ew that |n a|| mater|a| respects they comp|y w|th the re|evant prov|s|ons of
the Oompan|es Act and lFRS and fa|r|y present the fnanc|a| pos|t|on at that date and the resu|ts of operat|ons and cash fows
for the year then ended. The Oomm|ttee has a|so sat|sfed |tse|f of the |ntegr|ty of the rema|nder of the annua| report. Hav|ng
ach|eved |ts object|ves, the Oomm|ttee has recommended the fnanc|a| statements and annua| report for the year ended 31
March 2011 for approva| to the Foskor Pty} |td Board. The Board has subsequent|y approved the fnanc|a| statements, wh|ch
w||| be open for d|scuss|on at the forthcom|ng annua| genera| meet|ng.
On beha|f of the Board Aud|t and R|sk Oomm|ttee

MS A ALBCK
Oha|rperson of the Board Aud|t and R|sk Oomm|ttee
Johannesburg
24 June 2011
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The |nterna| aud|t funct|on`s p|ann|ng and approach are |nformed by the strategy of Foskor and |t d|rects |ts efforts to a||gn
w|th bus|ness performance. lnterna| aud|t, as a s|gn|fcant ro|e p|ayer |n governance, contr|butes |n the endeavour to ach|eve
strateg|c object|ves and prov|des an effect|ve cha||enge to a|| aspects of the governance, r|sk management and |nterna|
contro| env|ronment.
lnterna| aud|t pursues a r|sk-based approach to requ|rements of p|ann|ng, assesses the needs and expectat|ons of |ts key
stakeho|ders and ensures aud|t report|ng meets the management and the Board Aud|t and R|sk Oomm|ttee requ|rements.
The Group lnterna| Aud|t Manager, a|so known as the Oh|ef Aud|t Execut|ve OAE}, has a stand|ng |nv|tat|on to attend Exco
as an |nv|tee to protect the |ndependence of the |nterna| aud|t funct|on.
The Board Aud|t and R|sk Oomm|ttee ensures that the |nterna| aud|t funct|on |s subjected to an |ndependent qua||ty rev|ew
at |east once every three years, as a measure to ensure the funct|on rema|ns effect|ve. Th|s |ndependent Oua||ty Assurance
Report OAR} was conducted |n January 2011 and the resu|ts of the rev|ew were shared w|th the Board Aud|t and R|sk
Oomm|ttee members. lt |s now po||cy that an |ndependent OAR w||| be conducted every three years.
The m|ss|on of Foskor Group Aud|t Serv|ces FGAS} |s to prov|de |ndependent, object|ve assurance and consu|t|ng serv|ces
des|gned to add va|ue and |mprove Foskor Pty} |td`s operat|ons. The |nterna| aud|t department w||| ass|st Foskor |n
accomp||sh|ng |ts object|ves by br|ng|ng a systemat|c, d|sc|p||ned approach to eva|uate and |mprove the effect|veness of r|sk
management, contro| and governance processes.
The scope of FGAS` work |s to determ|ne whether Foskor`s network of r|sk management, contro| and governance processes
as des|gned and represented, |s adequate and funct|on|ng |n such a way as to ensure that:
R|sks are appropr|ate|y |dent|fed and managed.
lnteract|on w|th the var|ous governance groups w|th|n the company occurs as appropr|ate.
S|gn|fcant fnanc|a|, manager|a| and operat|ng |nformat|on |s accurate, re||ab|e and t|me|y.
Emp|oyees` act|ons are |n comp||ance w|th po||c|es, standards, procedures and app||cab|e |aws and regu|at|ons.
Resources are acqu|red econom|ca||y, used effect|ve|y and adequate|y protected.
Programmes, p|ans and object|ves are ach|eved.
Oua||ty and cont|nuous |mprovement are fostered |n the organ|sat|on contro| process.
S|gn|fcant |eg|s|at|ve or regu|atory |ssues |mpact|ng on the company are recogn|sed and addressed appropr|ate|y.
FGAS` scope |nc|udes but |s not ||m|ted to:
Deve|op|ng a fex|b|e annua| aud|t p|an us|ng the Oomm|ttee of Sponsor|ng Organ|sat|ons of the Treadway Oomm|ss|on
OOSO ll} methodo|ogy, |nc|ud|ng any r|sks or contro| concerns |dent|fed by management, and subm|tt|ng that p|an to
the Board Aud|t and R|sk Oomm|ttee and Foskor`s lnterna| Aud|t and R|sk Oomm|ttee for rev|ew and approva| as we|| as
per|od|c updates.
lmp|ement|ng the annua| aud|t p|an, as approved, |nc|ud|ng, as appropr|ate, any spec|a| tasks or projects requested by
management and the Aud|t and R|sk Oomm|ttee and Foskor`s lnterna| Aud|t and R|sk Oomm|ttee.
Ma|nta|n|ng profess|ona| aud|t|ng staff w|th suffc|ent know|edge, sk|||s, exper|ence, and profess|ona| cert|fcat|ons to
meet the requ|rements of th|s Oharter.
Internal audit
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Internal audit cont.
Eva|uat|ng and assess|ng s|gn|fcant merg|ng/conso||dat|ng funct|ons and new or chang|ng serv|ces, processes,
operat|ons, and contro| processes co|nc|dent w|th the|r deve|opment, |mp|ementat|on, and/or expans|on.
lssu|ng per|od|c reports to the Board Aud|t and R|sk Oomm|ttee and the lnterna| Aud|t and R|sk Oomm|ttee and
management summar|s|ng resu|ts of aud|t act|v|t|es.
Keep|ng the Board Aud|t and R|sk Oomm|ttee |nformed of emerg|ng trends and successfu| pract|ces |n |nterna| aud|t|ng.
Prov|d|ng a ||st of s|gn|fcant measurement goa|s and resu|ts for the |nterna| aud|t funct|on to the Board Aud|t and R|sk
Oomm|ttee and the lnterna| Aud|t and R|sk Oomm|ttee.
Ass|st|ng |n the |nvest|gat|on of s|gn|fcant suspected fraudu|ent act|v|t|es w|th|n the organ|sat|on and not|fy|ng
management, the Board Aud|t and R|sk Oomm|ttee, the Fraud Prevent|on and Eth|cs Oomm|ttee and the lnterna| Aud|t
and R|sk Oomm|ttee of the resu|ts.
Oons|der|ng the scope of work of the externa| aud|tors and regu|ators, as appropr|ate, for the purpose of prov|d|ng
opt|ma| aud|t coverage to the organ|sat|on at a reasonab|e overa|| cost.
Opportun|t|es for |mprov|ng management contro|, proftab|||ty and the company`s |mage may be |dent|fed dur|ng aud|ts. Th|s
w||| be commun|cated to the appropr|ate |eve| of management.
The aud|t coverage performed by FGAS w||| be determ|ned by them, based upon an appropr|ate cons|derat|on of bus|ness
and other r|sks re|ated to the ent|ty under rev|ew. Such coverage must take account of management`s areas of concern,
a|though |t shou|d not be d|ctated so|e|y by such concerns. The Board Aud|t and R|sk Oomm|ttee |s requ|red on a regu|ar
bas|s to cons|der the appropr|ateness and scope of the work performed by FGAS. The Board Aud|t and R|sk Oomm|ttee may
request FGAS to carry out spec|a| rev|ews or aud|ts |n add|t|on to the aud|t coverage p|an.
ln re|at|on to r|sk management, the ro|e of the Oomm|ttee |s as fo||ows:
Act as the R|sk Management Steer|ng Oomm|ttee.
Rev|ew and eva|uate the most s|gn|fcant r|sks the company faces |n the ord|nary course of bus|ness, and dea| w|th day-
to-day r|sks and |ssues.
D|scuss spec|fc r|sk matters, such as Hlv/A|ds.
D|scuss |nstances where management |s accept|ng a h|gher res|dua| r|sk.
Appropr|ate|y address and d|scuss matters where management`s response to |ssues ra|sed |s not cons|dered appropr|ate.
Compliance with chapter 7 King III
The re|ease of K|ng lll on 1 September 2009 represents a s|gn|fcant m||estone |n the evo|ut|on of corporate governance |n
South Afr|ca and br|ngs w|th |t s|gn|fcant opportun|t|es for organ|sat|ons that embrace |ts pr|nc|p|es. K|ng lll was effect|ve from
1 March 2010.
K|ng lll app||es to a|| ent|t|es regard|ess of the manner and form of |ncorporat|on or estab||shment and whether |n the pub||c,
pr|vate or non-proft sectors".
K|ng lll has opted for a more fex|b|e 'app|y or exp|a|n` approach to |ts pr|nc|p|es and recommended pract|ces. Ent|t|es are
requ|red to make a statement as to whether or not they app|y the pr|nc|p|es and then exp|a|n the|r pract|ces. lt |s re|evant too
that K|ng lll states: Each pr|nc|p|e |s of equa| |mportance, consequent|y 'substant|a|` app||cat|on of the Oode and the Report
does not ach|eve comp||ance".
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There are three new assignments for internal audit
Report forma||y to the Board on the effect|veness of |nterna| contro|.
Report to the Board on the effect|veness of r|sk management.
Report to the Aud|t Oomm|ttee on the effect|veness of |nterna| fnanc|a| contro|.
K|ng lll |ntroduces fve pr|nc|p|es re|at|ng to |nterna| aud|t:
7.1 The Board shou|d ensure there |s an effect|ve r|sk based |nterna| aud|t.
7.2 lnterna| aud|t shou|d fo||ow a r|sk based approach to |ts p|an.
7.3 lnterna| aud|t shou|d prov|de a wr|tten assessment of the effect|veness of the company`s, system of |nterna| contro|
and r|sk management.
7.4 The Aud|t Oomm|ttee shou|d be respons|b|e for oversee|ng |nterna| aud|t.
7.5 lnterna| aud|t shou|d be strateg|ca||y pos|t|oned to ach|eve |ts object|ves.
Principle 7.3 lnterna| aud|t shou|d prov|de a wr|tten assessment of the effect|veness of the company`s system of |nterna|
contro| and r|sk management}:
lnterna| aud|t p|ays an |mportant ro|e |n prov|d|ng assurance to the Board regard|ng the effect|veness of the system of
|nterna| contro|s and r|sk management of the company. The Board shou|d report on the effect|veness of the system of
|nterna| contro|s |n the annua| report.
lnterna| contro|s shou|d be estab||shed over not on|y fnanc|a| matters, but a|so operat|ona|, comp||ance and susta|nab|||ty
|ssues |n order to manage the r|sks fac|ng the company.
A company shou|d ma|nta|n an effect|ve r|sk management and |nterna| contro| framework.
lnterna| aud|t shou|d prov|de a wr|tten assessment of the effect|veness of the system of |nterna| contro| and r|sk
management to the Board and |nterna| fnanc|a| contro| to the Aud|t Oomm|ttee.
Principle 7.4 The Aud|t Oomm|ttee shou|d be respons|b|e for oversee|ng |nterna| aud|t}:
A r|sk based |nterna| aud|t p|an shou|d be agreed w|th the Aud|t Oomm|ttee for |ts approva|.
The |nterna| aud|t funct|on shou|d prov|de |ndependent and object|ve assurance to the Aud|t Oomm|ttee that the r|sk
management and |nterna| contro| cons|derat|ons of the company are adequate.
lnterna| aud|t shou|d p|ay a p|vota| ro|e |n the comb|ned assurance mode| by prov|d|ng |ndependent assurance on r|sk
management and systems of |nterna| contro|.
The Oh|ef Aud|t Execut|ve OAE} shou|d attend a|| Aud|t Oomm|ttee meet|ngs and prov|de the meet|ng w|th a wr|tten
assessment of the effect|veness of the governance, r|sk and contro| env|ronment.
The OAE`s assessment of the effect|veness of the governance, r|sk and contro| env|ronment shou|d not necessar||y re|ate to
a part|cu|ar fnanc|a| year but shou|d be based on aud|ts comp|eted by the |nterna| aud|t funct|on s|nce the prev|ous report|ng
per|od.
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Internal control
The Board |s u|t|mate|y respons|b|e for the system of |nterna| contro|. Management |s respons|b|e for |mp|ement|ng and
ma|nta|n|ng an |nterna| contro| framework to address r|sks re|evant to the company`s ach|evement of |ts object|ves. Foskor
adopts an |nterna| contro| framework as set out by the Oomm|ttee of Sponsor|ng Organ|sat|ons of the Treadway Oomm|ss|on
OOSO ll}, wh|ch addresses the fo||ow|ng bus|ness object|ves:
Strateg|c
Operat|ona|
Oomp||ance
F|nanc|a|
Susta|nab|||ty
Management |s charged w|th the respons|b|||ty for estab||sh|ng a network of processes w|th the object|ve of contro|||ng the
operat|ons of Foskor |n a manner that prov|des the Board of D|rectors reasonab|e assurance that:
Data and |nformat|on pub||shed e|ther |nterna||y or externa||y |s accurate, re||ab|e, and t|me|y.
The act|ons of d|rectors, execut|ves and emp|oyees are |n comp||ance w|th Foskor`s po||c|es, standards, p|ans and
procedures, and a|| re|evant |aws and regu|at|ons.
Foskor`s resources |nc|ud|ng |ts peop|e, systems, data/|nformat|on bases and customer goodw|||} are adequate|y
protected.
Resources are acqu|red econom|ca||y and emp|oyed proftab|y, qua||ty bus|ness processes and cont|nuous |mprovement
are emphas|sed.
Foskor`s p|ans, goa|s and object|ves are ach|eved.
Oontro| |s a funct|on of management and |s an |ntegra| part of the overa|| process of manag|ng operat|ons. As such, |t |s the
respons|b|||ty of managers at a|| |eve|s of Foskor to:
ldent|fy and eva|uate the exposures to |oss that re|ate to the|r part|cu|ar sphere of operat|ons.
Spec|fy and estab||sh po||c|es, p|ans and operat|ng standards, procedures, systems and other d|sc|p||nes to be used to
m|n|m|se, m|t|gate and/or ||m|t the r|sks assoc|ated w|th the exposures |dent|fed.
Estab||sh pract|ca| contro|||ng processes that requ|re and encourage d|rectors, execut|ves, and emp|oyees to carry out
the|r dut|es and respons|b|||t|es |n a manner that ach|eves the fve contro| object|ves out||ned |n the preced|ng paragraph.
Ma|nta|n the effect|veness of the contro|||ng processes they have estab||shed and foster cont|nuous |mprovement to these
processes.
ln accordance w|th the lnternat|ona| Standards for the Profess|ona| Pract|ce of lnterna| Aud|t|ng, |t |s the po||cy of Foskor to
ma|nta|n a centra||sed |ndependent |nterna| aud|t|ng funct|on, ca||ed Foskor Group Aud|t Serv|ces FGAS}.
The ro|e of th|s funct|on |s to ass|st the Board Aud|t and R|sk Oomm|ttee, as we|| as management personne| at a|| |eve|s, |n
the effect|ve exerc|se of the|r respons|b|||t|es through the prov|s|on of ana|yses, appra|sa|s, recommendat|ons, counse|, and
|nformat|on concern|ng the act|v|t|es rev|ewed and by promot|ng effect|ve contro| at reasonab|e cost.
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The |nterna| aud|t funct|on |s thus respons|b|e for prov|d|ng |ndependent assurance to the Board Aud|t and R|sk Oomm|ttee
regard|ng the effect|ve management of a|| r|sks, wh|ch may |mpact the ach|evement of the bus|ness object|ves.
The Board Aud|t and R|sk Oomm|ttee estab||shes FGAS and defnes |ts respons|b|||t|es. The Group lnterna| Aud|t Manager
reports adm|n|strat|ve|y to the Oh|ef Execut|ve Offcer, and funct|ona||y to the Oha|rperson of the Board Aud|t and R|sk Oomm|ttee.
The Board Aud|t and R|sk Oomm|ttee on beha|f of the Board of D|rectors estab||shes the author|ty and respons|b|||t|es of
FGAS. The Group lnterna| Aud|t Manager has fu|| and |ndependent access to the Oh|ef Execut|ve Offcer, Oha|rman of the
Board Aud|t and R|sk Oomm|ttee and the Board Aud|t and R|sk Oomm|ttee. The approva| of the Board Aud|t and R|sk
Oomm|ttee |s requ|red for the appo|ntment, remova| or rep|acement of the Group lnterna| Aud|t Manager.
FGAS has a respons|b|||ty to |nform and adv|se management and the Board Aud|t and R|sk Oomm|ttee as to s|gn|fcant
defc|enc|es or other substant|ve |ssues noted |n the course of |ts act|v|t|es.
FGAS has unrestr|cted access to a|| records, propert|es, funct|ons and personne| necessary to effect|ve|y exerc|se |ts
respons|b|||t|es. A|| act|v|t|es of Foskor Pty} |td may be subject to per|od|c aud|t by FGAS, |nc|ud|ng |ts subs|d|ar|es, fe||ow
subs|d|ar|es, assoc|ates and jo|nt ventures, prov|ded that the jo|nt venture and shareho|der agreements a|so g|ve Foskor th|s
r|ght. Documents and |nformat|on g|ven to the |nterna| aud|tors dur|ng a per|od|c rev|ew w||| be hand|ed |n the same prudent
manner as by those emp|oyees norma||y accountab|e for them.
ln perform|ng |ts funct|ons, FGAS sha|| have no d|rect respons|b|||ty or author|ty over any of the act|v|t|es rev|ewed. lt sha|| not
des|gn and |nsta|| procedures, prepare records, or engage |n any other act|v|ty that |t wou|d norma||y rev|ew and appra|se
and that cou|d reasonab|y be construed to comprom|se |ts |ndependence and object|v|ty. Where c|rcumstances d|ctate that
work |s performed by FGAS wh|ch may |mpa|r the |ndependence of those staff |nvo|ved, |t |s the respons|b|||ty of the Group
lnterna| Aud|t Manager to ensure that an appropr|ate |ndependent rev|ew |s performed.
FGAS' object|v|ty |s not adverse|y affected, however, by recommend|ng standards of contro|s to be app||ed |n deve|op|ng
systems and procedures, or by eva|uat|ng ex|st|ng or p|anned fnanc|a| and operat|ng systems and re|ated procedures
and mak|ng recommendat|ons for mod|fcat|on and |mprovements thereto |n order to |mprove contro|s and/or enhance
operat|ona| effect|veness.
FGAS has comp|ete |ndependence w|th respect to the areas under aud|t and consequent|y |s not subject to restr|ct|on |n the
scope of |ts work by operat|ona| or execut|ve management. Further, the Board of D|rectors does not p|ace any restr|ct|ons on
the scope of the aud|ts, a|though |t |s recommended that the Board Aud|t and R|sk Oomm|ttee may prov|de genera| d|rect|on
as to the scope of work and the act|v|t|es to be aud|ted, and, |n part|cu|ar, may request FGAS to carry out spec|a| rev|ews or
aud|ts |n add|t|on to the determ|ned aud|t coverage requ|rement.
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Fraud prevention and ethics
lt |s an accepted fact that no matter how str|ngent fraud prevent|on measures w|th|n an organ|sat|on are, there |s no guarantee
that fraud and uneth|ca| behav|our w||| not occur. Fraud, by |ts very nature, |nvo|ves decept|on. New ways of c|rcumvent|ng
contro|s |n order to fac|||tate the perpetrat|on of fraud are cont|nua||y be|ng dev|sed. lt |s accord|ng|y |mportant that Foskor
Pty} |td be prepared to respond to a cr|s|s |n an effect|ve manner to ||m|t |osses.
Management |s respons|b|e for detect|ng fraud, theft and other |rregu|ar|t|es. Each member of the management team shou|d
be fam|||ar w|th the types of |mpropr|et|es that m|ght occur w|th|n h|s or her area of respons|b|||ty and be a|ert for any
|nd|cat|on of |rregu|ar|ty.
Fraud and re|ated cr|me prevent|on techn|ques fa|| |nto three d|sc|p||nes:
Operat|ona| contro|, that addresses re|ated r|sk exposures and embraces re|ated fnanc|a| and aud|t contro|s, personne|
se|ect|on and mon|tor|ng techn|ques.
Phys|ca| secur|ty that dea|s |arge|y w|th v|s|tor contro| restr|ct|ng access to sens|t|ve areas by unauthor|sed staff, members
of the pub||c, frearms, drugs, etc}.
System secur|ty that concentrates on |mproper usage of computer systems, e-ma|| fac|||t|es, password contro|,
author|sat|on, |ogg|ng off, encrypt|on and message authent|cat|on.
Preventat|ve contro|s shou|d focus on prevent|on rather than detect|on, and shou|d encompass an understand|ng as we|| as
awareness of the fo||ow|ng:
The eth|ca| va|ues and code of conduct of the organ|sat|on.
The |mportance of persona||y contr|but|ng to cr|me prevent|on.
The organ|sat|on`s bus|ness pract|ces, systems and manua| or automated contro|s.
The d|fferent cr|mes that may occur and how to detect them.
The Fraud Prevent|on and Eth|cs Oomm|ttee |s respons|b|e for address|ng |nvest|gat|ons of uneth|ca| conduct and p|ay|ng a
|ead|ng ro|e when |nc|dents of fraud and corrupt|on have occurred w|th|n Foskor, thereby a||ow|ng more transparency |n the
|nvest|gat|on process.
Whistle-blowing policy
Foskor Pty} |td |s comm|tted to the h|ghest standards of openness and accountab|||ty. An |mportant aspect of accountab|||ty
and transparency |s a mechan|sm to enab|e staff to report concerns |n a respons|b|e and effect|ve manner. Where an
|nd|v|dua| d|scovers |nformat|on wh|ch they be||eve shows ser|ous ma|pract|ce or wrongdo|ng w|th|n the organ|sat|on, then
th|s |nformat|on shou|d be d|sc|osed |nterna||y w|thout fear of repr|sa|.
Foskor Pty} |td recogn|ses that emp|oyees, supp||ers, bus|ness partners, |oca| commun|t|es and other stakeho|ders have a
strong preference to be assoc|ated w|th organ|sat|ons that va|ue and pract|se eth|ca| conduct.
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As a means of re|nforc|ng Foskor Pty} |td`s va|ues, the wh|st|e-b|ow|ng po||cy serves to bu||d emp|oyee, supp||er and bus|ness
partner |oya|ty through |dent|fy|ng and e||m|nat|ng uneth|ca| pract|ces. The wh|st|e-b|ow|ng po||cy prov|des a confdent|a|
means of convey|ng |nformat|on and does not rep|ace ex|st|ng ||nes of commun|cat|on.
The po||cy |s |ntended to encourage and enab|e staff to ra|se concerns w|th|n Foskor Pty} |td rather than over|ook|ng a
prob|em or b|ow|ng the wh|st|e through |nappropr|ate channe|s.
The Protected D|sc|osures Act, Act 26 of 2000 came |nto effect on 16 February 2001. ln order to comp|y w|th the Act, Foskor
Pty} |td w|||:
Str|ve to create a cu|ture wh|ch w||| fac|||tate the d|sc|osure of |nformat|on by emp|oyees re|at|ng to cr|m|na| and other
|rregu|ar conduct |n the workp|ace |n a respons|b|e manner by prov|d|ng c|ear gu|de||nes for the d|sc|osure of such
|nformat|on and protect|on aga|nst repr|sa|s as a resu|t of such d|sc|osure.
Promote the erad|cat|on of cr|m|na| and other |rregu|ar conduct w|th|n Foskor Pty} |td.
Sect|on 2 of the Protected D|sc|osures Act defnes the Objects of the Act" as fo||ows:
To protect an emp|oyee from be|ng subjected to an occupat|ona| detr|ment on account of hav|ng made a protected
d|sc|osure.
To prov|de remed|es |n connect|on w|th any occupat|ona| detr|ment suffered on account of hav|ng made a protected
d|sc|osure.
To prov|de procedures |n terms of wh|ch an emp|oyee can, |n a respons|b|e manner, d|sc|ose |nformat|on regard|ng
|mpropr|et|es by h|s co||eagues, other stakeho|ders and emp|oyer.
Th|s po||cy |s based on the pr|nc|p|es conta|ned |n the Protected D|sc|osures Act, wh|ch encourages emp|oyees to d|sc|ose
any m|sconduct w|thout fear of repr|sa| and w||| not affect the wh|st|e-b|ower`s cont|nued emp|oyment w|th Foskor Pty} |td.
Supplier blacklisting policy
The company expects |ts emp|oyees and supp||ers to conduct a|| aspects of bus|ness at the h|ghest |eve| of profess|ona||sm
and exce||ence |n ||ne w|th estab||shed organ|sat|ona| va|ues, a cu|ture embedded w|th|n the company`s organ|sat|on,
report|ng and qua||ty systems.
A|| emp|oyees and supp||ers are ob||ged to report susp|c|ons of fraud, corrupt|on, theft or uneth|ca| or s|m||ar |||ega| behav|our
w|th|n Foskor Pty} |td. These types of a||egat|ons w||| be |nvest|gated by Foskor Group Aud|t Serv|ces FGAS}.
The vP Procurement and |og|st|cs w||| consu|t w|th the v|ce-Pres|dent: Oorporate Serv|ces and |f requ|red, may obta|n a
|ega| op|n|on on the matter before dec|d|ng to term|nate the bus|ness re|at|onsh|p w|th the vendor.
The vP Procurement and |og|st|cs, or a person des|gnated by h|m, sha|| be respons|b|e for ma|nta|n|ng a database of a||
b|ack||sted supp||ers. The ent|t|es and |nd|v|dua|s to be b|ack||sted w||| be dependent on the ev|dence gathered.
Any emp|oyee found gu||ty of uneth|ca| conduct or who res|gns pr|or to a d|sc|p||nary hear|ng w||| not be a||owed to perform
work for Foskor as a vendor and w||| not be perm|tted to be |nc|uded on the Foskor vendor ||st.
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Top vendors
Foskor has more than 2,500 vendors |n |ts supp||er database. Preferent|a| procurement |s g|ven to those whose BEE status
has been |ndependent|y ver|fed. Foskor`s b|ggest supp||ers, as determ|ned by the va|ue of contracts awarded, are:
Transnet Fre|ght Ra||,
Eskom,
Oatar Fert|||ser Oompany,
|A Orushers,
Petrosu| lnternat|ona|,
Transfert FZOO,
Pr|sm Su|phur Oorporat|on,
Tosaco Oommerc|a| Serv|ce,
Komatsu Southern Afr|ca,
Saso| N|tro,
uMh|atuze Water,
lndustr|a| O|eochem|ca|,
Sun lnternat|ona| FZE,
Husky Energy lnternat|ona|,
Getax Austra||a,
Gr|ndrod Term|na|s,
Maroc Phosphore,
Transnet Port Term|na|s,
|eomat Oonstruct|on,
Nat|ona| Ports Author|ty,
Saso| Gas ||m|ted,
Pa|abora M|n|ng Oompany,
Tota| South Afr|ca,
||ebherr Afr|ca, and
Kho|o Dr||||ng.
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KOBUS VAN DER SANDT
Network technician
Maak n verskil.
Ons is nie hier om
in te pas nie maar
om uit te staan."
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Staff children at year-end function
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At Foskor, our emp|oyees are our most va|uab|e asset. Foskor |s a va|ues-dr|ven organ|sat|on that |s comm|tted to sett|ng the
benchmark |n our |ndustry by ||v|ng out the four core va|ues, name|y Reso|ve, Respect, Reward and Respons|b|||ty. Peop|e
are drawn to the company because of |ts cha||eng|ng work env|ronment and opportun|t|es for growth and deve|opment. Each
emp|oyee`s contr|but|on of ta|ent |s va|uab|e to the overa|| performance.
Foskor`s human cap|ta| strategy |s a|med at attract|ng and reta|n|ng scarce sk|||s, deve|op|ng a ta|ent poo| and sk|||s p|pe||ne,
reward|ng exce||ence generous|y, foster|ng sound emp|oyee re|at|ons |n a stab|e work env|ronment, and encourag|ng d|vers|ty
through transformat|on. Foskor |s comm|tted to empower|ng staff and |oca| commun|t|es, up||ft|ng the |ess pr|v||eged wh||e
protect|ng the human r|ghts of a|| and promot|ng gender equa||ty.
Employee benets
Foskor a|ms to prov|de affordab|e, effect|ve and susta|nab|e hea|thcare, and death and d|sab|||ty benefts to a|| emp|oyees
and the|r dependants |n an equ|tab|e manner, as we|| as to attract and ma|nta|n a hea|thy workforce. Emp|oyees have
freedom of cho|ce |n the |eve| of hea|thcare and the company subs|d|ses a port|on of the med|ca| a|d contr|but|on. Death
and d|sab|||ty benefts as we|| as funera| cover w|th mortgage protect|on are prov|ded through an |nsurance company. A||
permanent emp|oyees are members of the company`s ret|rement fund, wh|ch |s reg|stered w|th the F|nanc|a| Serv|ces Board
and the South Afr|can Revenue Serv|ce. A structured remunerat|on package caters for |nd|v|dua| cho|ces, tak|ng each
|nd|v|dua|`s needs |nto cons|derat|on.
Individual performance contracts
A|| non-barga|n|ng un|t management emp|oyees rece|ve forma| performance and career deve|opment rev|ews b|-annua||y.
Managers are assessed throughout the year as the bas|s for |nd|v|dua| success|on programmes and ta|ent management.
These assessments are a|so ||nked to reward and remunerat|on. The annua| ta|ent rev|ew outcomes form the bas|s of ta|ent,
success|on and deve|opment p|ann|ng. Execut|on of deve|opment |n|t|at|ves takes p|ace |n the form of sk|||s aud|ts, sk|||s
ana|ys|s and |nd|v|dua| deve|opment p|ans.
Recruiting expatriates
Foskor |n|t|a||y recru|ted expatr|ates from lnd|a under the three-year Bus|ness Ass|stance Agreement BAA} effect|ve 2005
to 2008 w|th Ooromande| lnternat|ona| ||m|ted Ol|}. S|nce Apr|| 2008, a Techn|ca| Ass|stance Agreement was s|gned
w|th Ol| whereby Ol| agreed to ra|se and |mprove Foskor`s techn|ca|, safety, procurement, cap|ta| expend|ture, research,
techno|og|ca| and recru|tment capab|||t|es. ln 2005, Foskor recru|ted fve expatr|ates through the BAA and by March 2011
there were 25 lnd|an expatr|ates emp|oyed at Foskor.
Talent management
Through ta|ent management |n|t|at|ves we d|scover, ma|nta|n and bu||d each |nd|v|dua|`s competenc|es and potent|a|.
The object|ves of the ta|ent management strategy are ta|ent acqu|s|t|on, deve|opment, engagement and success|on, and
retent|on of future |eaders and successors |n the company. Th|s approach creates a work env|ronment conduc|ve to exce||ent
performance and recogn|t|on for ach|evements.
Nurturing and developing our people
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Nurturing and developing our people cont.
Emphas|s |s p|aced on the educat|on, tra|n|ng and deve|opment of emp|oyees at a|| |eve|s to ensure that the sk|||s necessary
for susta|nab|e and effc|ent funct|on|ng of the company and |ts operat|ons are ava||ab|e. Tra|n|ng |s conducted both |nterna||y
and externa||y.
Dur|ng May 2010 the M|n|ng D|v|s|on rece|ved fu|| accred|tat|on from the M|n|ng Oua||fcat|ons Author|ty MOA} enab||ng the
group to de||ver fu||y accred|ted tra|n|ng to emp|oyees |n the fe|ds of meta||urgy, m|nera| excavat|on, ftt|ng and turn|ng and
e|ectr|ca| stud|es. The Ac|d D|v|s|on rece|ved a scope extens|on for a |earn|ng programme |n Ohem|ca| Operat|ons |eve| three
and four, w|th|n the|r fu|| accred|tat|on dur|ng January 2011 from the Ohem|ca| lndustr|es Educat|on and Tra|n|ng lnst|tut|on
OHlETA}.
Training and development
A|| tra|n|ng and deve|opment |s based on a thorough needs ana|ys|s, tak|ng cogn|sance of bus|ness strategy, |dent|fed sk|||s
defc|enc|es v|a the performance management process, success|on p|ann|ng requ|rements for cr|t|ca| pos|t|ons}, emp|oyee
career progress and the re|evant emp|oyment equ|ty p|ans.
Foskor |n|t|ated partnersh|ps w|th the Jo|nt Tra|n|ng Oomm|ttee |n R|chards Bay and Mopan| FET Oo||ege and PROTEO |n
Pha|aborwa to prov|de umbre||a p|atforms to d|scuss mutua| tra|n|ng matters, create synerg|es on tra|n|ng |ntervent|ons and
network on tra|n|ng matters.
Succession management
A success|on management mode| |s |ncorporated |nto the |eadersh|p and success|on management framework to address
success|on p|ann|ng and strateg|c execut|ve ta|ent management needed for cr|t|ca| bus|ness capab|||t|es, acce|erated
execut|ve deve|opment and strateg|c ta|ent |everage.
The graduate-in-training programme
Foskor offers exc|t|ng opportun|t|es and fu||-t|me emp|oyment w|th graduate-|n-tra|n|ng programmes cons|st|ng of forma|,
|nforma| and on-the-job tra|n|ng for graduates. lnd|v|dua| object|ves are set and assessed b|-annua||y. At Foskor, the graduates
work w|th HR Deve|opment staff and the|r managers to create graduate deve|opment p|ans, out||n|ng the|r projected career
path w|th|n the organ|sat|on. The three-year programme br|dges the gap between academ|c theory and the pract|ca| work|ng
env|ronment. Each graduate-|n-tra|n|ng has a mentor who superv|ses and |eads the forma| tra|n|ng.
Bursaries
Foskor grants bursar|es to matr|cu|ants who have a keen |nterest |n study|ng towards obta|n|ng degrees or d|p|omas |n
var|ous eng|neer|ng d|sc|p||nes. Foskor has a we||-estab||shed bursary scheme, focus|ng on eng|neer|ng, geo|ogy and
meta||urgy and chem|ca| d|sc|p||nes. Foskor`s bursary scheme |s ta|ent-based, a|med at attract|ng and reta|n|ng except|ona|
|nd|v|dua|s. Preference |s g|ven to cand|dates w|th a super|or academ|c record and those |nd|v|dua|s who meet the m|n|mum
requ|rements. Bursar|es are a|so granted to students who are a|ready study|ng at un|vers|t|es |n South Afr|ca. The eng|neer|ng
d|sc|p||nes for bursar|es are: mechan|ca|, e|ectr|ca|, m|n|ng, |nstrumentat|on and chem|ca|.
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Study assistance
Foskor prov|des fnanc|a| ass|stance to permanent emp|oyees w|th potent|a| to further the|r educat|on through part-t|me
stud|es of certa|n recogn|sed, approved courses and programmes.
Executive coaching programmes
Foskor`s execut|ve coach|ng programme |s |n |ts th|rd year w|th the a|m to |everage ex|st|ng strengths of |eaders and
|mprove performance. lt further enhances career p|ann|ng and deve|opment w|th an act|on-or|ented p|an. The programme
|s custom|sed w|th support and opportun|t|es to |ntegrate |earn|ng |nto rea|-||fe work exper|ence. ln tota|, e|ght execut|ves/
sen|or managers part|c|pate |n the current programme w|th quarter|y mon|tor|ng and eva|uat|on.
Learnership programmes
The |earnersh|p programme |nc|udes tra|n|ng |n the p|ant, m|n|ng and eng|neer|ng d|sc|p||nes. ln 2010 Foskor expanded |ts
focus to |nc|ude other |earnersh|ps and espec|a||y sk|||s programmes, wh||e stead||y |ncreas|ng the number of eng|neer|ng
|earnersh|ps and sk|||s programmes |n meta||urgy and m|nera| excavat|on. Foskor`s eng|neer|ng |earnersh|ps w||| deve|op
fu||y qua||fed art|san such as e|ectr|c|ans, ftters and turners. Foskor`s human cap|ta| profess|ona|s cont|nue to contr|bute
s|gn|fcant|y to the nat|ona| and sectora| transformat|on process through membersh|p and part|c|pat|on |n bod|es such as
techn|ca| reference groups.
Leadership development programmes
Foskor enhances the performance of m|dd|e management by an appropr|ate and ta||ormade |n-house deve|opment programme
backed by the n|vers|ty of Ste||enbosch Bus|ness Schoo|. Th|s programme equ|ps m|dd|e managers w|th an understand|ng of
the d|fferent fe|ds of management and |eadersh|p, br|ng|ng rea| bus|ness benefts to part|c|pants and the organ|sat|on.
Portable skills programme
Portab|e sk|||s tra|n|ng |s offered to emp|oyees through a d|verse range of tra|n|ng and deve|opment programmes. Emp|oyees
are offered the opportun|ty to acqu|re add|t|ona| sk|||s to enhance the|r ex|st|ng capab|||t|es.
E-learning
Dur|ng the year, e-|earn|ng, wh|ch compr|ses a|| forms of e|ectron|ca||y supported |earn|ng and teach|ng, was |mp|emented at
the Ac|d D|v|s|on. The |nformat|on and commun|cat|on systems serve as spec|fc med|a to |mp|ement the |earn|ng process.
Adult Basic Education Training (ABET)
Accord|ng to a survey carr|ed out, approx|mate|y 485 emp|oyees |n the M|n|ng D|v|s|on have no h|gh schoo| qua||fcat|ons.
The |ow |eve|s of ||teracy at the operat|ons and the requ|rements of the M|n|ng Oharter regard|ng emp|oyee tra|n|ng and
deve|opment, make ABET a pr|or|ty.
ABET |s prov|ded on a fu||-t|me bas|s, w|th 84 |nd|v|dua|s |n tota| part|c|pat|ng |n 2010. Fu||-t|me ABET |s prov|ded accord|ng
to deve|opmenta| and bus|ness p|an needs. The prov|s|on of ABET and the fu|f|ment of the company`s charter ob||gat|ons
|s not w|thout cha||enges: pass rates are |ow as tra|n|ng |s frequent|y |nterrupted by per|ods of |eave and persona| prob|ems.
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Nurturing and developing our people cont.
Employee well-being
Foskor`s fu||y fedged Hlv/A|ds programme |s one of the best |n the country and as such Foskor has ma|nta|ned |ts
SANS16001 accred|tat|on s|nce 2008. Through the prevent|on programme, ma|e and fema|e condoms are supp||ed to a|| the
departments, access|b|e |n a|| the rest-rooms and change rooms` condom d|spensers, or from peer educators and c|eaners.
Foskor has 25 tra|ned peer educators across a|| d|v|s|ons, who run a 36-week tra|n|ng programme for 20 m|nutes per week
and are retra|ned every two years.
vo|untary counse|||ng and test|ng |s done by profess|ona| nurses every year at an on-s|te occupat|ona| centre. The most
recent preva|ence test|ng had a 63% part|c|pat|on rate. Emp|oyees who have been tested and found to have a OD4 ce|| count
be|ow 350 are p|aced on treatment programme run by three med|ca| doctors. The company prov|des treatment through the
c||n|c, wh|ch prov|des transport to med|ca||y boarded emp|oyees and the|r spouses where necessary. Emp|oyees who are
med|ca||y boarded may a|so rece|ve home-based care and be v|s|ted by emp|oyee ass|stance programme pract|t|oners.
A|ds awareness campa|gns are promoted through Oondom week, TB awareness, red r|bbon, cand|e||ght and Wor|d A|ds
Day commemorat|ons. Posters, pamph|ets and book|ets are d|str|buted to a|| the departments and r|pp|e effect newspaper
art|c|es on Hlv/A|ds and we||ness are supp||ed.
Foskor, act|ng |n partnersh|p w|th the thungu|u D|str|ct Mun|c|pa||ty, wh|ch has s|x |oca| mun|c|pa||t|es, funds the d|str|ct`s
Hlv/A|ds programmes |n a|| the |oca| mun|c|pa||t|es. These mun|c|pa||t|es part|c|pate |n the company`s strateg|c comm|ttee
meet|ngs to g|ve feedback and progress.
Table 10: Human capital equity progress report as at 31 March 2011
Males Females
Foreign
nationals
Total
Afr|can Oo|oured As|an Wh|te Afr|can Oo|oured As|an Wh|te Ma|e Fema|e
Top management 8 0 0 4 2 0 0 0 0 0 14
Sen|or management 8 4 5 6 4 2 1 2 5 0 32
M|dd|e management 54 2 15 45 15 1 2 11 19 0 145
Superv|sory 296 3 26 150 58 1 10 35 0 0 579
Sem|-sk|||ed 578 0 5 33 54 1 1 10 0 0 682
|1 and |2 |owest |eve|} 312 0 0 0 43 0 0 0 0 0 355
Total permanent 1,253 9 52 236 177 5 14 57 0 0 1,803
Oontractors 39 0 1 3 13 0 0 0 3 14 73
Grand total 1,292 9 53 239 190 5 14 57 27 14 1,875
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Corporate social investment
Foskor`s Oorporate Soc|a| lnvestment OSl} projects are concentrated on the commun|t|es where we operate and focus on
educat|on, tra|n|ng, sports, cu|ture, ph||anthropy and char|tab|e g|v|ng. A br|ef ||st of the |n|t|at|ves supported by the company
fo||ows. For more deta||s, see www.foskor.co.za.
Foskor supports the fo||ow|ng OSl |n|t|at|ves:
Dinaledi schools - Foskor |s current|y |n |ts th|rd year of co||aborat|on w|th the Department of Educat|on |n support of the
D|na|ed| Schoo|s project. Th|s project recogn|ses schoo|s that exce| |n Maths and Sc|ence and promote the|r ab|||t|es to
obta|n potent|a| fund|ng from the pr|vate sector.
Skills development - Th|s project |s a|med at
empower|ng women w|th sk|||s to enab|e them to surv|ve
the d|ffcu|t|es ar|s|ng from unemp|oyment. Women
from Namakga|e, |u|ekan|, Mash|sh|ma|e, and Majeje
were |dent|fed and enro||ed |n an e|ght-week course |n
sew|ng.
Welfare project - The Se|ema Tse|a Drop-|n Oentre
supports orphans and vu|nerab|e ch||dren, prov|des
them w|th mea|s, ass|sts them w|th schoo|work and ||fe
sk|||s teach|ng to keep them from cr|me.
Cattle project - Ord|nary cow c|ock be|ts were
mod|fed w|th traffc ye||ow ||ght refectors to make
the catt|e more v|s|b|e at n|ght and hence reduce the
number of n|ght-t|me car acc|dents |n Ba-Pha|aborwa.
E-learning - Th|s project supports the ||mpopo
Department of Educat|on`s v|s|on, us|ng lOT |nteract|ve
commun|cat|on and the |nternet to add va|ue to the
know|edge, sk|||s and va|ues for a|| teachers and |earners
|n subjects such as: Mathemat|cs, Mathemat|ca|
||teracy, Phys|ca| Sc|ence Ohem|stry and Phys|cs}, ||fe
Sc|ence, Eng||sh |anguage, Techno|ogy and lOT.
Housing for orphans and widowers - Foskor bu||t and
furn|shed three-bedroomed houses for fve fam|||es |n the Ntambanana commun|ty. To ensure susta|nab|||ty, Foskor
tra|ned 14 |nd|v|dua|s from the fve fam|||es |n br|ck|ay|ng, p|aster|ng and p|umb|ng at mfo|oz| Oo||ege. The houses were
bu||t w|th b|ocks, p|astered and pa|nted and prov|s|on was made for future runn|ng water and sewerage fac|||t|es.
Beading training |n Mand|anz|n|, near R|chards Bay for 16 women. The Department of Arts and Ou|ture offers var|ous
sk|||s deve|opment |n|t|at|ves and Foskor partnered w|th them |n ensur|ng that the ne|ghbour|ng commun|t|es benefted
from th|s |n|t|at|ve. ln co||aborat|on w|th the Department of Arts and Ou|ture Foskor a|so ass|sts these women |n market|ng
the|r products at re|evant expos and market days.
Cattle project
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CSI: House built by Foskor in Ntambanana, Richards Bay
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Farming - A second cons|gnment of tractors and |mp|ements presented at Nkand|a, one of the most |mpover|shed
commun|t|es w|th|n the KwaZu|u-Nata| area, |s |ntended to he|p a||ev|ate poverty w|th|n rura| commun|t|es.
Farming market day - R1 m||||on was spent |n the prev|ous fnanc|a| year to tra|n 400 househo|ds |n susta|nab|e organ|c
agr|cu|tura| and pr|nc|p|es of perm cu|ture. These househo|ds were supp||ed w|th the too|s and seeds requ|red to estab||sh
a product|ve organ|c home food garden to meet the bas|c nutr|t|ona| needs of a househo|d. Our |oca| farmers were g|ven
the p|atform to market the|r fresh produce enterpr|ses dur|ng the annua| Agr|cu|tura| Market Day.
The media resource centre ass|sts under-resourced schoo|s |n the Empangen| Schoo| D|str|ct, prov|d|ng them w|th
fac|||t|es for copy|ng |earn|ng mater|a|, at no cost.
Science centre - The n|Zu| Sc|ence centre has
equ|pment and mode|s to ass|st rura| schoo|s |ack|ng
fac|||t|es and equ|pment for pract|ca| |earn|ng. The
centre offers more than 100 |nteract|ve d|sp|ays.
Indigenous home, Enseleni - Foskor bu||t and
furn|shed a new home for the Mas|nga fam||y at the
Mayor`s request, wh|ch was handed over to the fam||y
on 27 February 2011.
Zululand Birding Route - Foskor contr|butes to the
conservat|on and ma|ntenance of the Ongoye forest
and |mp|ements conservat|on measures such as
fenc|ng the protected area, remov|ng |nvas|ve a||en
p|ants and creat|ng broad commun|ty awareness and
env|ronmenta| educat|on projects.
Business against crime |n Zu|u|and promotes a safe
and secure env|ronment for |ts peop|e, conduc|ve to
econom|c growth.
Ntambanana Community Centre serv|ces ma|n|y
women and youth who have no access to proper
|nfrastructure, |nadequate access to tra|n|ng and
deve|opment fac|||t|es, and ||ve |n poverty |n areas of
h|gh Hlv |nfect|on rates.
ARC Grain Crop Institute - By partner|ng w|th ARO
Gra|n Orop lnst|tute, Foskor |s |nvo|ved |n the fo||ow|ng farm tr|a|s: three groundnut tr|a|s at Nokaneng, Tafe|kop and
Fert|||s, two dry bean tr|a|s at Fert|||s and M|ondoz| |n Mpuma|anga, and two crop rotat|on tr|a|s |nc|ud|ng both groundnuts
and cowpeas.
Foskor Primary School - Foskor bought two mob||e ||brary un|ts for Foskor Pr|mary Schoo|.
Zululand Centre for Sustainable Development - 400 househo|ds have been tra|ned |n susta|nab|e organ|c agr|cu|tura|
and pr|nc|p|es of perm cu|ture. These househo|ds were supp||ed w|th too|s and seeds requ|red to estab||sh a product|ve
organ|c home food garden to meet the bas|c nutr|t|ona| needs of a househo|d.
Science centre
Corporate social investment cont.
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Corporate social investment cont.
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University of Fort Hare Foundation (UFH} - Foskor
agreed to make funds ava||ab|e to FH for deserv|ng
students |n the Facu|ty of Sc|ence and Agr|cu|ture for
a per|od of two years. S|nce 2009, 20 bursar|es have
been awarded.
Protec - S|nce 2005, Foskor has partnered w|th the
Pa|abora M|n|ng Oompany and Saso| N|tro to fund
the Techno|og|ca| Oareers Protec} programme, wh|ch
prov|des ded|cated and qua||ty |earners to compan|es
and |ndustr|es w|th|n the Pha|aborwa reg|on.
Table 11: G3.1 Key performance indicators
Key performance indicator March 2011 March 2010 March 2009 March 2008 March 2007
Finance
Corporate donations - rand 12,644,237* 7,762,932 1,628,963 1,441,539 882,490
Materials handling
Energy consumption [MWh] Mining 462,280 446,007 460,017 472,462 498,483
Energy consumption [MWh] Acid 124,953 116,989 150,108 177,533 150,148
Total water usage [megalitres] - Mining** 4,447 5,489 5,561 6,172 7,373
Total water usage [megalitres] Acid 8,858 8,735 7,298 6,366 6,266
Employment
Average employee age 41.82 42.48 42.82 42.87 43.11
Average length of service - years 12.97 13.59 14.04 14.33 14.65
Foskor Primary School
* lnc|udes |oca| econom|c deve|opment project contr|but|ons
**Rev|sed fgures
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Key performance indicator March 2011 March 2010 March 2009 March 2008 March 2007
Staff turnover rate - % 6,1 7,0 8,4 13,3 8,3
Number of staff surveys conducted 3 3 4 2 3
Average wage settlement - % 8,5 12,3 10,4 5,9 5,5
Disabling injury frequency rate [DlFR| 0.27 0.30 0.22 0.44 0.73
Average ratio of women's to men's salaries 1:1.09 1:1.10 1:1.17 1:1.18 1:1.20
Number of in-house training programmes 138 39 40 38 36
Number of participants in learnership programmes 58 62 63 35 42
Number of graduates-in-training 13 9 10 4 0
Controls/compliance
Number of dismissals 9 8 12 11 7
Number of fraud cases/thefts reported 0 1 4 2 1
Number of disciplinary hearings 122 80 58 68 40
Number of grievances submitted 3 1 1 8 7
Number of cases referred to CCMA 13 12 11 5 14
Corporate Social lnvestment
Number of communities supported 11 3 9 5 3
Number of community projects invested in 85 65 88 29 21
Number of SMMEs supported 33 7 10 0 0
Employment
Total workforce - Group 1,803 1,753 1,723 1,805 1,799
Total workforce - Mining 1,203 1,133 1,118 1,233 1,196
Total workforce - Acid 628 620 605 572 603
Hours worked - Mining 4,460,000 5,254,410 4,515,629 4,091,809 4,011,446
Hours worked - Acid 2,213,035 2,120,047 1,989,331 2,004,332 2,251,264
LTlFR - Mining [target <1| 0,22 0,32 0,09 0,15 0,25
LTlFR - Acid [target <1| 0,27 0,28 0,70 0,70 0,80
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MUHAMMAD ALI
Safety manager
Sustainability and
change comes
about when we
stop assuming that
procedures were
automatically followed
and actively place
our colleagues' safety
above our own"
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Directors responsibility and approval of the group and company annual nancial statements
To the members of Foskor (Pty) Ltd
The d|rectors are respons|b|e for the preparat|on and fa|r presentat|on of the group and company annua| fnanc|a| statements,
compr|s|ng the statements of fnanc|a| pos|t|on at 31 March 2011, and the statements of comprehens|ve |ncome, changes
|n equ|ty and cash fow for the year then ended, and the notes to the fnanc|a| statements, wh|ch |nc|ude a summary
of s|gn|fcant account|ng po||c|es and other exp|anatory notes, and the d|rectors` report, |n accordance w|th lnternat|ona|
F|nanc|a| Report|ng Standards and |n the manner requ|red by the Oompan|es Act of South Afr|ca.
The d|rectors` respons|b|||ty |nc|udes: des|gn|ng, |mp|ement|ng and ma|nta|n|ng |nterna| contro| re|evant to the preparat|on
and fa|r presentat|on of these fnanc|a| statements that are free from mater|a| m|sstatement, whether due to fraud and
error, se|ect|ng and app|y|ng appropr|ate account|ng po||c|es, and mak|ng account|ng est|mates that are reasonab|e |n the
c|rcumstances.
The d|rectors` respons|b|||ty a|so |nc|udes ma|nta|n|ng adequate account|ng records and an effect|ve system of r|sk
management as we|| as preparat|on of the supp|ementary schedu|es |nc|uded |n these fnanc|a| statements.
The d|rectors have made an assessment of the group`s and company`s ab|||ty to cont|nue as a go|ng concern and have no
reason to be||eve that the bus|ness w||| not be a go|ng concern |n the year ahead.
The |ndependent aud|tors are respons|b|e for express|ng an op|n|on on whether the group and company annua| fnanc|a|
statements are fa|r|y presented |n accordance w|th the app||cab|e fnanc|a| report|ng framework.
Approval of the annual nancial statements
The group and company annua| fnanc|a| statements, as |dent|fed |n the frst paragraph, were approved by the Board of
D|rectors on 24 June 2011 and are s|gned on |ts beha|f by:

MR MA PITSE MR MG QHENA
Pres|dent/Oh|ef Execut|ve Offcer Oha|rman
24 June 2011 24 June 2011
Directors declaration
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Foskor Annual Report 2011
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Directors responsibility and approval of the group and company annual nancial statements
To the members of Foskor (Pty) Ltd
The directors are responsible for the preparation and fair presentation of the group and company annual nancial statements,
comprising the statements of nancial position at 31 March 2011, and the statements of comprehensive income, changes
in equity and cash ow for the year then ended, and the notes to the nancial statements, which include a summary
of signicant accounting policies and other explanatory notes, and the directors report, in accordance with International
Financial Reporting Standards and in the manner required by the Companies Act of South Africa.
The directors responsibility includes: designing, implementing and maintaining internal control relevant to the preparation
and fair presentation of these nancial statements that are free from material misstatement, whether due to fraud and
error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
The directors responsibility also includes maintaining adequate accounting records and an effective system of risk
management as well as preparation of the supplementary schedules included in these nancial statements.
The directors have made an assessment of the groups and companys ability to continue as a going concern and have no
reason to believe that the business will not be a going concern in the year ahead.
The independent auditors are responsible for expressing an opinion on whether the group and company annual nancial
statements are fairly presented in accordance with the applicable nancial reporting framework.
Approval of the annual nancial statements
The group and company annual nancial statements, as identied in the rst paragraph, were approved by the Board of
Directors on 24 June 2011 and are signed on its behalf by:

MR MA PITSE MR MG QHENA
President/Chief Executive Ofcer Chairman
24 June 2011 24 June 2011
Directors declaration
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Certicate by Company Secretary
Foskor (Pty) Ltd has complied with all statutory and regulatory requirements in accordance with the Companies Act of
South Africa, 1973 as amended. I hereby conrm that, for the year ended 31 March 2011, the company has lodged with the
Registrar of Companies all such returns as are required of a private company in terms of this Act and that all such returns are,
to the best of my knowledge and belief, true, correct and up to date.

MS AUS KHANYILE
Company Secretary
24 June 2011
Directors declaration cont.
95
Independent auditors report to the
members of Foskor (Pty) Ltd
We have audited the group annual nancial statements and annual nancial statements of Foskor (Pty) Ltd, which comprise
the consolidated and separate statements of nancial position as at 31 March 2011, and the consolidated and separate
statements of comprehensive income, changes in equity and cash ows for the year then ended, and a summary of signicant
accounting policies and other explanatory notes, and the directors report, as set out on pages 97 to 160.
Directors responsibility for the nancial statements
The companys directors are responsible for the preparation and fair presentation of these nancial statements in accordance
with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa, and for
such internal control as the directors determine is necessary to enable the preparation of nancial statements that are free
from material misstatements, whether due to fraud or error.
Auditors responsibility
Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance whether the nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial
statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material
misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the nancial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
nancial statements.
We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the nancial statements present fairly, in all material respects, the consolidated and separate nancial position
of Foskor (Pty) Ltd as at 31 March 2011, and its consolidated and separate nancial performance and its consolidated and
separate cash ows for the year then ended in accordance with International Financial Reporting and in the manner required
by the Companies Act of South Africa.
PricewaterhouseCoopers Inc Ngubane & Co. Inc
DIRECTOR: TD SHANGO DIRECTOR: DS MSOMI
Registered Auditor Registered Auditor
Sunninghill Durban
24 June 2011 24 June 2011
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PEP2 new wet milling plant of Extension 8: Mining Division, Phalaborwa
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The directors have pleasure in presenting the annual nancial statements of the Foskor group for the year ended
31 March 2011.
Nature of business
Foskors core business is the beneciation of phosphate rock at the Phalaborwa plant and the manufacture and supply
of internal standard merchant grade phosphoric acid and related granular fertiliser products at the Richards Bay plant.
Approximately 93,6% of the phosphate rock concentrate is railed to Richards Bay for export and processing into phosphoric
acid, which is then used as a raw material in the production of granular fertiliser. About 82% of the phosphoric acid sales are
exported, while granular fertiliser sales are mainly to the local market.
Further information on Foskors business activities is provided in the CEOs review (page 27).
Environmental responsibilities
Management continually assesses and monitors the various environmental threats to the group. Foskors environmental
provision strategy prescribes the use of a special purpose vehicle (Section 37A, Environmental Rehabilitation Trust) for
scheduled mine closures, and bank guarantees for unscheduled or premature mine closure, as per Department of Mineral
Resources (DMR) regulations. The environmental impact of emissions and other hazardous materials at the Richards Bay
plant is closely monitored. A signicant portion of the capital expenditure at the Richards Bay division is dedicated to
minimising harmful effects on the environment, such as groundwater contamination.
Financial results
The group achieved a turnover of R4,6 billion, representing a 33% increase compared to the R3,5 billion of the previous year.
Net prot after tax increased from a loss of R58 million for the year ended 31 March 2010 to R377 million. The group has a
positive cash balance of R404 million (FY2010: R518 million), and a long-term loan of R107 million at March 2011.
A detailed report on the groups nancial performance is contained on pages 35 to 38.
General review of operations
As at 31 March 2011, Foskor produced 2,6 million tons (FY2010: 2,2 million tons) of phosphate rock concentrate; 647,000
tons (FY2010: 622,000 tons) of phosphoric acid; and 351,000 tons (FY2010: 307,000 tons) of granular fertiliser (MAP/DAP).
A detailed operational review of the Phalaborwa and Richards Bay divisions is contained in the report on pages 41 to 61.
Accounting policies, restatements and reclassications
The group has adopted all the new and revised standards and interpretations issued by the International Accounting
Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are
relevant to its operations and effective for accounting periods beginning on or after 1 January 2010.
Directors report
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Strategically important investments
Investment in Coromandel International Ltd
Coromandel International Ltd (CIL) is a customer of Foskor and a multinational group with interests in the manufacturing of
merchant grade phosphoric acid. Foskor owns 1,70% of CIL share capital; the value of the investment as at 31 March 2011
was R211 million, as compared to R122 million as at 31 March 2010. During the year there was a share split for every one
equity share of 2 Indian Rupees into two equity shares of one Indian Rupee each.
Foskor Zirconia (Pty) Ltd
Foskors shareholding in Zirconia (Pty) Ltd reduced from 49% to 29,9% due to the sale of shares to a BEE partner that was
concluded in July 2010. Foskor Zirconia is a producer of electro-fused zirconia for export. This is a raw material used in the
production of monoclinic or calcia-stabilised zirconia, mainly used in the steel casting, refractory and abrasive industries.
Altogether 51% of Foskor Zirconia is owned by Carborundum Universal Ltd (a multinational company based in India and part
of the Murugappa group), and 19,9% is held by Perfect Positions CC, a black-owned company.
Subsidiaries
Details of subsidiaries of the company are set out in Note 5 of the annual nancial statements.
Dividends
Dividends are approved by the Board subject to performance and affordability. The Board declared a dividend of
R75,4 million, STC included, (R8,23 per share) at the annual general meeting. For the previous year (ended 31 March 2010),
no dividends were declared. Dividends were received from CIL for R4,5 million (FY2010: R3,9 million) during the year under
review. (Refer to note 15 of the AFS.)
Insurance and risk management
The groups philosophy is to manage its risks in order to protect its assets and earnings against unacceptable nancial loss
and to avoid legal liabilities. In this regard, possible catastrophic type risks are insured at a relatively advantageous cost with
satisfactory cover, while non-catastrophic type risks are self-insured. The management of risk is further supported by the
groups health and safety programmes, and maintenance of the ISO 9001 (quality) and ISO 14001 (environmental) standards.
The policy loss limit is restricted to R2 billion per event, with sub-limits for each cover and a R10 million deductible for property
damage. The deductible for business interruption is 30 days and R25 million combined average daily values. The insured
value of the assets is R9 billion. Risk surveys and assessments are integral to the groups risk management policy and are
performed as part of the integrated group risk management system. Risks identied during these surveys are eliminated,
reduced or transferred to the insurers.
Share capital
The authorised and issued share capital as at 31 March 2011 was 9,157,647 ordinary shares of R1 each.
Foskors shareholding is as follows:
Directors report cont.
99
59% - The lndustr|a| Deve|opment Oorporat|on of South Afr|ca |td lDO}.
15% - The Manyoro Oonsort|um.
11,82% - OF| Maur|t|us |td a Maur|t|us-based company}.
6% - The Kopano Foskor Emp|oyees Trust.
5% - The Ba-Pha|aborwa and uMh|athuze Oommun|ty Trusts.
2,18% - Ooromande| lnternat|ona| |td Ol| - based |n lnd|a}.
1% - Sun lnternat|ona| FZE a company based |n lnd|a}.
The IDC shareholding reduced from 85% in FY2010 to 59% in the current year as a result of the conclusion of the B-BBEE
ownership deal, which transferred 26% of the companys equity to black shareholders, the communities in which Foskor
operates and employees. The directors are authorised, until the next Annual General Meeting, to issue unissued ordinary
shares.
Public Finance Management Act
Foskor was granted full exemption by the Minister of Finance for compliance with the Public Finance Management Act (No.
1 of 1999, as amended by Act No. 2 of 1999) until 31 October 2011. It is likely that the exemption will be renewed. There are
no monetary exchanges with the government.
Resolutions
No special resolutions were passed during the nancial year ended 31 March 2011.
Loans by and to the Foskor group
Foskor has a long-term funding facility from the IDC amounting to R1 billion for the Pyroxenite Expansion Project, and a
committed short-term facility of R200 million from the commercial banks. As at year-end R107 million had been utilised from
the long-term facility and the remaining R893 is available for use at 31 March 2011.
Material commitments, lease payments and contingencies
The groups head ofce in Midrand leases a building and accounts for the lease as an operating lease. The lease commenced
on 1 September 2008 for a period of three years ending August 2011 with the option to extend the lease. The operating lease
payments escalate by 8% per annum. The Richards Bay plant leases a pipeline from the uMhlathuze Water Board (Richards
Bay Municipality) to discharge efuent. The lease has been accounted for as a nance lease. The remaining period of the
lease is 15 years.
Capital expenditure
Capital expenditure of R662 million has been approved for the next nancial year.
Going concern
The directors believe that Foskor has sufcient resources and expected cash ows to continue operating as a going concern.
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Post-balance sheet events
There have been no facts or circumstances of a material nature that have occurred between the accounting year-end and
the date of this report that require adjustment or disclosure in the annual nancial statements.
Corporate governance
Fu|| deta||s on the corporate governance po||c|es and procedures as we|| as comp||ance w|th K|ng lll are set out |n the
corporate governance section of this report.
Changes to the Board
Biographical details of directors currently serving on the Board are provided on pages 8 to 11 of this report. Ms A Albck
was appointed to the Board on 9 December 2010 and is also the Chairperson of the Board Audit and Risk Committee. Mr
SP Ngwenya was appointed to the Board on 24 March 2011. Mr M Booi resigned from the Board on 2 September 2010; he
was also the Chairperson of the Board Audit and Risk Committee.
Service contracts with directors and executive management
The Chief Executive Ofcer (CEO) and the executive management of Foskor have signed contracts of employment with the
company. There are no service contracts between the company and any of its non-executive directors having a notice period
exceeding one month, or providing for compensation and benets in excess of one months salary.
Employee Share Ownership Plan
All Foskor employees (including executives) are entitled to receive units in the ESOP Trust which holds 6% of the companys
equity through a special purpose vehicle. The ESOP Trust is part of the B-BBEE ownership deal and the purchase of the
shares was nanced by means of a loan from the IDC. The ESOP Trust holds ordinary shares and will have the same rights
as other ordinary shareholders.
Directors interests
The non-executive directors, with the exception of Mr P Ngwenya, have no interests in the company. Mr P Ngwenya is a
representative of the Manyoro Consortium that owns 15% of the company and is Foskors strategic business partner. Mr
Ngwenya is a shareholder of Odjfell Makana, a company that provides shipping services for Foskor. The CEO, by virtue of the
all-employee share scheme, will be awarded units in the Employee Share Ownership Plan Trust.
Independent auditors
PricewaterhouseCoopers Inc and Ngubane & Co. Inc will continue in ofce in accordance with Section 270(2) of the
Companies Act of South Africa.
Annual general meeting
The AGM was held at 15:00 on Friday 24 June 2011. Refer to the Company Secretarial Notice for further details.
Directors Report cont.
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Group and company statements of nancial position
As at 31 March 2011
GROUP COMPANY
2011 2010 2011 2010
Notes R000 R000 R000 R000
ASSETS
Non-current assets
Property, plant and equipment 3 3,325,229 2,932,647 3,324,579 2,931,929
Intangible assets 4 514 1,756 514 1,756
Investments in subsidiaries 5 - - 104,007 104,007
Loans to subsidiaries 5 - - 13,088 13,654
Investment in joint venture 6 25 25 25 25
Investment in associate 7 20,865 29,742 15,869 26,006
Inventories ore raw materials 10,096 - 10,096 -
Financial investments 8 320,489 217,458 310,489 207,458
3,677,218 3,181,628 3,778,667 3,284,835
Current assets
Inventories 9 1,078,648 752,817 1,078,648 752,817
Trade and other receivables 10 560,601 341,232 557,890 335,209
Derivative nancial instruments 11 5,815 1,314 5,815 1,314
Current tax asset 51,994 - 51,994 -
Cash and cash equivalents (excluding bank overdrafts) 12 404,063 517,542 402,576 515,380
2,101,121 1,612,905 2,096,923 1,604,720
Total assets 5,778,339 4,794,533 5,875,590 4,889,555
EQUITY AND LIABILITIES
Equity attributable to owners
Ordinary shares 14 9,158 9,158 9,158 9,158
Share premium 14 132,013 132,013 132,013 132,013
Retained earnings 3,322,017 2,945,264 3,197,318 2,818,356
Share-based payment reserve 16.1 303,914 303,914 303,914 303,914
Fair value reserve 179,598 91,306 179,598 91,306
Total equity 3,946,700 3,481,655 3,822,001 3,354,747
Liabilities
Non-current liabilities
Finance lease liability 17 20,009 22,092 20,009 22,092
Environmental rehabilitation liability 18 248,071 244,094 248,071 244,094
Employee share-based payment liability 16.2 48,233 23,460 48,233 23,460
Long-term interest-bearing loan 28 107,031 - 107,031 -
Retirement benet obligations 19 97,657 83,700 97,657 83,700
Deferred income tax liabilities 13 600,782 442,769 602,325 442,937
1,121,783 816,115 1,123,326 816,284
Current liabilities
Trade and other payables 20 603,254 417,796 601,559 416,740
Loans from subsidiaries 5 - - 223,216 222,801
Current income tax liability - 7,429 - 7,539
Derivative nancial instruments 11 756 245 756 245
Provisions for other liabilities 21 103,762 68,483 102,649 68,390
709,856 496,763 930,264 718,525
Total liabilities 1,831,639 1,312,877 2,053,590 1,534,808
Total equity and liabilities 5,778,339 4,794,533 5,875,590 4,889,555
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Group and company statements of comprehensive income
For the year ended 31 March 2011
GROUP COMPANY
2011 2010 2011 2010
Notes R000 R000 R000 R000
Revenue 4,611,341 3,465,001 4,610,609 3,464,477
Cost of sales (3,077,781) (2,276,652) (3,075,298) (2,274,296)
Gross prot 1,533,560 1,188,349 1,535,311 1,190,181
Distribution costs (813,906) (671,069) (813,906) (671,069)
Administrative expenses (239,791) (216,765) (239,978) (221,807)
Share based payment expense 16.3 (24,773) (327,374) (24,773) (327,374)
Transaction fees 16.4 (8,673) (27,731) (8,673) (27,731)
Other income 63,030 44,449 67,293 48,737
Investment income 8.1.1 4,482 3,932 4,482 3,932
Operating prot 22 513,929 (6,209) 519,756 (5,131)
Loss on sale of shares in associate 7 (5,554) - (3,889) -
Share of prot/(loss) from associate 7 2,925 (310) - -
Prot before interest and tax 511,300 (6,519) 515,867 (5,131)
Finance income 23 24,478 76,038 23,577 74,690
Finance costs 23 (27,779) (48,250) (27,779) (48,250)
Net foreign exchange prots 24 26,765 27,273 26,685 27,253
Prot before taxation 534,764 48,542 538,350 48,562
Income tax expense 25 (158,011) (107,060) (159,388) (107,177)
Prot/(Loss) for the year 376,753 (58,518) 378,962 (58,615)
Fair value gain 8.1.1 88,292 80,663 88,292 80,663
Other comprehensive income for the year 88,292 80,663 88,292 80,663
Total comprehensive income for the year 465,045 22,145 467,254 22,048

Earnings per share attributable to the equity holders of the
company during the year (expressed in Rand per share)
Basic earnings per share 26 41.14 (6.39)
Diluted earnings per share 26 41.14 (6.39)

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Group and company statements of changes in equity
GROUP Share Share Retained Share-based Fair value
capital premium earnings payment reserve reserve Total
R000 R000 R000 R000 R000 R000
Balance at 1 April 2009 9,158 132,013 3,003,782 - 10,643 3,155,596
Comprehensive income
Loss for the year - - (58,518) - - (58,518)
Other comprehensive income
Fair value gain - - - - 80,663 80,663
Total comprehensive income - - (58,518) - 80,663 22,145
Transactions with owners
Share-based payment reserve - - - 303,914 - 303,914
Total transactions with owners - - - 303,914 - 303,914
Balance at 31 March 2010 9,158 132,013 2,945,264 303,914 91,306 3,481,655
Prot for the year - - 376,753 - - 376,753
Fair value gain - - - - 88,292 88,292
Total comprehensive income for the period - - 376,753 - 88,292 465,045
Balance at 31 March 2011 9,158 132,013 3,322,017 303,914 179,598 3,946,700
COMPANY Share Share Retained Share-based Fair value Total
capital premium earnings payment reserve reserve
R000 R000 R000 R000 R000 R000
Balance at 1 April 2009 9,158 132,013 2,876,971 - 10,643 3,028,785
Loss for the year - - (58,615) - - (58,615)
Fair value gains - - - - 80,663 80,663
Total comprehensive income - - (58,615) - 80,663 22,048
Transactions with owners
Share-based payment reserve - - - 303,914 - 303,914
Total transactions with owners - - - 303,914 - 303,914
Balance at 31 March 2010 9,158 132,013 2,818,356 303,914 91,306 3,354,747
Prot for the year - - 378,962 - - 378,962
Fair value gain - - - - 88,292 88,292
Total comprehensive income for the period - - 378,962 - 88,292 467,254
Balance at 31 March 2011 9,158 132,013 3,197,318 303,914 179,598 3,822,001
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Group and company statements of cash ows
GROUP COMPANY
2011 2010 2011 2010
Notes R000 R000 R000 R000
Cash ows from operating activities
Cash generated from operations 27 418,095 1,035,083 418,869 1,036,789
Interest received 24,478 61,444 23,577 60,096
Interest paid (27,779) (28,308) (27,779) (28,308)
Realised exchange gains 19,572 17,522 19,492 17,543
Taxes paid (59,423) (103,876) (59,534) (103,778)
Net cash generated from operating activities 374,943 981,865 374,625 982,342
Cash ows from investing activities
Purchase of property, plant and equipment (PPE) 3 (595,853) (824,071) (595,681) (823,902)
Purchase of software 4 - (1,063) - (1,063)
Proceeds from sale of PPE 480 2,112 320 2,112
Proceeds on the sale of share in associate 7 6,248 - 6,248 -
Purchase of nancial investment held in the Environmental
Rehabilitation Trust 18.1 (8,000) (8,000) (8,000) (8,000)
Dividends received 4,482 3,932 4,482 3,932
Net cash used in investing activities (592,643) (827,090) (592,631) (826,921)
Cash ows from nancing activities
Repayment of loans from subsidiaries - - 981 (1,473)
Repayment of nance lease liability (2,809) (3,062) (2,809) (3,062)
Long-term interest-bearing loan incurred 28 107,031 - 107,031 -
Net cash used in nancing activities 104,222 (3,062) 105,203 (4,535)
Net (decrease)/increase in cash and cash equivalents (113,478) 151,713 (112,803) 150,886
Cash and cash equivalents at the beginning of the year 517,542 365,829 515,380 364,495
Cash and cash equivalents at the end of the year 12 404,063 517,542 402,576 515,380
105
PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these consolidated nancial statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated. To assist with improved disclosure
some comparatives have been restated.
1. Summary of signicant accounting policies
1.1 Basis of preparation
The consolidated nancial statements of the Foskor Group
have been prepared in accordance with the International
Financial Reporting Standards (IFRS). The nancial
statements have been prepared under the historical cost
convention, as modied by the revaluation of available-
for-sale investment securities, and nancial assets and
liabilities at fair value through prot or loss.
The preparation of nancial statements in conformity with
IFRS requires the use of certain critical accounting estimates
and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets
and liabilities at the date of the nancial statements, and
the reported amounts of revenue and expenses during the
reporting period based on managements best knowledge
of current events and actions. The areas involving a
higher degree of judgement or complexity or areas where
assumptions and estimates are signicant to the nancial
statements are disclosed in note 2.
1.1.1 International Financial Reporting Standards, amend-
ments and interpretations effective for the rst time in
the current year:
* IFRS 1: First-time adoption of International Financial
Reporting Standards - Revised (effective for nancial
periods beginning on or after 1 July 2009). The revised
standard has an improved structure but does not contain
any technical changes.
* IFRS 3: Business combinations - Revised (effective for
nancial periods beginning on or after 1 July 2009). The
standard continues to apply the acquisition method to
business combinations, with some signicant changes.
All payments to purchase a business are to be recorded
at fair value at the acquisition date, with some contingent
payments subsequently re-measured at fair value through
income. Goodwill and non-controlling (minority) interests
may be calculated on a gross or net basis. All transaction
costs will be expensed.
* IAS 27: Consolidated and separate nancial
statements - Revised (effective for nancial periods
beginning on or after 1 July 2009). IAS 27 (revised)
requires the effects of all transactions with non-controlling
interests to be recorded in equity if there is no change in
control. They will no longer result in goodwill or gains and
losses. The standard also species the accounting when
control is lost. Any remaining interest in the entity is re-
measured to fair value and a gain or loss is recognised in
prot or loss.
* Amendments to IAS 32: Classication of rights issues
(effective for nancial periods beginning on or after 1
February 2010.) The amendment claries the accounting
treatment when rights issues are denominated in a
currency other than the functional currency of the issuer.
The amendment states that if such rights are issued
pro rata to an entitys existing shareholders for a xed
amount of currency, they should be classied as equity
regardless of the currency in which the exercise price is
denominated.
* Amendments to IAS 39: Financial instruments
recognition and measurement eligible hedged
items (effective for nancial periods beginning on or after
1 July 2009.) The amendment makes two signicant
changes. It prohibits designating ination as a hedgeable
component of a xed rate debt. It also prohibits including
time value in the one-sided hedged risk when designating
options as hedges.
Notes to the nancial statements
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* Amendments to IFRS 2: Group cash-settled share-
based payment transactions (effective for nancial periods
beginning on or after 1 January 2010). The amendment
claries the accounting for group cash-settled share-based
payment transactions. The entity receiving the goods or
services shall measure the share-based payment transaction
as equity-settled only when the awards granted are its own
equity instruments, or the entity has no obligation to settle the
share-based payment transaction. The entity settling a share-
based payment transaction when another entity in the group
receives the goods or services recognises the transaction as
equity-settled only if it is settled in its own equity instruments. In
all other cases, the transaction is accounted for as cash-settled.
* Improvements to IFRSs (various effective dates). This is a
collection of amendments to IFRSs (15 amendments to 12
standards). These amendments are the result of conclusions
the IASB reached on proposals made in its annual
improvements project.
* IFRIC 17: Distributions of non-cash assets to owners
(effective for nancial periods beginning on or after 1 July
2009). IFRIC 17 applies to the accounting for distributions of
non-cash assets (commonly referred to as dividends in specie)
to the owners of the entity. The interpretation claries that: a
dividend payable should be recognised when the dividend is
appropriately authorised and is no longer at the discretion of
the entity; an entity should measure the dividend payable at
the fair value of the net assets to be distributed; and an entity
should recognise the difference between the dividend paid
and the carrying amount of the net assets distributed in prot
or loss.
1.1.2 Standards, amendments and interpretations to existing
standards not yet effective and also not early adopted
by the group:
* Amendment to IAS 24: Related party disclosures
(effective for nancial periods beginning on or after
1 January 2011). This amendment provides partial relief from
the requirement for government related entities to disclose
details of all transactions with the government and other
government-related entities. It also claries and simplies the
denition of a related party.
The group will apply the standard from 1 April 2012, when the
revised standard is applied, the group will need to disclose
any transactions between its subsidiaries and associates. It is
not possible at this stage to disclose the impact if any, of the
revised standard on the related party disclosures.
* Improvements to IFRSs (issued May 2010) (various effective
dates). Improvements to IFRSs (Issued May 2010) was issued
by the IASB as part of the annual improvements process
resulting in 11 amendments to 7 standards.
* Amendment to IFRS 7: Disclosures transfer of
nancial assets (effective for nancial periods beginning
on or after 1 July 2011). The amendments are intended to
address concerns raised during the nancial crisis by the
G20, among others, that nancial statements did not allow
users to understand the ongoing risks the entity faced due to
derecognised receivables and other nancial assets.
The amendment is not considered to have a material impact on
the Foskor group.
* Amendment to IAS 12, Income taxes on deferred tax
recovery of underlying assets (effective for nancial periods
beginning on or after 1 January 2012). Currently IAS 12:
Income taxes, requires an entity to measure the deferred tax
relating to an asset depending on whether the entity expects
to recover the carrying amount of the asset through use or
sale. This amendment introduces an exception to the existing
principle for the measurement of deferred tax assets or liabilities
arising on investment property measured at fair value. As a
resu|t of the amendments, SlO 21, 'lncome taxes - recovery
of revalued non-depreciable assets, would no longer apply to
investment properties carried at fair value. The amendments
also incorporate into IAS 12 the remaining guidance previously
contained in SIC 21, which is accordingly withdrawn.
Notes to the nancial statements cont.
107
This amendment will not have an impact on the Foskor
Group as investment properties are not held, however
if any investment property is acquired after the effective
date the amendment will be taken into account when
measuring the deferred tax relating to it.
* IFRS 9: Financial instruments (effective for nancial
periods beginning on or after 1 January 2013). This IFRS
is part of the IASBs project to replace IAS 39. IFRS 9
addresses classication and measurement of nancial
assets and replaces the multiple classication and
measurement models in IAS 39 with a single model that
has only two classication categories: amortised cost
and fair value. There are further amendments relating to
nancial liabilities. The main change is that in cases where
the fair value option is taken for nancial liabilities, the
part of a fair value change due to an entitys own credit
risk is recorded in other comprehensive income rather
than prot and loss, unless this creates a mismatch. This
change will mainly affect nancial institutions.
The group is yet to assess IFRS 9s full impact.
* IFRIC 19: Extinguishing nancial liabilities with equity
instruments (effective for nancial periods beginning on or
after 1 July 2010). This IFRIC claries the accounting when
an entity renegotiates the terms of its debt with the result
that the liability is extinguished through the debtor issuing
its own equity instruments to the creditor. A gain or loss is
recognised in the prot and loss account based on the fair
value of the equity instruments compared to the carrying
amount of the debt.
The group will apply the interpretation from the effective
date, it is however not expected to have any impact on
the nancial statements.
* Amendments to IFRIC 14: Pre-payments of a
minimum funding requirement (effective for nancial
periods beginning on or after 1 January 2011). This
amendment will have a limited impact as it applies
only to companies that are required to make minimum
funding contributions to a dened benet pension plan.
It removes an unintended consequence of IFRIC 14
related to voluntary pension prepayments when there is a
minimum funding requirement.
* IFRS 10: Consolidated nancial statements (effective
for nancial periods beginning on or after 1 January 2013).
This standard builds on existing principles by identifying
the concept of control as the determining factor in whether
an entity should be included within the consolidated
nancial statements. The standard provides additional
guidance to assist in determining control where this is
difcult to assess.
This new standard is not expected to have a material
impact on the group, it will however be applied as required.
* IFRS 11: Joint arrangements (effective for nancial
periods beginning on or after 1 January 2013). This
standard provides for a more realistic reection of joint
arrangements by focusing on the rights and obligations
of the arrangement, rather than its legal form. There are
two types of joint arrangements: joint operations and joint
ventures. Joint operations arise where a joint operator
has rights to the assets and obligations relating to the
arrangement and hence accounts for its interest in assets,
liabilities, revenue and expenses. Joint ventures arise
where the joint operator has rights to the net assets of the
arrangement and hence equity accounts for its interest.
This standard is not expected to impact on the group
materially.
* IFRS 12: Disclosure of interests in other entities
(effective for nancial periods beginning on or after 1
January 2013). A new standard on disclosure requirements
for all forms of interests in other entities, including joint
arrangements, associates, special purpose vehicles and
other off-balance sheet vehicles.
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This is expected to impact on the disclosures made by the
group in terms of its interest in subsidiaries and associates
and will be applied as required.
* Amendment to IAS 27: Separate nancial statements
(effective for nancial periods beginning on or after
1 January 2013). This amendent includes the provisions on
separate nancial statements that are left after the control
provisions of IAS 27 have been included in the new IFRS 10.
This is expected to impact on the disclosures made by the
group in terms of its interest in subsidiaries and associates
and will be applied as required.
* Amendment to IAS 28: Investments in associates and
joint ventures (effective for nancial periods beginning on
or after 1 January 2013). This amendment now includes the
requirements for joint ventures, as well as associates, to be
equity accounted for following the issue of IFRS 11.
The amendment will have an effect on the accounting for
the groups investment in joint venture and will be applied
as required.
1.2 Consolidation
1.2.1 Investments in subsidiaries
Subsidiaries are all entities (including special purpose
entities) over which the group has the power to govern the
nancial and operating policies generally accompanying
a shareholding of more than one half of the voting rights.
The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when
assessing whether the group controls another entity.
Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are no longer
consolidated from the date that control ceases.
The group uses the acquisition method of accounting to
account for the aquisition of subsidiaries. The consideration
transferred for the acquisition of a subsidiary is the fair values
of the assets transferred, the liabilities incurred and the equity
interests issued by the group. The consideration transferred
includes the fair value of any asset or liability resulting
from a contingent consideration arrangement. Acquisition-
related costs are expensed as incurred. Identiable assets
acquired and liabilities and contingent liabilities assumed
in a subsidiary are measured initially at their fair values
at the acquisition date. On an acquisition-by-acquisition
basis, the group recognises any non-controlling interest
in the acquiree either at fair value or at the non-controlling
interests proportionate share of the acquirees net assets.
Investments in subsidiaries are accounted for at cost less
impairment. Cost is adjusted to reect changes in consideration
arising from contingent consideration amendments. Cost also
includes direct attributable costs of investment.
The excess of the consideration transferred, the amount
of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest
in the acquiree over the fair value of the groups share of
the identiable net assets acquired is recorded as goodwill.
If this is less than the fair value of the net assets of the
subsidiary acquired in the case of a bargain purchase, the
difference is recognised directly in prot and loss.
Inter-company transactions, balances and unrealised prots
on transactions between group companies are eliminated.
Unrealised losses are also eliminated. The accounting
policies of subsidiaries are consistent with the policies
adopted by the group.
1.2.2 Investments in joint ventures
The groups interest in jointly controlled entities is accounted
for by the equity method of accounting. Under this method,
the investment in the jointly controlled entity is initially
recognised at cost. For subsequent measurement, the
companys share of the post-acquisition prots or losses of
joint ventures is recognised in prot and loss, and its share
of post-acquisition movements in reserves is recognised
109
in other comprehensive income. The cumulative post-
acquisition movements are adjusted against the carrying
amount of the investment. In the companys stand-alone
accounts, joint ventures are recorded at cost.
At each balance sheet date the group assesses whether
there is any indication of impairment.
Unrealised prots on transactions between the group
and its joint ventures are eliminated to the extent of the
groups interest in the joint venture. Unrealised losses are
also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. The accounting
policies of joint ventures are consistent with the policies
adopted by the group.
1.2.3 Investments in associates
Associates are all entities over which the group
has signicant inuence but not control, generally
accompanying a shareholding of between 20% and
50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting and
are initially recognised at cost. The groups investment in
associates includes goodwill identied on acquisition, net
of any accumulated impairment loss.
The groups share of its associates post-acquisition prots
and losses is recognised in prot and loss, and its share
of post-acquisition movements in reserves is recognised
in other comprehensive income. The cumulative post-
acquisition movements are adjusted for against the
carrying amount of the investment. When the groups share
of losses in an associate equals or exceeds its interest in
the associate, including any other unsecured long-term
receivables, the group does not recognise further losses,
unless it has incurred obligations or made payments on
behalf of the associate.
Unrealised gains on transactions between the group and
associates are eliminated to the extent of the groups
interest in the associates. Unrealised losses are also
eliminated unless the transaction provides evidence of
an impairment of the asset transferred. The accounting
policies of associates are consistent with the policies
adopted by the group. Dilution prots and losses arising in
investments in associates are recognised in prot and loss.
Investments in associates are accounted for at cost in the
companys stand alone nancial statements.
1.3 Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision-maker. The chief operating decision-maker,
who is responsible for allocating resources, assessing
performance of the resources and assessing performance
of the operating segments, has been identied as the
Executive Committee.
1.4 Property, plant and equipment
Property, plant and equipment includes mining assets, land
and buildings, plant, equipment, vehicles and aircraft, as well
as certain essential plant spares that are held to minimise
delays arising from plant breakdowns. All property, plant
and equipment is stated at historical cost less accumulated
depreciation and accumulated impairment. Historical cost
includes expenditure that is directly attributable to the
acquisition of the items. Land and capital work in progress
is stated at cost less accumulated impairment.
Direct costs incurred on major projects during the period of
development or construction are capitalised. Subsequent
costs are included in the assets carrying amount or
recognised as a separate asset, as appropriate, only when
it is probable that future economic benets associated
with the item will ow to the group and the cost of the
item can be measured reliably. The carrying amount of
the replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during
the nancial period in which they are incurred.
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1.4.1 Depreciation
Land and capital work in progress
Land and capital work in progress is stated at cost and is not
depreciated.
Property, plant and equipment
Property, plant and equipment are depreciated on the
straight-line method less estimated residual values over their
useful lives as follows:
Mining asset, land and buildings:
Building and structures 30 - 50 years
Mining asset 10 - 20 years
Plant, equipment and vehicles:
Vehicles 4 - 5 years
Heavy plant and machinery 10 - 20 years
Equipment 8 - 10 years
Computer equipment 3 - 5 years
Factory equipment 4 - 5 years
Oap|ta| |nsurance spares 10 - 20 years
Aircraft
Body 20 years
Engines 10 years
1.4.2 Useful lives and residual values
The assets useful lives and residual values are reviewed,
and adjusted if appropriate, at each reporting date. Gains
and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in prot
and loss.
1.4.3 Impairment
An assets carrying amount is written down immediately
to its recoverable amount if the assets carrying amount
is greater than its estimated recoverable amount (Note 1.6
below).
1.4.4 Capitalisation on borrowing costs
Interest costs on borrowings to nance the construction of
property, plant and equipment that are considered to be
qualifying assets are capitalised during the period of time
that is required to complete and prepare the asset for its
intended use. Other borrowing costs are expensed.
1.5 Intangible assets
1.5.1 Computer software
Costs associated with maintaining computer software
programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the design
and testing of identiable and unique software products
controlled by the group are recognised as intangible assets
when the following criteria are met:
|t |s techn|ca||y feas|b|e to comp|ete the software product
so that it will be available for use;
management |ntends to comp|ete the software product
and use it;
there |s an ab|||ty to use the software product,
|t can be demonstrated how the software product w|||
generate probable future economic benets;
adequate techn|ca|, fnanc|a| and other resources to
complete the development and to use the software
product are available; and
the expend|ture attr|butab|e to the software product
during its development can be reliably measured.
Directly attributable costs that are capitalised as part of
the software product include the software development
employee costs and an appropriate portion of relevant
overheads.
Other development expenditures that do not meet
these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense
are not recognised as an asset in a subsequent period.
Computer software development costs recognised as
assets are amortised over their estimated useful lives,
which do not exceed three years.
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1.6 Impairment of assets
The carrying amounts of the groups assets and cash
generating units are reviewed at each reporting date, to
determine whether there is any indication of impairment. If
any such indication exists, the assets recoverable amount
is determined. The recoverable amount is the higher of an
assets fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identiable cash
ows (cash-generating units). Non-nancial assets other than
goodwill that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
An impairment loss is recognised whenever the carrying
amount of an asset or its cash-generating unit exceeds its
recoverable amount.
Cash-generating units
A cash-generating unit is the smallest identiable group
of assets that generates cash inows that are largely
independent of the cash inows from other assets or
groups of assets. For an asset whose cash ow is largely
dependent on that of other assets, the recoverable amount
is determined for the cash-generating unit to which the
asset belongs.
Impairment losses recognised in respect of cash-
generating units are allocated rst to reduce the net book
value of any goodwill allocated to cash-generating units
and then to reduce the net book value of the other assets
in the unit on a pro rata basis. Impairment losses are
recognised in the statement of comprehensive income in
prot and loss.
Impairment reversals
An impairment loss is reversed only to the extent that the
assets carrying amount does not exceed the carrying
amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had
been recognised.
1.7 Leases
The group is the lessee
Leases of property, plant and equipment where the group
has substantially all the risks and rewards of ownership are
classied as nance leases.
Assets held under nance lease agreements are capitalised.
Such assets are depreciated in terms of the lease term
relating to the relevant lease agreement, provided that
such term of lease is shorter than the assets useful lives.
Finance leases are capitalised at the inception of the lease
at the lower of the fair value of the leased property and
the present value of the minimum future lease payments.
Lease nance charges are allocated to accounting periods
over the duration of the leases by the effective rate method,
which reects the extent and cost of the lease nance
utilised in each accounting period.
All other leases are treated as operating leases and the
relevant rental expenses are recognised in prot and loss
on a straight-line basis over the lease term.
Where an arrangement with a supplier includes a
component that has the substance of a lease, the lease
component is separated from other payments and
accounted for as a lease.
1.8 Inventories
Spares and consumables
Spares and consumables are valued at the lower of cost
and net realisable value. Cost is determined using the
weighted average method.
The cost of inventories comprises all costs of purchase
and other costs incurred in bringing the inventories to the
present location and condition. It excludes borrowing costs.
Obsolete, redundant and slow-moving items of spares and
consumable stores are identied on a regular basis and
written down to their net realisable value.
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Net realisable value is the estimated selling price in the
ordinary course of business, less the costs of completion and
selling expenses.
Raw materials, work in progress and nished goods
Raw materials and nished goods consisting of phosphate
rock, phosphoric acid, magnetite stock and other minerals
are valued at the lower of cost of production and net realisable
value.
Cost in respect of raw materials is determined on a rst-in-
rst-out (FIFO) basis. Cost of production in respect of work
in progress and nished goods is calculated on a standard
cost basis, which approximates the actual cost and includes
production overheads and is adjusted to net realisable value
at year-end when it is below cost. Production overheads are
allocated on the basis of normal capacity.
Net realisable value is the estimated selling price in the
ordinary course of business, less the costs of completion and
selling expenses.
1.9 Trade and other receivables
Trade receivables are amounts due from customers for
merchandise sold in the ordinary course of business. If
collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classied as
current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. A provision for
impairment of trade receivables is established when there is
objective evidence that the group will not be able to collect all
amounts due according to the original terms of receivables.
Signicant nancial difculties of the debtor, probability that
the debtor will enter bankruptcy or nancial reorganisation,
and default or delinquency in payments are considered
indicators that the trade receivable is impaired. The amount
of the provision is the difference between the assets carrying
amount and the present value of estimated future cash ows,
discounted at the original effective interest rate. The amount
of the provision is recognised in prot and loss.
1.10 Provisions
A provision is recognised when the group has a present
legal or constructive obligation as a result of past events; it is
probable that an outow of resources will be required to settle
the obligation; and a reliable estimate of the obligation can
be made. Provisions are not recognised for future operating
losses. Where the effects of discounting are material,
provisions are measured at their present values.
Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation
using a pre-tax rate that reects current market assessments
of the time value of money and the risks specic to the
obligation. The increase in the provision due to the passage
of time is recognised as nance cost.
1.11 Pension obligation
The group operates a dened benet and a dened
contribution plan, the assets of which are held in separate
trustee-administered funds. The schemes are generally
funded through payments to insurance companies or trustee-
administered funds as determined by periodic actuarial
valuations. A dened benet plan is a pension plan that
denes an amount of pension benet to be provided, usually
as a function of one or more factors such as age, years of
service and compensation. A dened contribution plan is a
pension plan under which the group pays xed contributions
into a separate entity (a fund) and under which the group
will have no legal or constructive obligations to pay further
contributions if the fund does not hold sufcient assets to pay
all employees benets relating to employee service in the
current and previous periods.
The liability in respect of dened benet pension plans is the
present value of the dened benet obligation at the reporting
113
date less the fair value of plan assets. The dened benet
obligation is calculated annually by independent actuaries
using the projected unit credit method. The present value of
the dened benet obligation is determined by discounting
the estimated future cash outows using interest rates
of government securities that have terms to maturity
approximating the terms of the related liability. Actuarial
gains and losses arising from experience adjustments
and the effects of changes in actuarial assumptions to the
dened benet plans are recognised fully in prot and loss.
Past-service costs are recognised immediately in prot and
loss, unless the changes to pension plan are conditional on
the employees remaining in service for a specied period of
time (the vesting period). In this case, the past-service costs
are amortised on a straight-line basis over the vesting period.
1.12 Other post-employment obligations
The group provides post-employment health care benets
to its retirees who were employed by the company on or
before 1 July 1995. The same benets are provided to a
specic group of employees employed before 1 July 1996.
The entitlement to post-employment health care benets is
based on the employee remaining in service up to retirement
age. The expected costs of these benets are accrued over
the period of employment, using the projected unit credit
method. Valuations of these obligations are carried out
annually by independent, qualied actuaries.
Actuarial gains and losses arising from previous adjustments
and the effects of changes in actuarial assumptions to the
dened benet plans are recognised fully in prot and loss.
1.13 Current and deferred taxation
The tax expense for the period comprises current and
deferred tax. Tax is recognised in prot and loss, except
to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case,
the tax is also recognised in other comprehensive income
or directly in equity, respectively.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantially enacted at the
reporting date and in instances where companies in the
group generate taxable income.
Management periodically evaluates the positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax and deferred capital gains tax are
accounted for using the liability method for all temporary
differences arising between the net book value of assets and
liabilities in the nancial statements and the corresponding
tax bases. Deferred tax liabilities are recognised for all
taxable temporary differences, and deferred tax assets
are recognised to the extent that it is probable that future
taxable prot will be available against which deductible
temporary differences can be utilised.
Deferred tax assets and liabilities are not recognised if the
temporary differences arise from goodwill or from the initial
recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither
accounting nor taxable prot or loss.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted
by the reporting date and are expected to apply when
the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax is provided on temporary differences
arising on investments in subsidiaries, except where
the timing of the reversal of the temporary difference
is controlled by the group and it is probable that the
temporary difference will not reverse in the foreseeable
future.
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Deferred income tax assets and liabilities are offset when
there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income
tax assets and liabilities relate to the same taxation authority
on either the same taxable entity or different taxable entities
where there is an intention to settle the balances on a net
basis.
1.14 Foreign currencies
Foreign currency translation
The groups presentation currency is the same as its
functional currency. The groups presentation currency is
South African rands (ZAR). The functional currency of the
groups operation is the currency of the primary economic
environment in which each operation has its main activities.
Foreign currency transactions
Transactions in foreign currencies are translated into South
African rands at the foreign exchange rate ruling at the date
of the transaction.
Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in prot
and loss.
Foreign exchange gains and losses that relate to borrowings
and cash and cash equivalents are presented in the
statement of comprehensive income within nance income
and expenses. All other foreign exchange gains and losses
are presented in the statement of comprehensive income
within other gains/(losses).
1.15 Revenue
Revenue comprises the fair value of the consideration
received or receivable for the sale of goods in the ordinary
course of the groups activities. Revenue is shown net of
Value Added Tax (VAT), returns, rebates and discounts and
after eliminating sales within the group.
The group recognises revenue when the amount of revenue
can be reliably measured, it is probable that future economic
benets will ow to the entity and specic criteria have been
met for each of the groups activities, as described below. The
amount of revenue is not considered to be reliably measurable
until all contingencies relating to the sale have been resolved.
The group bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction
and the specics of each arrangement.
(a) Sale of goods
Sales of goods are recognised when risks and rewards
transfer (depending on the international commercial terms
agreed to with the customer, i.e. Free on Board [FOB], Free
on Rail [FOR] or Cost and Freight [CFR]), and when there
is no unfullled obligation that could affect the customers
acceptance of the products.
(b) Interest income
lnterest |ncome |s recogn|sed on a t|me-proport|on bas|s
using the effective interest method. When a receivable
is impaired, the group reduces the carrying amount to
its recoverable amount, being the estimated future cash
ow discounted at the original effective interest rate of the
instrument, and continues unwinding the discount as interest
income. Interest income on impaired loans and receivables
is recognised using the original effective interest rate.
(c) Royalty income
Royalty income is recognised on an accruals basis in
accordance with the substance of the relevant agreements.
(d) Dividend income
Dividend income is recognised when the right to receive
payments is established.
1.16 Financial instruments
Financial instruments consist mainly of borrowings, nance
lease liabilities, listed and unlisted investments, cash and
115
cash equivalents, derivative instruments, trade and other
receivables, and trade and other payables. Derivative
instruments consist of forward exchange contracts and
option contracts. At inception the group classies its
nancial assets into the following categories:
Financial assets or nancial liabilities at fair value
through prot or loss - a fnanc|a| asset |s c|ass|fed |n
this category if acquired principally for the purpose of
selling in the short term. Derivatives are also categorised
as held for trading unless they are designated as hedges.
Assets in this category are classied as current assets.
None of the nancial assets or liabilities are designated
as at fair value through prot and loss.
Loans and receivables - non-der|vat|ve assets w|th
xed or determinable payments that are not quoted in an
active market other than those that the group intends to
sell in the near future.
Available-for-sale nancial assets - non-derivative
nancial assets that are designated as available for sale
or are not classied as:
- |oans and rece|vab|es,
- he|d-to-matur|ty |nvestments, or
- fnanc|a| assets at fa|r va|ue through proft or |oss.
Impairment losses on available-for-sale equity
instruments are not reversed through prot or loss.
Any increase in the fair value, after an impairment loss
has been recognised, is treated as a revaluation and is
recognised directly in equity.
1.16.1 Initial and subsequent measurement
Financial assets or nancial liabilities at fair value through
prot or loss:
ln|t|a| measurement |s at fa|r va|ue at trade date exc|ud|ng
transaction costs).
Subsequent measurement |s at fa|r va|ue w|th ga|ns or |osses
from fair-value adjustments recognised in prot and loss.
Available-for-sale nancial assets:
ln|t|a| measurement |s at fa|r va|ue at trade date |nc|ud|ng
transaction costs).
Subsequent measurement |s at fa|r va|ue w|th ga|ns
or losses from fair-value adjustments recognised in
other comprehensive income, except for impairment
losses and foreign exchange gains and losses that are
recognised in prot and loss. The fair-value adjustments
previously recognised in equity are transferred to prot
and loss upon de-recognition.
D|v|dends accru|ng on ava||ab|e-for-sa|e fnanc|a|
instruments are recognised in prot and loss on right to
receive dividends.
lnterest on ava||ab|e-for-sa|e fnanc|a| |nstruments |s
recognised in prot or loss using the effective-interest
method.
Loans and receivables:
ln|t|a| measurement |s at fa|r va|ue net of transact|on
costs directly attributable to acquisition of funds.
Subsequent measurement |s at amort|sed cost, us|ng
the effective interest method.
Prov|s|on for |mpa|rment of |oans and rece|vab|es |s
raised in line with accounting policy 1.9 (above) with
write-off of irrecoverable amount approved by the Board
of Directors.
1.16.2 Recognition and de-recognition
Financial instruments are recognised when the company
becomes party to the contractual provisions of the
instruments.
Financial assets are de-recognised when the contractual
rights to receive cash ows from the nancial asset have
expired or have been transferred and the group has
transferred substantially all risks and rewards of ownership.
Financial liabilities are de-recognised when, and only when,
they are extinguished, that is, when the obligation specied
in the contract is either discharged, cancelled or expired.
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1.16.3 Offsetting nancial instruments
Financial assets and liabilities are offset and the net amount
reported in the statement of nancial position when there is
a legally enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis or realise the
asset and settle the liability simultaneously.
1.16.4 Impairment of nancial assets
(a) Assets carried at amortised cost
The group assesses at the end of each reporting period
whether there is objective evidence that a nancial asset
or group of nancial assets is impaired. A nancial asset
or a group of nancial assets is impaired and impairment
losses are incurred only if there is objective evidence
of impairment as a result of one or more events that
occurred after the initial recognition of the asset (a loss
event) and that loss event (or events) has an impact on
the estimated future cash ows of the nancial asset or
group of nancial assets that can be reliably estimated.
The criteria that the group uses to determine that there
is objective evidence of an impairment loss include the
following:
S|gn|fcant fnanc|a| d|ffcu|ty of the |ssuer or ob||gor.
A breach of contract, such as a defau|t or de||nquency
in interest or principal payments.
The group, for econom|c or |ega| reasons re|at|ng
to the borrowers nancial difculty, granting to the
borrower a concession that the lender would not
otherwise consider.
lt becomes probab|e that the borrower w||| enter
bankruptcy or other nancial reorganisation.
The d|sappearance of an act|ve market for that
nancial asset because of nancial difculties.
Observab|e data |nd|cat|ng that there |s a measurab|e
decrease in the estimated future cash ows from a
portfolio of nancial assets since the initial recognition
of those assets, although the decrease cannot yet
be identied with the individual nancial assets in the
portfolio, including:
(i) adverse changes in the payment status of borrowers
in the portfolio; and
(ii) national or local economic conditions that correlate
with defaults on the assets in the portfolio.
The group rst assesses whether objective evidence of
impairment exists.
For loans and receivables category, the amount of the
loss is measured as the difference between the assets
carrying amount and the present value of estimated
future cash ows (excluding future credit losses that have
not been incurred) discounted at the nancial assets
original effective interest rate. The carrying amount of the
asset is reduced and the amount of the loss is recognised
in prot and loss. If a loan has a variable interest rate,
the discount rate for measuring any impairment loss
is the current effective interest rate determined under
the contract. As a practical expedient, the group may
measure impairment on the basis of an instruments fair
value using an observable market price.
If, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related
objectively to an event occurring after the impairment
was recognised (such as an improvement in the debtors
credit rating), the reversal of the previously recognised
impairment loss is recognised in prot and loss.
(b) Assets classied as available for sale
The group assesses at the end of each reporting period
whether there is objective evidence that a nancial
asset or a group of nancial assets is impaired. For debt
securities, the group uses the criteria in (a) above. In the
case of equity investments classied as available for sale,
a signicant or prolonged decline in the fair value of the
security below its cost is also evidence that the assets
are impaired. If any such evidence exists for available-
for-sa|e fnanc|a| assets, the cumu|at|ve |oss - measured
as the difference between the acquisition cost and
the current fair value, less any impairment loss on that
117
fnanc|a| asset prev|ous|y recogn|sed |n proft or |oss - |s
removed from equity and recognised in the the prot and
loss. Impairment losses recognised in prot and loss
on equity instruments are not reversed through prot
and loss. If, in a subsequent period, the fair value of a
debt instrument classied as available for sale increases
and the increase can be objectively related to an event
occurring after the impairment loss was recognised in
prot or loss, the impairment loss is reversed through
prot and loss.
1.17 Environmental obligations
Long-term environmental obligations are based on the
groups environmental management plans, in compliance
with current environmental and regulatory requirements.
Full provision is made based on the net present value of the
estimated cost of restoring the environmental disturbance
that has occurred up to the reporting date, using a risk-
free rate and risk-adjusted cash ows that reect current
market assessments and the risks specic to the provision.
Increases due to additional environmental disturbances are
capitalised and amortised over the remaining life of the mine.
Annual increases in the provision relating to unwinding of the
discount are shown as part of nance costs in the statement
of comprehensive income.
The estimated costs of rehabilitation are reviewed on a
three-yearly basis or when events suggest that the costs
may have changed, and adjusted as appropriate for
changes in legislation, technology or other circumstances.
Cost estimates are not reduced by the potential proceeds
from the sale of assets, or from planned clean-up at closure,
in view of the uncertainty of estimating the potential future
proceeds. Changes in the expected costs are capitalised or
reversed against the relevant asset.
Contributions are made to a dedicated Environmental
Rehabilitation Trust Fund to fund the estimated cost of
rehabilitation during and at the end of the life of the mine.
The Environmental Rehabilitation Trust is consolidated into
the group nancial statements at each reporting date.
1.18 Dividends
Dividends paid are recognised by the group when the
shareholders right to receive payment is established.
These dividends are recorded and disclosed as dividends
paid in the statement of changes in equity. Dividends
proposed or declared subsequent to year-end are not
recognised at the nancial year-end, but are disclosed in
the notes to the nancial statements.
1.19 Secondary tax on companies
Tax costs incurred on dividends are included in the taxation
line in prot and loss in the year in which the related
dividends are declared.
1.20 Cash and cash equivalents
In the statement of cash ows, cash and cash equivalents
are dened as cash on hand, deposits held on call with
banks, short-term liquid investments and original maturities
of three months or less and bank overdrafts. Cash and
cash equivalents are measured at amortised cost based
on the relevant exchange rate at the balance sheet date.
In the statement of nancial position, bank overdrafts are
shown within borrowings in current liabilities.
1.21 Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any difference between the
proceeds (net of transaction costs) and the redemption
value is recognised in prot and loss over the period of the
borrowings using the effective interest method.
Borrowings are classied as current liabilities unless the
group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
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1.22 Share-based payment transactions
The group operates an equity-settled share-based plan and
a cash-settled share-based plan. The equity-settled plan
was entered into with Strategic Business Partners (SBPs)
and Special Black Groups, under which the company will
receive services (BEE credentials) as consideration for its
own equity instruments. The equity-settled share-based
payments vest immediately.
The cash-settled plan was entered into with the companys
employees, under which the company receives services
from employees by incurring the liability to transfer cash to
the employees for amounts that are based on the value of
the companys shares. The fair value of the transaction is
measured using an option pricing model, taking into account
all terms and conditions.
The fair value of the services received in exchange for the
grant of the options is recognised as an expense. The total
amount to be expensed is determined by reference to the
fair value of the options granted:
|nc|ud|ng any market performance cond|t|ons,
exc|ud|ng the |mpact of any serv|ce and non-market
performance vesting conditions; and
|nc|ud|ng the |mpact of any non-vest|ng cond|t|ons. The
services received by the company are recognised as
they are received and the liability is measured at fair
value. The fair value of the liability is re-measured at
each reporting date and at the date of settlement. Any
changes in the fair value are recognised in prot or loss
for the period.
1.23 Earnings per share
Earnings/(loss) per share is calculated based on the net
income/(loss) divided by the weighted average number of
shares in issue during the year. A diluted earnings per share
is presented when the inclusion of ordinary shares that
may be issued in the future will have a dilutive effect on the
earnings per share.
2. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances.
The group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by denition,
rarely equal the related actual results. The estimates and
assumptions that have a signicant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next nancial year are outlined below.
(a) Income taxes
Signicant judgement is required in determining the
provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business.
The group recognises liabilities for anticipated tax audit
issues based on estimates of whether additional taxes
will be due. Where the nal tax outcome of these matters
is different from the amounts that were initially recorded,
such differences will impact the income tax and deferred
tax provisions in the period in which such determination
is made.
(b) Fair value of nancial instruments
The fair value of nancial instruments that are not traded
in an active market is determined by using valuation
techniques. The group uses its judgement to select a
variety of methods and make assumptions that are mainly
based on market conditions existing at each balance
sheet date at the end of each reporting period.
(c) Post-employment obligations
Signicant judgement and actuarial assumptions are
required to determine the fair value of the post-employment
obligations. More detail on these actuarial assumptions is
provided in Note 19 to the nancial statements.
119
(d) Environmental rehabilitation liability
In determining the environmental rehabilitation liability, an
ination rate of 6.31% (FY2010: 6.16%) was assumed to
increase the rehabilitation liability for the next 20 years,
and a rate of 8.97% (FY2010: 8.97%) to discount that
amount to present value. The discount rate assumed
of 8.97% is a risk-free rate, specically the rate at which
the R186 South African government bond was quoted at
year-end.
(e) Fair value of share-based payments
The fair value of equity instruments on grant date is
determined based on a simulated company value, using
the Geometric Brownian Motion model. The valuation
technique applied to determine the simulated company
value is part of the Monte Carlo simulation methodology.
The market conditions relating to the growth in the market
value of the Foskor shares have been taken into account
in estimating the fair value of the equity instruments
granted. The key assumptions used in the calculation are
included in Note 16 of the nancial statements.
(f) Impairment of assets
The group follows the guidance of IAS 36: Impairment
of Assets to determine when an asset is impaired. This
determination requires signicant judgement. In making
this judgement, the group evaluates the impairment
indicators that could exist at year-end, such as signicant
decreases in the selling prices of nished goods,
signicant decreases in sales volumes and changes in
the international export regulatory environment.
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
3 PROPERTY, PLANT AND EQUIPMENT
At cost
Mining asset, land and buildings 840,514 688,502 840,018 687,872
Plant, equipment and vehicles 3,844,286 3,443,062 3,843,220 3,442,170
Capital work in progress 854,413 807,435 854,413 807,435
Aircraft 66,374 66,374 66,374 66,374
Total 5,605,587 5,005,373 5,604,025 5,003,851
Accumulated depreciation
Aircraft 10,228 6,137 10,228 6,137
Total 2,280,357 2,072,726 2,279,446 2,071,922
Net book amount
Capital work in progress 854,413 807,435 854,413 807,434
Aircraft 56,146 60,237 56,146 60,237
Net book amount 3,325,229 2,932,647 3,324,579 2,931,929
Plant, equipment and vehicles includes the following lease where Foskor (Pty) Ltd is the lessee under a nance lease. The efuent pipeline is the only
asset under nance lease (refer to Note 17).
Cost - Capitalised nance lease 41,567 41,567 41,567 41,567
Accumulated depreciation (14,029) (11,950) (14,029) (11,950)
Net book amount 27,538 29,617 27,538 29,617
Details of land and buildings are available for inspection at the registered ofce of the company.
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3 PROPERTY, PLANT AND EQUIPMENT (Continued)
Mining Plant, Capital
asset, land equipment work in
and buildings and vehicles progress Aircraft Total
R000 R000 R000 R000 R000
12 months ended 31 March 2011
Movement in carrying value for the year r
Group
Opening net book amount 431,518 1,633,458 807,434 60,237 2,932,647
Additions 145,843 403,031 46,979 - 595,853
Adjustment to the mining asset (refer to Note 18) 9,235 - - - 9,235
Depreciation charge (28,560) (177,905) - (4,091) (210,556)
Disposals (204) (1,746) - - (1,950)
Closing net book amount 557,832 1,856,838 854,413 56,146 3,325,229
Company
Additions 145,748 402,954 46,979 - 595,681
Disposals (71) (1,746) - - (1,817)
Group
Additions 54,043 357,946 412,082 - 824,071
Impairment charge - 323,000 - - 323,000
Disposals (1,374) (4,402) - - (5,776)
Company
Additions 53,874 357,946 412,082 - 823,902
Impairment charge - 323,000 - - 323,000
Disposals (1,340) (4,402) - - (5,742)
The 2010 reversal of the impairment to the amount of R323 million which relates to property, plant and equipment at the Richards Bay cash
generating business operation (which manufactures phosphoric acid) was deemed necessary by management due to the increase in phosphoric
acid prices, fertiliser prices, a weak exchange rate and the new plant operating at almost full capacity. The operation was previously impaired in the
year ended 31 March 2009. Management reviewed these indicators again at year-end to determine whether a further reversal of the impairment
(R277 million balance) is deemed necessary and concluded that no reversal or impairment charge would be required for the 2011 year-end. The manner
used to determine the recoverable amount was value in use and the discount rate used in the current estimate was 14,36%.
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
4 INTANGIBLE ASSETS
At cost
Computer software 1,756 2,864 1,756 2,864
1,756 2,864 1,756 2,864
Accumulated amortisation
Computer software 1,242 1,108 1,242 1,108
1,242 1,108 1,242 1,108
Net book amount
Computer software 514 1,756 514 1,756
Closing net book amount 514 1,756 514 1,756
Computer
software Total
R000 R000
Movement in book value
Group and Company
Opening net book amount 1,756 1,756
Additions - -
Amortisation charge (1,242) (1,242)
Closing net book amount 514 514
Movement in book value
Group and Company
Opening net book amount 1,801 1,801
Additions 1,063 1,063
Amortisation charge (1,108) (1,108)
Closing net book amount 1,756 1,756
123
Issued ordinary
and preference shares Shares at cost Indebtedness
Number r % % R000 R000
2011 2010 2011 2010 2011 2010 2011 2010
5 INVESTMENTS IN SUBSIDIARIES
Indian Ocean Fertilizer (Pty) Ltd (South Africa) 93,265 93,265 100% 100% 103,956 103,956 (218,501) (218,501)
Inter Minerals Holdings AG (Switzerland) - - - - 10 10 (10) (10)
Phosphate Shipping (Pty) Ltd 1,000 1,000 100% 100% 1 1 (4,705) (4,290)
Loans from and shares in subsidiaries 103,967 103,967 (223,216) (222,801)
Phosfert Marine (Pty) Ltd (South Africa) 40,000 40,000 100% 100% 40 40 2,559 2,965
Phosphate Shipping (Pty) Ltd 1,000 1,000 100% 100% - - - -
Foskor Social Responsibility Trust - - - - - - 10,000 10,000
IOF Property Trust (South Africa) - - - - - - 529 689
Loans to subsidiaries 40 40 13,088 13,654
Total shares at cost/Net loans owing 104,007 104,007 (210,128) (209,147)
The majority of subsidiaries have nancial years ending 31 March and are consolidated to that date. Loans to and from subsidiaries are interest-free
with no repayment terms. The shares in Indian Ocean Fertilizer (Pty) Ltd previously held by Inter Minerals South Africa (Pty) Ltd are now held directly
by Foskor (Pty) Ltd. Indicators for impairment were considered at 31 March 2011 and no impairment on these investments was deemed necessary.
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
6 INVESTMENT IN JOINT VENTURE
Foskor (Pty) Ltd has a 50% interest in a joint venture,
Palfos Aviation (Pty) Ltd. The companys major asset,
an aircraft, was sold in June 2004.
Palfos Aviation (Pty) Ltd (South Africa)
Carrying amount at the beginning of the year r 25 25 25 25
Carrying amount at the end of the year r 25 25 25 25
The investment consists of 12,500 shares of R2 each, being 50% of the authorised and issued share capital. As at year-end the ventures assets
comprised cash and cash equivalents of R25,000. The company is currently in the process of being deregistered.
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
7 INVESTMENT IN ASSOCIATE
At 1 April:
Investment in Foskor Zirconia (Pty) Ltd 29,742 30,052 26,006 26,006
Sale of 19.1% share of Foskor Zirconia (Pty) Ltd on 23 July 2010 (11,802) - (10,137) -
Proceeds on sale of investment (6,248) - (6,248) -
Loss on sale of investment (5,554) - (3,889) -
Investment in associate 17,940 30,052 15,869 26,006
Share of (loss)/prot 2,925 (310) - -
At 31 March 20,865 29,742 15,869 26,006
On 23 July 2010 Foskor sold a further 19,1% of its shares to BEE partners, Perfect Positions Investments 41 CC, of Foskor Zirconia (Pty) Ltd at a selling
price of R6,2 million, realising a loss on sale of R3,8 million on company level and R5,5 million on group level. The remaining shareholding of Foskor
Zirconia (Pty) Ltd is owned by Carborundum Universal Ltd 51% and Foskor (Pty) Ltd 29,9%.
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
8 FINANCIAL INVESTMENTS
8.1 Available-for-sale investments
Listed shares
8.1.1 Investment in Coromandel International Ltd 210,956 122,664 210,956 122,664
Opening balance 122,664 42,001 122,664 42,001
Fair value movements 88,292 80,663 88,292 80,663

A subdivision of existing Coromandel equity shares took place in December 2010 from every one equity share of RS.2/-each into two equity shares
of Re.1/-each. Foskors number of equity shares increased from 2,4 million to 4,8 million. The closing share price of the Coromandel International Ltd
shares as at 31 March 2011 was Indian rupees 288.35 (2010: 315.35). Dividends received during the year amounts to R4,5 million (2010: R4 million).
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8 FINANCIAL INVESTMENTS (Continued) GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
8.1.2 Environmental Rehabilitation Trust investments - Available-for-sale investments 90,518 75,998 90,518 75,998
Unit trusts 90,074 75,597 90,074 75,597
Sanlam shares 266 240 266 240
Old Mutual shares 178 161 178 161
The unit trust portfolio for these investments is invested in equity (21%), property (8%), international equity (11%), bonds (18%) and money market
and cash (42%).
8.2 Environmental Rehabilitation Trust investments - Other loans and receivables
Cash deposits held by the Environmental Rehabilitation Trust 9,015 8,796 9,015 8,796
First National Bank 9,015 8,796 9,015 8,796
Total investments held in the Environmental Rehabilitation Trust (Note 18) 99,533 84,794 99,533 84,794
Cash receivable from Foskor (Pty) Ltd arising from dividends received on behalf of the Rehabilitation Trust is Nil (2010: R41,876).
8.2.1 Other loans and receivables
Foskor Social Responsibility Trust 10,000 10,000 - -
Nedbank Call Account 10,000 10,000 - -
Total investments 320,489 217,458 310,489 207,458
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
9 INVENTORIES
Spares and consumables stores 282,962 249,429 282,962 249,429
Phosphate rock 337,889 91,940 337,889 91,940
Raw material
1
244,690 240,307 244,690 240,307
Finished goods 211,126 169,144 211,126 169,144
Work in progress 1,981 1,997 1,981 1,997
1,078,648 752,817 1,078,648 752,817

1
Includes magnetite stockpiles
There was no write-down of inventory as at 31 March 2011 and the net realisable value of all inventory exceeds the cost.
10 TRADE AND OTHER RECEIVABLES
Trade receivables 405,655 241,179 400,018 235,724
Less: Provision for impairment of trade receivables (6,998) (5,068) (3,481) (5,024)
Trade receivables - net 398,657 236,111 396,537 230,700
Employee loans - 38 - 38
VAT receivable 100,247 44,705 99,844 44,173
Prepaid insurance 19,842 16,410 19,821 16,377
Other receivables 41,855 43,968 41,688 43,921
Current portion 560,601 341,232 557,890 335,209
Trade receivables are denominated in US dollar and rand
Other receivables as at 31 March 2011 mainly comprised sundry debtors of R17,1 million (2010: R28,5 million) , payments made in advance for
imports of R2,4 million (2010: R11,4 million) as well as expected income on the derailment insurance claim of R22,1 million.
Movement in the impairment provisions
At 1 April (5,068) (22,043) (5,024) (22,043)
Additional provisions (6,998) (5,068) (3,481) (5,024)
Utilised during period 5,068 22,043 5,024 22,043
At 31 March (6,998) (5,068) (3,481) (5,024)
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
11 DERIVATIVE FINANCIAL INSTRUMENTS
Assets 5,815 1,314 5,815 1,314
Forward foreign exchange contracts 5,815 1,314 5,815 1,314
Liabilities (756) (245) (756) (245)
Forward foreign exchange contracts (756) (245) (756) (245)
Current portion 5,059 1,069 5,059 1,069
Trading derivatives are classied as a current asset or liability. The remaining maturity of the instruments is less than 12 months. Prot and losses on
these instruments are recognised in prot and loss.
12 CASH AND CASH EQUIVALENTS
Cash at bank and on hand 394,038 290,468 392,551 288,306
Short-term bank deposits 10,025 227,074 10,025 227,074
Cash and cash equivalents (excluding bank overdrafts) 404,063 517,542 402,576 515,380
Cash and cash equivalents include the following for the purposes of the statement of cash ows:
Cash and cash equivalents 404,063 517,542 402,576 515,380
Bank overdrafts - - - -
Cash and cash equivalents 404,063 517,542 402,576 515,380
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
13 DEFERRED INCOME TAX
The deferred income tax balance is made up as follows:
At 1 April: (442,769) (333,640) (442,937) (333,640)
Mining operations temporary differences - Other (1,092) (932) (1,092) (932)
Mining operations temporary differences - Capex (237,102) (23,414) (237,102) (23,414)
Non-mining operations temporary differences - Other (1,752) (90,330) (1,752) (90,330)
Under-provision prior year 1,020 5,379 1,020 5,379
Tax loss increased 80,913 168 79,538 -
At 31 March (600,782) (442,769) (602,325) (442,937)

The deferred income tax balance is made up as follows:
Deferred tax asset
Finance lease liability 6,186 6,972 6,186 6,972
Provisions 66,856 55,545 66,856 55,545
Mining rehabilitation liability 64,357 60,006 64,357 60,006
Income in advance - 10,344 - 10,344
Other 11,686 4,750 11,686 4,750
Tax losses increased 81,081 168 79,538 -
At 31 March 230,166 137,785 228,623 137,617

Deferred tax liability
Property, plant and equipment - Mining (575,237) (338,135) (575,237) (338,135)
Property, plant and equipment - Other (194,218) (191,581) (194,218) (191,581)
Property, plant and equipment - Leased (7,711) (8,292) (7,711) (8,292)
Mark-to-market adjustment of forward exchange contracts - (299) - (299)
Mining footprint (19,820) (18,505) (19,820) (18,505)
Mining rehabilitation investment (27,869) (23,742) (27,869) (23,742)
Other (6,093) - (6,093) -
At 31 March (830,948) (580,554) (830,948) (580,554)

Deferred tax liabilities (net) (600,782) (442,769) (602,325) (442,937)
Deferred tax on amounts charged to equity:
No deferred tax has arisen on items charged to equity or other comprehensive income.
129
GROUP AND COMPANY
Number Ordinary Share
of shares shares premium Total
(thousands) R000 R000 R000
14 SHARE CAPITAL AND PREMIUM
At 31 March 2010 9,158 9,158 132,013 141,171
Movements during the year - - - -
At 31 March 2011 9,158 9,158 132,013 141,171
The total authorised share capital of ordinary shares is 9,157,647 (2010: 9,157,647) with a par value of R1 per share. All issued shares are fully paid.
GROUP COMPANY
Dividend
per share 2011 2010 2011 2010
R000 R000 R000 R000
15 DIVIDEND PROPOSED
Gross dividend proposed 8.23 75,351 - 75,351 -
Secondary tax on companies (0.82) (7,535) - (7,535) -
Net dividend proposed 7.41 67,816 - 67,816 -
The dividend proposed is subject to approval at the Annual General Meeting and not recognised in the nancials at year-end. Secondary tax on
companies is payable at a rate of 10% on the distribution of prots. The potential secondary tax on companies on the proposed dividend amounts to
R7.5 million.
16 SHARE-BASED PAYMENT RESERVE
16.1 Equity-settled share-based payment plan
Black economic empowerment transaction
In the 2010 nancial year, Foskor and the Industrial Development Corporation Ltd (IDC) entered into a Black Economic Empowerment Transaction (BEE
Transaction). In terms of the transaction the IDC sold 15% interest in Foskor to Strategic Business Partners (SBPs) and Special Black Groups (SBGs)
(collectively, the BEE Partners), 5% to the communities where Foskor operates and a 6% interest in Foskor to the Foskor Employee Share Ownership
Plan (ESOP). The transaction with the BEE Partners and communities constitutes an equity-settled share-based plan and the transaction with the
employees constitutes a cash-settled share-based plan (Refer to Note 16.2). Under the equity-settled share-based plan, the shares vest immediately
at grant date. In determining the fair value of services received as consideration for equity instruments granted, measurement is referenced to the fair
value of the equity instruments granted.
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
At 1 April 303,914 - 303,914 -
Granted - 303,914 - 303,914
At 31 March 303,914 303,914 303,914 303,914
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
16 SHARE-BASED PAYMENT RESERVE (Continued)
Weighted average fair value assumptions
The fair value of services received in return for equity instruments granted is measured by reference to the fair value of the equity instruments granted.
The estimate of the fair value of the equity instruments granted is measured based on the Monte Carlo Option Pricing model.
The following weighted average assumptions were used in the share pricing models during the year:
Group and Company
2011
Grant date 31 December 2009
Initial company value (Exercise price) R 3,500,000,000
Average share price at grant date R 382,19
Annualised expected volatility 43,19%
Risk-free interest rate 8,54%
Dividend yield (%) 2,25%
Strike price R 655,68

The holders of the equity instruments are required to hold the instruments to maintain the BEE status until 30 March 2018, thereafter they will be able to
acquire Foskor shares that can be sold or retained. The volatility indicator used in the calculation was based on the market prices of globally listed proxy
companies that are in the same industry as Foskor and the changes in their share prices over the last 10 years was used to determine the volatility in
their share prices.
16.2 Cash-settled share-based payment plan
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
Cash-settled share-based payment liability 48,233 23,460 48,233 23,460
The company entered into a cash-settled share-based payment plan with its employees. A total liability of R48,2 million (2010: R 23,4 million) was
recorded. The share-based payment expense for the current year of R24,7 million was expensed in prot and loss (refer Note 16.3). The fair values
were determined by reference to the fair value of the equity instruments granted using the Monte Carlo Options Pricing Model. This model has been
modied to take into account early exercise opportunities and expected employee exercise behaviour.
131
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
16 SHARE-BASED PAYMENT RESERVE (Continued)
The following weighted average assumptions were input into the model:
Group and Company Group and Company
2011 2010
Exercise price R 3,500,000,000 R 3,500,000,000
Average share price at grant date R 382,19 R 382,19
Annualised expected volatility 43,51% 43,19%
Risk-free interest rate
- ve-year expected option lifetime (%) 8,36% 8,33%
- seven-year expected option lifetime (%) 8,75% 8,54%
Expected dividend yield (%)
- ve-year expected option lifetime (%) 2,64% 2,11%
- seven-year expected option lifetime (%) 2,64% 2,25%
Strike price
- ve-year expected option lifetime (%) R 492,40 R 532,01
- seven-year expected option lifetime (%) R 498,27 R 617,45

The units in the Employee Share Ownership Trust (ESOP Trust) will vest over a period of three years from 1 April 2012 for employees employed at
1 April 2009. All other employees units will vest from three years after allocation date. The employees have the option to start selling their vested units
from 1 July 2016 until 30 March 2018. The ESOP Trust will be wound up on 30 March 2018, where any employees with remaining units will be given
Foskor shares in exchange for their units if the company is listed. If the company is not listed, the employees will be given cash in exchange for their
units.
The volatility indicator used in the calculation was based on the market prices of globally listed proxy companies that are in the same industry as Foskor
and the changes in their share prices over the last 10 years was used to determine the volatility in their share prices.
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
16.3 Total share-based payment expense
Equity-settled share-based payment expense - 303,914 - 303,914
Cash-settled share-based payment expense 24,773 23,460 24,773 23,460
Total share-based payment expense (refer Note 16.2) 24,773 327,374 24,773 327,374
16.4 Transaction fees
The transaction fees of R8.6 million mainly comprise the abort fees incurred in respect of the cancellation of the Foskor listing. The 2010 transaction
fees of R27,7 million comprises legal and advisory fees incurred with respect to the BEE transaction.
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GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
17 FINANCE LEASE LIABILITY
Gross nance lease liability - Minimum lease payments:
Not later than one year 5,266 6,396 5,266 6,396
Later than one year and not later than ve years 17,382 18,750 17,382 18,750
Later than ve years 20,019 23,916 20,019 23,916
42,667 49,062 42,667 49,062
Future nance charges on nance lease (20,574) (24,160) (20,574) (24,160)
Present value of nance lease liability 22,093 24,902 22,093 24,902
Less current portion (2,084) (2,810) (2,084) (2,810)
Long-term portion of nance lease liability 20,009 22,092 20,009 22,092
Present value of nance lease liability is as follows:
Not later than one year 2,084 2,810 2,084 2,810
Later than one year and not later than ve years 7,510 7,761 7,510 7,761
Later than ve years 12,499 14,331 12,499 14,331
22,093 24,902 22,093 24,902
The nance lease is between Foskor (Pty) Ltd and uMhlathuze Water Board for an efuent pipeline. The lease liability is effectively secured, as the rights
to the leased asset revert to the lessor in the event of default. The lease is over a 20-year period with 15 years remaining as at 31 March 2011. Foskor
has sole use of the efuent pipeline and pays for the maintenance. The lease is at a xed rate of 14,4% per annum.
18 ENVIRONMENTAL REHABILITATION LIABILITY
Foskor (Pty) Ltd continually contributes to the Environmental Rehabilitation Trust, to ensure that adequate funds are available to pay for mine closure
and reclamation costs. The Environmental Rehabilitation Trust is an irrevocable trust under the companys control. This note compares the net present
value of the rehabilitation liability to the assets held by the Trust. Refer to the Mine Site Rehabilitation and Closure Section of this report.
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18 ENVIRONMENTAL REHABILITATION LIABILITY (Continued) GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
18.1 Mining environmental rehabilitation liability
Balance at the beginning of the year 214,307 206,623 214,307 206,623
Unwinding of discount 23 6,304 - 6,304 -
Adjustment to the liability 3 9,235 7,684 9,235 7,684
Balance at the end of the year 229,846 214,307 229,846 214,307
Environmental Rehabilitation Trust
Balance at the beginning of the year 84,794 69,558 84,794 69,558
Movement recognised in prot and loss 23 6,739 7,236 6,739 7,236
Investments held by the Trust 91,533 76,794 91,533 76,794
Cash contribution made to the Trust 8,000 8,000 8,000 8,000
Total assets held by the Trust (refer to Note 8) 99,533 84,794 99,533 84,794
Unfunded portion of rehabilitation liability 130,313 129,513 130,313 129,513
The nancial assets held by the Trust are intended to fund the environmental rehabilitation liability of Foskor (Pty) Ltd and are not available for general
purposes of the group. The objective of the Trust is to act as the nancial provider for expenditure that its member, Foskor (Pty) Ltd, is likely to incur in
order to comply with the statutory obligation for the environmental rehabilitation. The Trust is exempt from tax in accordance with Section 10(1)cP of
the Income Tax Act (No. 58 of 1962).
The directors are aware of the estimated cost of rehabilitation and are satised that adequate provision is being made to meet this obligation. A
contingent liability has been recognised for the issuing of guarantees to the Department of Mineral Resources (refer to Note 31.2).

18.2 Groundwater contamination - Richards Bay
Foskor, in consultation with the Department of Water and Environmental Affairs (DWEA), continues to monitor the groundwater situation while solutions
are being developed for approval by the DWEA for implementation. In the current year, ended 31 March 2011, R11,6 million was spent on this project.
In the nancial statements for the year ended 31 March 2011 an amount of R18,2 million has been accrued for the groundwater rehabilitation costs,
as estimated by an independent external expert.
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
Groundwater contamination accrual at year-end 18,225 29,787 18,225 29,787
Total environmental liability 248,071 244,094 248,071 244,094
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GROUP AND COMPANY
2011 2010 2009 2008 2007
R000 R000 R000 R000 R000
19 RETIREMENT BENEFIT OBLIGATIONS
Liabilities included in the statement of nancial position:
Pension benets - -
Post-employment medical benets 97,657 83,700
Liability in the statement of nancial position 97,657 83,700
Amounts recognised in prot and loss: (refer to Note 22)
Pension benets - -
Post-employment medical benets 13,957 16,678
13,957 16,678
19.1 Pension benets
The group has established a post-employment pension scheme covering certain employees who were employed by the company prior to 1995. The
pension fund is funded by plan assets. The assets of the fund are held in an independent trustee-administered fund. The liability is valued every year
using the projected unit credit method. The latest actuarial valuation was performed on 31 December 2010.
The amounts recognised in the statement of nancial position are determined as follows:
Present value of funded obligations 340,692 320,289 313,968 319,181 278,090
Fair value of plan assets (335,741) (328,189) (298,447) (324,340) (313,654)
4,951 (7,900) 15,521 (5,159) (35,564)
Pension fund unrecognised surplus/(obligation) (4,951) 7,900 (15,521) 5,159 35,564
Contribution to plan assets - After 31 December - - 14,000
Liability in the statement of nancial position at 31 March - - (1,521)
Experience adjustments on plan liabilities 15,878 11,567 (7,122) 47,049 46,182
Experience adjustments on plan assets 6,398 19,446 (30,012) 9,098 34,692
The movement in the dened benet obligation over the year is as follows:
At 1 January 320,289 313,968
Current service cost 896 646
Interest cost 31,668 22,505
Contributions by plan participants 204 189
Actuarial losses 15,878 11,378
Benets paid (28,243) (28,397)
At 31 December 340,692 320,289
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19 RETIREMENT BENEFIT OBLIGATIONS (Continued) GROUP AND COMPANY
2011 2010 2009 2008 2007
R000 R000 R000 R000 R000
The movement in the fair value of plan assets over the year is as follows:
At 1 January 328,189 298,447
Expected return on plan assets 29,047 22,764
Actuarial gains 6,398 19,446
Employer contributions 542 15,740
Contributions by plan participants 204 189
Expenses and adjustments (396) (679)
Benets paid (28,243) (27,718)
At 31 December 335,741 328,189
The interest rate assumption is derived with reference to the ALBI long-term yield at 31 December 2010 and the asset distribution of the Fund. At
31 December 2010 the ALBI interest yield (over 12 years) was 8,66% annualised. This has been used for xed interest assets with a margin of 1,5%
lower for cash and 1,5% higher for equities and foreign investments. These are weighted by the actual asset distribution at the valuation date.
The actual return on plan assets was:
Expected return on plan assets 29,047 22,764
Actuarial gains on plan assets 6,398 19,446
Actual return on plan assets 35,445 42,210
Plan assets are comprised as follows:
Equity instruments 34,79% 42,80%
Cash 30,46% 27,00%
Debt instruments 11,36% 10,40%
Other 23,39% 19,80%
100,00% 100,00%
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136
2011 2010 2009 2008 2007
R000 R000 R000 R000 R000
The principal actuarial assumptions used were as follows:
- Discount rate 8,50% 9,25%
- CPI ination rate 5,75% 5,75%
- Expected return on plan assets 8,50% 7,50%
- Future salary increases 6,75% 6,75%
- Future pension increases 4,89% 4,89%
- Normal retirement age 60 60
- Pre-retirement mortality: Males SA85-90 (light) SA85-90 (light)
- Pre-retirement mortality: Females SA85-90 (light) SA85-90 (light)
with a 3-year with a 3-year
age deduction age deduction
- Post-retirement mortality PA90-2 PA90-2
The sensitivity of the overall pension liability to changes in the weighted principal assumptions is:
IMPACT ON OVERALL LIABILITY
Ination rate (increase of 1%) 8% increase 8% increase
Ination rate (decrease of 1%) 7% decrease 7% decrease
The expected contributions to the post-employment pension scheme for the year ending 31 March 2012 are R436,000.
19.2 Post-employment medical obligation
The group provides post-employment health care benets to its retirees who were employed by the company on or before 1 July 1995. The same
benets are provided to a specic group of employees employed before 1 July 1996.
The group operates a post-employment medical obligation scheme, which is held in an independent trustee-administered fund. The liability is valued
every year using the projected unit credit method. The latest actuarial valuation was performed on 31 March 2011.
In addition to the assumptions set out above, the principal actuarial assumptions for the medical obligation were:
- Discount rate 9,00% 9,25%
- General ination rate 6,25% 5,75%
- Medical ination rate 7,75% 7,25%
- Normal retirement age 60/65 60/65
- Expected rate of salary increases 7,25% 6,75%
- Pre-retirement mortality SA85-90 (light) SA85-90 (light)
- Post-retirement mortality PA90-2 PA90-2
The amounts recognised in the statement of nancial position are determined as follows:
Present value of unfunded obligations 97,657 83,700 67,022 67,000 68,234
Liability in the statement of nancial position 97,657 83,700 67,022 67,000 68,234
137
2011 2010 2009 2008 2007
R000 R000 R000 R000 R000
The movement in the dened benet obligation over the year is as follows:

At 1 April 83,700 67,022
Contributions paid (5,007) (3,198)
At 31 March 97,657 83,700

The amounts recognised in prot and loss were as follows:
Contributions paid (5,007) (3,198)
Total, included in staff costs (refer to Note 22) 13,957 16,678

Change in past- Change in service
service liability cost plus
interest cost
Ination rate (increase of 1%) 13,5% increase 13,9% increase
Ination rate (decrease of 1%) 11,2% decrease 11,5% decrease

The expected contributions to post-employment medical plans for the year ending 31 March 2012 are R 5,5 million.
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138
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
20 TRADE AND OTHER PAYABLES
Trade payables 285,586 115,809 283,891 114,762
Accrued expenses 268,511 245,615 268,511 245,615
Leave 26,960 24,445 26,960 24,445
Sundry payables
1
10,819 20,549 10,819 20,540
BHP Billiton South Africa Ltd refund
2
11,378 11,378 11,378 11,378
603,254 417,796 601,559 416,740

1
Sundry payables as at 31 March 2011 comprise mainly R4,5 million payable for 13th cheque bonuses and also includes R3,1 million deferred grant
income. For the year ended 31 March 2010 sundry payables mainly comprise R11,9 million VAT payable and R4,2 million provision for shortfall on
the export storage tonnages.

2
This amount relates to a refund due to BHP Billiton South Africa Ltd from a joint project between Foskor and BHP Billiton South Africa Ltd. The
amount will be nalised following the completion of the Foskor tax assessments. The refund has no contractual repayment terms, and is unsecured
and interest free.
21 PROVISIONS FOR OTHER LIABILITIES AND CHARGES
Bonus 101,113 57,859 100,000 57,766
Demurrage
3
2,649 10,624 2,649 10,624
Total 103,762 68,483 102,649 68,390
Movement in the bonus provision
At 1 April 57,859 71,053 57,766 71,053
Additional provisions 85,579 66,070 84,466 65,977
Utilised during period (42,325) (79,264) (42,232) (79,264)
At 31 March 101,113 57,859 100,000 57,766
Movement in the demurrage provision
At 1 April 10,624 4,433 10,624 4,433
Additional provisions 8,884 26,003 8,884 26,003
Utilised during period (16,859) (19,812) (16,859) (19,812)
At 31 March 2,649 10,624 2,649 10,624
Analysis of total provisions:
Non-current - - - -
Current 103,762 68,483 102,649 68,390
103,762 68,483 102,649 68,390

3
Demurrage is a penalty payable to a ship owner if the agreed loading time is not honoured.
139
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
22 OPERATING PROFIT
Operating prot is arrived at before nance income, nance costs, and net foreign exchange gains after taking into account:
Income
Reversal of impairment - 323,000 - 323,000
Expenditure
Loss on disposal of property, plant and equipment 1,470 3,659 1,494 3,629
Amortisation of intangible assets
- Software 1,242 1,108 1,242 1,108
Auditors remuneration 4,443 4,216 4,428 4,216
- Audit fee 2,905 2,451 2,890 2,451
- Other services 1,225 1,500 1,225 1,500
- Expenses 313 265 313 265
Depreciation 210,556 172,550 210,448 172,463
- Mining assets, land and buildings 28,560 24,480 28,452 24,090
- Plant, equipment and vehicles 177,905 143,979 177,905 144,282
- Aircraft 4,091 4,091 4,091 4,091
Operating lease charges 4,078 6,244 4,078 6,244
- Property rentals 1,997 1,423 1,997 1,423
- Equipment 2,081 4,821 2,081 4,821
Repairs and maintenance 431,058 375,950 431,057 375,950
Share-based payment expense 24,773 327,374 24,773 327,374
Staff costs 693,380 603,985 693,380 603,985
- Salaries and wages 484,078 432,345 484,078 432,345
- Bonus 95,684 57,859 95,684 57,859
- Pension costs: Dened contribution plans 45,093 40,857 45,093 40,857
- Increase in post-employment medical liability (refer to Note 19) 13,957 16,678 13,957 16,678
- Other staff costs 54,568 56,246 54,568 56,246
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140
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
23 FINANCE INCOME AND COST
Interest expense:
- Bank borrowings (16,290) (1,833) (16,290) (1,833)
- Finance lease liabilities (3,586) (4,027) (3,586) (4,027)
- Unwinding of discount on the environmental liability (Note 18.1) (6,304) - (6,304) -
- Interest paid - Other (1,599) (42,390) (1,599) (42,390)
Total nance cost (27,779) (48,250) (27,779) (48,250)
Finance income:
- Interest income from banks 17,739 54,208 16,838 52,860
- Interest income Other - 14,594 - 14,594
Finance income 17,739 68,802 16,838 67,454
Environmental Rehabilitation Trust investment
- Growth in investment (Note 18.1) 6,739 7,236 6,739 7,236
Total nance income 24,478 76,038 23,577 74,690
Net nance (cost)/income (3,301) 27,788 (4,202) 26,440
24 NET FOREIGN EXCHANGE GAINS
The exchange differences (charged)/credited to prot and loss are included as follows:
Foreign transaction losses (5,491) (165,472) (5,491) (165,472)
- Foreign exchange transaction losses (5,491) (162,066) (5,491) (162,066)
- Derivative instruments - (3,406) - (3,406)
Foreign transaction prots 32,256 192,745 32,176 192,725
- Foreign exchange transaction prots 32,256 154,517 32,176 154,497
- Derivative instruments - 38,228 - 38,228
Net foreign exchange gains 26,765 27,273 26,685 27,253

141
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
25 INCOME TAX EXPENSE
Tax charge:
South African normal income tax
Normal current tax:
- Current tax on prots for the year - (52) - -
- Adjustment in respect of prior years - 2,121 - 2,121
Total normal current tax - 2,069 - 2,121
Deferred tax
- Current deferred tax on prots for the year 158,011 (114,508) 159,388 (114,677)
- Adjustment in respect of prior years - 5,379 - 5,379
Total deferred tax 158,011 (109,129) 159,388 (109,298)
Total tax charge 158,011 (107,060) 159,388 (107,177)
Reconciliation of tax rate
Standard tax rate 28.00% 28.00% 28.00% 28.00%
Non-deductible expenses 1.81% 209.91% 1.80% 208.05%
Prior year under-provision - Income and deferred tax -0.25% -15.57% -0.19% -15.44%
Effective rate 29.56% 222.34% 29.61% 220.61%
26 EARNINGS PER SHARE
26.1 Basic earnings per share - Rands 41.14 (6.39)
Basic earnings per share is calculated by dividing the prot attributable to equity holders of the company/group by the weighted average number of
ordinary shares in issue during the year excluding ordinary shares purchased by the company and held as treasury shares.
Prot attributable to equity holders of the company 376,753 (58,518)
Weighted average number of ordinary shares in issue 9,157,647 9,157,647
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142
26 EARNINGS PER SHARE (Continued) GROUP
2011 2010
R000 R000
26.2 Diluted earnings per share - Rands 41.14 (6.39)
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The company has no dilutive potential ordinary shares.
Prot attributable to ordinary shareholders of the company 376,753 (58,518)
Prot used to determine diluted earnings per share 376,753 (58,518)
Weighted average number of ordinary shares in issue 9,157,647 9,157,647
Weighted average number of ordinary shares for diluted earnings per share 9,157,647 9,157,647

26.3 Headline earnings per share (net after tax) Rands 41.69 (29.80)
Headline earnings per share is calculated on the basis of adjusted net earnings attributable to ordinary shareholders of R381,811,000 (2010:
(R272,939,000)) for the group and R382,838,000 (2010: (R273,058,000)) for the company; and 9,517,647 (2010: 9,517,647) shares being the
weighted average number of ordinary shares in issue during the year.
Net prot attributable to ordinary shareholders from continuing operations
is reconciled to headline earnings as follows: 376,753 (58,518)
Adjustments (gross):
Impairment reversal - (301,467)
Loss on disposal of property, plant and equipment 1,470 3,659
Loss on sale of associate 5,554 -
Total adjustments 7,024 (297,808)
Headline earnings (gross before tax) 383,777 (356,326)
Net prot attributable to ordinary shareholders from continuing operations
is reconciled to headline earnings as follows: 376,753 (58,518)
Adjustments (net):
Impairment reversal - (217,056)
Loss on disposal of property, plant and equipment 1,058 2,634
Loss on sale of associate 3,999 -
Total adjustments 5,057 (214,421)
Headline earnings (net after tax) 381,811 (272,939)
143
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
27 CASH GENERATED FROM OPERATIONS
Reconciliation of prot for the year:
Prot before taxation 534,764 48,542 538,350 48,562
Adjustments for:
- Depreciation 210,556 172,550 210,449 172,463
- Amortisation of intangible assets 1,242 1,108 1,242 1,108
- Loss on disposal of property, plant and equipment 1,470 3,659 1,494 3,629
- Movement in ground water contamination accrual (11,562) (2,213) (11,562) (2,213)
- Environmental rehabilitation liability non-cash unwinding of discount 6,304 - 6,304 -
- Adjustment for non-cash interest received on the rehabilitation trust (6,739) (7,236) (6,739) (7,236)
- Post-employment obligation growth 13,957 15,157 13,957 15,157
- Decrease in ore stockpile - 11,412 - 11,412
- Impairment reversal - (323,000) - (323,000)
- Share-based payment expense 24,773 327,374 24,773 327,374
- Realised foreign exchange prots on operating activities (19,572) (17,522) (19,492) (17,542)
- Net nance cost/(income) 3,301 (27,788) 4,203 (26,439)
- Investment income (4,482) (3,932) (4,482) (3,932)
- Losses from sale of shares in associate 5,554 - 3,889 -
- (Income)/losses from associate (2,925) 310 - -
Changes in working capital:
Inventory and ore raw materials increase (335,927) (78,015) (335,927) (78,015)
Trade and other receivables (increase)/decrease (219,369) 1,155,463 (222,681) 1,157,129
Derivative nancial assets increase (3,990) (14,774) (3,990) (14,774)
Trade and other payables increase/(decrease) 185,458 (211,646) 184,819 (212,434)
Other provisions increase/(decrease) 35,279 (14,366) 34,259 (14,459)
Total changes in working capital (338,548) 836,662 (343,518) 837,447
Cash generated from operations 418,095 1,035,083 418,869 1,036,789
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144
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
28 BORROWING FACILITIES
Rand-denominated facilities
Long-term interest-bearing facilities:
Total facility 1,000,000 1,000,000 1,000,000 1,000,000
Utilised (107,031) - (107,031) -
Available 892,969 1,000,000 892,969 1,000,000
The R1 billion is a long-term interest-bearing facility granted by the Industrial Development Corporation Ltd. R100 million of the total facility has been
utilised. The amount is repayable in ten equal bi-annual installments commencing on 1 April 2012. Interest payable on the loan is calculated at a rate
of South African prime plus one point two percent per annum (prime + 1,2%). Terminal Drawing Date for the unutilised portion is 31 January 2012. The
fee for unutilised funds is calculated at 0,5% per annum.
Short-term interest-bearing facilities:
Total committed facility 200,000 200,000 200,000 200,000
Utilised - - - -
Available 200,000 200,000 200,000 200,000
Guarantees:
Total facility from banks 571,210 550,000 570,000 550,000
Utilised (refer to Note 31.1) (393,192) (390,471) (391,972) (390,471)
Available 178,018 159,529 178,028 159,529
Letters of credit:
Total facility from banks 490,000 780,000 490,000 780,000
Utilised (119,351) (51,959) (119,351) (51,959)
Available 370,649 728,041 370,649 728,041
145
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
29 COMMITMENTS
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not
yet incurred is as follows:
Property, plant and equipment 167,038 591,875 167,038 591,875
Total capital commitments 167,038 591,875 167,038 591,875
Operating lease commitments
The future minimum lease payments payable under non-cancellable
leases are as follows:
Payable not later than one year 660 1,752 660 1,752
Payable later than one year and not later than ve years - 755 - 755
660 2,507 660 2,507
The lease for the head ofce premises in Midrand commenced on 1 September 2008 and expires at the end of August 2011 with an option to extend.
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146
2011 2010
Estimated Carrying Estimated Carrying
fair value value fair value value
Note R000 R000 R000 R000
30 FINANCIAL INSTRUMENTS
Group
Financial assets
The carrying amount and fair values of nancial assets are as follows:
Available-for-sale investments
Financial assets investments 8.1.1, 8.1.2 301,474 301,474 198,662 198,662
Loans and receivables
Other loans and receivables 10 161,944 161,944 105,121 105,121
Cash and cash equivalents 12 404,063 404,063 517,542 517,542
At fair value through prot and loss
Total assets 1,271,953 1,271,953 1,058,750 1,058,750
Liabilities
Financial liabilities at amortised cost
Trade payables (including accrued expenses) 20 554,097 554,097 361,424 361,424
Other payables (excluding leave provision) 20 22,197 22,197 31,927 31,927
Total liabilities 599,143 599,143 418,498 418,498
Company
Financial assets
The carrying amount and fair values of nancial assets are as follows:
Financial assets investments 8.1.1, 8.1.2 301,474 301,474 198,662 198,662
Loans and receivables
Other loans and receivables 10 161,353 161,353 104,509 104,509
Total assets 1,267,755 1,267,755 1,050,565 1,050,565
Liabilities
Financial liabilities at amortised cost
Trade payables (including accrued expenses) 20 552,402 552,402 360,377 360,377
Other payables (excluding leave provision) 20 22,197 22,197 31,918 31,918
Total liabilities 597,448 597,448 417,442 417,442
147
30 FINANCIAL INSTRUMENTS (Continued) 2011
Level 1
1
Level 2
2
Total
Note R000 R000 R000
The fair value of nancial assets and liabilities is determined by reference to the quoted market price; otherwise the carrying value approximates their
fair value. An analysis of nancial assets and liabilities carried at fair value is set out below:
Assets
Financial assets investments (excluding unit trusts) 8.1 211,400 - 211,400
Derivative nancial instruments 11 - 5,815 5,815
211,400 5,815 217,215
Liabilities
Derivative nancial instruments 11 - 756 756
1
Valued using unadjusted quoted prices in active markets for identical nancial instruments. This category includes exchange-traded derivatives.
2
Valued using techniques based signicantly on observable market data. Instruments in this category are valued using valuation techniques where all
of the inputs that have a signicant effect on the valuation are directly or indirectly based on observable market data.
Financial risk management
The principal nancial risks arising from the group activities are credit risk, liquidity risk and those related to market risk (price risk, currency risk and
interest rate risk).
The groups overall risk management programme focuses on the unpredictability of nancial markets and seeks to minimise potential adverse effects
on the groups nancial performance. The group uses derivative nancial instruments to hedge certain risk exposures. The groups nancial instruments
are set out above.
30.1 Market risk management
30.1.1Foreign currency risk management
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollar.
Foreign exchange risk arises from future commercial transactions or recognised assets and liabilities that are denominated in a currency that is not the entitys
functional currency. Approximately 67% of the foreign-denominated revenue transactions are covered by forward exchange contracts and zero-cost collar
option contracts. These contracts are entered into to cover export earnings of which the proceeds are not yet receivable.
The import of raw materials amounting to approximately a third of foreign-denominated revenue transactions is regarded as a natural hedge, which is
considered sufcient to mitigate the remaining risk.
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148
30 FINANCIAL INSTRUMENTS (Continued) GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
30.1.1 Foreign currency risk management
Details of the contracts are as follows:
Forward exchange contracts
Denominated in United States Dollars (export notional amount) 26,500 8,500 26,500 8,500
Denominated in United States Dollars (import notional amount) (5,500) (5,300) (5,500) (5,300)
Average exchange rate as per contract R 7.01 R 7.46 R 7.01 R 7.46
Derivative option contracts
Denominated in United States Dollars (notional amount) - - - -
Spot rate at year-end R/$ R 6.79 R 7.34 R 6.79 R 7.34
The following receivable and payable balances are exposed to exchange rate
movements:
Receivables (less than one year)
US$ denominated balances at year-end - $000 36,279 24,764 36,279 24,764
Rand equivalent balances at year-end - R000 246,334 181,768 246,334 181,768
Payables (less than one year)
US$ denominated balances at year-end - $000 30,950 11,854 30,950 11,854
Rand equivalent balances at year-end - R000 210,150 87,008 210,150 87,008
At 31 March 2011 if the Rand had weakened by 10% against the US Dollar with all other variables held constant, the prot before taxation for the group
for the year would have been R3,6 million higher (2010: R9,5 million higher); conversely, if the Rand had strengthened by 10% against the US Dollar
with all other variables held constant, the prot before taxation for the group would have been R3,6 million less (2010: R9,5 million less).
This sensitivity analysis considers the impact of a change in the Rand vs. US Dollar exchange rate on the translation of US Dollar denominated trade
receivables and trade payables, as well as the fair value of open derivative contracts at year-end.
30.1.2 Interest rate risk management
As part of an ongoing restructuring of the borrowing mix and interest rate characteristics of borrowings, the group restructures funding of operating
capital as appropriate. The group is exposed to cash ow interest rate risk in respect of cash and cash equivalents that earn interest at a variable rate
and short and long term loans.
The group invests cash funds on call and in xed short-term interest-bearing deposits. Interest on these deposits is linked to the prime interest
rate.
The group secured R1,2 billion worth of borrowing facilities during the year. The Group borrows funds on a variable contract basis. The utilised facilities
attracted interest linked to South African prime rate and Jibar rate.
149
2011 2010 2011 2010
Note R000 R000 R000 R000
Long-term interest bearing loan 28 (107,031) - (107,031) -
Net amount 297,032 517,542 295,545 515,380
At 31 March 2011 if interest rates on nancial instruments had been 1% lower with all other variables remaining constant, the pre-tax prot for the year
would have been R3 million lower (2010: R5 million lower); conversely, if interest rates had been 1% higher with all other variables remaining constant,
the pre-tax prot for the year would have been R3 million higher (2010: R5 million higher).
30.1.3 Price risk management
Commodity and share price risk
Changes in phosphoric acid, fertiliser, sulphur and ammonia prices may have an adverse effect on current or future earnings. The phosphoric acid,
fertiliser, sulphur and ammonia markets are predominantly priced in US Dollars, which further exposes the group to the risk that uctuations in the SA
Rand/US Dollar exchange rate, which may also have an adverse effect on current or future earnings.
Some of the risk of changes in the price of these commodities is hedged by entering into xed contracts with customers and suppliers and derivative
option contracts. As at 31 March 2011 and 31 March 2010, the group did not hold any commodity-based nancial instruments.
The risk associated with listed equity investments is the change in equity prices resulting in changes in the fair values of the investments. Unit trusts
and other investments (refer to Note 8) are actively managed by reputable fund managers and are held in conservative portfolios, which guarantees
return of the capital amount invested.
GROUP COMPANY
2011 2010 2011 2010
R000 R000 R000 R000
Listed investments (excluding unit trusts)
Fair value at 31 March 8.1 211,400 123,065 211,400 123,065
The equity investments are listed on the Bombay Stock Exchange in India and on the JSE in South Africa. A 5% decrease in the share index at the
reporting date, with all other variables held constant, would have decreased equity by R10,6 million (2010: R6,2 million); conversely, a 5% increase in
the share index at the reporting date, with all other variables held constant, would have increased equity by R10,6 million (2010: R6,2 million).
30.2 Credit risk management
Credit risk arises from cash and cash equivalents, derivative nancial instruments and outstanding receivables.
The group limits its investments and deposits to a maximum of R500 million per nancial institution with AA+ rating by Fitch, and R200 million per
nancial institution with rating of AA-. Increase in such limits is subject to approval by the Board of Directors. Surplus funds available on transactional
bank accounts are deposited in short-term high interest yielding investments.
The group manages credit risk on accounts receivable by xing payment terms on open accounts and selling on letters of credit to foreign
customers. Stringent credit assessments are employed before allowing credit sales with customers. At year-end customers are assessed individually
for impairment.
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150
2011 2010 2011 2010
Note R000 R000 R000 R000
Recoverability for the outstanding amount can be analysed as follows:
Trade receivables
Fully performing
- Outstanding for less than 60 days 403,559 229,466 399,531 224,055
- Outstanding for more than 60 days but less than 120 days 2,096 1,579 487 1,622
Past due and impaired
- Outstanding for more than 120 days (6,998) 5,066 (3,481) 5,023
Total 10 398,657 236,111 396,537 230,700
Major foreign debtors - Account balance
Mangalore Chemicals and Fertilisers Ltd 18,602 24,313 18,602 24,313
Intermaritime 22,722 - 22,722 -
Coromandel International Ltd 48,318 - 48,318 -
Gujarat State Fertilizers 103,608 90,544 103,608 90,544
Thermphos International BV 27,097 34,107 27,097 34,107
220,347 148,964 220,347 148,964
Cash and cash equivalents on hand 12 404,063 517,542 402,576 515,380
The group does not hold any collateral, nor has it pledged any nancial assets as collateral for any of its obligations. No contracts that were past due
have been renegotiated. Maximum exposure to credit risk is in the carrying amount of all nancial assets.
30.3 Liquidity risk management
Prudent liquidity risk management implies maintaining sufcient cash and marketable securities, the availability of funding through an adequate amount
of committed credit facilities and the ability to close out market positions.
Liquidity risk arises from existing obligations associated with the industry and the requirements to raise funds in order to meet these obligations. The
group manages liquidity by monitoring forecasted cash ows and ensuring that adequate unutilised borrowing facilities are available if necessary. The
group secured committed borrowing facilities of R1,2 billion. R1,1 billion of the facility remained unutilised at 31 March 2011. The Group negotiates
short-term general borrowing facilities annually with approved banks. R200 million of the total short-term borrowing facility was committed during the
year for 12 months renewable annually.
Long-term obligations include a loan from the holding company. There is no security or collateral written against the loan. It is repayable in ten bi-annual
equal instalments commencing 1 April 2012. The group has written open-ended guarantees with the approved banks in favour of various beneciaries
for operating and compliance reasons. (Refer to Note 31.)
151
2011 2010 2011 2010
Note R000 R000 R000 R000
Short-term obligations mainly include amounts payable to the trade creditors and derivative liability instruments. The derivative instrument obligations
are hedged by underlying transactions. Current years trade payables can be analysed as follows:
Trade payables
- Due in less than 60 days 223,053 99,944 221,358 98,897
- Due in more than 60 days but less than 120 days 31,925 2,077 31,925 2,077
- Due in more than 120 days 30,608 13,787 30,608 13,788
20 285,586 115,809 283,891 114,762
Other payables
- Due in less than 60 days 20 279,330 245,615 279,330 245,615
- Sundry payables due in less than 60 days 20 10,819 20,549 10,819 20,540
BHP Billiton South Africa Ltd payable 20 11,378 11,378 11,378 11,378
Derivative nancial instrument 12 756 245 756 245
Long-term loan (Industrial Development Corporation Ltd) 28 107,031 - 107,031 -
Total 694,900 393,596 693,205 392,540
Maturity dates for the derivative instruments are within 12 months. The loan is repayable from 1 April 2012 in ten bi-annual equal instalments.
30.4 Capital risk management
The groups objectives when managing capital are to safeguard the groups ability to continue as a going concern, in order to provide returns for share-
holders and benets for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. The groups capital includes share
capital and share premium.
In order to maintain the capital structure, the group may issue new shares, adjust dividend amounts payable to shareholders, or return capital to
shareholders.
GROUP COMPANY
2011 2010 2011 2010
Note R000 R000 R000 R000
Share capital 9,158 9,158 9,158 9,158
Share premium 132,013 132,013 132,013 132,013
Capital 14 141,171 141,171 141,171 141,171
There were no changes to the groups approach to capital management during the year. The company is not subject to externally imposed capital
requirements.
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GROUP COMPANY
2011 2010 2011 2010
Note R000 R000 R000 R000
31 GUARANTEES AND CONTINGENT LIABILITIES
31.1 Guarantees
Guarantees issued by the group to various beneciaries amount to R393 million (2010: R390 million).
Details and beneciary
Mine rehabilitation - Department of Mineral Resources (refer to Note 18) 365,090 365,090 365,090 365,090
Water and electricity supply - Richards Bay Transitional Local Council 12,432 12,432 12,432 12,432
Rail transport of phosphate rock and granular fertiliser - Transnet Ltd 15,220 12,499 14,000 12,499
Various ZAR denominated guarantees - Various 450 450 450 450
Total 28 393,192 390,471 391,972 390,471
Refer to the Directors Report and to the Mine site rehabilitation and closure costs section of the Corporate Governance Report, on responsibilities
and guarantees in respect of the mine rehabilitation.
31.2 Contingent liabilities
Mine rehabilitation guarantees
The group had mine rehabilitation guarantees amounting to R365 million at year-end (refer above). In line with the requirements set out by the
Department of Mineral Resources (DMR), this amount of R365 million (2010: R365 million) was in place at 31 March 2011. These guarantees and
the agreement reached with the DMR were based on the environmental rehabilitation and closure costs assessment that was performed during the
2011 nancial year. The assessments are performed on a three-year rolling basis, with the next assessment due in 2013. Estimated scheduled closure
costs for the mine are R409 million. For unscheduled or premature closure, the DMR, in accordance with the Minerals and Petroleum Resources
Development Act, requires Foskor (Pty) Ltd to provide for the liability of R486 million in the form of guarantees and cash.
32 GROUP SEGMENTAL REPORTING
32.1 Segment information
Management has determined the operating segments based on the reports reviewed by the Executive Committee that are used to make strategic
decisions.The Executive Committee considers the business primarily from a product perspective. The products are segmented into phosphate rock
and copper (Phalaborwa) and phosphoric acid and granular (Richards Bay).
Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, prepaid tax, trade and other receivables and cash
and cash equivalents. Segment liabilities comprise non-current and current liabilities.
Capital expenditure comprises additions to property, plant and equipment (refer to Note 3) and intangible assets (refer to Note 4).
153
32 GROUP SEGMENTAL REPORTING (Continued)
Phalaborwa Richards Bay Total
Phosphate Copper Phosphoric Granular
rock acid
2011 2011 2011 2011 2011
Rm Rm Rm Rm Rm
Total segment revenue 2,413 7 3,294 890 6,604
Inter-segment revenue (1,993) - - - (1,993)
Revenue from external customers 420 7 3,294 890 4,611
Earnings before interest and tax (EBIT) 412 - 255 - 667
Depreciation and amortisation 115 - 95 - 210
Reportable segment assets 3,008 - 2,449 - 5,457
Capital expenditure for reportable segment
non-current assets 450 - 146 - 596
Reportable segment liabilities 594 - 553 - 1,147
Phalaborwa Richards Bay Total
Phosphate Copper Phosphoric Granular
rock acid
2010 2010 2010 2010 2010
Rm Rm Rm Rm Rm
Total segment revenue 2,418 151 2,057 890 5,516
Inter-segment revenue (2,051) - - - (2,051)
Revenue from external customers 367 151 2,057 890 3,465
Earnings before interest and tax (EBIT) 659 151 (348) - 462
Depreciation and amortisation 89 - 84 - 173
Impairment charge - - 323 - 323
Reportable segment assets 2,297 - 2,412 - 4,709
Capital expenditure for reportable segment
non-current assets 677 - 147 - 824
Reportable segment liabilities 464 - 353 - 817
32.2 Reconciliation of reportable segment EBIT to group prot before tax is provided as follows:
The Executive Committee assesses the performance of the operating segments based on a measure of adjusted earnings before interest and tax
(EBIT). Segment EBIT equals segment revenue less segment expenses, which include costs of sales and other operating costs. This measurement
basis excludes the effects of allocated corporate expenditure. Interest income and expenditure, as well as foreign exchange gains and losses, are not
allocated to segments as this type of activity is driven by the central treasury function, which manages the cash position of the group.
The revenue from external parties reported to the Executive Committee is measured in a manner consistent with that of the income statement and there
were no reconciling items. Sales of phosphate rock between operating segments (Phalaborwa and Richards Bay) are carried out at arms length.
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2011 2010
R000 R000
Segmental earnings before interest and tax (EBIT) 667 462
Corporate expenses (155) (141)
Finance income 24 76
Finance costs (28) (48)
Net foreign exchange prots 27 27
Equity accounted losses - (327)
Group prot before tax 535 49
32.3 Reportable segment assets are reconciled to total group assets as follows:
The amounts provided to the Executive Committee with respect to the total assets are measured in a manner consistent with that of the nancial
statements. Deferred tax and derivative nancial instruments held by the group are not considered to be segment assets but rather are managed by
the central treasury function.
Segment assets for reportable segments 5,457 4,709
Unallocated:
Derivative nancial instruments 5 1
Other assets 316 85
Total group assets per the statement of nancial position 5,778 4,795
32.4 Reportable segment liabilities are reconciled to total liabilities as follows:

The amounts provided to the Executive Committee with respect to the total liabilities are measured in a manner consistent with that of the nancial
statements. Deferred tax and derivative nancial instruments are not considered to be segment assets but rather are managed by the central treasury
function.
Segment liabilities for reportable segments 1,147 817
Unallocated:
Deferred tax 601 443
Corporate and subsidiary liabilities 83 53
Total group liabilities per the statement of nancial position 1,832 1,313
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2011 2010
R000 R000
32.5 Geographical information
Geographical information - Revenues
1
India 1,734 1,488
South Africa 2,071 1,535
Europe 163 112
Middle East 133 -
Far East 344 117
Unites States 110 121
Other
2
56 92
Total external revenues 4,611 3,465
1
Revenues are attributable to countries on the basis of customer location.
2
This includes revenue generated by sales to customers based in Dubai, Zambia and other countries.

The group does not have non-current assets in any country other than its country of domicile (South Africa). Revenues of approximately R1,6 billion
(2010: R3.,billion) are derived from three external customers. These revenues are attributable to the Richards Bay segment.
33 RELATED PARTY TRANSACTIONS
33.1
Subsidiaries (refer to Note 5) Nature of business
Ownership
interest
Indian Ocean Fertilizer (Pty) Ltd
(South Africa)
The current Richards Bay operational segment of Foskor (Pty) Ltd was previously known as
Indian Ocean Fertilizer (Pty) Ltd. Currently the equity value of the company is the value of its
ordinary and preference share capital which is now wholly owned by Foskor (Pty) Ltd.
100%
Phosfert Marine (Pty) Ltd (South
Africa)
The companys objective is clearing and forwarding agents that provides services to Foskor
and other clients.
100%
Phosphate Shipping (Pty) Ltd The companys objective is ship brokerage whereby they earn commission from ship-owners
from whom Foskor and other clients charter vessels.
100%
Foskor Social Responsibility Trust The Trust was established in accordance with section 10(1) (cP) of the Income Tax Act of
1962. The objective of the Trust is for the benet of widows, widowers, orphans and social
responsibility projects in and around Richards Bay.
No shares
issued by
the Trust
IOF Property Trust (South Africa) The IOF Property Trust was registered during the 1998 nancial year in terms of the Trust
Property Control Act of 1988. The principal purpose of the Trust is to acquire properties in
Esikhawini, and to make these properties available for purchase by the employees of Foskor
Richards Bay or any other qualied person.
No shares
issued by
the Trust
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33 RELATED PARTY TRANSACTIONS (Continued)
33.2
Joint Venture (refer to Note 6) Nature of business
Ownership
Interest
Palfos Aviation (Pty) Ltd Aviation company - the companys major asset, an aircraft, was sold in June 2004.
The company is currently in the process of being deregistered.
50%
33.3
Associate (refer to Note 7) Nature of business
Share of
prots or
2011 R000
Ownership
Interest
Foskor Zirconia (Pty) Ltd Manufacturing of fused Zirconia 2,925 29.9%
Directors emoluments
The following table records the emoluments payable to the directors during the period:
33.4
Non-executive directors remuneration
Directors
fees
2011 R
Directors
fees
2010 R
A Albck,
P Ngwenya
A Vellayan
JM Modise
MG Qhena
4
G van Wyk
4
SS Ngoma
4
DS Phaho
F Madavo
M Booi
5
XGS Sithole
6
52,180
28,000
147,420
163,180
343,420
143,600
152,480
154,180
114,360
46,000
-
-
-
33,060
160,110
409,180
189,480
170,360
181,060
137,300
162,060
33,060
Total 1,344,820 1,475,670

1
Independent Director

2
Appointed 9 December 2010

3
Appointed 24 March 2011

4
All directors fees accrue directly to the Industrial Development Corporation Ltd and not to the director in his/her personal capacity

5
Resigned on 2 September 2010

6
Resigned 22 June 2009
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33.5 Executive directors and executive members remuneration
Rands Basic salary
Termination
benet
Performance
bonuses *
Contributions
to medical
aid, pension,
life, insurance
& UIF
Expenses
allowances/
Leave en-
cashment Total
MA Pitse**
JW Horn
TJ Koekemoer
G Skhosana
KM Cele
XS Luthuli
JWT Potgieter
MP Mosweu
SMS Sibisi
2,748,412
2,094,635
1,632,483
1,758,839
1,694,027
1,651,714
1,311,986
1,740,491
1,646,619
-
-
-
-
-
-
1,850,813
-
-
4,697,161
2,639,916
2,492,482
2,452,659
2,359,087
2,343,345
-
2,007,019
2,587,488
482,041
54,583
379,268
249,850
237,373
268,817
312,679
280,278
295,569
248,458
31,154
589
100,417
43,998
26,316
13,286
77,252
44,331
8,176,072
4,820,288
4,504,822
4,561,765
4,334,485
4,290,192
3,488,764
4,105,040
4,574,007
Total 16,279,206 1,850,813 21,579,157 2,560,458 585,801 42,855,435
33.5 Executive directors and executive members remuneration
Rands Basic salary
Termination
benet
Performance
bonuses *
Contributions
to medical
aid, pension,
life, insurance
& UIF
Expenses
allowances/
Leave en-
cashment Total
MA Pitse**
JW Horn
TJ Koekemoer
G Skhosana
KM Cele
XS Luthuli
JWT Potgieter
MP Mosweu
SMS Sibisi
2,927,877
1,941,553
1,521,490
1,809,254
1,584,463
1,547,416
1,523,923
1,632,699
1,500,703
-
-
-
-
-
-
-
-
-
1,647,725
939,196
870,214
861,947
829,687
813,740
830,596
694,268
919,335
414,240
29,454
331,801
213,302
190,466
214,309
322,305
209,208
247,782
1,200
24,192
15,717
102,724
60,240
17,543
15,256
56,515
-
4,991,042
2,934,395
2,739,222
2,987,227
2,664,855
2,593,008
2,692,080
2,592,690
2,667,820
Total 15,989,378 - 8,406,708 2,172,867 293,387 26,862,340
1
Resigned November 2010
* Represents amounts payable to executive members for achieving certain objectives that are aligned to the corporate objectives (targets). These
objectives are approved by the Board at the beginning of each period. The amount paid is based on the nancial, corporate and divisional
performance objectives.
** Executive director
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33.6
BEE Partners Shareholding in Foskor
Number of
Shares
% Holding
in the BEE
issued share
capital of
Foskor
Makana Energy Consortium (Pty) Ltd
Mgwali Investments (Pty) Ltd
Morning Tide Investments 390 (Pty) Ltd
Palama Phosphate Investment Company (Pty) Ltd
RSA Capital (Pty) Ltd
Umanyolo Investment Holdings (Pty) Ltd
Phalimpopo Investments (Pty) Ltd
DEC Investment Holdings (Pty) Ltd
AIH Investment Consortium (Pty) Ltd
Azara Foskor (Pty) Ltd
S B resources (Pty) Ltd
Podwala Investments (Pty) Ltd
265,309
73,177
105,145
167,166
194,717
116,201
75,322
75,322
75,322
75,322
75,322
75,322
19,34%
5,32%
7,65%
12,17%
14,17%
8,46%
5,48%
5,48%
5,48%
5,48%
5,48%
5,48%
Total 1,373,647 100,00%
No other transactions with the BEE partners were entered into during the current nancial year.
33.7 The following transactions were carried out with other related parties:
The group is controlled by the Industrial Development Corporation Ltd (IDC), which owns 59% of the companys shares. The remaining shares are
owned as follows:
- 15% by the Manyoro Consortium being Foskors Black Economic Empowerment partner (SA)
- 6% by the Kopano Foskor Employees Trust (SA)
- 5% by the Ba-Phalaborwa and uMhlatuze Community Trusts (SA)
- 14% by Coromandel International Ltd (India),
- 1% by Sun International FZE (UAE).
The IDC is controlled by the South African government. Therefore, the state and all entities controlled by the state are related parties as dened in IAS
24 (Related Party Disclosures).

159
Nature of relationship
2011
Receiving of
services
R000
Purchase of
goods
R000
Outstanding
balances
R000
Share-based
payment
transaction
R000
Total
R000
Shareholders
Industrial Development Corporation Ltd
Coromandel International Ltd
Sun International FZE
-
8,193
108,349
-
986,060
146,423
107,031
48,318
11,514
-
-
-
107,031
1,042,571
266,286
116,542 1,132,483 166,863 - 1,415,888
State-owned enterprises
Eskom Ltd
Transnet Ltd
Telkom Ltd
National Ports Authority
SA Post Ofce Ltd
201,692
602,101
2,317
21,278
1
-
-
-
-
-
15,506
59,257
323
7,547
-
-
-
-
-
-
217,198
661,358
2,640
28,825
1
Other
Odfjell Makana SA 201,332 - 12,439 - 213,771
1,028,721 - 95,072 - 1,123,793
Total related party transactions 1,145,263 1,132,483 261,935 - 2,539,681
1
A long-term borrowing facility of R1 billion was concluded with the Industrial Development Corporation Ltd during the year. R107 million of the facility
was utilised at year-end.
All outstanding balances payable are paid in accordance to Foskors payment terms. All outstanding receipts are received as per Foskor credit terms
on such sale transactions. There are no guarantees issued on any of the outstanding balances.
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Nature of relationship
2010
Receiving of
services
R000
Purchase of
goods
R000
Outstanding
balances
R000
Share-based
payment
transaction
R000
Total
R000
Shareholders
Industrial Development Corporation Ltd
Coromandel International Ltd
Sun International FZE
42
3,686
32,592
-
765,354
-
327,374
-
-
327,416
769,040
30,125
36,320 765,354 327,374 1,126,581
State-owned enterprises
Eskom Ltd
Transnet Ltd
South African Airways (Pty) Ltd
Telkom Ltd
National Ports Authority
SA Post Ofce Ltd
127,161
459,344
2,183
3,489
23,911
85
-
-
-
-
-
-
-
-
-
-
-
-
137,644
497,351
2,183
3,739
26,804
85
616,173 - - 667,806
Total related party transactions 652,493 765,354 327,374 1,794,387
The directors of Foskor (Pty) Ltd have no interest in contracts.
33.8 PENSION FUND
The group has established a post-employment pension scheme namely the Foskor Pension Fund, covering certain employees who were employed by
the company prior to 1995. For more details refer to Note 19.
-
-
(2,467)
(2,467)
10,483
38,007
-
250
2,893
-
51,633
49,166
161
Notice of the Annual General Meeting
FOSKOR (PTY) LIMITED
(Reg. No. 1951/002918/07)
NOTICE IS HEREBY GIVEN that the Sixty First Annual General Meeting of the members of the above company will be held at
Foskor (Pty) Ltd, 21 John Ross Parkway, Richards Bay on Friday, 24 June 2011 at 15:00.
1. To receive and consider the Annual Financial Statements for the year ended 31 March 2011, including the Directors Report
and the report of the Auditors thereon.
2. To authorise the Directors to x the Auditors remuneration for the past year.
3. To approve the Directors fees.
4. Resignation and appointment of Directors.
5. Appointment of Auditors.
6. To declare the dividend.
7. To transact any other business as may be transacted at the annual general meeting.
A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his stead. A
proxy need not be a member of the Company.
A proxy form should be forwarded to reach the registered ofce of the Company not less than 48 hours before the time for the
holding of the meeting.
BY ORDER OF THE BOARD

AMAGUGU KHANYILE
Group Company Secretary
Registered Ofce
Foskor (Pty) Ltd
Riverview Ofce Park
Block G, Janadel Avenue
MIDRAND
07 June 2011
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Glossary
Abbreviation Meaning
ABET Adult Basic Education Training
AEP (Unisa) Advanced Executive Programme
AMP Advanced Management Programme
AMS Aids Management System
APRM Advanced Planning and Risk Management
ASMP Advanced Sales Management Programme
AHF Anhydrous Hydrogen Flouride
ATF Aluminium Triouride
Adv Tax Cert Certicate in Advanced Taxation
BA LLB Bachelor of Arts with Bachelor of Laws
BARC Board Audit and Risk Committee
BB&A Besigheids Bestuur & Admin (Honours in management & accounting)
B-BBEE Broad-based black economic empowerment
BCom Bachelor of Commerce
BCompt (Unisa) Bachelor of Computation
BEE Black Economic Empowerment
BEng Bachelor or Engineering
BHRC Board Human Resources Committee
BSc Bachelor of Science
BSocSci Bachelor of Social Science
BTC Board Technical Committee
Bus Devt Business Development
Capex Capital expenditure
CA (SA) Chartered Accountant South Africa
CAE Chief Audit Executive
CCMA Commission for Conciliation, Mediation and Arbitration
CD4 T-cell count in HIV/Aids patients
CEO Chief Executive Ofcer
CEPPAWU Chemical, Energy, Paper, Printing, Wood and Allied Workers Union
CFL Coromandel Fertiliser Ltd
CFO Chief Financial Ofcer
CFR Cost and Freight
Chem Eng Chemical Engineering
163
CHIETA Chemical Industries Education and Training Institution
CIL Coromandel International Ltd
CIMA Chartered Institute of Management Accountants
COSO Committee of Sponsoring Organisations of the Treadway Commission
CSI Corporate Social Investment
Cu Copper
DAP Diammonium Phosphate
Dec December
DI Disabling Injuries
DIFR Disabling Injury Frequency Rate
Dip Bus Tax Diploma in Business Taxation
DMR Department of Mineral Resources
dti Department of Trade and Industry
DTech Doctor of Technology
EBIT Earnings Before Interest and Tax
EBITDA Earnings Before Interest and Tax adjusted for depreciation and amortisation
ECSA Engineering Council of South Africa
EDP Executive Development Programme
Elec Eng Electrical Engineering
EPWP Expanded Public Works Programme
EWRM Enterprise Wide Risk Management
Exco Executive Committee
FET Further Education and Training
FGAS Foskor Group Audit Services
FOB Free on Board
FOR Free on Rail
FIFA Fdration Internationale de Football Association
FSSA Fertiliser Society of South Africa
FY Financial or Fiscal Year
GCC Government Certicate of Competence
GCT Groupe Chimique Tunisien
GDP Gross Domestic Product
Gecopham General Company for Phosphate and Mines
HDSA Historically Disadvantaged South Africans
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HIV/AIDS Human Immunodeciency Virus/Acquired Immune Deciency Syndrome
H
2
SO
4
Sulphuric Acid
Hons Honours degree
IASB International Accounting Standards Board
ICT Information and communications technology
IDC Industrial Development Corporation of South Africa Ltd
IDP Integrated Development Plan
IEP International Executive Programme
IEDP (Wits) International Executive Development Programme
IFA International Fertiliser Association
IFFCO Indian farmers fertiliser co-operative
IFRIC International Financial Reporting Interpretations Committee
IFRS/s International Financial Reporting Standard/s
Inc Incorporated
Ind Admin Industrial Administration
INSEAD Or|g|na||y: lnst|tut Europeen d'Adm|n|strat|on des Affa|res - European lnst|tute of Bus|ness Adm|n|strat|on
ISO International Organization for Standardization
ISO 9001 lnternat|ona| Organ|zat|on for Standard|zat|on - Oua||ty Management
ISO 14001 lnternat|ona| Organ|zat|on for Standard|zat|on - Env|ronmenta| Management
IT Information Technology
JPMC Jordan Phosphates Mine Company
K|ng lll Oorporate Governance Oodes of the K|ng lll report
km kilometre/s
LED Local Economic Development
Ltd Limited
LTIFR Long-term injury-free rate
m Million
m
3
Cubic metres
MAP Management Advancement Programme
MAP Mono-ammonium Phosphate
MAPZN Mono-ammonium Phosphate with zinc
Mar March
MBA Master of Business Administration
MBL Master of Business Leadership
Glossary cont.
165
MBS Master of Business Studies
MCom Master of Commerce
MD Managing Director
MDP Management Development Programme
Mech-lnd Mechan|ca|-lndustr|a|
mm millimetre/s
MGA Merchant grade acid
MOP Muriate of potash
MOA M|n|ng Oua||fcat|ons Author|ty
MSAIIE Masters: South African Institute for Industrial Engineering
mt Metric tons
MSc Master of Science
MVA Megavolt Ampere
MW Mega Watt
MWh Mega Watt hour
NATO North Atlantic Treaty Organisation
NHD National Higher Diploma
NNR National Nuclear Regulator
NPKs Nitrogen-phosphate-kalium based fertilisers (complex fertilisers)
NOF Nat|ona| Oua||fcat|ons Framework
NUM National Union of Mineworkers
OHS Occupational Health and Safety
OHSAS Occupational Health and Safety Assessment Series
OHSAS 18001 Occupat|ona| Hea|th and Safety Assessment Ser|es - Occupat|ona| Hea|th and Safety Management
p.a. per annum
P2O5 The term used in the phosphate industry to measure its phosphoric acid production volumes
PDP Personal Development Program
PEP1 Pyroxen|te Expans|on Project - Phase 1
PEP2 Pyroxen|te Expans|on Project - Phase 2
PhD Doctor of Philosophy
PIC Public Investment Corporation
PP&V Phalaborwa Phosphate and Vermiculite
PMC Palabora Mining Company
Pr Eng Professional Engineer
O
t
h
e
r
166
Pty Proprietary
PWC PricewaterhouseCoopers
OAR Oua||ty assurance rev|ew
R Rand
Rm Rand million
SA South Africa/n
SACNASP South African Council for Natural Scientic Professions
SANS South African National Standard/s
SANS 451 South Afr|can Nat|ona| Standard/s - Sp|rometry
SANS 16001 South Afr|can Nat|ona| Standard/s - Hlv/AlDS
SARS South African Revenue Service
SEP Senior Executive Programme
SMME Small, Medium and Micro Enterprise
SO
2
Sulphur Dioxide
SOP Sulphate of potash
SHE Safety, Health and Environment
SHEO Safety, Hea|th, Env|ronment and Oua||ty
SHREO Safety, Hea|th, Rad|at|on, Env|ronment and Oua||ty
STC Secondary Tax on Companies
TFR Transnet Freight Rail
tph tons per hour
TSP Triple superphosphate
UAN Solution of urea and ammonium nitrate
UFH University of Fort Hare Foundation
K n|ted K|ngdom
UNISA University of South Africa
UniZul University of Zululand
US United States
USA United States of America
US$ or USD United States of Americas dollar
VAT Value Added Tax
VP Vice President
Wits University of Witwatersrand
ZAR South African Rand
Glossary cont.
167
Term Meaning
Black As dened in the dti Codes of Good Practice and amended in terms of the High Court
ruling at June 2008
Carry trade A trade where you borrow and pay interest in order to buy something else that has higher
interest
Current ratio Current assets to current liabilities ratio
Debt to equity ratio Interest-bearing debt to equity ratio
Free cash ows Net cash from operating activities less net cash in investing activities
Governing Board The committee of directors that governs the affairs of Foskor
Group Incorporates the operations in Phalaborwa, Richards Bay, Midrand, Phosphate Shipping
and Phosphate Marine
Kr|g|ng A geostatistical approach to modelling
Middle management Functional managers
Operating income to revenue Operating income expressed as a percentage of revenue
Pre-tax margin Prot before tax expressed as a percentage of revenue
Professional Technical experts and specialists
Return on net assets Prot after tax expressed as a percentage of net assets
Return on equity Operating prot expressed as a percentage of shareholder equity and reserves
Senior management Group and divisional managers
Semi-skilled employees Technical and mechanical operators, drivers (heavy motor vehicles) and technical
assistants
Skilled employees Artisans, technicians and production supervisors
Top management Executives and general managers
Unskilled labour Elementary occupations
Denition of terminology
O
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168
Administration
DIRECTORS
Chairperson
Mr MG Ohena
Executive director
Mr MA Pitse
(President/Chief Executive Ofcer)
Non-executive directors
Mr A Vellayan
Mr G van Wyk
Ms SS Ngoma
Ms JM Modise
Mr SP Ngwenya
Dr DS Phaho (Independent)
Mr F Madavo (Independent)
Ms A Albck (Independent)

AUDITORS
PriceWaterhouseCoopers Inc
Johannesburg
Ngubane & Co. Inc
Durban
COMPANY SECRETARY
Ms AS Khany||e
STAKEHOLDER RELATIONS
Ms BKM Sm|th
REGISTRATION NUMBER
Foskor (Pty) Ltd
1951/002918/07

REGISTERED OFFICE
Foskor
Riverview Ofce Park, Block G
Janadel Road, Midrand
PO Box 2494, Halfway House, 1685
Telephone: +27 11 347 0600
Telefax: +27 11 347 0640
Website: www.foskor.co.za

PHALABORWA
27 Selati Road, Phalaborwa
PO Box 1, Phalaborwa, 1390
Telephone: +27 15 789 2000
Telefax: +27 15 789 2066
RICHARDS BAY
21 John Ross Parkway, Richards Bay
PO Box 208, Richards Bay, 3900
Telephone: +27 35 902 3111
Telefax: +27 35 797 3739

PART ONE ANNUAL REVIEW
Introduction ....................................................
Financial and non-nancial highlights .........................
Company prole ................................................................
Group structure ........................................................................
Business model ................................................................................
Board of directors ....................................................................................
Executive management ..................................................................................
Review of the year
Five-year review and key ratios .......................................................................................
Economic value added statement ..........................................................................................
Review of the years performance
Chairmans statement .........................................................................................................................
From the CEOs desk ................................................................................................................................
CFOs report ..................................................................................................................................................
Operations report
Mining Division: Phalaborwa ......................................................................................................................................
Acid Division: Richards Bay ............................................................................................................................................
Review of mineral resources and ore reserves .....................................................................................................................
Mine site Rehabilitation and Closure ........................................................................................................................................
Enterprise risk management ........................................................................................................................................................
Corporate governance ....................................................................................................................................................................
Board and sub-committees ..................................................................................................................................................................
Board Audit and Risk Committee Report ..................................................................................................................................................
Internal audit .................................................................................................................................................................................................
Sustainability review ................................................................................................................................................................................
Nurturing and developing our people ......................................................................................................................................................
Corporate Social Investment ................................................................................................................................................................
G3.1 Key performance indicators ....................................................................................................................................................
PART TWO ANNUAL FINANCIAL STATEMENTS
Annual Financial Statements
Directors declaration ...........................................................................................................................................................
Independent Auditors Report ...........................................................................................................................................
Directors report .............................................................................................................................................................
Principal statements .................................................................................................................................................... 1
Notes to the nancial statements .............................................................................................................................. 1
Other Information
Notice of Annual General Meeting ...................................................................................................................... 1
Glossary ........................................................................................................................................................... 1
Administration ................................................................................................................................................ 1
The paper used in the report is a combination of two different paper products. One is made from wood
fibre sourced from fully sustainable forests. Recycled water is used in the manufacturing process. The
second paper product is produced from a combination of recycled sugar cane bagasse and wood
pulp sourced from sustainable forests. The cane fibre is sourced from local suppliers, many of them
previously disadvantaged growers. Both products are totally chlorine-free.
Foskor (Pty) Ltd - Registered Ofce
Riverview Ofce Park, Block G, Janadel Avenue, Midrand
PO Box 2494, Halfway House, 1685
Tel: +27 11 347 0600
Fax: +27 11 347 0640
www.foskor.co.za
Registration Number: 1951/002918/07

Foskor AFS 2011

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