Financial Accounting and Reporting in South African Perspective 成品.docx

Financial Accounting and Reporting in South African Perspective 成品.docx

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FinancialAccountingandReportinginSouthAfricanPerspective成品

AnalysisontheHarmonyGoldMine

ExecutiveSummary

SouthAfricaiscurrentlygoingthroughmajorchangesinpolitical,socialandotherarenas.Itisthereforeappropriatetoconsidertheeffectofthesedevelopmentsonfinancialreportinginachangingenvironment.Thispaper"'explorestheoriginsofthecurrentSouthAfricanaccountingsystem,givenitsstatus.asadevelopingcountry,andendeavourtoshowthatfinancialreportingneedstobeamendedtoreflectthechangingfaceoftheSouthAfrica'ssocialfabric,itsstatusasadevelopingcountry,aswellastheemergenceofnewusersoffinancialstatements.Certainrecommendationsaremadetoaddresstheseissues.

HarmonyGold MiningCompanyLimited（‘Harmony’or‘theCompany’）isthethirdlargestgoldminingcompanyinSouthAfricawithareportedproductionof1.27Mozofgoldforthefinancialyear2012.Harmonyisamulti-listedcompany（JSE:

HAR,NYSE:

HMY）withitsprincipleminingoperationsinSouthAfricaandPapuaNewGuinea（PNG）anditsworldclassWafi-GolpuexplorationprojectalsoinPNG.

TableofContents

ExecutiveSummary1

Introduction2

DiscussionandAnalysis3

SouthAfricaasadevelopingcountry7

Theoriginsofaccountingsystemsindevelopingcountries8

Differentenvironmentsandneeds9

Conclusion10

Recommendations11

References12

Introduction

Historyofcorporatereporting

SouthAfricaiscurrentlygoingthroughmajorchangesinpolitical,socialandotherarenas.Itisthereforeappropriatetoconsidertheeffectofthesedevelopmentsonfinancialreportinginachangingenvironment.

Reportinginthecorporateworldfirstbeganintheformoffinancialreporting,andwasusedasameansofinformingshareholdersaboutthefinancialperformanceofacompany.Additionaltypesofcorporatereportingarenowbeingusedtogatherawiderrangeofinformation,includinghealthandsafetyreporting,qualityreporting,environmentalreporting,socialresponsibilityreporting,andmostrecentlysustainabilityreporting（seeBox1）.Thesenewertypesofreportingaretypicallyusedtoinformstakeholders（whoincludecustomers,employees,neighbours,investors,government,non-governmentalorganizations（NGO’s）civicassociationsandthepublic）abouttheoverallperformanceoftheorganization.

Box1-TrendsinCorporateReporting

1930s–Financialreporting

1970s–Socialaccounting

1980/90s–Environmentalreporting

1990s–Businessreporting,non-financialreporting,“ValueReporting”,Intangiblesaccounting

2000+–Sustainabilityreporting

2010+–Totalperformancereporting?

（AdaptedfromWhite,2003）

DiscussionandAnalysis

HarmonyGoldMineenvironmentalreportinginSouthAfrica

HarmonywasincorporatedandregisteredasapubliccompanyinSouthAfricaon25August1950andlaterbecameaRandgold-managedcompany,exploitingthesingleHarmonyminelease.In1995,HarmonywasrecreatedasaseparateentityfollowingthewindingupofRandgold.

InSouthAfrica,moreparticularlyintheworld-renownedWitwatersrandBasinandKraaipanGreenstoneBelt,theCompanyhastenundergroundminesandoneopen-pitmineandseveralsurfaceoperations.InPNG,Harmonyhasa50%interestintheMorobeMiningJointVentures（MMJV）,whichincludesHiddenValley,anopen-pitgoldandsilvermine（openedin2010）,theWafi-Golpuproject,andextensiveexplorationtenements.Outsidethejointventure,Harmony’sownexplorationportfoliofocusesprincipallyonhighlyprospectiveareasinPNG.

HiddenValley（aspartoftheMMJV）inPNGisHarmony’sfirstgreenfieldsoffshoredevelopment,whiletheCompanyhasthreeoperationsinbuild-upinSouthAfrica,namelyKusasalethu,DoornkopandPhakisa.

Thecompanyemployed40257peopleinFY12,largelyinSouthAfrica,ofwhom34187werefull-timeemployeesand6070contractors（FY11:

39440people,includingcontractors）.

At30June2012,Harmonyreportedattributablegoldequivalentmineralreservesof52.9Moz（FY11:

41.6Moz）andattributablegoldmineralresourcesof150.2Moz（FY11:

163.9Moz）.

Thecompanyhadissued431564236（FY11:

430084628）ordinarysharesandhadamarketcapitalisationofR33.0billion（US$US$4.0billion）[FY11:

R38.7billion（US$5.7billion）]attheendofJune2012

Thecompany’sstrategyistoproduce1.7millionsafeandprofitableouncesofgoldbyFY16.

RememberyourTargetGroups（Stakeholders）

Targetgroupsforreportsconsistofarangeofstakeholders.Itisoftenpossibletoprepareareportwhichcancaterforthefullrangeofstakeholders.However,itshouldbeborneinmindthattheremaybeoccasionswherespecializedreportsareneededforspecificstakeholdergroups.Forexample,itmaybenecessarytoprepareaspecialreportfortheregulatoryauthoritiesbecausetheyrequirespecificdatainaparticularformatortheymayrequiredetailwhichwouldnotbehelpfulorcleartothegeneralpublic.Tryingtomakeareportsaytoomanythingsintoomanydifferentwayscanbeconfusingtosomestakeholdersandcanalsocreatethewrongimpression.

Consultationwithstakeholdersisanimportantstageinthereportingprocessandexamplesofstakeholders（alsodescribedasInterestedandAffectedParties）areincludedinBox3.

Box3:

ExamplesofStakeholders

•Employees

•TradeUnionsandStaffAssociations

•Investorsandpotentialinvestors

•Investmentanalystsandadvisors

•Customersandsuppliers

•Competitors

•Contractors

•Banks,FinanceHouses,LendingInstitutions,Insurers

•Regulatoryandlegislativebodies（local,provincial,national）

•Neighbouringandregionalcommunities

•Pressandmedia（hardcopyandelectronic）

•Business,administrative,academicandresearchinstitutions（national&international）

•ChambersofCommerceandIndustryandotherbusinessassociations

•Environmentalgroups

•OtherNon-GovernmentalOrganizations

•Consumerinterestgroups

•CivilSocietygroupsandassociations

•GeneralPublic

Thecommunicationanddisseminationofcorporateenvironmentalinformationhasbecomeavitalrequirementintheon-goingmanagementandmonitoringofhumanactivityanditsimpactupontheearth.Accurateandsuccessfulreportinginitsmanyformsrequiresskillandexpertiseinensuringthattheinformationisreportedtotargetgroupsinthebestpossiblemanner,appropriatetotheirneeds.Reportinghasevolvedfromthemostbasicword-of-mouthformtosophisticatedelectronictransferandbroadcast.Itisclearthatthereisno“right”or“wrong”waytoreport,justtherequirementtoensurethatreportingisappropriateandaccurate.Therearemanydifferenttypesof“environmental”reportingthatcanbeundertaken.

Beforeembarkinguponthedevelopmentofareportingprocess,carefulthoughtneedstobegivenastowhattypeofreportwouldbestsatisfytheneedsofstakeholders.Trendssuggestthatabroadbasedlevelofreportingwhichincludessocialresponsibility,socialinvestment,aswellasthetraditionalsafety,health,environmentalandfinancialreporting,isbecomingmorerelevantandnecessarytojudgeandmonitororganizations.

Asadevelopingcountry,andendeavourtoshowthatfinancialreportingneedstobeamendedtoreflectthechangingfaceoftheSouthAfrica'ssocialfabric,itsstatusasadevelopingcountry,aswellastheemergenceofnewusersoffinancialstatements.Certainrecommendationsaremadetoaddresstheseissues.

Astheeconomyofthecountryisbeingrestructuredtoachieveamoreevendistributionoftheeconomicpower,andasalargerportionofthatpowermovestothepreviouslydisadvantagedandlesseducatedsectionsofthepopulation,itisinevitablethatthesepeoplewillbecomemoreimportantusersoffinancialinformation.Thissituation,togetherwiththegrowingimportanceofemployeesasstakeholdersinbusinessenterprises（mostlyunschooledworkersviatradeunions）asillustratedbyBooysen（1993:

1）,raisesthequestionofthesuitabilityofthecurrentformatanddisclosureprovidedbythefinancialstatementsofenterprises.Thisarticlesetsouttoinvestigatetheoriginsoftheaccountingsystemsusedbymostdevelopingcountries,andseekstodeterminewhethertheaccountingsystemsofthedevelopedcountriesandthefinancialreportsthusgenerated,aresuitableforuseinthedevelopingcountriestoo.TheseissuesarethenrelatedtotheSouthAfricansituation.Finallysomerecommendationstocorrectthesituationaremade.

AccordingtoapressreleasedatedApril16,2008,theComplaintchargesHarmonyGoldandcertainofitsofficersanddirectorswithviolationsoftheSecuritiesExchangeActof1934.HarmonyGoldisagoldproducerthatoperates22individualminesandprojectsacrosstheworld.Morespecifically,theComplaintallegesthattheCompanyfailedtodiscloseandmisrepresentedthefollowingmaterialadversefactswhichwereknowntodefendantsorrecklesslydisregardedbythem:

（1）thattheCompany’scostshadsignificantlyincreasedthroughout2007;

（2）thattheCompanyhadunderreportedtheseincreasedcostsinitspreviouslyissuedfinancialstatements;（3）thattheCompanyhadexperiencedasignificantdecreaseingoldproductionforthethirdquarter2007duetoproductionproblemsatvarioussites,whichhadalreadymaterializedatthetimeitsClassPeriodstatementsweremade;（4）thattheCompanyhadfailedtodisclosethefullimpactthattheseproductionproblemswouldhaveontheCompany’sfinancialandoperationalresults;（5）that,asaresultoftheCompany’sunderstatementofitscostsanditslowerproductionforthequarter,theCompanyhadunderstateditsoperatingcostsandoverstateditsnetprofitforthethirdquarter;（6）that,asaresultoftheforegoing,theCompa