shaft
sinkers
shaft sinkers
annual financial report 2012
shaft
sinkers
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 1ja
telephone 44 01624 624100
email infoshaftsinkersgroupcom
wwwshaftsinkersgroupcom
shaftsinkersra2013coverindd   1 27042013   0053 group overview
highlights 1
board of directors 2
chairman’s statement 4
chief executive officer’s statement 6
business review
financial review 10
internal controls and 
risk management 16
2012 kpis 20
sustainability review and  
corporate social investment 21
directors report
directors’ report – business review 22
directors’ report – corporate 
governance 27
directors’ report – remuneration  34
statement of directors’  
responsibility for the annual  
report and accounts 39
financial statements
independent auditors’ report 40
consolidated income statement 41
consolidated statement of 
comprehensive income 42
consolidated statement  
of financial position 43
parent company statement  
of financial position 44
consolidated statement  
of changes in equity 45
consolidated statement  
of cash flows 46
notes to the consolidated  
annual financial statements  47
information 
shareholder information 91
corporate information 92
financial calendar for 2013 93
notice of annual general meeting 94
proxy form for annual  
general meeting 99
shaftsinkersra2013coverindd   2 27042013   0053 shaft sinkers annual financial report 2012
1
highlights
revenue down by 15 to gbp1925 million 
2011 gbp2265 million
gross proﬁ t down by 41 to gbp226 million 
2011 gbp383 million
proﬁ t before tax down by 75 
to gbp34 million 2011 gbp135 million
eps down 73  to 49p 2011 183p
interim dividend paid 24p
no ﬁ nal dividend recommended 
net debt of gbp21 million 2011 net cash 
gbp61 million
year end committed order book 
gbp3465 million  2011 gbp3011 million
strong tender pipeline
gbp11 billion 2011 gbp11 billion
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board of directors
stephen oke
nonexecutive chairman age 58
mr oke joined the board in november 2010 
he was the senior independent director until 
30 august 2012 before being appointed as 
chairman and he also chairs the nominations 
committee he holds a bsc honours degree in 
geology from the university of southampton and 
an mba from the university of the witwatersrand 
graduate school of business he has 35 years’ 
experience in the mining and metals industry 
of which some 12 years were spent in various 
operational management positions for the 
national coal board anglovaal ltd bp coal 
and johannesburg consolidated investment 
company limited subsequently he has held 
senior positions in the investment banking 
industry for smith new court merrill lynch 
nm rothschild and sons and standard bank 
specialising in the metals and mining sector 
where he advised on a number of transactions 
and equity capital fund raisings worldwide he 
is a nonexecutive director of international ferro 
metals limited african mining  exploration plc 
and kolar gold limited and was previously on the 
boards of nikanor plc katanga mining limited 
and kazakhgold group limited
alon davidov
chief executive ofﬁ cer age 38
mr davidov joined the board as chief executive 
ofﬁ cer in november 2010 having been a 
director of shaft sinkers pty since 2007 he 
had previously worked for imr in its business 
development function since 2003 as imr’s 
south african representative he was responsible 
for imr’s original investment in the group in 
2007 and oversight of the group’s subsequent 
development on behalf of imr he was previously 
finance director of bateman litwin kazakhstan 
from 2003 to 2005 he is a ﬂ uent russian speaker 
and is also a nonexecutive director of samancor 
chrome mr davidov has dual citizenship in 
south africa and israel
christopher hall
chief financial ofﬁ cer age 53
mr hall joined the board in november 2010 
as chief financial ofﬁ cer he originally joined 
the group in 2007 as the chief financial ofﬁ cer 
following three years as the chief executive 
ofﬁ cer of jselisted excellerate holdings he has 
over 13 years’ experience in the oil industry and 
was previously finance director of total south 
africa during which time he spent seven years in 
france he qualiﬁ ed as a chartered accountant 
and spent four years postqualiﬁ cation at 
pricewaterhousecoopers and ernst  young mr 
hall is a south african citizen
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ian watson
independent nonexecutive director age 69
mr watson joined the board in november 
2010 and chairs the safety committee and the 
remuneration committee he is a qualiﬁ ed 
mining engineer with over 46 years’ experience 
of the mining industry he joined gold fields 
of south africa ltd in 1962 and after working at 
various gold mines became mine manager at 
successively the west driefontein gold mine the 
kloof gold mining company and the northam 
platinum ltd platinum mine and then consulting 
engineer from 1992  1998 he subsequently 
worked as managing director of northam 
platinum ltd from 1998  2002 as chief executive 
ofﬁ cer of international ferro metals sa pty 
ltd from 2003  2005 and as chief executive 
ofﬁ cer of boynton investments pty ltd until 
his retirement in 2009 he is a professional 
engineer engineering council of south africa 
and holds a national diploma in mining from 
the witwatersrand technical college a mine 
manager’s certiﬁ cate of competency from the 
south african college of mining and has been 
a participant on the 34 general management 
programme at henley management college in 
the uk he is currently nonexecutive chairman of 
galaxy gold a private company
roger williams
independent nonexecutive director age 49
mr williams joined the board in november 
2010 and chairs the audit committee he is 
a uk and south african chartered accountant 
with over 20 years’ international experience 
in mining ﬁ nance after graduating from the 
university of southampton with an honours 
degree in french and spanish he qualiﬁ ed as 
a chartered accountant with touche ross and 
joined the ﬁ nance department of carlton paper 
in 1997 he joined randgold resources and was 
appointed group finance director in 2002 
he was subsequently chief financial ofﬁ cer 
of jselisted aeci limited and bsg resources 
limited a private company both involved in 
the mining industry he is an independent non
executive director of sylvania platinum limited 
and is currently interim cfo for digby wells 
environmental he is a uk citizen 
each of the directors can be contacted at the 
registered ofﬁ ce of the company at 18 athol 
street douglas isle of man im1 1ja
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chairman’s statement
dear shareholders
the past year has been a 
challenging and turbulent one 
for the global economy and 
especiall y the mining industry  
amid shareholder calls for stricter capital allocation 
and greater cash returns mining companies 
are under pressure to be more selective in the 
development of new projects  generally this has 
resulted in a reduction in capital expenditure or a 
slowing down of investment decisions for major 
projects despite this testing global environment 
your company continues to experience high levels 
of tendering activity and has a gbp11 billion new 
business pipeline 
in our key market of south africa it has been a 
particularly demanding year which has undoubtedly 
affected our results negatively severe disruption 
was caused to the mining industry by a wave of wild 
cat strikes and whilst management worked hard 
to mitigate the effects of this action we could not 
escape the general impact on the entire industry 
in south africa also in our key client base in the 
platinum sector it has been a particularly tough 
climate as producers faced severe margin pressure 
due to both rising costs and a subdued pricing 
environment 
the future prospects of the south african mining 
industry are difﬁ cult to predict with potentially 
arduous wage negotiations expected to take place 
around june within a challenging environment  
against this industry backdrop shaft sinkers 
also encountered some operational issues at a 
number of its south african sites however action 
is being taken by management to deal with the 
disappointing slip in operational effectiveness 
implementing efﬁ ciencies and restoring operational 
productivity which is expected to result in a stronger 
operating position in 2013 
on a more pleasing note your company was 
successful in its stated strategy of increasing its 
exposure to the global market by being awarded 
two major contracts for the kibali joint venture 
in the democratic republic of the congo and 
hindustan zinc in india both these contract 
awards are testimony to the highly respected 
skills the company is fortunate to possess and 
should add signiﬁ cantly to the company’ s ﬁ nancial 
performance 
in addition the implementation of our bee 
strategy for our south african business has been 
acknowledged by the receipt of a rating certiﬁ cate 
indicating compliance with the ownership criteria  
we are pleased to have created a broad based 
structure that includes our work force and qualiﬁ es 
us to meet the south african bee requirements
however the illegal strikes in south africa the 
depreciation of the rand the later start date of 
newly awarded projects and operational problems 
all impacted proﬁ tability during the year under 
review  
as we have announced previously shaft sinkers 
terminated its contract with eurochem with effect 
from 20 april 2012 following a suspension by the 
client of our grouting efforts in october shaft 
sinkers received a notice of arbitration claiming an 
amount of approximately usd800 million 
gbp495 million we have reviewed the arbitration 
claims and after extensive consultation with legal 
counsel continue to believe that the claims are 
without merit and are contesting them robustly  a 
claim for a net amount of usd15 million 
gbp93 million has been ﬁ led against eurochem 
for amounts still owing under the contract  
health and safety
safety remains a strong focus for the group 
and is supported by international best practice 
training and development programmes  the 
group’s key safety benchmarks have showed an 
improvement in 2013 
shaftsinkersra2013front endindd   4 27042013   0055 5
various campaigns and initiatives were introduced 
during 2012 to improve the safety culture in the 
group and to continue to strive for zero harm to 
our employees in the challenging environment in 
which they operate
regrettably on 7 june 2012 mr salomão 
chunguane was fatally injured at the impala 17 
fridge shaft operations after a fall of ground 
occurred on level 21 development
dividend 
in october 2012 an interim dividend of 24 pence 
per share was paid  due to the lower than expected 
operational and ﬁ nancial performance in the second 
half of the year under review and taking into 
consideration the current cash position of the group 
the board has taken a prudent view and therefore is 
recommending not to pay a ﬁ nal dividend for 2012
due to the lower than expected operational and 
ﬁ nancial performance in the second half
of the year under review and taking in to
consideration the current cash position of the group 
the board has taken a prudent view and there is 
recommending not to pay a ﬁ nal dividend for 2012
despite the difﬁ culties experienced during the 
ﬁ nancial year the board remains optimistic as to the 
company’ s long term prospects for growth and the 
board intends to resume its progressive dividend 
policy in due course 
strategy
your company is committed to continue with 
the strategic imperatives that formed part of 
our ambitions when we became a publicly listed 
company namely growing a strong global business 
through international expansion and commodity 
diversiﬁ cation continuing the emphasis on best 
practice safety initiatives enhancing our competitive 
position by improving operational efﬁ ciencies and 
effectiveness and seeking acquisition opportunities 
that have the potential to add value to our 
operations 
people
i was appointed chairman of the board in 
august last year following the resignation of 
my predecessor amre youness having served 
previously as the senior independent director since 
ipo on behalf of the board and staff i would like to 
thank amre for his extensive  efforts and signiﬁ cant 
contribution he made on behalf of the company 
over the two years that he was chairman including 
guiding the company to a successful ipo in 2011 
also during the year we appointed louis 
germishuys as chief operating ofﬁ cer louis brings 
over 24 years of international mining sinking and 
contracting experience  he has already made a 
signiﬁ cant contribution to the company during a 
difﬁ cult period of operational challenges  
i would like to take this opportunity to thank all 
our employees my colleagues on the board 
our business partners shareholders and all other 
stakeholders for their continued support
outlook
throughout the year the company has experienced 
demand for its services from various regions as 
well as across numerous commodities every new 
opportunity is carefully assessed and the best suited 
prospects are being pursued aggressively
we continue to actively seek and respond to queries 
and tenders from several countries that are part of 
our strategic focus we are seeing increased activity 
in the gold diamond and base metal markets and 
a slowdown in the platinum market in all likelihood 
due to prevailing market conditions the emergence 
of this trend reinforces our diversiﬁ cation strategy
in spite of a disappointing year in 2012 the board 
believes that we have made substantial progress 
in addressing that year’ s shortcomings and we are 
putting in place the right strategy and people to 
deliver growth in 2013 and beyond
stephen oke
chairman
25 april 2013
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chief executive ofﬁ cer’s statement
the tough trading environment 
in the mining industry over 
the past year has affected our 
operations and profitability 
our clients have been carefully evaluating 
expansion programs and refocusing on production 
efﬁ ciency whilst this may prolong the project 
decision making process we are still seeing a 
growing trend in demand for deep shafts to access 
increasingly deeper replacement reserves borne 
out by both our latest projects for hindustan zinc 
and kibali goldmine
most of our clients in south africa were severely 
impacted by labour disputes throughout 2012 
and we were unable to escape the effects of the 
disputes in most instances our contracts provide 
cost recovery of work interruption caused by the 
client but typically it excludes or limits recovery of 
proﬁ tability and does not cover low efﬁ ciency work 
restart and rampup period the latter often having 
a bigger impact
our results were further impacted by 
underperformance at certain operations during 
the ﬁ rst half of the year under review our 
operations at impala 16 and 17 suffered from 
inefﬁ ciencies caused by poor planning labour over 
compliments excessive overtime and logistical 
congestion that together culminated in target 
production not being met both projects were 
entering different phases of work which resulted 
in various changes in the operating environment 
which were not handled adequately by us  
change in scope or operating conditions can 
often lead to additional costs which need to be 
recovered by us through variation orders variation 
orders are covered in our contracts with our clients 
and have a deﬁ ned process for their generation 
approval and payment inefﬁ ciencies in the 
variation order process has impacted our ﬁ nancial 
performance in certain projects as well as inﬂ ating 
our receivables and ultimately impacting cash ﬂ ow 
it is therefore imperative as a contractor to be 
much more sensitive and proactive to changes 
and to optimise the variation order recovery 
process in order to address this management 
have started restructuring the business by 
streamlining its control structures and introducing 
the requisite skills in order to better cope with 
change once these measures are implemented 
in 2013 we believe that we will be well placed 
to deal with the changes affecting our business 
the illegal strikes the depreciation of the rand 
the later start date of newly awarded projects and 
operational difﬁ culties all impacted on proﬁ tability   
management is conducting a review of the 
group’s activities with a view to ensuring that 
costs are effectively managed and that the 
group’s support structures are commensurate 
with its level of activity and growth prospects 
management has identiﬁ ed some initial areas 
where cost savings may be achieved 
revenue has decreased by 15  percent and proﬁ t 
from operations has dropped to gbp52 million 
2011 gbp153 million before exceptional item 
of gbp31 million net proﬁ t after tax dropped 
to gbp24 million 2011 gbp87 million after 
exceptional item net cash decreased by gbp85 
million to net debt of gbp21 million due mainly 
to the lower proﬁ tability from operations and an 
increase in accounts receivable
operations
2012 saw a number of new contract wins and 
extensions of contracts including the award by 
hindustan zinc limited part of vedanta of a 
project for the sinking of the main shaft and 
north and south ventilation shafts at the rampura 
agucha mine rajasthan in western india
this is a signiﬁ cant development for shaft sinkers 
and an important step in our international growth 
strategy it is particularly pleasing given our 
shaftsinkersra2013front endindd   6 27042013   0055 7
strong position in india and the potential future 
opportunities that may arise in the subcontinent
in november randgold resources awarded the 
company the vertical shaft contract at the kibali 
gold mine “kibali” in the democratic republic 
of the congodrc the combined mobilisation 
and vertical shaft contracts have an estimated 
total value of gbp823 million  kibali is a joint 
venture between mine operator randgold 
resources 45 anglogold ashanti 45 and 
congolese parastatal sokimo 10 the project 
is situated near doko in the north eastern 
orientale province of the drc
operations – south africa
at impala 16 the equipping of the main shaft 
progressed well during 2012 the development 
however undertaken via the ventilation shaft 
performed below expectation resulting in cost 
overruns as a result of overtime and over
complement of personnel contractual cost 
escalations in addition to the contract duration 
being extended have added a further gbp59 
million to the order book
operational performance at impala 17 was met 
with under recovery of revenue through the low 
rates billed for the fridge shaft which should be 
rectiﬁ ed by the middle of 2013 with a revised 
contract construction activities performed via 
the ventilation shaft proved to be a challenge 
and management has taken decisive action to 
mitigate the situation  the leeuwkop contract 
with afplats performed to management’s 
expectations and we were awarded an extension 
of the contract to sink the main shaft from 488 
metres to a depth of 700 metres below surface 
current depth is a little over 600m and  is 
scheduled to be completed at the end of may 
2013 and adds a total value of gbp70 million to 
the order book a further extension is anticipated
work at the moab project undertaken for 
anglogold ashanti recovered to management’s 
expectations after being negatively affected by 
strike action the rescheduled work programme is 
progressing according to the contract and is now 
achieving average monthly  target rates of 600 
cubic meters
the hernic ferrochrome project at the bokone 
shaft previously named bokfontein performed in 
line with management’s expectations
work at lonmin’s saffy project progressed well in 
line with management’s expectations the proﬁ t 
margin earned was negatively impacted by the 
loss of efﬁ ciency following the illegal strikes  our 
claims for costs were submitted and have mostly 
been settled work at the hossy shaft performed 
to expectation but was deferred due to austerity 
measures within the client’s business karee 3 
shaft work progressed well but more recently 
there has been ﬁ nancial underperformance 
due to historically low rates this has now been 
rectiﬁ ed by changing the contract to an agreed 
target cost atc contract in 2013 
at the styldrift project operations performed 
well in terms of the sinking rate but during the 
last quarter we underrecovered revenue for 
horizontal level development operations due to a 
low rate charged per cubic metre for that section 
of the work this is to be  addressed by seeking 
agreement with the client on revised rates and 
which is expected to be concluded  in the ﬁ rst 
half of 2013
south african labour situation
the group’s operations in south africa have now 
returned to normal from a labour perspective 
however the company is aware of the 
continued sensitivity in the south african labour 
environment we are continuously engaging with 
all our labour representatives in order to ensure 
shaftsinkersra2013front endindd   7 27042013   0055 8
cooperation and stability  at lonmin’s saffy shaft 
workers returned to work from the illegal strike 
on monday 29 october in total 11 working days 
were lost as a result of this action which resulted 
in a negative impact on the project’s margins
at anglogold ashanti’s moab project workers 
reported for duty and operations were back 
to normal on 30 october 2012 in total 25 
working days were lost as a result of this action 
the company is in discussions with the client 
regarding costs incurred during this period
health and safety
the year ended with an improved safety 
performance when compared to the previous 
year in line with the business review we have 
recently undertaken we have introduced various 
structural changes in order to further improve 
safety in the daily operations of the business 
safety will receive the constant attention of 
management the safety department has become 
more independent giving it more oversight into 
the operations our focus on safety is being 
recognised by our clients we were awarded best 
contractor in the safety category by lonmin this 
signiﬁ cant achievement was enhanced by the 
fact that our k3 project at lonmin has recently 
recorded a 4 million fatality free shift mark 
safety remains a strong focus for the group 
and is supported by training and development 
programmes  the group’s lost time injury 
frequency rate ltifr has decreased from 475 
to 408
regrettably on 7 june 2012 the group suffered 
a fatal injury at the impala 17 fridge shaft 
operations after a fall of ground occurred on 
level 21 development 
the group constantly searches for new and 
innovative ways to instil a safety culture at 
every level of the organisation during the last 
quarter of 2012 the “mteto” campaign was 
launched across all the operations the focus 
of this campaign was to get “back to basics” 
and instil adherence to standards in addition 
a longer term safety campaign was  rolled out 
called “snakes for safety” these campaigns 
will be enhanced during 2013 by introducing 
interventions which will address areas where 
the company experienced high incidence of  
accidents during 2012 the group has introduced 
a system of crossaudits between the various sites 
as well as speciﬁ c campaigns to address “material 
handling” and “tools and equipment” related 
injuries during 2012 these two aspects were 
responsible for 60 of injuries an additional 
motivational campaign called “one step more” 
was launched which encourages our employees 
to go the extra mile in ensuring we have safe 
operations
the groups benchmarks for 2013 have been set 
based on the achievements of 2012 and have 
been mapped out as  non lost time injury 
frequency rate nltifr 600 lost time injury 
frequency rate ltifr 35 and the reportable 
injury frequency rate rifr at 25  
operations  international
the hindustan zinc project at the rampura 
agucha mine was awarded in may 2012 and 
work commenced immediately the latter half 
of 2012 saw the project underperform due to 
logistical difﬁ culties encountered mainly with our 
subcontractor onsite various alternative steps 
are being taken to meet the milestones on the 
project and management is conﬁ dent that 2013 
will demonstrate an improved performance
in november 2012 the company was awarded the 
vertical shaft contract at kibali goldmine during the 
startup phase of the project we experienced some 
logistical challenges but after various initiatives were 
taken operations are back on track
 2011 ﬁ gures are restated
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9
our mining engineering and technical services 
mets division continues to ﬁ nd new opportunities 
for design and epcm contracts a team from 
mets was mobilised in 2013 to commence work 
at the poderosa project in peru the cis ofﬁ ce was 
contracted to perform a desktop study for kazzinc 
a subsidiary of glencore in kazakhstan  a very 
important step in our cis strategy
corporate social responsibility
shaft sinkers recognizes corporate social 
responsibility as a business imperative and 
is engaging with clients communities and 
stakeholders to enable the group to meet the 
needs of each territory in which it operates
shaft sinkers implements various initiatives 
ranging from adult based education and training 
abet classes  which is aimed at improving the 
literacy of our unskilled employees to increasing 
employment from the surrounding community 
black economic empowerment 
our bee structure and credentials are in place as 
this becomes an exceedingly important criterion 
for contractor selection in south africa our structure 
has been completed and rated as compliant 
management took care at creating a far reaching 
equitable structure that empowers its work force 
meaningfully the response from the unions was 
extremely positive our new bee partners are a 
good mix of experience enthusiasm and youth 
we are encouraged by the depth and experience 
represented amongst our bee partners   
research and development
our research and development programmes are 
progressing in line with previous announcements 
in this regard development work on the 
sightpower shaft scanning technology we have 
invested in continues and we are nearing the 
introduction of the beta version which will be the 
prototype for marketing to our clients
working capital
at 31 december the group was carrying 
approximately gbp13 million of outstanding 
amounts for variation orders at the last practical 
date of this report there was an amount of 
approximately gbp7 million that remained to be 
collected most of which is scheduled for the end 
of may 2013
order book and tendering activity
at 31 december 2012 the order book stood 
at gbp346 million h1 2012 gpb348 million 
revenue to be billed on committed contracts
the group has £11 billion of outstanding tenders 
or price submissions h1 2012 gbp11 billion on 
16 projects approximately 58 per cent in value 
representing six projects are outside of south 
africa and 75 per cent in value representing nine 
projects are nonplatinum related projects
management continues to actively pursue a 
number of new tenders with geographic and 
commodity diversity  the group believes it is 
well placed to secure a number of these tenders
looking ahead a key focus will be implementing 
more efﬁ cient control structures that will return 
operations to their optimal levels with a stable 
operating environment management will be 
freed to intensify efforts to convert prospects into 
order book we are positive about the prospects 
that the company is pursuing we expect our 
operations in 2013 to improve and look forward 
to achieving our planned growth 
alon davidov
chief executive ofﬁ cer
25 april 2013
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10
financial review
basis of preparation
the ﬁ nancial information presented has been 
prepared in terms of international financial 
reporting standards and has been prepared 
on a basis consistent with that used in the 
preparation of the ﬁ nancial statements for the 
yearended 31 december 2011
with effect from 1 january 2012 the group 
changed its accounting policy in respect of 
inventory valuation from the ﬁ rstinﬁ rstout 
method to the weighted average cost method 
the change in accounting policy did not have a 
signiﬁ cant effect on the results presented
apart from the above mentioned change in 
accounting policy there have been no other 
changes to the accounting policies or new 
standards that have been applied during the year 
that had an effect on the reported performance in 
comparison to the prior year
overview
the 2012 ﬁ nancial year has been a challenging 
one for the group the ﬁ nancial results were 
impacted by operating difﬁ culties experienced at 
a number of sites as well as by disruptions caused 
by labour unrest in south africa during the year 
the award of the hindustan zinc and kibali 
goldmine projects during the latter part of the 
2012 ﬁ nancial year partially offset the impact of 
the poor performance in south africa
the group’s cash position has decreased 
during the year largely as a result of a build
up of variation orders in 2012 increasing trade 
receivables at yearend and the poor ﬁ nancial 
performance of the group’s operations 
despite the difﬁ culties experienced during 
the ﬁ nancial year the board remains optimistic 
over the long term prospects for growth the 
company paid an interim dividend of 24p per 
share in october 2012 and while the board does 
not recommend a ﬁ nal dividend for 2012 it 
reiterates its dividend policy
in october 2012 eurochem ﬁ led a notice of 
arbitration against shaft sinkers proprietary 
limited a wholly owned subsidiary of the group 
and its immediate holding company rossal no 
126 pty ltd wherein eurochem have claimed 
an amount of usd800 million gbp 495 million 
the claim has been reviewed by the group and 
after consultation with legal counsel we continue 
to believe that the claim is without merit and 
the companies in question will contest the claim 
robustly shaft sinkers pty ltd ﬁ led a claim of 
usd15 million gbp93 million against eurochem 
for inter alia unpaid amounts recorded under 
trade and other receivables in the ﬁ nancial 
statements 
analysis of results
income statement
proﬁ ts for the year have decreased by 725 percent 
in gbp terms the effect of the weaker zar 
average exchange rate for the year at zar1299 
compared to an average of zar1158 in 2011 has 
been to increase proﬁ ts by gbp01 million  
revenue
revenues decreased by 150 percent to 
gbp1925 million 2011 gbp2265 million the 
decrease in revenues was primarily as a result of 
the termination of the russian eurochem project 
on 20 april 2012 the reduction in revenues 
earned on the saffy and hossy stoping contracts 
where the client has taken over a large portion 
of work previously performed by the group and 
revenues lost due to the labour unrest in south 
africa during the third quarter of 2012 which 
resulted in lost production
shaftsinkersra2013front endindd   10 27042013   0055 11
the decrease in revenues as described above 
were partially offset by revenues earned on 
the hindustan zinc and the kibali goldmine 
contracts awarded during the second half of the 
ﬁ nancial year 
gross proﬁ t
gross proﬁ t decreased by 410 percent to 
gbp226 million 2011 gbp383 million the 
decrease in gross proﬁ t can be ascribed to the 
following factors
•  the termination of the eurochem project in 
april 2012
•  poor operational performance experienced 
on impala 16 and 17
•  poor financial returns on the karee 3 
project and
•  labour unrest that was experienced in the 
south african mining industry during the third 
quarter
offset partially by
•  proﬁ t margins earned on the hindustan zinc 
and kibali goldmine projects awarded during 
the latter part of 2012 
the gross proﬁ t margin decreased to 117 
percent for the 2012 ﬁ nancial year 2011 169 
percent
operating income
operating income increased by gbp11 million 
due to gains made on foreign exchange 
differences reversals made on overprovisions for 
interest and indirect taxes and other reversals of 
overprovisions for costs 
operating expense
operating expenses decreased by gbp45 
million during fy2012 in comparison to fy2011 
which included  a onceoff amount of gbp31 
million for ipo bonuses paid to middle to senior 
management fy2012 annual bonuses decreased 
by gbp30 million as a result of ﬁ nancial targets 
not being achieved this was partially offset 
by an increase in legal fees incurred relative to 
the arbitration proceedings against eurochem 
an impairment loss recognised on plant and 
equipment and an expense recognised on the 
derecognition of items replaced on plant and 
equipment overhauled during the year
finance expense
during the 2012 ﬁ nancial year the group repaid 
gbp39 million on its borrowing facilities with the 
standard bank of south africa this resulted in a 
decrease of gbp05 million on ﬁ nance expenses 
incurred on borrowing facilities the decrease was 
offset by an increase in interest charges levied by 
the south african tax authorities which resulted in 
the ﬁ nance expense remaining at a similar level in 
2012 as compared to 2011
taxation 
in 2012 the group’s effective tax rate was 302 
percent 2011 355 percent the reduction in the 
effective tax rate was largely due to a charge in 
2011 that was not incurred in 2012 for secondary 
tax on companies stc relating to dividends 
declared from south africa in 2012 stc was 
replaced by a dividend withholding tax  the 
south african standard corporate tax rate remains 
unchanged in 2012 from 2011 at 28 percent 
the comparable standard tax rates in india are 
approximately 40 percent before withholding 
taxes while standard tax rates in the democratic 
republic of the congo are around 42 percent 
before withholding taxes
shaftsinkersra2013front endindd   11 27042013   0055 12
effect of exchange difference on translation 
from functional to presentation currency
the group reports in gbp while the functional 
currencies of the main operations of the group are 
zar and usd the average rate of exchange for 
2012 was zar1299 to the gbp 2011 zar1158 
and usd159 to the gbp 2011 usd161 the spot 
rate at 31 december 2012 saw the zar and the 
usd both weaken against the gbp to zar1369 
2011 zar1254 and usd162 2011 usd155 
respectively the translation of income statement 
items at the average rate for the year monetary 
items in the balance sheet at the closing spot rate 
and historical items at historical rates gave rise to a 
loss of gbp32 million 2011 gbp70 million
ebitda
earnings before interest tax and depreciation for 
the year were gbp109 million 2011 gbp249 
million a decrease of 561 percent  although 
depreciation was lower at gbp57 million 2011 
gbp96 million the decrease in ebitda is 
largely attributable to the termination of the 
eurochem project in april 2012 and poor ﬁ nancial 
performance of some of the projects 
earnings per share
earnings per share was calculated on the 475 
million shares in issue throughout the year 
earnings per share decreased to 488 pence 
2011 1831 pence a decrease of 733 percent 
the effect of awarding incentive shares to the 
executive directors of the company is reﬂ ected 
in a diluted earnings per share of 486 pence 
taking into account the share price at 31 
december 2010 and comparing it to the target 
growth in price of at least 13 percent per annum 
for ltip shares to vest each year and a net proﬁ t 
target growth rate of 20 percent per annum
dividend policy
the group has adopted a progressive dividend 
policy with dividends moving broadly in line with 
earnings over time dividends are expected to be 
paid semiannually in respect of each year with an 
interim dividend for each year paid in september 
and a ﬁ nal dividend paid in june of the following 
year in each case subject to the satisfaction of 
the solvency test 
interim dividends are expected to represent 
around one third and ﬁ nal dividends around 
two thirds of the full year dividend for each year 
annual dividends per share are expected to be 
covered some 25–30 times by earnings per share 
due to the lower than expected operational and 
ﬁ nancial performance in the second half of the year 
under review and taking in to consideration the 
current cash position of the group the board has 
taken a prudent view and there is recommending 
not to pay a ﬁ nal dividend for 2012
despite the difﬁ culties experienced during the 
ﬁ nancial year the board remains optimistic as to 
the company’s long term prospects for growth 
and the board intends to resume its progressive 
dividend policy in due course
financial position
total assets decreased to gbp1335 million 2011 
gbp1438 million and net assets decreased to 
gbp437 million 2011 gbp480 million
interestbearing debt to equity has decreased to 
257 percent 2011 337 percent the facilities 
granted to the group by standard bank of south 
africa limited have been reduced by gbp39 
million during the year in accordance with the 
amortisation schedule of the facilities
the group’s net debt deﬁ ned as interest bearing 
debt minus cash has deteriorated to gbp21 
shaftsinkersra2013front endindd   12 27042013   0055 shaft sinkers annual financial report 2012
13
million 2011 net cash of gbp61 million this 
was largely due to the poor ﬁ nancial performance 
on contracts that resulted in lower cash generation 
from operating activities and cash utilised in 
the increase in working capital notably trade 
receivables by way of accumulated unpaid 
variation orders the bulk of these variation orders 
have been collected subsequent to year end
the group’s net current assets decreased 
to gbp162 million 2011 net current assets 
gbp168 million 
ppe
new additions to property plant and equipment 
amounted to gbp127 million 2011 gbp105 
million the additions during the year comprised 
mainly the capital expenditure incurred in 
respect of the hindustan zinc and kibali 
goldmine projects that were awarded during 
the 2012 ﬁ nancial year the acquisition of and 
improvements to the new training centre of the 
group as well as capital expenditure incurred in 
respect of the impala 17 and leeuwkop projects
disposals of plant and equipment in 2012 were 
gbp25 million 2011 gbp13 million the 
majority of the disposals during the period 
related to plant and equipment of the eurochem 
project that were included in the receivable from 
eurochem and has therefore been treated as a 
disposal in the group’s accounting records
other intangibles
the group has invested gbp17 million to date 
in a 75 share of the development of technology 
for the automated inspection of mine shafts the 
development is in the prototype phase and it is 
envisaged at this stage that the group will not 
be required to invest any material amounts going 
forward
inventories
inventories decreased to gbp49 million 2011 
gbp162 million due primarily to inventory held 
for the eurochem project being recognised 
as part of the claim against eurochem upon 
termination of the contract in april 2012
trade and other receivables
trade and other receivables increased to gbp612 
million 2011 gbp490 million the increase 
in trade and other receivables are attributable 
primarily to the following factors
•  the award of the hindustan zinc and kibali 
gold mine projects during the 2012 ﬁ nancial 
year resulted in an increase in receivables
•  plant and equipment and inventories held 
in respect of the eurochem project were 
recognised as receivables following the 
termination of the contract together with 
accrued demobilisation costs and
•  revenue accruals raised on the impala 16 and 
17 styldrift and karee 3 projects for work 
performed under scope variations
offset by
•  interest free advances received from 
eurochem for which the group has a 
contractual right to set off against unpaid 
amounts
order book
the group’s order book at ﬁ nancial reporting 
period end is calculated to represent the total 
value of estimated outstanding project revenues 
for contractually committed projects excluding 
any escalation which is typically built into the 
contracts the order book at 31 december 
2012 amounted to gbp3465 million 2011 
gbp3011 million  the increase is mainly due 
shaftsinkersra2013front endindd   13 27042013   0055 shaft sinkers annual financial report 2012
14
to the award of the hindustan zinc and kibali 
goldmine projects during the year which was 
offset by revenue recognised during the year on 
continuing projects
cash
the group ended the year with a favourable cash 
balance of gbp91 million 2011 gbp223 million 
the cash utilisation went towards working capital 
increases of gbp229 million further expenditures 
on interest and taxes of gbp07 million and 
dividends of gbp34 million reduced cash on hand 
interest bearing debt was repaid to the extent of 
gbp39 million during the year under review the 
group received advance revenues and interest free 
advances from clients that amounted to gbp307 
million project related capital expenditure of 
gbp127 million was incurred during the year
at 31 december 2012 the group held its cash in 
the following currencies
•  british pounds  
gbp07 million
•  united states dollars
usd77 million   gbp47 million
•  russian roubles 
rur09 million  gbp002 million
•  united arab emirates dirham
aed01 million  gbp001 million
•  indian rupees
inr573 million  gbp06 million
•  euro
eur04 million  gbp03 million
•  kazakstan tenge
kzt09 million  gbp0004 million
•  south african rands
zar393 million  gbp29 million
during the year the group set aside usd30 
million gbp19 million as security for the 
issuance of a performance bond in respect of 
the newlyawarded kibali goldmine project 
these funds are therefore restricted and are not 
currently freely available for other use by the 
group
committed order book   gbp million
0
20
40
60
80
100
120
140
160
2017 2016 2015 2014 2013
shaftsinkersra2013front endindd   14 27042013   0055 15
deferred revenue
deferred revenue represents revenues received 
in advance from clients in line with the group’s 
contracting model clients are generally required 
to fund the procurement of capital expenditures 
necessary for a project in advance of the group 
procuring those assets these revenues received 
in advance are deferred for recognition as and 
when the plant and equipment is brought into use 
on the project and amortised to revenue over the 
remaining life of the project
the other expenditures on projects such as 
labour and consumable materials are billed to 
clients monthly and are generally paid within 30 
days of billing
deferred revenues in the statement of ﬁ nancial 
position increased to gbp157 million 2011 
gbp128 million primarily as a result of the 
award of both the hindustan zinc and kibali 
goldmine projects as well as increases in deferred 
revenues on the styldrift project these increases 
were offset by deferred revenues released to 
proﬁ ts during the year
deferred revenues released to proﬁ ts during 
the year amounted to gbp115 million 2011 
gbp141 million against cash received from 
clients for advance revenue of gbp152 million 
2011 gbp122 million
interestfree advances from clients
interest free advances that were received from 
eurochem in prior years were reclassiﬁ ed and 
set off against receivables owed to the group by 
eurochem at 31 december 2012 as a result of 
the termination of the contract with eurochem in 
april 2012
the interest free advances reﬂ ected at 31 
december 2012 relate to advances received from 
new contract awards during the 2012 ﬁ nancial 
year these advances are repayable over the 
remaining contract period once the group’s 
billing to the relevant client reaches 10 of the 
total contract value
at 31 december 2012 total interest free 
advances outstanding amounted to gbp155 
million 2011 gbp244 million
shaftsinkersra2013front endindd   15 27042013   0055 shaft sinkers annual financial report 2012
16
internal controls and risk management
introduction
this section explains the group’s internal 
control environment the process for assessing 
its effectiveness and the way in which risk is 
evaluated and managed within the group 
there is also a brief discussion of the principal 
risks identiﬁ ed by the group and the mitigating 
strategies adopted
internal controls
the group’s internal control system comprise 
the policies procedures and work methods 
that combine to ensure an effective and 
efﬁ cient operation they are intended to allow 
the business to respond appropriately to 
signiﬁ cant operational ﬁ nancial compliance 
and other business risks facing the group on 
a daily basis this includes stringent safety 
procedures procedures for the safeguarding 
of assets against loss and fraud and managing 
exposure to liabilities where possible so as to 
ensure the sustainability of the group’s ongoing 
business the group’s systems of information 
ﬂ ow are critical to ensure that no unnecessary 
risks arise from lack of or poor communication 
the group is vigilant to ensure it complies with 
applicable laws and regulations and keeps 
abreast of developments in these areas the 
group monitors the effectiveness of the systems 
of internal control on a regular basis through 
its internal audit function the external audit 
function an annual review of risk approved by 
the board and through ongoing reconciliations 
and reviews of ﬁ nancial transactions on a regular 
monthly basis
the group has complied with the provisions 
of the uk corporate governance code on 
internal controls and the relevant parts of the 
turnbull guidance for the ﬁ nancial periods 
under review internal controls form an integral 
part of the group’s culture while the system of 
internal control mitigates it cannot eliminate 
the possibility of poor judgement in decision
making human error control processes being 
deliberately circumvented by employees and 
others management overriding controls and 
the occurrence of unforeseeable circumstances 
it can only therefore provide reasonable but not 
absolute assurance that the control objectives 
are met it cannot provide guaranteed protection 
against the group failing to meet its business 
objectives or avoiding all material errors losses 
fraud or breaches of laws or regulations
responsibilities
the board of directors acknowledges its 
responsibility for the group’s system of internal 
control it has set appropriate policies on internal 
control and seeks regular assurance that the 
system is functioning effectively the board 
endeavours to ensure that the system of internal 
control is effective in managing risks in the 
manner which it has approved
the board considers the following factors in 
determining the adequacy of the group’s system 
of internal control
•  the nature and extent of the risks facing 
the group
•  the extent and categories of risk that it 
regards as acceptable for the group to bear
•  the likelihood of the risks concerned 
materialising
•  the group’s ability to reduce the incidence 
and impact on the business of risks that may 
materialise through mitigating strategies and
•  the costs of operating particular controls 
relative to the beneﬁ t thereby obtained in 
managing the related risks
shaftsinkersra2013front endindd   16 27042013   0055 17
management implement policies set by the 
board on risk and control management identify 
and evaluate the risks faced by the group for 
consideration by the board and design operate 
and monitor a suitable system of internal control 
which implements the policies adopted by 
the board
the group’s employees share the responsibility 
for internal control as part of their accountability 
for achieving objectives they participate in 
setting and carrying out the group’s objectives 
and assist in designing the mitigating strategies 
to avoid the risks the group faces
reviewing the effectiveness of 
internal control
the board reviews the effectiveness of internal 
control on a regular annual basis the board 
forms its own view on the effectiveness of the 
system of internal control after due and careful 
enquiry based on the information and assurances 
provided to it management is accountable to 
the board for monitoring the system of internal 
control and provides assurance to the board that 
it has done so the role of each of the board 
committees in the review process including that 
of the audit committee has been set out by the 
board the various board committees report 
to the board at each quarterly board meeting 
on the matters set out in their respective terms 
of reference and the board carefully considers 
these reports the board takes responsibility for 
the disclosures on internal control in the annual 
report and accounts
process of preparing consolidated accounts
the consolidation of ﬁ nancial performance and 
assets and liabilities is performed on the group’s 
software systems which have appropriate access 
controls all signiﬁ cant movements and unusual 
items in data which are submitted are reviewed 
by a senior member of the ﬁ nance team key 
consolidation journals relating to data submitted 
by group companies are reviewed within the 
ﬁ nance department in accordance with their 
signiﬁ cance a reconciliation and analysis of 
consolidation journals is reviewed by the chief 
financial ofﬁ cer for the country concerned 
internal ﬁ nancial reports are produced monthly by 
the ﬁ nance department and reviewed by senior 
members of the group’s ﬁ nance and operations 
teams and then distributed to management and 
the board
the ﬁ nancial department produces quarterly 
instructions and an annual timetable to be 
followed by group companies in the preparation 
of monthly and quarterly forecasts and the 
annual budget the ﬁ nance department monitors 
compliance with the instructions and timetable 
and follow up any cases of noncompliance
risk management
the group has an ongoing process for 
identifying evaluating and managing the 
signiﬁ cant risks faced by the group that has 
been in place for the year under review and up 
to the date of approval of the annual report and 
accounts this process is regularly reviewed by 
the board
the executive management of the group 
conducts regular monthly operational reviews for 
each site and for each operational department 
against measurable performance targets budgets 
and other key performance indicators to ensure 
risks are being communicated and managed
risk assessment
the principal risks faced by the group are 
considered and formally reviewed by the board 
on an annual basis the key risks faced by the 
group are summarised below without any 
speciﬁ c order of ranking
shaftsinkersra2013front endindd   17 27042013   0055 18
strategic risk
the risk of ineffective or poorly executed strategy 
failing to meet shareholder objectives is one of 
the primary risks facing the group the board 
gets involved in setting the broad strategic 
objectives and monitors executive management’s 
performance against these annually set goals by 
frequent communication and regular quarterly 
review of ﬁ nancial performance
safety risk
due to the nature of the group’s operations 
a signiﬁ cant part of our risk relates to safety a 
dedicated safety health environment quality 
and training department sheqt monitors safety 
statistics and events on a daily basis each site 
has a dedicated safety ofﬁ cer responsible for 
managing safety matters including monitoring 
the progress of action plans reporting on safety 
incidents and ensuring the group’s policies in 
this regard are being adhered to in this way the 
group ensures accountability and responsibility 
for these matters remains with the operational 
management team the safety committee of the 
board meets quarterly to review reports from the 
sheqt department
safety is one of the cornerstones of the group’s 
success as a result executive management adopt 
a daily monitoring of safety statistics with weekly 
presentations should any incident arise resulting 
in lost time injuries the safety committee reviews 
the performance on a quarterly basis and reports 
to the board with recommendations should 
they be required a comprehensive set of safety 
procedures are regularly reviewed and updated for 
any new risks identiﬁ ed 
financial risk
the risk of inadequately funding or 
inappropriately managing the funding of the 
business is one of the primary risks that could 
lead to ﬁ nancial adversity regular daily reviews 
of cash management with rolling forecasts and 
strong controls over the management of cash 
are implemented by the executive management 
the board sets prudent policies for the hedging 
of currency and interest rate risk and the audit 
and risk committee reviews these aspects on a 
quarterly basis insurance is taken to protect the 
group against the risk of fraud or theft of funds
other signiﬁ cant ﬁ nancial risks include the 
safeguarding of assets inappropriate tendering 
prices that could cause the group to lose 
potential contracts corrupt procurement practices 
resulting in excessive costs and mismanagement 
of expenditures for each of these the group 
has implemented appropriate policies and 
procedures and executive management regularly 
reviews performance against set targets 
the group is in the process of upgrading its 
information systems to further enhance controls 
improve the efﬁ ciency of reporting of information 
and to ensure its tendering process has the latest 
accurate information on costs with less time and 
effort required
legal and regulatory breach
we are committed to high standards of corporate 
responsibility we adhere to the principles of 
selfregulation backed by appropriate policies 
and management review  we have developed 
a groupwide antibribery and corruption 
policy which is being implemented throughout 
the group through the necessary procedures 
taking into account the requirements of the 
oecd convention on bribery of foreign public 
ofﬁ cials in international business transactions 
the us foreign corrupt practices act of 1977 as 
amended the uk bribery act 2010 and the anti
bribery and corruption statutes of all jurisdictions 
to which the company and its subsidiaries and 
shaftsinkersra2013front endindd   18 27042013   0055 shaft sinkers annual financial report 2012
19
afﬁ liates are subject and any related rules and 
regulations the rolling out of an enhanced 
compliance framework is in progress
we are aware that some of the jurisdictions in 
which the group operates pose particular and 
often heightened reputational issues that need 
to be managed appropriately we are conscious 
of the risk of failure to comply with antibribery 
anticorruption antimoney laundering andor 
sanctions laws and regulations which could lead 
to share price devaluation ﬁ nancial penalties and 
criminal prosecutions
we are committed to high standards of corporate 
responsibility we adhere to the principles of self
regulation backed by appropriate policies and 
management review we are developing a group
wide antibribery and corruption compliance 
function the rolling out of an enhanced 
compliance framework is in progress
for a further discussion on the group’s exposure 
to market risk liquidity risk and credit risk refer 
to notes 281 282 and 283 to the ﬁ nancial 
statements on pages 76 to 83
external risk
the political social or economic environment 
in any jurisdiction may change leading to the 
inability to realise the expected results from our 
projects by diversifying into other industrial 
applications and geographic regions the board 
has sought to mitigate these risks to the extent 
possible through the strategic direction of the 
business the group is aware of the political 
risks in some of the geographies in which it 
operates and has implemented appropriate risk 
mitigating strategies both on a ﬁ nancial and 
legal framework level
operational risks
the risk of operating below best industry 
standards could lead to lost contracts in the 
long run or could lead to shortterm costs to the 
group the contracting models of the group 
have been established to mitigate some of these 
risks but strong disciplines within the operations 
departments and the focus on attracting and 
retaining key skills is a vital part of the strategy 
of the group regular planning by executive 
management on securing the appropriate resources 
for current and future projects is part of the 
mitigating strategies constantly receiving attention 
at all levels of management and the board
internal audit
the internal audit function of the group 
reviews the various business cycles of the 
group throughout the year on a cyclical basis 
and follows up on all risk mitigating strategies 
identiﬁ ed for implementation at the annual risk 
planning sessions held by the group the group 
has retained the services of deloitte as internal 
auditors for the larger assignments the group’s 
internal audit manager has a direct reporting line 
to the chairman of the audit and risk committee 
and also a reporting line to the chief financial 
ofﬁ cer internal audit has unfettered access to all 
areas of the group and follows an annual plan set 
by the audit and risk committee internal audit 
encourages employees to make use of a whistle
blowing facility on an anonymous basis 
shaftsinkersra2013front endindd   19 27042013   0055 shaft sinkers annual financial report 2012
20
2012 key performance indicators
revenue £m
2265
2011 2012
1925
order book £m
3011
2011 2012
3460
eps pence
1830
2011 2012
488
lost time injury frequency rate
475
2011 2012
408
gross margin 
169
2011 2012
117
ebitdarevenue 
110
2011 2012
57
cash and cash 
equivalents £m
223
2011 2012
91
 restated
shaftsinkersra2013front endindd   20 27042013   0055 shaft sinkers annual financial report 2012
21
sustainability review and corporate 
social investment
introduction
to remain at the forefront of shaft sinking and 
underground development both in south 
africa and abroad requires innovative strategies 
to attract and retain the best talent as well as 
being a responsible social partner in order to 
be sustainable over the long term investing in 
our people and the communities within which 
we operate are key pillars to ensure sustained 
success in a highly specialised and competitive 
environment
while remaining at the forefront of the industry 
in terms of our remuneration levels to retain and 
attract scarce skills this comes at a price of facing 
more severe competition on price from within 
the territories where we compete in the market 
or alternatively from competitors bidding for the 
same work at a lower cost of labour one of the 
primary concerns to us is the safety and quality 
of our operations and our investment in people 
is testimony to our track record which often 
counts more to potential clients than the direct 
cost of labour in the long term a quality product 
delivered to our clients is more sustainable and 
yields better economics 
community
the group has adopted a focussed approach 
since the latter part of 2009 to invest in carefully 
selected initiatives within the communities 
surrounding our operations the focus is to 
create selfsustaining meaningful employment 
opportunities
the company has taken a multi pronged 
approach to the development of the community 
by investing in microsized enterprises some 
initiatives have included for example the 
building of three fullyequipped food trailers 
with a view to providing our employees access 
to refreshments close to their place of work 
and at the same time providing employment 
to an entrepreneur from the local community 
the focus is on sustainability which will allow 
the entrepreneurs to integrate into the local 
community once shaft sinkers has completed its 
project 
in keeping with the focus on sustainability 
shaft sinkers invests in enterprise development 
initiatives which include contributing towards 
the funding of several new businesses for 
entrepreneur development through a professional 
service provider the types of businesses 
supported are diverse and range from wetcrete 
applications for underground operations waste 
removal oil recycling to catering 
investment in our people 
we acknowledge that our people are the core 
asset of the business and we are therefore 
continuously exploring ways of maintaining and 
building on this asset
competitive salaries and bonus schemes with 
good quality beneﬁ ts are minimum requirements 
to ensure good quality skills are obtained and 
retained the differentiating factors to be the 
employer of choice are often hidden in other 
beneﬁ ts 
we provide for the debrieﬁ ng of staff on site by 
qualiﬁ ed psychologists in the event of a traumatic 
event and includes facetoface counselling 
for personal issues including hiv counselling 
professional assistance with debt management 
etc
we have two adult based education training 
abet centres with two fulltime abet 
facilitators which provides adult basic education 
to employees after work hours at our impala and 
lonmin projects 
we engage fulltime engineering learners 
apprentices in various trades to ensure a 
constant supply of these scarce resources to our 
business and to help develop the communities in 
which we operate
shaftsinkersra2013front endindd   21 27042013   0055 shaft sinkers annual financial report 2012
22
directors’ report – business review
the directors hereby present the annual report 
and accounts of shaft sinkers holdings plc the 
‘company’ and together with its subsidiaries 
the ‘group’ for the year ended 31 december 2012
principal activities
the group is a leading diversiﬁ ed shaft sinking and underground 
excavation group providing services in the areas of shaft sinking 
engineering design tunnelling large underground storage caverns 
contract mining and mine operations assets are principally located 
in the republic of south africa india and the democratic republic of 
the congo the group has two main service divisions shaft sinking 
and mining engineering technical services mets and two main 
segments for reporting purposes international and south africa
business review
the business review has been prepared to provide the company’s 
shareholders and other interested parties with a fair review of the 
business of the group and a description of the principal risks and 
uncertainties facing it the business review incorporates by reference 
into this report the following which collectively contain a discussion 
of the main trends and factors likely to affect the future development 
performance and position of the company’s business and the 
strategy for preserving value and for delivering objectives
chairman’s statement on pages 4 and 5
chief executive ofﬁ cer’s statement on pages 6 to 9
financial review on pages 10 to 15
internal controls and risk management on pages 16 to 19
2012 key performance indicators on page 20
sustainability review and corporate social investment on page 21
the business review may not be relied upon by anyone including the 
company’s shareholders for any other purpose the business review 
is designed to provide shareholders with an understanding of the 
company’s business and the environment in which it operates and of 
necessity only focuses on material issues and facts the omission of 
reporting on any speciﬁ c topic should not be taken as implying that it 
is not being addressed
the business review and other sections of this report contain forward
looking statements by their nature forwardlooking statements involve 
a number of risks uncertainties and future assumptions because they 
relate to events and  or depend on circumstances that may or may 
not occur in the future and could cause actual results and outcomes 
to differ materially from those expressed in or implied by the forward
looking statements no assurance can be given that the forward
looking statements in the business review will be realised statements 
about the directors’ expectations beliefs hopes plans intentions 
and strategies are inherently subject to change and they are based on 
expectations and assumptions as to future events circumstances and 
other factors which are in some cases outside the company’s control 
the information contained in the business review has been prepared 
on the basis of the knowledge and information available to directors at 
the date of its preparation and the company does not undertake any 
obligation to update or revise the business review during the ﬁ nancial 
year ahead it is believed that the expectations set out in these 
forwardlooking statements are reasonable but they may be affected 
by a wide range of variables which could cause actual results or trends 
to differ materially the forwardlooking statements should be read in 
particular in the context of the speciﬁ c risk factors for the company 
identiﬁ ed in the business review the company’s shareholders 
are cautioned not to place undue reliance on the forwardlooking 
statements shareholders should note that the business review has not 
been audited or otherwise independently veriﬁ ed 
principal events of the year
the principal events of the year are covered in the business review 
the key events during the year were
•  the termination of the eurochem contract on 20 april 2012 and 
the arbitration claims instituted against the group on 5 october 
2012 together with the group’s counterclaims
•  the south african labour unrest during the second half of the 2012 
ﬁ nancial year and
•  the award of two key projects to the group being the hindustan 
zinc and the kibali goldmine projects 
eurochem project
the eurochem contract was terminated on 20 april 2012 following 
the suspension by the client of the grouting efforts on the project 
toward the end of the 2011 ﬁ nancial year the demobilisation 
activities on the project were largely completed by the end of the 
2012 ﬁ nancial year
in october 2012 eurochem issued a notice of arbitration claiming 
an amount of approximately usd800 million gbp495 million the 
arbitration claim was reviewed in consultation with external legal 
counsel and the board continues to be of the view that the claim is 
without merit and the subsidiaries concerned are contesting the claims 
robustly
the group submitted a counterclaim against eurochem to the net 
value of usd15 million gbp93 million for outstanding amounts 
payable under the contract the gbp equivalent of this claim is 
included in trade and other receivables in the statement of ﬁ nancial 
position 
shaftsinkersra2013front endindd   22 27042013   0055 shaft sinkers annual financial report 2012
23
south african labour unrest
during the second half of the ﬁ nancial year the south african mining 
industry was subjected to a wave of illegal strike action by workers in the 
mining industry the disruption caused by these actions had an adverse 
effect on production at the group’ s south african operations with a 
consequential impact on the ﬁ nancial performance of the group
contract awards
the group was awarded two high proﬁ le projects during the year 
which were the award of the hindustan zinc project in india and the 
kibali goldmine project in the democratic republic of the congo 
the award of these projects reﬂ ects the strategy that has been 
followed by the board in achieving both geographical and resource 
diversiﬁ cation 
dividends
during the 2012 ﬁ nancial year the following dividends were declared 
and paid
• final dividend of 2011 of 48p per share – paid in june 2012 and
•  interim dividend of 2012 of 24p per share – paid during 
october 2012 
no final dividend for 2012 is recommended by the board
annual general meeting
the second annual general meeting ‘agm’ will be held on friday 
7 june 2013 in london details of the resolutions to be presented at 
the agm together with explanations appear in the notice of agm on 
pages 94 to 97
share capital
as at 31 december 2012 the company’s issued share capital was 
gbp58900001 with 47500000 ordinary shares of no par value in 
issue share capital in the statement of ﬁ nancial position is stated 
after deduction of capitalised ipo expenses of gbp2336202 
the ordinary shares are listed on the premium segment of the 
london stock exchange the rights and obligations attaching to the 
company’s shares in addition to those conferred on their holders by 
law are set out in the articles of association a copy of which can be 
obtained from the company’s registered agent and the company 
secretary at the company’s registered ofﬁ ce the holders of ordinary 
shares are entitled to receive all shareholder documents to attend 
and speak at general meetings of the company to appoint proxies 
and to exercise all voting rights and to participate in distributions of 
income or capital 
amendments to the articles of association
the company’s articles of association may only be amended by a 
special resolution at a general meeting of the shareholders
major interests in shares
as at 31 march 2013 the following shareholders either notiﬁ ed the 
company or the company is aware of major interests in shares where 
the threshold of 3 of the issued share capital of the company was 
crossed or reached
 number of voting rights  nature of holding
international mineral 
resources bv 22819266 4804 direct
artemis investment
management llp 1753680 369 direct
j o hambro
investment management 1656000 349 indirect
relationship agreements
international mineral resources bv “imr” and the company entered 
into a relationship agreement on 20 december 2010 the ‘‘relationship 
agreement’’ which regulates the ongoing relationship between imr 
and the group with a view to ensuring that the group is capable of 
carrying on its business independently of imr and that transactions 
and relationships between the group and imr are at arm’s length and 
on a normal commercial basis
imr its direct and indirect beneﬁ cial owners and any subsidiary 
not including the company are referred to in this paragraph as its 
‘‘shareholder group’’ for the purposes of the relationship agreement 
an “independent director” broadly means a director of the company 
who is not a current or recent director ofﬁ cer employee or shareholder 
of or consultant to or a person having a relationship association or 
interest which is material to him with or in or who has been nominated 
by imr or any associate as deﬁ ned in the relationship agreement of 
imr or with or in any person having a relationship which is material to it 
or him with imr or any associate of imr
under the relationship agreement imr and the company agree 
inter alia that
a  imr shall not vote on any shareholder resolution that is required 
pursuant to applicable law or regulation to alter the company’s 
articles or memorandum of association which would be contrary 
to the maintenance of the company’s ability to manage and run 
its business independently of imr and the shareholder group 
unless such resolution is supported by the votes of the majority of 
independent directors
shaftsinkersra2013front endindd   23 27042013   0055 shaft sinkers annual financial report 2012
24
b   there shall at all times be a majority of independent directors 
on the board whose number shall not be less than the number 
of directors nominated by imr in addition the number of 
nonexecutive independent directors shall not be less than the 
number of nonindependent directors imr shall exercise the 
voting rights attaching to the ordinary shares held from time to 
time directly or indirectly by it andor by any of its shareholder 
  group and shall use reasonable efforts to procure so far as it 
is able that the nonindependent directors shall exercise their 
voting rights on the board so that if it becomes aware that an 
independent director ceases to be an independent director of the 
company for any reason that independent director will insofar as 
may be necessary to ensure that there continues to be a majority of 
independent directors on the board and that the number of non
executive independent directors shall not be less than the number 
of nonindependent directors be replaced or supplemented as 
the case may be by a new executive or nonexecutive director as 
the case may be who is also an independent director
c   save to the extent required by law or as otherwise contemplated in 
the relationship agreement they shall exercise their powers in a 
manner which shall not prevent the company from being managed 
in accordance with the principles and provisions set out in the uk 
corporate governance code
d   they shall and shall respectively use reasonable efforts to procure 
that all subsidiaries of imr and the company respectively shall 
conduct all transactions and relationships with imr and all 
subsidiaries of imr as the case may be on arms’ length terms
e   no material agreement arrangement or transaction between the 
group and any associate of the controlling shareholder shall be 
entered into novated varied abrogated nor shall any agreement 
be materially amended unless approved by a resolution of the 
board which has been voted for by a majority of the independent 
directors the group must enforce the terms of agreements with 
imr and associates of imr unless there is a bona ﬁ de commercial 
reason not to do so and such action has been approved by 
resolution of the board which has been voted for by a majority of 
the independent directors
 f   if within ﬁ ve years of the date on which the relationship 
agreement is executed imr is presented with an opportunity to 
develop or acquire a business principally concerned with shaft 
sinking it will ﬁ rst offer to the company the chance to take up 
such opportunity and if the company does not conﬁ rm in writing 
within 14 days of being so informed that it wishes to pursue the 
opportunity then it shall be deemed to have declined it and
h  save where the approval of the board has been given imr shall 
not and shall procure that no other member of its shareholder 
group shall recruit solicit or entice any senior employee of the 
company or any member of its group with a salary in excess of 
gbp100000 this prohibition shall not apply where such senior 
employee independently approaches imr 
  imr shall have the right to appoint two directors to the board so 
long as it its group or its shareholder group controls 25 per cent 
or more of the voting rights at general meetings of the company 
where such percentage control is 15 per cent or more but less 
than 25 per cent the right is to appoint one director 
  at the date of this report imr has no appointed director on 
the board
relations with shareholders
the group aims to provide a high level of transparency and 
communication to investors and analysts on a regular and timely basis 
through announcements meetings and seminars the group seeks to 
develop a regular dialogue with investors and analysts and to respond 
to their challenges and to understand their sentiments and concerns
all shareholders have the opportunity to attend and raise questions at 
the company’s annual general meeting the group aspires to have 
an investor relations programme that meets the aspirations of all of its 
current and potential shareholders and that lends itself to the growth of 
the group’s business and future sustainability
 the chief executive ofﬁ cer and chief financial ofﬁ cer aim to meet all 
major shareholders at least twice a year and to meet with a wide range 
of shareholders and prospective investors in the united kingdom 
these discussions will focus on the results and businesses of the group 
but will also seek to learn of any concerns amongst investors and to 
gain a deeper understanding of their strategic objectives the group 
will also seek to meet with sellside analysts to raise the group’s proﬁ le 
and to build the research coverage
the chairman and nonexecutive directors are encouraged to attend 
investor relations meetings or to request meetings with investors or 
analysts independent of the group’s management the chairman 
stephen oke remains available to shareholders and encourages a 
dialogue between shareholders and the company
transactions with related parties
loans to and from related parties are disclosed in note 23 to the annual 
ﬁ nancial statements 
shaftsinkersra2013front endindd   24 27042013   0055 shaft sinkers annual financial report 2012
25
employees
the group employed approximately 7400 people as at the end of the 
2012 ﬁ nancial year further information about employees is disclosed 
in the sustainability review on page 21
creditor payment policy
the group’s policy is to agree terms of trading with suppliers in 
advance and to make payment in accordance with these terms the 
group does not follow any speciﬁ c published code or standard on 
payment practice the group generally adheres to marketrelated 
repayment terms applicable to the territory in which it operates 
post balance sheet events
the directors are not aware of any other matter or circumstance not 
disclosed in this report and arising since the end of the ﬁ nancial year not 
otherwise dealt with in the annual ﬁ nancial statements which signiﬁ cantly 
affects the ﬁ nancial position at 31 december 2012 or the results of the 
group’ s operations or cash ﬂ ows for the year then ended
financial instruments
details of the group’s ﬁ nancial risk management objectives and 
policies are described in the internal controls and risk management 
report on pages 16 to 19 and in note 28 to the consolidated 
financial statements on pages 76 to 83
charitable and political donations
no political donations were made during the year and no donations 
were made to any political party representative or candidate in any 
part of the world during the year the group funded a number of 
long term corporate social investment projects in south africa as part 
of its corporate social responsibility programme refer also to the 
sustainability review which can be found on page 21 of this annual 
report
signiﬁ cant agreements and other potential legal 
impediments
the following represent signiﬁ cant agreements and other potential 
legal impediments which may entitle the counterparties to exercise 
termination or other rights in the event of a change of control of the 
company the remaining essential contractual arrangements can be 
summarised as follows
•  contracts for the purchase of inputs – the supplies needed to 
operate the group’s projects are secured through competitive 
tendering in the open market and can be obtained from a variety 
of sources
•  financing arrangements – the company and group have bank 
facilities in place which we believe could be replaced in the open 
market
•  contracts relating to labour and services – the principal 
arrangements essential to the group’s business in south africa 
are collective agreements with trade unions representing the 
majority of the group’s employees
signiﬁ cant agreements – change of control
a number of agreements take effect alter or terminate upon a change 
of control of the company following a takeover bid such as borrowing 
facilities and contracts with clients these are deemed to be signiﬁ cant 
to the group’s business the group’s banking facilities with standard 
bank of south africa limited amounting to zar250 million gbp199 
million require the approval of standard bank in the event of a change 
of ultimate control of its subsidiaries shaft sinkers pty limited or 
capstone 615 pty limited 
the group does not have agreements with any director or employee 
that would provide compensation for loss of ofﬁ ce or employment 
resulting from a takeover
shaftsinkersra2013front endindd   25 27042013   0055 shaft sinkers annual financial report 2012
26
auditors and disclosure of information to auditors
the group’s external auditors kpmg audit llc have indicated their 
willingness to continue in ofﬁ ce and a resolution seeking to reappoint 
them will be proposed at the forthcoming agm each of the directors 
at the date of approval of this report conﬁ rms that
1   so far as the director is aware there is no relevant audit 
information of which the group’s auditors are unaware and
2   the director has taken all the steps that he ought to have 
taken as a director to make himself aware of any relevant audit 
information and to establish that the group’s auditors are aware 
of the information
going concern
the group’s business activities and operational performance are 
detailed in the chairman’s report – refer to pags 4 to 5 and the 
chief executive ofﬁ cer’s report – refer to pags 6 to 9 the ﬁ nancial 
performance and liquidity of the group is described in the chief 
financial ofﬁ cer’s report – refer to pages 10 to 15
as described in note 20 to the consolidated annual ﬁ nancial 
statements the group has borrowings and facilities which together 
with receipts from clients fund the daily working capital requirements of 
the group 
volatile economic conditions may occasionally create uncertainty in 
respect of
•  demand for the group’s services as a consequence of reduced 
capital expenditure within the mining and related industries and
• the availability of bank ﬁ nancing in the foreseeable future
in assessing the group’s ability to continue as a going concern the 
board reviews the following
•  group forecasts and projections for at least an 18 month forward 
looking period taking into account potential changes in group 
performance the forecasts and projections focus on both the 
ﬁ nancial performance as well as the liquidity of the group
•  the aforementioned forecasts and projections are further 
subjected to a stress test by applying a conservatism factor in order 
to ascertain whether the group will be able to operate in periods 
of duress
the group forecasts and projections indicate the group should be 
able to operate within the level of its capital structure the board 
has factored into its liquidity forecasts and considered the impact of 
gbp19m usd3m of cash being restricted as a result of the security 
provided to the groups bankers for the performance guarantee issued 
in respect of a project
the board has also considered the claim received from eurochem 
of an amount of approximately usd800 million gbp495 million 
in determining its ability to continue as a going concern based 
on the review of the arbitration claim in consultation with external 
legal counsel the board continues to be of the view that the claim 
is without merit and the subsidiaries concerned are contesting the 
claims robustly as such the board has not forecast any requirement to 
settle amounts arising from this claim however given the ongoing 
arbitration process management forecasts include best estimates of 
expenses likely to be incurred in defending the groups position 
the amount the group submitted as a counterclaim against eurochem 
to the net value of usd15 million gbp93 million for outstanding 
amounts payable under the contract  as a result of the uncertainty 
regarding the timing of any receipts awarded from the arbitration 
process has not been forecast as received during the future period 
reviewed and as such does not have any impact on available liquidity
discussions are currently being held with the group’s bankers about 
the future borrowing needs of the group athough these discussions 
have not yet reached ﬁ nal conclusion at the ﬁ rst practical date before 
issuing this report management is optimistic that the group is able 
to secure the necessary funding it may require 
based on the forecasts prepared the board considers that the 
group has sufﬁ cient ability to meet its scheduled debt repayments 
during the forecast period from the facilities and cashﬂ ows available 
to it the current facilities expire in december 2014 the group 
is negotiating renewal of these facilities at least in line with levels 
achieved previously with amended banking covenants in order to 
execute its current strategic plan the group will likely require the 
continued support of its bankers with regard to relaxation of covenant 
requirements should renegotiation of facilities not be ﬁ nalised 
prior to the next measurement date based on experience to date 
management have concluded that this is likely
the directors believe that the group has adequate resources in place 
to continue in operational existence for the foreseeable future the 
consolidated annual ﬁ nancial statements therefore continue to be 
prepared on a going concern basis
shaftsinkersra2013front endindd   26 27042013   0055 shaft sinkers annual financial report 2012
27
directors’ report – corporate governance
compliance with the code
shaft sinkers holdings plc is committed to high standards of 
corporate governance this report details how the company 
has applied the principles and provisions of the uk corporate 
governance code the ‘code’ which was published in june 
2010 by the financial reporting council and which applies to 
the company since 1 january 2011 throughout the company’s 
reporting period ended 31 december 2012 the company has been 
in compliance with the provisions of the code with two exceptions 
that of provision a31 which requires that ‘the chairman should 
on appointment meet the independence criteria set out in b11’ 
and that of provision a41 which requires that ‘the board should 
appoint one of the independent nonexecutive directors to be the 
senior independent director’ 
the independence criteria in b11 includes amongst other factors 
determining whether a director has or has had within the last three 
years a material business relationship with the company either 
directly or as a partner shareholder director or senior employee of a 
body that has such a relationship with the company
mr amre youness who was the chairman of the group for a part 
of the 2012 ﬁ nancial year is also the chief executive ofﬁ cer of 
imr management services limited a company related to imr bv 
which is a major shareholder in the company and was therefore not 
independent 
with the appointment of mr stephen oke as chairman of the 
group on 30 august 2012 the role of chairman is being filled by 
an independent nonexecutive director and the group therefore 
complies with all provisions of the code with effect from 
30 august 2012
given the appointment of an independent chairman and the small 
size of the company and its board the board has concluded there is 
no need for the role of senior independent director
role of the board
the board is responsible for promoting the longterm success of 
the company and ensuring that its principal aim is to enhance the 
company’s longterm value for the beneﬁ t of shareholders whilst 
having regard to the interests of other stakeholders at its meetings 
the board reviews the group’s longterm strategic direction capital 
expenditure and budget plans and monitors on a regular basis the 
company’s operating and ﬁ nancial performance and its approach to 
risk management and corporate governance the board has 
established a formal schedule of matters which are reserved for its 
attention the major components include 
• strategy and management
 – responsibility for the overall management of the group  
 –  approval of the group’s long term objectives and commercial 
strategy  
 –  approval of the annual operating and capital expenditure 
budgets and any material changes to them
 –  approval of any speciﬁ c key expenditures falling within pre
approved budget levels
 – oversight of the group’s operations
 –  review of performance in the light of the group’s strategy 
objectives business plans and budgets and ensuring that any 
necessary corrective action is taken  
 –  extension of the group’s activities into new business or 
geographic areas
 –  any decision to cease to operate all or any material part of 
the group’s business
• structure and capital
 –  changes relating to the group’s capital structure including 
reduction of capital share issues except under employee 
share plans share buy backs including the use of treasury 
shares
 –  major changes to the group’s corporate structure
 –  changes to the constitutional documents of the company or 
any of its subsidiaries
 –  changes to the group’s management and control structure
 –  any changes to the company’s or any other listed or 
public company in the group listing or its status as a public 
company
• financial reporting and controls
 –  approval of interim and ﬁ nal results and any preliminary 
announcement of such results following the recommendation 
of the audit committee
 –  approval of the annual report and accounts including the 
corporate governance statement and remuneration report 
following the recommendation of the audit committee
 –  approval of the dividend policy 
 –  declaration of the interim dividend and recommendation of 
the ﬁ nal dividend  
 –  approval of any signiﬁ cant changes in accounting policies 
or practices following the recommendation of the audit 
committee
 –  approval of treasury policies including foreign currency 
exposure and the use of ﬁ nancial derivatives
shaftsinkersra2013front endindd   27 27042013   0055 shaft sinkers annual financial report 2012
28
• internal controls
 –  ensuring maintenance of a sound system of internal 
control and risk management 
 –  approving an appropriate statement for inclusion in the 
annual report following the recommendation of the audit 
committee
• contracts
 – major capital projects
 –  contracts which are material strategically or by reason 
of size entered into by the company or any subsidiary 
in the ordinary course of business for example bank 
borrowings above a specified amount and material 
acquisitions or disposals of fixed assets
 –  borrowings by group companies in excess of two times 
adjusted capital and reserves defined as the amount 
of paid up share capital plus the amount standing to 
the credit of accumulated group reserves adjusted in 
accordance with the articles at the discretion of the 
board
 –  material contracts of the company or any subsidiary 
not in the ordinary course of business for example loans 
and repayments foreign currency transactions major 
acquisitions or disposals
 –  major investments including the acquisition or disposal 
of interests of more than 5 percent in the voting shares of 
any company or the making of any takeover offer
 – major leasing and rental arrangements 
 – major partnership and alliance agreements
 –  approval of any related party transactions with any 
directors forming part of such related party abstaining 
from the approval process
 – approval of key insurance policies 
 • communication
 –  approval of resolutions and corresponding documentation 
to be put forward to shareholders at a general meeting  
 –  approval of all material circulars and prospectuses 
approval of routine documents such as periodic circulars 
about scrip dividend procedures or exercise of conversion 
rights could be delegated to a committee
 –  approval of press releases concerning matters decided by 
the board
• board membership and other appointments
 –  changes to the structure size and composition of the board 
following recommendations from the nomination committee  
 –  ensuring adequate succession planning for the board and key 
senior management  
 –  appointments to the board following recommendations by the 
nomination committee  
 –  appointment of key senior management with family ties to 
shareholders 
 –  selection of the chairman of the board and the chief executive 
 –  appointment of the senior independent director
 –  ensuring that directors especially nonexecutive directors have 
access to independent professional advice at the company’ s 
expense where they judge it necessary in order to discharge their 
responsibilities as directors 
 –  ensuring that directors have access to sufﬁ cient training resources 
for their development needs review of which shall be undertaken 
by the chairman on an individual director basis 
 –  t erms and conditions of employment of directors and senior 
executives including the reimbursement of director’ s expenses
 –  membership and chairmanship of board committees following 
recommendations by the nomination committee
 –  continuation in ofﬁ ce of directors at the end of their term of 
ofﬁ ce when they are due to be reelected by shareholders at the 
agm and otherwise as appropriate following recommendations 
by the nomination committee
 –  continuation in ofﬁ ce of any director at any time including the 
suspension or termination of service of an executive director 
as an employee of the company subject to the law and their 
service contract following recommendations by the nomination 
committee
 –  appointment or removal of the company secretary  
 –  appointment reappointment or removal of the external 
auditor to be put to shareholders for approval following 
recommendations of the audit committee  
• remuneration
 –  approval of the remuneration policy for the directors 
company secretary and other senior executives following 
recommendations of the remuneration committee
 –  approval of the remuneration of the nonexecutive directors 
subject to the articles of association and shareholder approval as 
appropriate  
 –  approval of the remuneration of auditors
 –  the introduction of new share incentive plans or major changes 
to existing plans to be put to shareholders for approval 
following recommendations of the remuneration committee
shaftsinkersra2013front endindd   28 27042013   0055 shaft sinkers annual financial report 2012
29
• delegation of authority
 –  the division of responsibilities between the chairman the 
chief executive and if applicable other executive directors 
which should be in writing 
 –  approval of terms of reference of board committees  
 –  receiving reports from board committees on their activities
 –  approval of the delegation of authorities to the executive 
management and to subsidiary boards 
• corporate governance matters
 –  undertaking a formal and rigorous review annually of its own 
performance that of its committees and individual directors  
 –  determining the independence of directors  
 –  considering the balance of interests between shareholders 
employees customers and the community
 –  review of the group’s overall corporate governance 
arrangements
 –  receiving reports on the views of the company’s 
shareholders  
• policies 
 – approval of material policies
• other
 – the making of political donations
 –  approval of the appointment of the group’s principal 
professional advisers
 –  prosecution defence or settlement of litigation being 
material to the interests of the group as a whole
 –  approval of the overall levels of insurance for the group 
including directors’  ofﬁ cers’ liability insurance and 
indemniﬁ cation of directors
 –  approval of the arrangements related to any group pension 
scheme
 –  ensuring that matters requiring an approval of the company 
in a general meeting are referred to such meeting 
 – this schedule of matters reserved for board decisions
directors
details of the current directors of the company and their biographies 
are set out on pages 2 to 3
under the company’s articles of association directors retire by 
rotation and all directors are subject to election at the ﬁ rst annual 
general meeting after their appointment and to reelection at 
intervals of no more than three years in accordance with the 
recommendations and requirements of the uk corporate governance 
code of june 2010 published by the financial reporting council the 
“code” all directors should be subject to annual election by the 
shareholders unless the company is a smaller company below the 
ftse 350 the chairman conﬁ rms that each of the current directors’ 
individual performance continues to be effective and demonstrates 
commitment to the role 
directors are appointed and may be removed in accordance with 
the articles of association of the company and the provisions of the 
isle of man companies act 2006 further details and biographical 
information can be found on pages 2 and 3 of this annual report
the board considers that stephen oke roger williams and 
ian watson are independent directors in accordance with the 
requirements of the code the terms and conditions of their 
appointment are available for inspection at the company’s registered 
address
the following former director resigned
 appointed resigned
amre youness 19 november 2010 30 august 2012
mr martin peters is appointed as company secretary and was 
appointed in this role on 6 october 2010 the board has conﬁ rmed 
his appointment in this role greystone trust company limited was 
appointed as registered agent on 6 october 2010
directors’ interests
the following directors held a beneﬁ cial interest in the ordinary 
shares of the company at the date of this report
 number of  
 shares held shareholding
alon davidov 78 554 017
roger williams 50 000 011
chris hall 23 000 005
details of the long term incentive plan are dealt with elsewhere in this 
report showing the award of shares to the executive directors which 
have not yet vested
details of the individuals’ skills and experience are contained within 
the directors’ biographies on pages 2 and 3
shaftsinkersra2013front endindd   29 27042013   0055 shaft sinkers annual financial report 2012
30
directors’ attendance at board and committee meetings during 2012
during the 2012 ﬁ nancial year there were three formal scheduled board meetings of the company the attendance of individual directors at 
these board meetings and the board committee meetings is shown in the table below
 independent formal scheduled audit remuneration nominations safety
   board meetings  committee committee committee committee
  attended 2012    
amre youness no 22   11 
stephen oke yes 33 22 33 11 22
roger williams yes 33 22 33  
ian watson yes 33 22 33  22
alon davidov no 33    
christopher hall no 33    
 resigned 30 august 2012
board responsibility and accountability
the chairman is responsible for the leadership of the board 
and sets the agenda for all board meetings the chairman also 
ensures the effectiveness of the board on all aspects of its role 
the nonexecutive directors assist in setting the overall strategy 
of the group and maintaining a sound risk management and 
internal control systems the board is provided with regular timely 
and relevant information in a form that enables it to discharge its 
duties the board strives to meet at least twice a year to assess 
the performance of the group all directors have access to the 
advice and services of the company secretary whose terms of 
reference include advising the board on corporate governance 
matters the group’s general council ensures that applicable 
laws and regulations are followed the group’s general council 
provides regular updates to the board on the legal and regulatory 
environment and assists in providing any training needs of the 
board the company ensures that related party transactions are 
identiﬁ ed disclosed and a regular report is presented to the board 
for approval when applicable all directors declare their interests 
in other businesses on appointment to the board and a review of 
any conﬂ icts of interest is carried out at each board meeting on 
appointment directors are provided with adequate information 
to ensure that they fully understand the business of the group 
and their legal and regulatory responsibilities as a director of 
the company the board undertakes an annual review of its own 
performance
the board has put in place a procedure whereby all directors have 
access through the chief executive ofﬁ cer or the company secretary 
to independent professional advice at the expense of the company 
the company also maintains an appropriate level of directors’ and 
ofﬁ cers’ liability insurance 
board evaluation
the chairman carries out a formal evaluation of the board’s 
performance in terms of the adopted policy the board monitors on 
a regular basis the group’s performance against the group’s strategy 
and business plan  
board committees
the board has established four principal committees as follows
nominations  remuneration audit safety
committee committee committee committee
chaired by
stephen oke ian watson roger williams ian watson
other members 
roger williams  roger williams stephen oke stephen oke
 stephen oke ian watson alon davidov
audit committee
each member of the audit committee is considered to have 
extensive commercial and business leadership experience in 
particular roger williams and stephen oke have relevant and recent 
ﬁ nancial skills and experience 
under its terms of reference which are available from the company 
secretary the audit committee shall consist of at least three members 
all of whom shall be independent nonexecutive directors only 
members of the audit committee have the right to attend and vote 
at committee meetings however other individuals such as the chief 
executive ofﬁ cer chief financial ofﬁ cer other directors the head of 
internal audit and representatives from the ﬁ nance function may be 
invited to attend all or part of any meeting as and when appropriate  
the external auditors will be invited to attend meetings of the 
committee on a regular basis
shaftsinkersra2013front endindd   30 27042013   0055 shaft sinkers annual financial report 2012
31
appointments to the committee shall be for a period of up to 
three years which may be extended for further three year periods 
provided the director remains independent
the company secretary or their nominee shall act as the secretary 
of the committee  the secretary shall also act as a coordinating 
intermediary between the board and the committee
the primary responsibilities of the audit committee include the 
following
• to monitor the integrity of the group’s ﬁ nancial statements
•  to review the group’s internal control and risk management 
systems
•  to review the group’s whistle blowing and fraud prevention 
procedures
•  to review the group’s systems and controls for the prevention of 
fraud and bribery and receive reports on noncompliance
•  to monitor the effectiveness of the group’s internal audit function 
and
•  to oversee the relationship with the group’s external auditors
external audit
the overall performance of the external auditors is reviewed annually 
by the audit committee the audit committee is responsible to the 
board for ensuring that the external auditors remain independent 
of the company in all material respects and that kpmg audit llc 
as external auditors are adequately resourced so as to enable 
the delivery of an objective audit to the shareholders the audit 
committee is also responsible for making formal recommendations 
each year to the board in respect of the continuation of the external 
auditors in ofﬁ ce kpmg have been the group’s auditors since 2007 
and before it was listed on the london stock exchange in december 
2010 the group underwent a formal tendering process in 2008 and 
kpmg was chosen as the group’s worldwide auditors  the audit 
committee is satisﬁ ed with their effectiveness and independence 
accordingly the audit committee has not considered it necessary to 
require the ﬁ rm to tender for its audit work the external auditors are 
required to rotate the audit partner responsible for the group and 
subsidiary audits every ﬁ ve years and the current engagement partner 
has been in place from the 2010 ﬁ nancial year
the audit committee also reviews the level and nature of any non
audit work to be performed during the year and considers whether it 
is appropriate for this work to be carried out by the external auditors 
the external auditors are precluded from engaging in nonaudit 
services that would compromise their independence and objectivity 
or violate any laws or regulations affecting their appointment as 
external auditors
internal audit
the internal audit function of the group is performed in terms of the 
group’s internal audit charter which has been by approved by the 
committee and which contributes to the improvement of the group’s 
internal control systems the internal audit function of the group has 
been outsourced to deloitte who performs internal audits based on a 
three year rolling plan submitted to and approved by the committee 
the internal auditors are accountable to the committee and 
provide group management with the objective of providing positive 
assurance on the effectiveness of internal controls in mitigating 
inherent risks of audited processes or signiﬁ cant projects or initiatives 
the internal auditors also attend all committee meetings and report 
back to the committee on the work performed by them
a whistleblowing policy has been implemented and is facilitated 
by deliotte which enables employees to raise any concerns they 
may have about workplace fraud or mismanagement with local 
management on a conﬁ dential basis  
the complaint is then investigated in the ﬁ rst instance and a decision 
taken about further steps feedback is provided to the person 
making the complaint written records are kept of all whistleblowing 
incidents and a regular status report is presented at each audit 
committee meeting
safety committee
the safety committee is chaired by ian watson and its other 
members are stephen oke and alon davidov the committee 
will meet at least twice a year and has responsibility for making 
recommendations to the board to ensure a safe and healthy 
workplace is created and maintained for all employees
the role of the safety committee is to assist the board in its oversight of 
the following
•  safety health environment quality and training
•   the group’ s compliance with applicable legal and regulatory 
requirements associated with health safety environment and 
training matters
•  the group’ s performance in relation to health safety environment 
and training and monitoring sustainable development and
•  the preparation of a report by the committee to be included in the 
annual report
further details of the work of the safety committee are set out in the 
sustainability review on page 21
shaftsinkersra2013front endindd   31 27042013   0055 shaft sinkers annual financial report 2012
32
nomination committee
the nominations committee shall consist of not less than two 
members  a majority of the members shall be unconnected with 
the management of the group and free from any business or other 
relationship that could materially interfere with the exercise of their 
independent judgment the chairman of the committee shall be 
either the chairman of the board or an independent nonexecutive 
director who shall be appointed by the board the chairman of 
the board shall not chair the committee when it is dealing with the 
matter of succession to the chairmanship appointments to the 
committee shall be for a period of up to three years which may be 
extended for a further three year periods provided the majority of 
the committee remains independent
only members of the committee shall have the right to attend and 
vote at committee meetings  however other individuals such as 
the chief executive ofﬁ cer of the company the company’s head 
of human resources and external advisers of the company may 
be invited to attend for all or part of any meeting as and when 
appropriate the committee shall meet at least twice a year and at 
such other times as the chairman of the committee shall require
the main duties of the nominations committee include
•  to regularly review the structure size diversity and composition 
of the board and make recommendations to the board with 
regard to any changes
•  to give full consideration to succession planning for directors and 
other senior executives
•  to identify and nominate for the approval of the board 
candidates to ﬁ ll board vacancies as and when they arise
•  to evaluate the balance of skills knowledge independence and 
experience on the board and use open advertising or the services 
of external advisers to facilitate the search for new candidates 
when required
•  for the appointment of a chairman to prepare a job speciﬁ cation 
including the time commitment expected
•  to review the results of the board performance evaluation process 
that relates to the composition of the board and
•  generally to provide recommendations to the board on matters 
regarding the appointments to the various committees
remuneration committee
the role of the committee is to establish a framework for setting and 
maintaining at appropriate levels the remuneration of the group’s 
executive directors and senior management in general and for setting 
the remuneration for the executive directors in particular
the committee shall be made up of at least three members all of 
whom shall be independent nonexecutive directors the chairman 
of the board may also serve on the committee as an additional 
member if he or she was considered independent on appointment as 
chairman the chairman of the board shall not be chairman of the 
committee appointments to the remuneration committee shall be 
for a period of up to three years which may be extended for further 
threeyear periods provided the director still meets the criteria for 
membership of the committee
only members of the remuneration committee have the right to 
attend and vote at committee meetings  however other individuals 
such as the chief executive the head of human resources and 
external advisers may be invited to attend for all or part of any 
meeting as and when appropriate
no member of the board or of the remuneration committee shall 
attend meetings of the remuneration committee where his or her 
own remuneration arrangements are determined
the duties of the remuneration committee includes
•  to determine and agree with the board the framework or broad 
policy for the remuneration of the group’s chief executive 
ofﬁ cer chairman the executive directors the company 
secretary and such other members of the executive management 
as it is designated to consider the remuneration of non
executive directors shall be a matter for the chairman and the 
executive members of the board
•  to ensure that members of the executive management of the 
group are provided with appropriate incentives to encourage 
enhanced performance and are in a fair and responsible manner 
rewarded for their individual contributions to the success of the 
group
shaftsinkersra2013front endindd   32 27042013   0055 shaft sinkers annual financial report 2012
33
•  to review the ongoing appropriateness and relevance of the 
remuneration policy
•  to approve the design of and determine targets and upper 
limits for any performance related pay schemes operated by the 
group and approve the total annual payments made under such 
schemes ensuring that any performance based remuneration 
arrangements are clearly aligned with business strategy and 
objectives and are regularly reviewed
•  to review the design of all share incentive plans for approval by 
the board and shareholders  for any such plans determine each 
year whether awards will be made and if so the overall amount 
of such awards the individual awards to executive directors and 
other senior executives and the performance targets to be used
•  to ensure that any performance related pay schemes or share 
incentive plans operated by the group are compatible with the 
group’s risk policies and systems
•  to ensure that contractual terms on termination and any 
payments made are fair to the individual and the group that 
failure is not rewarded and that the duty to mitigate loss is fully 
recognised
•  within the terms of the agreed policy and in consultation with 
the chairman andor chief executive as appropriate determine 
the total individual remuneration package of each executive 
director senior executives and other members of the executive 
management including bonuses incentive payments and share 
options or other share awards
•  to review and note annually the remuneration trends across the 
group and have these in mind when setting remuneration policy 
for directors
•  to be aware of and oversee any major changes in employee 
beneﬁ ts structures throughout the group
•  to agree the policy for authorising claims for expenses from the 
chief executive ofﬁ cer the chairman and the other directors
•  to ensure that all provisions regarding disclosure of remuneration 
including pensions are fulﬁ lled
•  to be exclusively responsible for establishing the selection 
criteria selecting appointing and setting the terms of reference 
for any remuneration consultants who advise the committee
•  to obtain reliable uptodate information about remuneration 
in other companies within the same sector but ensure that 
automatic increases are not implemented and consider relative 
performance judging the implications carefully
•  to give guidance to the executive management in setting the 
levels of remuneration for the group 
•  to obtain shareholder approval before departing from the stated 
remuneration policy
•  to work with the company’s audit committee in evaluating 
performance criteria
•  to review and consider all executive and management 
compensation agreements
•  to work closely with the nomination committee in relation to the 
remuneration to be offered to any new executive director and
•  to ensure that any material payments that may be viewed as 
exgratia in nature are fully explained justiﬁ ed and subject to 
shareholder approval prior to payment
the section of the directors’ report entitled “directors’ report – 
remuneration” on pages 34 to 38 shall constitute a remuneration 
report  a resolution to approve the remuneration report will be 
proposed at the forthcoming agm
shaftsinkersra2013front endindd   33 27042013   0055 shaft sinkers annual financial report 2012
34
directors’ report – remuneration
introduction
the directors have pleasure in presenting their report on directors’ 
remuneration for the year ended 31 december 2012
role of the remuneration committee
the remuneration committee is a formal committee of the board its 
remit is set out in terms of reference formally adopted by the board in 
december 2010 the terms of reference are designed to enable the 
committee to comply with the requirements relating to remuneration 
policy set out in the code a copy of the terms of reference can be 
obtained from the company secretary
the principal responsibilities of the remuneration committee are
•  to determine and agree with the board the framework or broad 
policy for the remuneration of the group’s chief executive ofﬁ cer 
chairman the executive directors the company secretary 
and such other members of the executive management as it is 
designated to consider
•  to review the ongoing appropriateness and relevance of the 
remuneration policy
•  to approve the design of and determine targets and upper 
limits for any performance related pay schemes operated by the 
group and approve the total annual payments made under such 
schemes  and
•  to review the design of all share incentive plans for approval by 
the board and shareholders  for any such plans determine each 
year whether awards will be made and if so the overall amount 
of such awards the individual awards to executive directors and 
other senior executives and the performance targets to be used
membership of the remuneration committee
the members of the committee all of whom are independent non
executive directors and were appointed on 19 november 2010 are 
as follows
• ian watson
• stephen oke
• roger williams
the company secretary acts as secretary to the committee the 
chief executive ofﬁ cer and the head of human resources and 
external advisors also attend committee meetings by invitation but 
none is present when the committee discusses issues relating to their 
own remuneration
advisors to the remuneration committee
the remuneration committee has retained the services of kepler 
associates in 2012 to carry out a review of the senior executive 
remuneration and to provide advice in relation to the long term 
incentive plan ‘ltip’ other than as described above no other 
service was provided by kepler associates to the group during the 
2012 ﬁ nancial year kepler associates have no connection with the 
group other than as consultants 
remuneration policy
the group’s remuneration policy is focused upon providing a level 
of remuneration which attracts retains and motivates directors 
and senior executives of sufﬁ cient calibre to achieve the group’s 
strategic goals and enhance shareholder value whilst ensuring 
that remuneration is consistent with best practice and provides an 
appropriate alignment with personal and business performance 
the committee recognises that there is a competitive market for 
successful executives with experience in the mining industry and 
that the provision of appropriate rewards for superior performance is 
important for the continued growth of the business the committee’s 
aim in formulating remuneration policy is to assess relevant 
benchmark data from sources such as other companies listed on the 
london stock exchange of a similar size and complexity international 
mining companies and the market generally in setting remuneration 
within this framework the committee aims to give senior executives 
every encouragement to enhance the group’s performance whilst 
ensuring that they are fairly but responsibly rewarded for their 
personal contributions 
the committee believes that it is important to benchmark the 
remuneration packages of senior executives in april 2012 the 
committee instructed kepler associates to carry out a review of senior 
executive remuneration packages and the incentive schemes in place 
for other senior managers 
components of executive directors’ remuneration
remuneration packages are structured to provide an appropriate 
balance between ﬁ xed and variable elements the main components 
of the two executive directors’ remuneration and the percentage of 
each element as part of the total package are detailed below 
  
salaries and fees
bonuses
value of ltip award 37
18
22 45
45
33
ceo cfo
shaftsinkersra2013front endindd   34 27042013   0055 shaft sinkers annual financial report 2012
35
salaries
salaries are reviewed annually by the committee and take account of 
the relevant benchmark data pay quantum and structure
bonuses
for the years ended 31 december 2012 and 2011 the performance 
measures for the annual bonus were based on a group ﬁ nancial 
performance target and on personal performance the bonus 
arising from the performance target is up to 75 of annual salary 
for the chief executive ofﬁ cer and 50 of annual salary for the 
chief financial ofﬁ cer with a potential to earn an additional 15 if 
targets are exceeded by 10 if performance is 10 below target 
no target performance bonus is paid the group failed to achieve 
the ﬁ nancial targets in 2012 and no target performance bonus is 
therefore payable in 2011 the targets were exceeded by more than 
10 the bonus arising from personal performance is up to 15 of 
annual salary for the chief executive ofﬁ cer and the chief financial 
ofﬁ cer speciﬁ c ﬁ nancial targets have not been disclosed as they are 
considered to be commercially conﬁ dential but they are deemed 
to be appropriately challenging the personal performance bonus 
is paid in december of the same year of measurement while the 
ﬁ nancial performance target bonus is deferred for 1 year and paid in 
december of the year following measurement 
provident fund
one of the group’s subsidiaries shaft sinkers pty limited 
contributes towards a provident fund the fund is a deﬁ ned 
contribution fund the group contributes 15 of a base salary for 
each eligible member 
ipo bonus
pursuant to admission to trading on the london stock exchange 
the group declared a bonus “ipo bonus” of an estimated zar445 
million gbp44 million of which an estimate zar134 million 
gbp13 million would be paid to executive directors and senior 
management and an estimated zar311 million gbp32 million to 
other employees employees received two cash payments the ﬁ rst 
payment six months following admission june 2011 and the second 
payment one year following admission december 2011 conditional 
in each such case on continued employment by the group at that 
date the executive directors received their ipo bonus as follows
 6 months following 1 year following
 admission admission total
 zar zar zar
alon davidov 1785308 1785308 3570616
christopher hall 1479342 1479342 2958684
long term incentive plan ‘ltip’
the ltip allows the committee to make awards which are 
a conditional right to receive shares in the company for nil 
consideration an award will normally vest ie become exercisable 
over a three year period from the date of its grant with a third being 
eligible for vesting each year to the extent that the applicable 
performance conditions have been satisﬁ ed beneﬁ ts in the ltip are 
not pensionable
the initial awards of 2250000 ordinary shares in the company were 
made as to 750000 to alon davidov 750000 to robert schroder 
a former director and 750000 to christopher hall following the 
resignation of robert schroder in 2011 he has forfeited his rights to 
receive these ltip shares the ltip consists of a total of 2500000 
ordinary shares the remuneration committee will determine the 
allocation and offer of awards over the balance of 250000 ordinary 
shares
the total number of ordinary shares issued under the ltip on 
any date of issue when aggregated with the number of ordinary 
shares issued or issuable under any other share scheme for senior 
employees of the group in any rolling ten year period may not 
exceed ﬁ ve per cent of the company’s issued ordinary shares
if an award is forfeited or becomes incapable of vesting the ordinary 
shares subject to that award may not be reallocated for future awards
the performance conditions applicable to these initial awards are 
measured in stages over each of the vesting periods and are linked to
•  growth in earnings per share of the company ‘‘eps’’ and
• growth in the company’s share price
eps in respect of the ﬁ nancial year ending 31 december 2011 and 
for each of the ﬁ nancial years ending 31 december 2012 and 31 
december 2013 the company will need to achieve growth in eps of 
at least 20 per cent per annum in comparison to the previous ﬁ nancial 
year for the relevant proportion of awards to be capable of vesting 
in full should the company only achieve between 1020 per cent 
per annum growth in eps in the ﬁ nancial year under measurement 
between 50100 per cent of the relevant proportion of awards will 
be capable of vesting on a straight line basis between those two 
growth points should the company not achieve at least 10 per cent 
per annum growth in eps in the ﬁ nancial year under measurement 
none of the relevant proportion of awards will be capable of vesting 
if however over the full three years’ vesting periods the company 
has achieved a compound average growth in eps of 20 per cent per 
annum despite not having achieved that growth rate in any particular 
ﬁ nancial year then the eps performance criteria shall be deemed to 
have been achieved and awards shall be capable of vesting in full
shaftsinkersra2013front endindd   35 27042013   0055 shaft sinkers annual financial report 2012
36
share price in respect of the ﬁ nancial year ended 31 december 
2011 and for each of the ﬁ nancial years ending 31 december 2012 
and 31 december 2013 the company will need to achieve a growth 
in its share price of at least 26 per cent per annum for the relevant 
proportion of awards to be capable of vesting in full the base 
share price for the ﬁ nancial year ended 31 december 2011 shall be 
the placing price 124 pence and thereafter any increase shall be 
measured by reference to the average of the company’s closing share 
prices for the 30 days following the announcement of the company’s 
audited results for each ﬁ nancial year should the company only 
achieve between 1326 per cent per annum growth in its share price 
in the ﬁ nancial year under measurement between 50100 per cent 
of the relevant proportion of awards will be capable of vesting on 
a straight line basis between those two growth points should the 
company not achieve at least 13 per cent per annum growth in 
share price in the ﬁ nancial year under measurement none of the 
relevant proportion of awards will be capable of vesting if however 
the average of the company’s closing share prices over the 30 days 
following announcement of the company’s audited results for the 
year ending 31 december 2013 is 100 per cent or more above the 
placing price despite not having achieved a 26 per cent growth in its 
share price in any particular year then the share price performance 
criteria shall be deemed to have been achieved and awards shall be 
capable of vesting in full
each award is split into three equal annual tranches within each 
annual tranche vesting of 50 per cent of that tranche will be subject 
to the eps performance criteria and 50 per cent to the share price 
performance criteria the remuneration committee will determine 
whether and to what extent the applicable performance conditions 
have been satisﬁ ed shortly after the announcement of the company’s 
audited results for each of the years ending 31 december 2011 
31 december 2012 and 31 december 2013 respectively and if 
applicable to total eps or share price growth over the full 3 year 
vesting period
the remuneration committee may at any time amend the ltip 
in any respect provided that the prior approval of the company in 
general meeting is obtained for amendments to the provisions of 
the ltip relating to eligibility the overall limits on the issue of new 
shares the maximum entitlement for any participant and the basis for 
determining that entitlement where such changes are to the material 
advantage of participants shareholder approval is not however 
required for minor amendments to beneﬁ t the administration of the 
ltip  to take account of changes in legislation or to obtain or maintain 
favourable taxation or regulatory treatment for participants or for any 
member of the group
the grant date fair value of the ltip was measured based on the 
monte carlo simulation option pricing model volatility was based on 
the historical share price data of the constituents of the oil services 
and equipment sector on the london stock exchange the inputs 
used in the measurement of the fair values at grant date of the ltip 
were as follows
description value per  assumed share price number number of weighted
 share right vesting date at grant date of days shares average volatility
 gbp  gbp   
share price growth shares      
1st tranche 063 10 april 2012 124 474 375000 5251
2nd tranche 052 10 april 2013 124 839 375000 5251
3rd tranche 072 10 april 2014 124 1204 375000 5251 
eps shares      
1st tranche 122 10 april 2012 124 474 375000 5251
2nd tranche 111 10 april 2013 124 839 375000 5251
3rd tranche 099 10 april 2014 124 1204 375000 5251
 
shaftsinkersra2013front endindd   36 27042013   0055 shaft sinkers annual financial report 2012
37
for the ﬁ nancial year 2012 the following parameters were used in valuing the eps shares that could potentially be earned under this ltip
description value per share right assumed vesting date number of days number of shares
 gbp   
eps shares    
1st tranche 107 10 april 2012 474 
2nd tranche 098 10 april 2013 839 
3rd tranche  088 10 april 2014 1204 
long term incentive plan
 shares awards held  share awards granted share awards settled shares awards held
 at 31 december 2011 during the year forfeited during the year at 31 december 2012
alon davidov 750000   750000
christopher hall 750000   750000
directors’ remuneration for the period 1 january 2012 to 31 december 2012
the following table gives details of directors’ remuneration for the period 1 january to 31 december 2012
 salaries   value of total 2012  total 2011
 and fees bonuses ltip award gbp gbp
executive directors
alon davidov 199616 160574 78451 438641 883309
robert schroder     358968
christopher hall 164583 121442 78451 364476 744891
 364199 282016 156902 803117 1987168
nonexecutive directors      
    
amre youness 60000   60000 90000
stephen oke 95000   95000 75000
roger williams 60667   60667 60000
ian watson 62333   62333 60000
 278000   278000 285000
total 642199 282016 156902 1081117 2272168
shaftsinkersra2013front endindd   37 27042013   0055 shaft sinkers annual financial report 2012
38
directors’ contracts
executive directors
the executive directors have service agreements which can be 
terminated by either the group or the executive director giving 
at least 6 months’ notice under the terms of the agreements the 
group reserves the right in its absolute discretion to terminate an 
executive director’s employment by making a payment in lieu of 
notice in the event of a contract being terminated the remuneration 
committee would determine the level of any compensation to be 
paid normally by reference to ﬁ xed elements of remuneration and 
the notice period any annual bonus payment or vesting of shares 
under the ltip would be dealt with in accordance with the rules of 
the particular scheme payments would normally be prorated and 
subject to the performance conditions under which the awards were 
granted the executive directors are subject to restrictive covenants 
which seek to prevent them from soliciting customers or employees 
andor competing with the company’s business for six months 
following termination of employment
dates of the service agreements are
name date of agreement notice period
alon davidov 20 december 2010 6 months
christopher hall 20 december 2010 6 months
nonexecutive directors
nonexecutive directors do not have service agreements with the 
company but each has a letter of appointment details of the 
letters of appointment are summarised below
name effective date of appointment unexpired term
stephen oke 23 december 2010 1 year
roger williams 23 december 2010 1 year
ian watson 23 december 2010 1 year
the unexpired term is subject to reelection at the agm of the 
company following the 3rd anniversary of appointment
copies of all executive directors’ service agreements and the letters 
of appointment of the nonexecutive directors are available for 
inspection during normal business hours at the ofﬁ ce of the company 
secretary
nonexecutive directors’ fees
the remuneration of the nonexecutive directors other than the 
chairman is a matter for the chairman and the executive directors 
fees are designed to ensure that the company attracts and retains 
high calibre individuals they are reviewed on an annual basis 
and account is taken of the level of fees paid by other companies 
of a similar size and complexity nonexecutive directors do not 
participate in any annual bonus plan longterm incentive plan or 
pension arrangements 
directors’ fees including committee fees on an annual basis are as 
follows
  annual fees payable
nonexecutive director position gbp
stephen oke chairman 135000
roger williams independent 
 nonexecutive director   62000
ian watson independent
 nonexecutive director   67000
annual general meeting
the committee chairman is available at the company’s agm to 
answer any questions on the committee’s activities and shareholders 
will be asked to vote on this remuneration report at the agm
shaftsinkersra2013front endindd   38 27042013   0055 shaft sinkers annual financial report 2012
39
statement of directors’ responsibilities in respect of the 
directors’ report and the ﬁ nancial statements
the directors are responsible for preparing the directors’ report 
and the ﬁ nancial statements in accordance with applicable law 
and regulations in addition the directors have elected to prepare 
the ﬁ nancial statements in accordance with international financial 
reporting standards as adopted by the eu
the ﬁ nancial statements are required to give a true and fair view 
of the state of affairs of the group and parent company and of the 
proﬁ t or loss of the company for that period 
in preparing these ﬁ nancial statements the directors are required to
•  select suitable accounting policies and then apply them 
consistently
•  make judgements and estimates that are reasonable and prudent 
•  state whether they have been prepared in accordance with 
international financial reporting standards as adopted by the 
eu and
•  prepare the ﬁ nancial statements on the going concern basis 
unless it is inappropriate to presume that the group and parent 
company will continue in business
the directors are responsible for keeping proper accounting 
records that are sufﬁ cient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time its 
ﬁ nancial position they have general responsibility for taking such 
steps as are reasonably open to them to safeguard the assets of the 
group and to prevent and detect fraud and other irregularities
the directors are responsible for the maintenance and integrity of 
the corporate and ﬁ nancial information included on the company’s 
website legislation governing the preparation and dissemination of 
ﬁ nancial statements may differ from one jurisdiction to another
the directors conﬁ rm that to the best of their knowledge
•  the ﬁ nancial statements prepared in accordance with 
international financial reporting standards as adopted by the eu 
give a true and just view of the assets liabilities ﬁ nancial position 
and proﬁ t or loss of the group and
•  the directors reports includes a fair view of the development and 
performance of the business and position of the group together 
with a description of the principal risks and uncertainties that the 
group faces
by order of the board
alon davidov
chief executive ofﬁ cer
25 april 2013
shaftsinkersra2013front endindd   39 27042013   0055 shaft sinkers annual financial report 2012
40
independent auditors’ report
report of the independent auditors kpmg audit 
llc to the members of shaft sinkers holdings plc
we have audited the ﬁ nancial statements of shaft sinkers holdings 
plc for the year ended 31 december 2012 which comprises the 
consolidated income statement consolidated statement of 
comprehensive income the consolidated and parent company 
statements of financial position the consolidated statement of 
changes in equity and the consolidated statement of cash flows 
and the related notes the ﬁ nancial reporting framework that has 
been applied in their preparation is applicable law and international 
financial reporting standards ifrss as adopted by the eu
this report is made solely to the company’s members as a body 
our audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to 
anyone other than the company and the company’s members as a 
body for our audit work for this report or for the opinions we have 
formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement 
set out on page 39 the directors are responsible for the preparation 
of ﬁ nancial statements that give a true and fair view our 
responsibility is to audit and express an opinion on the ﬁ nancial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s apb’s ethical standards 
for auditors
scope of the audit of the ﬁ nancial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the ﬁ nancial statements sufﬁ cient to give reasonable 
assurance that the ﬁ nancial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of signiﬁ cant accounting 
estimates made by the directors and the overall presentation of the 
ﬁ nancial statements
opinion on the ﬁ nancial statements
in our opinion the ﬁ nancial statements
•  give a true and fair view of the state of the group’s and parent 
company’s affairs as at 31 december 2012 and of the group’s 
proﬁ t for the year then ended and
•  have been properly prepared in accordance with ifrss as 
adopted by the eu
listing rules
under the listing rules we are required to conﬁ rm that we have 
reviewed
•  the director’s statement set out on page 26 in relation to going 
concern
•  the parts of the corporate governance statement relating to the 
group’s compliance with the nine provisions of the uk corporate 
governance code speciﬁ ed for our review  and
•  the disclosures speciﬁ ed by chapter 9 section 8 paragraph 11 of 
the listing rules as applicable to the group
mr kelly responsible individual
for and on behalf of kpmg audit llc
chartered accountants
heritage court
41 athol street
douglas
isle of man im99 1hn
26 april 2013
shaft sinkers p40p100indd   40 28042013   0728 shaft sinkers annual financial report 2012
41
consolidated income statement 
for the year ended 31 december 2012 
  year ended year ended
  31 dec 2012 31 dec 2011
 note gbp  gbp
revenue  2     192538948     226539543 
direct expenses      169946792   188262281
gross proﬁ t  22592156      38277262 
operating income  6334496  5190993 
operating expense       23674741    28143045
proﬁ t from operations 3       5251911      15325210 
finance income 4         369180         394850 
finance expense 4      2184706     2213950
proﬁ t before income tax        3436385      13506110 
income tax 5      1037121     4789730
proﬁ t for the year        2399264       8716380 
attributable to    
owners of the company        2319554       8698114 
noncontrolling interests            79710          18266 
proﬁ t for the year        2399264       8716380 
  
earnings per share    pence   pence 
basic earnings per share 19 488 1831 
diluted earnings per share 19 486 1822 
the directors consider all results derived from continuing activities
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
shaft sinkers p40p100indd   41 27042013   0056 shaft sinkers annual financial report 2012
42
consolidated statement of comprehensive income
for the year ended 31 december 2012 
 year ended year ended
 31 dec 2012 31 dec 2011
note gbp  gbp
proﬁ t for the year        2399264       8716380 
other comprehensive income   
revaluation of land and buildings 6         323519  412145 
foreign currency translation differences for foreign operations  3154553 6960314
income tax on revaluation of property plant and equipment 5        138044  88747
other comprehensive lossincome for the year net of tax   2969078     6636916
total comprehensive income for the year   569814      2079464 
  
attributable to   
owners of the company  631143 2061198 
noncontrolling interests  61329  18266 
total comprehensive lossincome for the year   569814 2079464 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
shaft sinkers p40p100indd   42 27042013   0056 shaft sinkers annual financial report 2012
43
consolidated statement of ﬁ nancial position 
at 31 december 2012 
  year ended year ended
  31 dec 2012 31 dec 2011
 note gbp  gbp
assets   
noncurrent assets       56585776       54892004 
property plant and equipment 6      46739043       46332700 
goodwill 7       1991340        2 172 667 
other intangible assets 8       1654621                  
other unlisted investment 10            775              845 
loans receivable 11                         320238 
deferred taxation 12       5383394        4872910 
finance lease receivables 15        816603        1192644 
current assets       76925063       88955344 
inventories 13       4896988       16244485 
trade and other receivables 14      61182602       48995514 
finance lease receivables 15        381903          474440 
loan to related party 231          26040                  
loans receivable 11          36534           39861 
income taxation        1267060          902653 
cash and cash equivalents  unrestricted 16 7240833       22298391 
cash and cash equivalents  restricted 16 1893103 
total assets     133510839      143847348 
equity and liabilities   
equity        43727291       48024094 
ordinary share capital  17      56563799       56563799 
retained earnings       36801482       37901928 
foreign currency translation reserve       2440736 574557 
common control reserve 123    48965631 48965631
share based payment reserve 31        156902  389235 
revaluation reserve 18       1400353  1335757 
equity attributable to owners of the company       43516169       47799645 
noncontrolling interest         211122          224449 
noncurrent liabilities       29082806       23652104 
deferred taxation  12       7418870        6795749 
deferred revenue 26       6614608        4174100 
interest bearing borrowings  201       3653395       12305185 
interest free advances from clients 21      10781070             
subcontractor liabilities 22        113832     
loan from a related party 232        155166                 
post retirement beneﬁ t obligation 24        345865          377070 
current liabilities       60700742       72171150 
trade and other payables 25      36739118       34908849 
deferred revenue 26       9084935        8595742 
income taxation        1642899          344471 
interest bearing borrowings  202       7564971        3888492 
interest free advances from clients 21       4688971       24433596 
subcontractor liabilities 22        979848   
total equity and liabilities     133510839  143847348 
the consolidated annual ﬁ nancial statements were approved by the board of directors on 25 april 2013 and were signed on its behalf by
stephen oke nonexecutive chairman christopher hall chief financial ofﬁ cer 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
shaft sinkers p40p100indd   43 27042013   0056 shaft sinkers annual financial report 2012
44
parent company statement of ﬁ nancial position 
at 31 december 2012  
  year ended year ended
  31 dec 2012 31 dec 2011
 note gbp  gbp
assets
noncurrent assets        48981358       48966019 
investment in subsidiaries 35      28311229       28295890 
loan to subsidiary 36      20670129       20670129 
current assets         6972868       11831776 
other receivables 37          42250            9596 
related party loans receivable 381       3456183        1603589 
cash and cash equivalents 39       3474435       10218591 
total assets        55954226       60797795 
equity and liabilities
equity    55579697       59369921 
ordinary share capital  17  56563799       56563799 
retained earnings       1141003       2416887 
share based payment reserve 31        156901          389235 
current liabilities          374529        1 427874 
other payables 41          48420          386622 
related party loan payable 382        326109        1041252 
total equity and liabilities        55954226      60797795 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
shaft sinkers p40p100indd   44 27042013   0056 shaft sinkers annual financial report 2012
45
    foreign
  ordinary  currency common share based
  share retained translation control payment revaluation noncontrolling 
  capital  earnings reserve reserve reserve reserve interest total
 note gbp gbp gbp gbp gbp gbp gbp gbp
balance at 1 january 2011  56563 799  30343814  7275524   48965631 20669  1271706    46509881 
share based payment transactions 31         368566      368566 
dividend paid     1140000            1140000
acquisition of noncontrolling 
interest in shaft sinkers mining pty 
limited by black economic 
empowerment partners              206183  206183
proﬁ t for the year    8698114          18266  8716380  
other comprehensive income          
revaluation of property plant 
and equipment 6           412145    412145 
deferred taxation on 
revaluation adjustment 5            88747   88747
foreign currency translation 
differences for foreign operations 18     6700967      259347   6960314
total comprehensive 
income for the year   8698114   6700967   64051  224449  2079464 
balance at 31 december 2011  56563799  37901928  574557  48965631 389235  1335757  224449  48024094
disposal of noncontrolling 
interest in shaft sinkers mining
pty limited to black economic
empowerment partners               64192 64192
share based payment transactions 31          232333      232333
dividend paid    3420000          10464  3430464
proﬁ t for the year    2319554          79710  2399264 
other comprehensive income         
revaluation of property 
plant and equipment 6           323519     323519 
deferred taxation on 
revaluation adjustment 5            138044    138044
foreign currency translation 
differences for foreign operations 18      3 015293      120879  18381  3154553
total comprehensive
loss for the year   2319554   3015293      64596  61329   569814
balance at 31 december 2012  56563799  36801482   2440736  48965631 156902  1400353  211122   43727291 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
consolidated statement of changes in equity   
for the year ended 31 december 2012  
shaft sinkers p40p100indd   45 27042013   0056 shaft sinkers annual financial report 2012
46
consolidated statement of cash ﬂ ows   
for the year ended 31 december 2012  
  year ended year ended
  31 dec 2012 31 dec 2011
 note gbp  gbp
cash utilised ingenerated by operating activities 
before working capital changes 331 548068  18297252 
decreaseincrease in inventories   11484574   10285447
increase in trade and other receivables  42987891  10884495
increase in trade and other payables   8555240  2690170 
increase in deferred revenue and advances from clients   30741671  12242558 
payment of retirement beneﬁ t obligation    34922  43352
cash generated by operations  7210604  12016686 
interest paid   1563575  1969425
interest received    211302   394850 
dividend paid  3430464  1140000
income taxation refundedpaid  332  678498   4514977
net cash inﬂ ow from operating activities   3106365  4787134 
cash ﬂ ows from investing activities
property plant and equipment acquired 61  12136260  10373338
improvements to land and buildings 61  538970 132229
proceeds from disposal of property plant and equipment  2291117  1012458 
increase in other intangible assets   1334383 
proceeds from disposal of noncontrolling interest in subsidiary    107039 
loans granted to third parties    363434
decreaseincrease in ﬁ nance lease receivables   220017   331807
repayments received from joint venture partners    634 
repayments received on related party loans   16 523   432770 
net cash outﬂ ow from investing activities    11481956  9647907
cash ﬂ ows from ﬁ nancing activities   
repayments made on interest bearing borrowings   3854832  3943731
repayments made on ﬁ nance lease obligations    117308
repayments made on related party loan    435822
net cash outﬂ ow from investing activities    3854832  4496861
net decrease in cash and cash equivalents   12230423  9357634
cash and cash equivalents at the beginning of the year  22298391   35559630 
effect of exchange rate differences on cash and cash equivalents    934032  3903605
total cash and cash equivalents at the end of the year  9133936  22298391 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
shaft sinkers p40p100indd   46 27042013   0056 shaft sinkers annual financial report 2012
47
notes to the consolidated annual ﬁ nancial statements 
for the year ended 31 december 2012  
11 reporting entity
the consolidated annual ﬁ nancial statements of shaft sinkers holdings plc “the company” as at and for the year ended 31 december 2012 
comprise the company and its subsidiaries together referred to as “the group” and individually as the “group entities” and the group’s 
interest in jointly controlled entities the group is primarily involved in shaft sinking contract mining mine operation tunnelling and large 
underground excavations
12 basis of preparation
121 statement of compliance
the consolidated ﬁ nancial statements are prepared in accordance with international financial reporting standards ifrs and international 
financial reporting interpretations committee “ifric” interpretations adopted by the european union
the consolidated annual ﬁ nancial statements have been prepared in accordance with the listing rules of the london stock exchange
122 basis of measurement 
the consolidated ﬁ nancial statements have been prepared on the historical cost basis except for the following material items in the 
consolidated statement of ﬁ nancial position
– ﬁ nancial instruments at fair value through proﬁ t or loss are measured at fair value
– land and buildings are measured at fair value
the methods used to measure fair value are discussed further in note 1321
123 basis of preparation
group restructuring 
for the purposes of the consolidated ﬁ nancial statements the group restructuring during 2010 whereby shareholders in capstone 615 
proprietary limited received shares in the company has been treated as a group restructuring common control accounting principles have 
been applied for the group restructuring such that the consolidated results of shaft sinkers holdings plc have been prepared on the basis that 
the current group has been in existence since the inception of common control and therefore the consolidated comparative ﬁ gures relate to 
capstone 615 proprietary limited there was no restructuring of this nature during the current year
going concern
as described in note 20 to the consolidated annual ﬁ nancial statements the group has borrowings and facilities which together with receipts 
from clients fund the daily working capital requirements of the group
volatile economic conditions may occasionally create uncertainty in respect of
•   demand for the group’s services as a consequence of reduced capital expenditure within the mining and related industries and
•   the availability of bank ﬁ nancing in the foreseeable future
in assessing the group’s ability to continue as a going concern the board reviews the following
•   group forecasts and projections for at least an 18 month forward looking period taking into account potential changes in group 
performance the forecasts and projections focus on both the ﬁ nancial performance as well as the liquidity of the group
•   the aforementioned forecasts and projections are further subjected to a stress test by applying a conservatism factor in order to ascertain 
whether the group will be able to operate in periods of duress 
the group forecasts and projections indicate that the group should be able to operate within the level of its capital structure the board has 
factored into its liquidity forecasts and considered the impact of gbp19m usd3m of cash being restricted as a result of the security provided 
to the groups bankers for the performance guarantee issued in respect of a project 
the board has also considered the claim received from eurochem of an amount of approximately usd800 million gbp495 million in 
determining its ability to continue as a going concern based on the review of the arbitration claim in consultation with external legal counsel 
the board continues to be of the view that the claim is without merit and the subsidiaries concerned are contesting the claims robustly as 
such the board has not forecast any requirement to settle amounts arising from this claim however given the ongoing arbitration process 
management forecasts include best estimates of expenses likely to be incurred in defending the group’s position
 
 
shaft sinkers p40p100indd   47 27042013   0056 shaft sinkers annual financial report 2012
48
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
the amount the group submitted as a counterclaim against eurochem to the net value of usd15 million gbp93 million for outstanding 
amounts payable under the contract has not been forecast as received during the future period reviewed and as such does not have any 
impact on available liquidity as a result of the uncertainty regarding the timing of any receipts awarded from the arbitration process 
discussions are currently being held with the group’s bankers about the future borrowing needs of the group although these discussions have 
not yet reached ﬁ nal conclusion at the last practical date before issuing this report management is optimistic that the group is able to secure 
the necessary funding it may require 
based on the forecasts prepared the board considers that the group has sufﬁ cient ability to meet its scheduled debt repayments during the 
forecast period from the facilities and cashﬂ ows available to it the current facilities expire in december 2014 the group is seeking renewal 
of these facilities at least in line with levels achieved previously with amended banking covenants in order to execute its current strategic 
plan in line with the circumstances during the current ﬁ nancial year the group will likely require the continued support of its bankers with 
regard to relaxation of covenant requirements should renegotiation of facilities not be ﬁ nalised prior to the next measurement date based on 
experience to date management have concluded that this is likely 
the directors believe that the group has adequate resources in place to continue in operational existence for the foreseeable future the 
consolidated annual ﬁ nancial statements therefore continue to be prepared on a going concern basis
presentation currency
the consolidated ﬁ nancial statements are prepared in british pounds which is the functional and presentational currency of the parent company
124 use of estimates and judgements 
the preparation of ﬁ nancial statements in conformity with ifrs as adopted by the eu requires management to make judgements estimates and 
assumptions that affect the application of policies and reported amounts of assets liabilities income and expenses actual results may differ from 
these estimates
accounting estimates and underlying assumptions are reviewed on an ongoing basis revisions to accounting estimates are recognised in the 
period in which the estimate is revised and in any future periods affected
in particular information about signiﬁ cant areas of estimation uncertainty and critical judgements in applying accounting policies that have a 
signiﬁ cant effect on the amounts recognised in the ﬁ nancial statements is supplied in the following notes
– note 62 valuation of land and buildings
– note 65 useful lives of property plant and equipment
– note 24 measurement of post retirement beneﬁ t obligations
– note 136 and 271 lease classiﬁ cation
– note 1321 valuation of ﬁ nancial instruments
– note 32 contingent liabilities
125 change in accounting policy
on 1 january 2012 the group changed its accounting policy governing the measurement of inventory from the ﬁ rst in ﬁ rst out method to the 
weighted average cost formula the group believes that the subsequent measurement using the weighted average cost formula provides 
more relevant information about the ﬁ nancial performance of inventories assists users to better understand the risks associated with inventory 
and is consistent with the industry norms 
the change in accounting policy has been applied prospectively from 1 january 2012 as it is not practical to estimate the effects of applying 
the policy retrospectively or prospectively from any other date accordingly the adoption of the new policy has no effect on the prior period
13 signiﬁ cant accounting policies
the accounting policies set out below have been consistently applied to all periods presented in these consolidated ﬁ nancial statements 
except as explained above which addresses the change in accounting policy of inventory the accounting policies have been applied 
consistently to all entities within the group
131 basis of consolidation
subsidiaries 
subsidiaries are entities controlled by the group the ﬁ nancial statements of subsidiaries are included in the consolidated ﬁ nancial statements 
from the date that control commences until the date that control ceases the accounting policies of subsidiaries are aligned with the policies 
adopted by the group 
shaft sinkers p40p100indd   48 27042013   0056 shaft sinkers annual financial report 2012
49
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
noncontrolling interests
noncontrolling interests in the net assets of consolidated subsidiaries are identiﬁ ed separately from the group’s equity therein noncontrolling 
interests consist of the amount of those interests at the date of the original business combination and the noncontrolling interest’s share of 
changes in equity since the date of the combination losses applicable to the noncontrolling interest in excess of the noncontrolling interest’s 
share of changes in equity are allocated against the interests of the group except to the extent that the noncontrolling interest has a binding 
obligation and is able to make an additional investment to cover the losses 
changes in the group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their 
capacity of owners adjustments to noncontrolling interests are based on a proportionate amount of the net assets of the subsidiary no 
adjustments are made to goodwill and no gain or loss is recognised in proﬁ t or loss
acquisitions from entities under common control
business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the group are 
accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or if later at the date that 
common control was established the assets and liabilities acquired are recognised at the carrying amounts recognised previously in the 
group controlling shareholder’s consolidated ﬁ nancial statements the components of equity of the acquired entities are added to the same 
components within group equity and any gainloss arising is recognised directly in equity
jointly controlled operations
a jointly controlled operation is a joint venture carried on by each venturer using its own assets in pursuit of the joint operations the 
consolidated ﬁ nancial statements include the assets that the group controls and the liabilities that it incurs in the course of pursuing the joint 
operation and the expenses that the group incurs and its share of the income that it earns from the joint operation
special purpose entities
special purpose entities classiﬁ ed as such in accordance with sic 12 consolidation – specialpurpose entities special purpose entities are 
those companies in which the group has an interest of 50 or more of the voting rights or otherwise has the power to exercise control over 
the operations and derive the beneﬁ ts there from due to the fact that a special purpose entity is deemed to be controlled by the group the 
ﬁ nancial statements of a special purpose entity are included in the consolidated annual ﬁ nancial statements
transactions and balances eliminated upon consolidation
intragroup balances and transactions and any unrealised income and expenses arising from intragroup transactions are eliminated in 
preparing the consolidated ﬁ nancial statements unrealised gains arising from transactions with equity accounted investees and joint ventures 
are eliminated against the investment to the extent of the group’s interest in the investee unrealised losses are eliminated in the same way as 
unrealised gains but only to the extent that there is no evidence of impairment
132 foreign currency
foreign currency transactions
transactions in foreign currencies are translated at the functional currency of the relevant subsidiary company at the exchange rate at the 
transaction date monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional 
currency at the exchange rate at that date the foreign currency gain or loss on monetary items is the difference between the amortised cost 
in the functional currency at the beginning of the period adjusted for effective interest and payments during the period and the amortised 
cost in foreign currency translated at the exchange rate at the end of the reporting period nonmonetary assets and liabilities denominated in 
foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that their fair value 
was determined foreign currency differences arising on retranslation are recognised in proﬁ t or loss nonmonetary items that are measured in 
terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction
shaft sinkers p40p100indd   49 27042013   0056 shaft sinkers annual financial report 2012
50
foreign operations
the assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition are translated to british 
pounds at the exchange rates at the reporting date the income and expenses of foreign operations excluding foreign operations in 
hyperinﬂ ationary economics are translated to british pound at exchange rates at the dates of the transactions
foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve 
“translation reserve” in equity when a foreign operation is disposed of such that control is lost the cumulative amount in the translation 
reserve related to that foreign operation is reclassiﬁ ed to proﬁ t or loss as part of the gain or loss on disposal when the group disposes of only 
part of its interest in a subsidiary that includes a foreign operation while retaining control the relevant proportion of the cumulative amount is 
reattributed to noncontrolling interests
when the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable 
future foreign exchange gains and losses arising from such monetary item are considered to form part of a net investment in a foreign 
operation and are recognised in other comprehensive income
133 financial instruments
nonderivative ﬁ nancial assets 
the group initially recognises loans and receivables and deposits on the date that they are originated all other ﬁ nancial assets including 
assets designated at fair value through proﬁ t or loss are recognised initially on the trade date at which the group becomes a party to the 
contractual provisions of the instrument
the group derecognises a ﬁ nancial asset when the contractual rights to the cash ﬂ ows from the asset expire or it transfers the rights to receive 
the contractual cash ﬂ ows on the ﬁ nancial asset in a transaction in which substantially all risks and rewards of ownership of the ﬁ nancial asset 
are transferred any interest in transferred ﬁ nancial assets that is created or retained by the group is recognised as a separate asset or liability
financial assets and liabilities are offset and the net amount presented in the statement of ﬁ nancial position when and only when the group 
has a legal right to offset the amounts and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously
the group has the following nonderivative ﬁ nancial assets ﬁ nancial assets at fair value through proﬁ t or loss and loans and receivables
financial assets at fair value through proﬁ t or loss
a ﬁ nancial asset is classiﬁ ed at fair value through proﬁ t or loss if it is classiﬁ ed as held for trading or is designated as such upon initial 
recognition financial assets are designated at fair value through proﬁ t or loss if the group manages such investments and makes purchase 
and sale decisions based on their fair value in accordance with the group’s risk management and investment strategy upon initial recognition 
attributable transaction costs are recognised in proﬁ t or loss as incurred financial assets at fair value through proﬁ t or loss are measured at fair 
value and changes therein are recognised in proﬁ t or loss 
loans and receivables
loans and receivables are ﬁ nancial assets with ﬁ xed or determinable payments that are not quoted in an active market such assets are 
recognised initially at fair value plus any directly attributable transaction costs subsequent to initial recognition loans and receivables are 
measured at amortised cost using the effective interest method less any impairment losses
loans and receivables comprise trade and other receivables loans receivable loans to related parties and cash and cash equivalents
cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less bank overdrafts that are 
repayable on demand and form an integral part of the group’s cash management are included as a component of cash and cash equivalents 
for the purpose of the statement of cash ﬂ ows
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   50 27042013   0056 shaft sinkers annual financial report 2012
51
133 financial instruments continued
nonderivative ﬁ nancial liabilities
the group initially recognises debt securities issued and subordinated liabilities on the date that they are originated all other ﬁ nancial 
liabilities including liabilities designated at fair value through proﬁ t or loss are recognised initially on the trade date at which the group 
becomes a party to the contractual provisions of the instrument
the group derecognises a ﬁ nancial liability when its contractual obligations are discharged cancelled or expire
the group has the following nonderivative ﬁ nancial liabilities loans and borrowings bank overdrafts and trade and other payables
such ﬁ nancial liabilities are recognised initially at fair value plus any directly attributable transaction costs subsequent to initial recognition 
these ﬁ nancial liabilities are measured at amortised cost using the effective interest method
share capital
ordinary shares
ordinary shares are classiﬁ ed as equity incremental costs directly attributable to the issue of ordinary shares and share options are recognised 
as a deduction from equity net of any tax effects
when share capital recognised as equity is repurchased the amount of the consideration paid including any directly attributable costs is 
recognised as a deduction from equity
134 property plant and equipment
recognition and measurement
items of plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses
cost includes expenditure that is directly attributable to the acquisition of the asset the cost of selfconstructed assets includes the cost of 
materials and direct labour and any other costs directly attributable to bringing the asset to a working condition for its intended use and the 
costs of dismantling and removing items and restoring the site on which they are located
property comprising land and buildings is measured at fair value at the date of revaluation less for buildings accumulated depreciation since 
the date of revaluation
any revaluation reserve will be realised to retained earnings once the underlying properties are disposed of rather than realising the reserve 
systematically through usage
when parts of an item of property plant and equipment have different useful lives they are accounted for as separate items major 
components of property plant and equipment
gains and losses on disposal of an item of property plant and equipment are determined by comparing the proceeds from disposal with the 
carrying amount of property plant and equipment and are recognised net within other income in proﬁ t or loss when revalued assets are sold 
the amounts included in the revaluation reserve are transferred to retained earnings
subsequent costs
the cost of replacing a part of an item of property plant and equipment is recognised in the carrying amount of the item if it is probable that 
the future economic beneﬁ ts embodied within the part will ﬂ ow to the group and its cost can be measured reliably the carrying amount of the 
replaced part is derecognised the cost of daytoday servicing of property plant and equipment are recognised in proﬁ t or loss as incurred
depreciation
depreciation is calculated based on the depreciable amount which is the cost of an asset or other amount substituted for cost less its residual value
depreciation is recognised in proﬁ t or loss on a straightline basis over the estimated useful lives of each part of an item of property plant 
and equipment since this most closely reﬂ ects the expected pattern of consumption of the future economic beneﬁ ts embodied in the asset 
leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the group will obtain 
ownership by the end of the lease term land is not depreciated
the estimated useful lives are 2012 2011
buildings 50 years 50 years
plant and equipment 120 years 120 years 
furniture ﬁ ttings and ofﬁ ce equipment 26 years 26 years
motor vehicles 4 years 4 years
depreciation methods useful lives and residual values are reviewed at each ﬁ nancial yearend and adjusted if appropriate estimates in respect 
of certain items of plant and equipment were revised in 2012 – refer to note 65
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   51 27042013   0056 shaft sinkers annual financial report 2012
52
135 intangible assets
goodwill
goodwill that arises upon the acquisition of subsidiaries is included in intangible assets for measurement of goodwill at initial recognition see 
note 131
subsequent measurement
goodwill is measured at cost less accumulated impairment losses
research and development
expenditure on research activities undertaken with the prospect of gaining new scientiﬁ c or technical knowledge and understanding is 
recognised in proﬁ t or loss as incurred
development activities involve a plan or design for the production of new or substantially improved products or processes development 
expenditure is capitalised only if development costs can be measured reliably the product or process is technically and commercially feasible 
future economic beneﬁ ts are probable and the group intends to and has sufﬁ cient resources to complete development and to use of sell the 
asset the expenditure capitalised includes the cost of materials direct labour overhead costs that are directly attributable to preparing the 
asset for its intended use and capitalised borrowing costs other development expenditure is recognised in proﬁ t or loss as incurred
capitalised development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses
subsequent expenditure
subsequent expenditure is capitalised only when it increases the future economic beneﬁ ts embodied in the speciﬁ c asset to which it relates all 
other expenditure is recognised in proﬁ t or loss as incurred
136 leased assets
leases in terms of which the group assumes substantially all the risks and rewards of ownership are classiﬁ ed as ﬁ nance leases upon initial 
recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease 
payments subsequent to initial recognition the asset is accounted for in accordance with the accounting policy applicable to that asset
other leases are operating leases and the leased assets are not recognised in the group’s statement of ﬁ nancial position
137 inventories 
inventories are measured at the lower of cost and net realisable value the cost of inventories is based on the weighted average cost method 
and includes expenditure incurred in acquiring the inventories production or conversion costs and other costs incurred in bringing them to 
their existing location and condition
net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses 
obsolete redundant and slow moving inventories are identiﬁ ed on a regular basis and are written down to their estimated net realisable values
138 construction work in progress
construction work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to 
date it is measured at cost plus proﬁ t recognised to date less progress billings and recognises losses cost includes all expenditure related 
directly to speciﬁ c projects
construction work in progress is presented as part of trade and other receivables in the statement of ﬁ nancial position for all contracts in which 
costs incurred plus recognised proﬁ ts exceed progress billings if progress billings exceed costs incurred plus recognised proﬁ ts then the 
difference is presented as deferred revenue in the statement of ﬁ nancial position
139 impairment 
financial assets
a ﬁ nancial asset not carried at fair value through proﬁ t or loss is assessed at each reporting date to determine whether there is any objective 
evidence that it is impaired a ﬁ nancial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition 
of the asset and that the loss event had a negative effect on the estimated future cash ﬂ ows of that asset that can be estimated reliably
objective evidence that ﬁ nancial assets including equity securities are impaired include default or delinquency by a debtor restructuring of an 
amount due to the group on terms that the group would not consider otherwise indications that a debtor or issuer will enter bankruptcy the 
disappearance of an active market for a security in addition for an investment in an equity security a signiﬁ cant or prolonged decline in its fair 
value below its cost is objective evidence of impairment
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   52 27042013   0056 shaft sinkers annual financial report 2012
53
139 impairment  continued
the group considers evidence of impairment for receivables at both speciﬁ c asset and collective level all individually signiﬁ cant receivables 
are assessed for speciﬁ c impairment all individually signiﬁ cant receivables found not to be speciﬁ cally impaired are then collectively assessed 
for any impairment that has been incurred but not yet identiﬁ ed receivables that are not individually signiﬁ cant are collectively assessed for 
impairment by grouping together receivables with similar risk characteristics
in assessing collective impairment the group uses historical trends of the probability of default timing of recoveries and the amount of loss 
incurred adjusted for management’s judgement as to whether the current economic and credit conditions are such that the actual losses are 
likely to be greater or less than suggested by historical trends
an impairment loss in respect of a ﬁ nancial asset measured at amortised cost is calculated as the difference between its carrying amount and 
the present value of the estimated future cash ﬂ ows discounted at the asset’s original effective interest rate losses are recognised in proﬁ t 
or loss and reﬂ ected in an allowance account against receivables interest on the impaired asset continues to be recognised through the 
unwinding of the discount when a subsequent event causes the amount of impairment loss to decrease the decrease in impairment loss is 
reversed through proﬁ t or loss
nonﬁ nancial assets 
the carrying amount of the group’s nonﬁ nancial assets other than inventories and deferred tax assets are reviewed at each reporting date to 
determine whether there is an indication of impairment if any such indication exists then the assets recoverable amount is estimated
for goodwill assets that have an indeﬁ nite useful life and intangible assets that are not yet available for use including capitalised development 
costs the recoverable amount is estimated at each balance sheet date
the recoverable amount of an asset or cashgenerating unit is the greater of its value in use and its fair value less costs to sell in assessing the 
value in use the estimated future cash ﬂ ows are discounted to their present value using a pretax discount rate that reﬂ ects the current market 
assessments of the time value of money and the risks speciﬁ c to the asset for the purpose of impairment testing assets are grouped together 
into the smallest group of assets that generate cash inﬂ ows from continuing use that are largely independent of the cash inﬂ ows of other assets 
or groups of assets the “cashgenerating unit”
an impairment loss is recognised if the carrying amount of an asset or its cashgenerating unit exceeds its estimated recoverable amount 
impairment losses are recognised in proﬁ t or loss impairment losses recognised in respect of cashgenerating units are allocated ﬁ rst to 
reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit group 
of units on a pro rata basis in the case of land and buildings the revaluation decrease is recognised directly in other comprehensive income 
against the revaluation reserve
an impairment loss in respect of goodwill is not reversed in respect of other assets impairment losses recognised in prior periods are assessed at 
each reporting date for any indications that the loss has decreased or no longer exists an impairment loss is reversed if there has been a change 
in the estimates used to determine the recoverable amount an impairment loss is reversed only to the extent that the asset’s carrying amount 
does not exceed the carrying amount that would have been determined net of depreciation if no impairment loss had been recognised
1310 employee beneﬁ ts
shortterm employee beneﬁ ts
shortterm employee beneﬁ t obligations are measured on an undiscounted basis and are expensed as the related service is provided
a liability is recognised for the amount expected to be paid under shortterm cash bonus or proﬁ tsharing plans if the group has a present legal 
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably
share based payment transactions
the grantdate fair value of sharebased payment awards granted to employees is recognised as an employee expense with a corresponding 
increase in equity over the period that the employees unconditionally become entitled to the awards the amount recognised as an expense 
is adjusted to reﬂ ect the number of awards for which the related service and nonmarket vesting conditions are expected to be met such that 
the amount ultimately recognised as an expense is based on the number of awards that meet the related service and nonmarket performance 
conditions at the vesting date for sharebased payment awards with nonvesting conditions the grantdate fair value of the sharebased 
payment is measured to reﬂ ect such conditions and there is no trueup for differences between expected and actual outcomes
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   53 27042013   0056 shaft sinkers annual financial report 2012
54
1310 employee beneﬁ ts continued
deﬁ ned contribution plan
a deﬁ ned contribution plan is postemployment plan under which an entity pays ﬁ xed contributions into a separate legal entity and will have no 
legal or constructive obligation to pay further amounts obligations for contributions to deﬁ ned contribution pension places are recognised as an 
employee beneﬁ t expense in proﬁ t or loss in the periods during which services are rendered by employees prepaid contributions are recognised 
as an asset to the extent that a cash refund or a reduction in future payments is available contributions to a deﬁ ned contribution plan that is due 
more than 12 months after the end of the period in which the employees render the services are discounted to their present value
deﬁ ned beneﬁ t plan
a deﬁ ned beneﬁ t plan is a postemployment plan other than a deﬁ ned contribution plan the group’s net obligation in respect of deﬁ ned 
beneﬁ t plans is calculated separately for each plan by estimating the amount of future beneﬁ t that employees have earned in return for their 
service in the current and prior periods that beneﬁ t is discounted to determine its present value any unrecognised past service costs and the 
fair value of any plan assets are deducted the calculation is performed annually by a qualiﬁ ed actuary using the projected unit method
the group recognises all actuarial gains and losses arising from deﬁ ned beneﬁ t plans in proﬁ t or loss
1311 black economic empowerment bee transactions
where the group disposes of a portion of a south african based subsidiary or operation to a bee company or employee beneﬁ t trust at 
a discount to fair value the transaction is considered to be a share based payment in line with the principles contained in south africa 
interpretation ac503 accounting for black economic empowerment bee transactions the discount provided or value given is calculated in 
accordance with ifrs 2 share based payments and included in the determination of the proﬁ t or loss on disposal
1312 provisions
a provision is recognised if as a result of a past event the group has a present legal or constructive obligation that can be estimated reliably 
and it is probable that an outﬂ ow of economic beneﬁ ts will be required to settle the obligation provisions are determined by discounting the 
expected future cash ﬂ ows at a pretax rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c to the 
liability the unwinding of the discount is recognised as ﬁ nance cost
onerous contracts
a provision for onerous contracts is recognised when the expected beneﬁ ts to be derived by the group from a contract are lower than the 
unavoidable cost of meeting its obligations under the contract the provision is measured at the present value of the lower of the expected 
cost of terminating the contract and the expected net cost of continuing with the contract before a provision is established the group 
recognises any impairment loss on the assets associated with that contract
1313 interest free advances
interest free advances are received from clients primarily to enable the group to meet its procurement obligations in respect of the contract in 
jurisdictions where normal business practices dictate that suppliers are paid upfront for products andor services to be delivered
interest free advances are offset against normal monthly invoices issued to the client and are reﬂ ected in the statement of ﬁ nancial position as 
an undiscounted amount
1314 subcontractor liabilities
subcontractor liabilities represent the actual unpaid liability owing to subcontractors for work performed including retention monies owed 
subcontractor liabilities are initially recognised at fair value and are subsequently classiﬁ ed as ﬁ nancial liabilities and carried at amortised cost 
using the effective interest rate method
1315 revenue
revenue comprises the net invoiced value of contracts and other services rendered excluding value added tax
services
revenue from services rendered is recognised in proﬁ t or loss in proportion to the stage of completion of the transaction at the reporting date 
the stage of completion is assessed by reference to surveys of work performed
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012 
shaft sinkers p40p100indd   54 27042013   0056 shaft sinkers annual financial report 2012
55
1315 revenue continued
contract revenue
contract revenue includes the initial amount agreed in the contract plus any variations in contract work claims and incentive payments to 
the extent that it is probable that they will result in revenue and can be measured reliably as soon as the outcome of the contract can be 
estimated reliably contract revenue and expenses are recognised in proﬁ t or loss in proportion to the stage of completion of the contract 
contract expenses are recognised as incurred unless they create an asset related to future contract activity
the stage of completion is assessed by reference to surveys of work performed when the outcome of the contract cannot be estimated 
reliably contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable an expected loss on a 
contract is recognised immediately in proﬁ t or loss
1316 lease payments
payments made under operating leases are recognised in proﬁ t or loss on a straightline basis over the term of the lease
minimum lease payments made under ﬁ nance leases are apportioned between the ﬁ nance expense and the reduction of the outstanding 
liability the ﬁ nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the 
remaining balance of the liability
determining whether an arrangement contains a lease
at inception of an arrangement the group determines whether such an arrangement is or contains a lease a speciﬁ c asset is the subject of a 
lease if fulﬁ lment of the arrangement is dependent on the use of that speciﬁ c asset an arrangement conveys the right to use the asset if the 
arrangement conveys to the group the right to control the use of the underlying asset
at inception or upon reassessment of the arrangement the group separates payments and other consideration required by such an 
arrangement into those for the lease and those for other elements on the basis of their relative fair values if the group concludes for a ﬁ nance 
lease that it is impracticable to separate the payments reliably an asset and a liability are recognised at an amount equal to the fair value of 
the underlying asset subsequently the liability is reduced as payments are made and an imputed ﬁ nance charge on the liability is recognised 
using the group’s incremental borrowing rate
1317 finance income and costs 
finance income comprises interest income of funds invested dividend income gains on the disposal of availableforsale ﬁ nancial assets 
changes in fair value of ﬁ nancial assets at fair value through proﬁ t or loss and gains on hedging instruments that are recognised in proﬁ t or 
loss interest income is recognised as it accrues using the effective interest method dividend income is recognised in proﬁ t or loss on the date 
that the group’s right to receive payment is established
finance costs comprise interest expense on borrowings unwinding of the discount on provisions changes in the fair value of ﬁ nancial assets 
at fair value through proﬁ t or loss impairment losses recognised on ﬁ nancial assets and losses on hedging instruments that are recognised 
in proﬁ t or loss borrowing costs that are not directly attributable to the acquisition construction or production of a qualifying asset are 
recognised in proﬁ t or loss using the effective interest method foreign currency gains or losses are reported on a net basis
1318 income tax
income tax expense comprises current taxation deferred taxation and secondary taxation on companies being a south african taxation on 
dividends income tax expense is recognised in proﬁ t or loss except to the extent that it relates to items recognised directly in equity or in 
other comprehensive income
current tax
current taxation is the expected taxation payable on taxable income for the year using taxation rates enacted or substantively enacted at the 
reporting date and any adjustments to taxation payable in respect of previous years current tax payable also includes any tax liability arising 
from declaration of dividends not paid by reporting date
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   55 27042013   0056 shaft sinkers annual financial report 2012
56
1318 income tax continued
deferred tax
deferred taxation is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for ﬁ nancial reporting 
purposes and the amounts used for taxation purposes
deferred taxation is not recognised for the following temporary differences 
•  the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor 
taxable proﬁ t 
•  differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in 
the foreseeable future and 
•  taxable temporary differences arising on the initial recognition of goodwill
deferred taxation is measured at the taxation rates that are expected to be applied to the temporary differences when they reverse based on 
the laws that have been enacted or substantively been enacted by the reporting date
deferred taxation assets and liabilities are offset if there is a legally enforceable right to offset current taxation liabilities and assets and they 
relate to income taxes levied by the same authority on the same taxable entity or on different taxable entities but they intend to settle current 
taxation liabilities and assets on a net basis or their taxation liabilities and assets will be realised simultaneously
a deferred taxation asset is recognised for unused tax losses tax credits and deductible temporary differences to the extent that it is probable 
that future taxable proﬁ ts will be available against which the temporary difference can be utilised deferred taxation assets are reviewed at 
each reporting date and are reduced to the extent that it is no longer probable that the related taxation beneﬁ t will be realised
1319 earnings per share
the group presents basic earnings per share data for its ordinary shares basic earnings per share is calculated by dividing the proﬁ t or loss 
attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the year 
adjusted for the company’s own shares diluted earnings per share is determined by adjusting proﬁ t or loss attributable to the ordinary 
shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held and for the effects of all diluted 
potential ordinary shares which may comprise convertible notes and share options granted to employees
1320 segment reporting
an operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses 
including revenues and expenses that relate to transactions with any of the group’s other components all operating segments‘operating 
results are reviewed regularly by the group’s executive management to make decisions about resources to be allocated to the segment and to 
assess its performance and for which discrete ﬁ nancial information is available
segment results that are reported to executive management include items directly attributable to a segment as well as those that can be 
allocated on a reasonable basis unallocated items comprise mainly corporate overhead expenses and income tax assets and liabilities
segment capital expenditure is the total cost incurred during the year to acquire property plant and equipment and intangible assets other 
than goodwill
1321 determination of fair values
a number of the group’s accounting policies and disclosures require the determination of fair value for both ﬁ nancial and nonﬁ nancial 
assets and liabilities fair values have been determined for measurement andor disclosure purposes based on the following methods when 
applicable further information about the assumptions made in determining fair values is disclosed in the notes speciﬁ c to that asset or liability 
the fair value of these at grant date is dependent on market conditions and nonvesting conditions
property plant and equipment       
the fair value of property is based on market values the market value of property is the estimated amount for which a property could be 
exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein 
the parties had each acted knowledgeably prudently and without compulsion 
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   56 27042013   0056 shaft sinkers annual financial report 2012
57
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012 
1321 determination of fair values continued
trade and other receivables
the fair values of trade and other receivables excluding construction work in progress are estimated at the present value of future cash ﬂ ows 
discounted at the market rate of interest at the measurement date shortterm receivables with no stated interest rate are measured at the 
original invoice amount if the effect of discounting is immaterial fair value is determined at initial recognition and for disclosure purposes at 
each annual reporting date
nonderivative ﬁ nancial liabilities
fair value which is determined for disclosure purposes is calculated based on the present value of future principal and interest cash ﬂ ows 
discounted at the market rate of interest at the reporting date in respect of the liability component of convertible notes the market rate of 
interest is determined by reference to similar liabilities that do not have a conversion option for ﬁ nance leases the market rate of interest is 
determined by reference to the rate per the agreement which is linked to the prime lending rate of south africa
investments in equity
the fair value of ﬁ nancial assets at fair value through proﬁ t or loss heldtomaturity investments and availableforsale ﬁ nancial assets is 
determined by reference to their quoted bid price at the reporting date the fair value of heldtomaturity investments is determined for 
disclosure purposes only
share based payments
the fair value of the group’s long term share incentive scheme is measured using monte carlo simulation model measurement inputs include 
the share price at measurement date the expected volatility based on an evaluation of the company’s historic volatility particularly over the 
historic period commensurate with the expected term of the instruments the expected term of the instruments expected dividends and the 
risk free interest rates based on government bonds service and nonmarket performance conditions attached to the transactions are not taken 
into account in determining fair value
1322 new standards and interpretations
a number of new standards amendments to standards and interpretations issued are not yet effective for the year ended 31 december 2012 
and have not been applied in preparing these annual ﬁ nancial statements
ifrs 10 consolidated ﬁ nancial statements ifrs 11 joint arrangements ifrs 12 disclosure of interest in other entities
ifrs 10 introduces a single control model to determine whether an investee should be consolidated as a result the change is not expected to 
have an effect on the group 
under ifrs 11 the structure of the joint arrangement although still an important consideration is no longer the main factor in determining the 
type of joint arrangement and therefore the subsequent accounting 
•  the group’s interest in a joint operation which is an arrangement in which the parties have rights to the assets and liabilities will be 
accounted for on the same basis of the group’s interest in those assets and liabilities 
•  the group’s interest in a joint venture which is an arrangement in which the parties have an interest the net assets will be equity accounted 
the changes to joint arrangements are not expected to have an impact on the group 
ifrs 12 brings together in a single standard all disclosure requirements about an interest in subsidiaries joint arrangements associates and 
unconsolidated structured entities the group is currently assessing the disclosure requirements and the ﬁ nancial effects thereof 
these standards are effective for annual periods beginning on or after 1 january 2014 with early adoption permitted 
ifrs 13 fair value measurements 2011
ifrs 13 provides a single source of guidance on how fair value is measured and replaces the fair value measurement guidance that is currently 
dispersed throughout ifrs subject to limited exceptions ifrs 13 is applied when fair value measurements of disclosures are required or 
permitted by other ifrss the group is currently reviewing its methodologies in determining fair values ifrs 13 is effective for annual periods 
beginning on or after 1 january 2014 with early adoption permitted
ias 19 employee beneﬁ ts
ias 19 2011 changes the deﬁ nition of short term and other long term employee beneﬁ ts to clarify the distinction between the two for 
deﬁ ned beneﬁ t plans the removal of the accounting policy choice for recognition of actuarial gains and losses is not expected to have any 
impact on the group ias 19 2011 is effective on or after 1 january 2014 with early adoption permitted 
shaft sinkers p40p100indd   57 27042013   0056 shaft sinkers annual financial report 2012
58
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
2 revenue
  2012 2011
  gbp  gbp
contract revenue
revenue from south african core operations   176464872  185051420 
revenue from international core operations   16074076   41488123 
   192538948  226539543 
3 proﬁ t from operations
  is arrived at after taking into account
 2012 2011
 gbp  gbp
auditors’ remuneration 205602 684276
  for audit services rendered 200531 646629
  for nonaudit services rendered 5071 37647
impairment allowance on trade and other receivables  note 282 631723 2109735
  raised 1292680 2284658
  reversed 660957 174923
bad debts written off 10135 
consulting fees paid 1480866 688491
legal fees 1087712 320082
depreciation of property plant and equipment  note 61 5686969 9603430
impairment loss on plant and equipment  note 65 346560 
derecognition items replaced on plant and equipment  note 68 459501 
proﬁ tloss on disposal of property plant 
and equipment 645763 35061
personnel costs 139042970 137315395
employee beneﬁ ts – share based payments  note 31 232333 368566
share based payment expense arising on black economic empowerment transaction
in respect of shaft sinkers mining pty limited – 244665
write down of inventory to net realisable value due to obsolesence  note 13 4908 29532
operating lease charges 1275171 1426507
proﬁ t on foreign exchange differences 2764804 912766
directors’ fees 278000 285000
provision raised for future retirement beneﬁ t obligations relating to past employees  note 24 35200 19664
loss on recognition of claim receivable 889646 
reversal of provision for interest and indirect taxes 903633 
reversal of provision for site demobilisation costs  374339 
shaft sinkers p40p100indd   58 27042013   0056 shaft sinkers annual financial report 2012
59
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012 
31  proﬁ t from operations before exceptional items
the results of the group were affected by an exceptional item during the 2011 ﬁ nancial year a reconciliation has therefore been prepared 
below whereby the proﬁ t from operations as reﬂ ected in the consolidated income statement is reconciled to the proﬁ t from operations before 
exceptional items details around the nature of the exceptional item are more fully described below
    
  2012 2011
  gbp  gbp
proﬁ t from operations as per consolidated income statement  5251911 15325 210
adjusted for exceptional items
  ipo bonuses  included in operating expenses  32   3133771
proﬁ t from operations before exceptional items   5251911 18458981
32  ipo bonuses
the group announced in its  prospectus that it would pay a onceoff ipo bonus to a range of middle to senior management the amount was 
accrued for and paid in two tranches ie 30 june 2011 and 31 december 2011 the amount paid amounted to zar 419 million which was 
equivalent to gbp31 million      
4 finance income and costs       
  2012 2011
  gbp  gbp
interest on call and current account balances  54817 185056
sundry interest received  20463 6318
interest on ﬁ nance lease receivables  139214 189521
interest on loan receivable   2649
interest on loan to related party   11306
interest earned from revenue authorities  154686 
finance costs  369180 394850
interest paid on ﬁ nance lease obligations   46836
interest paid on interest bearing borrowings  1291422 1806070
fair value adjustments to derivative instruments   51631
interest on bank overdraft  191536 70658
sundry interest paid  8340 238755
interest due to revenue authorities  693408 
finance costs  2184706 2213950
net ﬁ nance costs recognised in proﬁ t or loss  1815526 1819100
shaft sinkers p40p100indd   59 27042013   0056 shaft sinkers annual financial report 2012
60
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012 
5 income tax        
  2012 2011
  gbp  gbp
current tax expense    
 current year  1823288 1029347
 prior year over provision  1037049 222626
secondary tax on companies   526989
dividend withholding tax  2511 
deferred tax
 current year  588016 3454141
 prior year under provision  836387 1879
total income tax  1037121 4789730
income tax recognised in other comprehensive income   
revaluation of property plant and equipment
before tax  323519 412145
tax expense  138044 88747
net of tax  185475 323398 
  
reconciliation of effective tax rate   
current year’s charge as a percentage of proﬁ t before tax  302 355
nondeductible expenditure  271 41
nontaxable income  31 13
dividend withholding taxes  01 
secondary tax on companies   48
prior year underover provision  58 20
foreign tax credits  10 
utilisation of taxable losses not previously raised as deferred tax assets   07
unutilised assessed losses raised as deferred tax asset   31
special deductions  82 
foreign tax rate differential  95 337
isle of man corporate tax rate    
the group’ s foreign tax rate differential decreased from 337 in 2011 to 95 in 2012 the decrease was caused by a decrease in proﬁ tability of the 
south african operations of the group resulting in a decrease in taxable income
the company is subject to tax in the isle of man at the standard tax rate of 0 2011 0
shaft sinkers p40p100indd   60 27042013   0056 shaft sinkers annual financial report 2012
61
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
6 property plant and equipment
61 reconciliation of property plant and equipment 
     furniture ﬁ ttings
 plant and  capital work   and ofﬁ ce
 equipment inprogress land buildings equipment motor vehicles total
 gbp gbp gbp gbp gbp gbp gbp
2012
cost or valuation
balance at beginning of year 60425545  2614190 4239620 3212587 1037888 71529830
additions 8935812 2154829 242782 296188 468306 577313 12675230
revaluation   124720 198799   323519
derecognition of replaced items 983840      983840
disposals 2206599    38091 285838 2530528
effect of exchange differences on
translation from functional to
presentation currency 5566728 109206 236 801 378917 289111 101392 6682155
balance at end of year 60604190 2045623 2 744 891 4355690 3353691 1227971 74332056
      
accumulated depreciation and impairment losses
balance at beginning of year 21868225    452190  2311533  565182  25197130 
depreciation 4962912    79609  447284  197164  5686969 
impairment 344013      2547    346560 
derecognition of replaced items 524339          524339 
disposals  885174           885174 
effect of exchange differences on
translation from functional to
presentation currency  1913772    41774   216409  56178   2228133 
balance at end of year 23851865   490025  2544955  706168  27593013 
carrying value      
balance at beginning of year 38557320    2614190  3787430 901054 472706 46332700
additions 8935812  2154829  242782  296188 468306 577313 12675230
revaluation     124720  198799   323519
impairment  344013       2547  346560
derecognition of replaced items  459501         459501
disposals  1321425       38091 285838 1645354
depreciation for the year  4962912      79609 447284 197164 5686969
effect of exchange differences on
translation from functional to
presentation currency 3652956  109206  236801  337143 72702 45214 4454022
balance at end of year 36752325  2045623  2744891  3865665 808736 521803 46739043
shaft sinkers p40p100indd   61 27042013   0056 shaft sinkers annual financial report 2012
62
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
6 property plant and equipment continued
61 reconciliation of property plant and equipment continued 
 plant and    furniture ﬁ ttings
 equipment land buildings and ofﬁ ce equipment motor vehicles total
 gbp gbp gbp gbp gbp gbp
2011       
cost or valuation
balance at beginning of year 64975261  2989474  4797046  3019259  1042252  76823292 
additions 8393584     132229  829690  1150064  10505567 
revaluation    190373  221772        412145 
disposals 347111      17179  946634   1310924 
effect of exchange differences on 
translation from functional to 
presentation currency 12596189  565657  911427  619183  207794   14900250 
balance at end of year 60425545  2614190  4239620  3212587  1037888   71529830 
      
accumulated depreciation and impairment losses       
balance at beginning of year 17116582     456504  2306528  444333   20323947 
depreciation 8752425    86498  477221  287286   9603430 
disposals 184686       11136  67584   263406 
effect of exchange differences on 
translation from functional to 
presentation currency 3816096    90812  461080  98853   4466841 
balance at end of year 21868225     452190  2311533  565182   25197130 
carrying value      
balance at beginning of year 47858679  2989474  4340542  712731  597919   56499345 
additions 8393584    132229  829690  1150064   10505567 
revaluation    190373  221772        412145 
disposals 162425      6043  879050  1047518 
depreciation for the year 8752425     86498  477221  287286  9603430 
effect of exchange differences on 
translation from functional to 
presentation currency 8780093  565657  820615  158103  108941  10433409 
balance at end of year 38557320  2614190  3787430  901054  472706  46332700 
shaft sinkers p40p100indd   62 27042013   0056 shaft sinkers annual financial report 2012
63
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
6 property plant and equipment continued 
62 land and buildings      
land and buildings include
 portion 6 of erf 53 eastgate and portion 701 of the farm zandfontein no 42 ir including ofﬁ ce buildings
 portion 305 of the farm scheerpoort no 477 jq including residential buildings and improvements
  portion 73 a portion of portion 63 of the farm oorzak 335 for the new training centre the construction of the new training centre will be 
completed in 2013 
the group’s land and buildings were revalued by ryle property realtors appraisals proprietary limited an independent sworn appraiser 
on 31 december 2012 the fair value of the land and buildings was determined with reference to market prices the cost of the land and 
buildings prior to any revaluation at 31 december 2012 had the cost model been used is gbp6175078 2011 – gbp6057271 it is the 
group’s policy to revalue its land and buildings on an annual basis
63 encumbrances
the group’s plant and equipment is encumbered by a cession to standard bank of south africa limited as security for its guarantee and 
banking facilities as set out in note 203
64 plant and equipment funded by instalment sale agreements
no plant and equipment 2011 – net book value of gbp61146 is funded by instalment sale agreements as set out in note 203
65 impairment loss
an impairment loss of gbp346560 2011 nil was recognised during the year on the group’s plant and equipment the impairments were 
identiﬁ ed on a line by line basis where the carrying amounts exceeded the estimated recoverable amounts the recoverable amounts were 
determined with reference to estimated cost of replacement of a similar asset
the impairment losses recognised are all allocated to the south african segment of the group
66 change in estimate
during the year under review the useful lives of items of plant and equipment were reassessed resulting in a decrease in useful life and 
an additional depreciation charge of gbp08 million 2011 gbp10 million being processed the following key factors were taken into 
consideration during the reassessments
• mechanical stress refers to forces and loads applied to the assets which lead to degradation over time
• electrical loading refers to stresses such as continuous loading temporary overloading and exposure to short circuit fault current
• operational practices refers to how frequently an asset is subject to operations automated andor manual 
•  environmental conditions include pollution salt acid rain humidity and extreme temperature that are prevalent causing longterm 
degradation over a period of time and
• maintenance practices refers to the frequency of routine inspection or routine testingmaintenance is performed on assets
67 capital workinprogress
capital work in progress relates to the construction of the group’s new training centre and improvements to the group’s johannesburg ofﬁ ces 
as well as items of plant and equipment which at the reporting date were not yet available for use
shaft sinkers p40p100indd   63 27042013   0056 shaft sinkers annual financial report 2012
64
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
68 derecognition of components replaced
components with a carrying value of gbp459501 2011 nil were replaced with new improved items resulting in the original component 
being derecognised to proﬁ t and loss
7 goodwill     
goodwill arose on the acquisition of rossal no 126 proprietary limited by the group during 2007 the balance represents the excess of the 
cost of the acquisition over the group’s interest in fair value of the identiﬁ able assets and liabilities of that company
reconciliation of goodwill balances     
   2012 2011 
   gbp gbp
opening balance  2172667  2663560 
foreign currency translation reserve    181327  490893 
closing balance   1991340  2172667 
allocation of goodwill to cash generating units      
goodwill has not been allocated to individual cash generating units as it is believed that goodwill relates to the specialised industry expertise 
and experiences within the group itself that allows the group to operate in various different geographical segments
impairment testing
an impairment test was performed on 31 december 2012 on the goodwill balance of the group whereby the recoverable amount of the 
group was determined based on its value in use which was determined using a discounted cash ﬂ ow model 
the recoverable amount was compared to the carrying amount of the group where it was found that the recoverable amount exceeded the 
carrying amount
key assumptions used in the discounted cash ﬂ ow projections
•  the budgeted and forecast earnings before interest taxation depreciation and amortisation for the period 2013 to 2017 are consistent 
with the budgets and forecasts submitted to the board of directors
•  a weighted average cost of capital of 169 2011 183 was used as a discount factor in determining the present value of future cash 
ﬂ ows and
•  capital expenditure budgeted averages gbp145 million during the period fy2013 to fy2017
8 other intangible assets
   2012 2011 
   gbp gbp
development costs capitalised   1654621  
during the period under review the group concluded an agreement with sightpower incorporated whereby the parties agreed to further 
develop intellectual property relating to automated mine shaft inspection through a subsidiary of the group
since the development of the intellectual property is still continuing no amortisation or impairment losses have been raised against the 
development costs incurred to date as the current net book value is deemed to be fully recoverable once the development of the technology 
is complete
shaft sinkers p40p100indd   64 27042013   0056 shaft sinkers annual financial report 2012
65
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
9 investment in and loans to joint venture companies      
91 loans to joint venture partners    
  2012 2011
  gbp gbp
rsvshaft sinkers international proprietary limited    20233  22076
sdm mining contractors proprietary limited  129807  47233
    150040  69309
impairment losses raised  150040  69309
      
the above mentioned loans are unsecured bear no interest and are repayable on demand
92 joint venture companies – summarised ﬁ nancial results    
no statement of comprehensive income was prepared for years ended 31 december 2012 and 31 december 2011 as rsvshaft sinkers 
international proprietary limited was dormant and did not trade the consolidated results include the following amounts relating to the group’s 
interest in joint venture companies
  rsvshaft sinkers international
  proprietary limited 
   2012 2011
   gbp gbp
short term loans payable   39075 42633
interest in equity   39075 42633
comprising of    
share capital   4 4
share of accumulated losses   17617 17617
foreign currency translation reserve   21462 25020
   39075 42633
shaft sinkers p40p100indd   65 27042013   0056 shaft sinkers annual financial report 2012
66
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
9 investment in and loans to joint venture companies continued
92 joint venture companies – summarised ﬁ nancial results continued   
  sdm mining contractors
  proprietary limited 
   2012 2011
   gbp gbp
sundry income   15245 13211
net expenses   5795 436
proﬁ tloss before taxation   9450 12775
taxation   5406 
net proﬁ tloss for the year   4044 12775
current assets   
income taxation receivable   19 59734
loan to a related party   15278 
   15297 59734
current liabilities   
loans payable   129811 188864
   129811 188864
interest in equity  114514 129130
comprising of   
share capital   65 65
share of accumulated losses   259548 263592
foreign currency translation reserve   144969 134397
   114514 129130
there were no capital commitments in respect of these joint ventures at the reporting date
by agreement with mmakau mining proprietary limited the group accounts for a 667 2011 – 667 economic interest in sdm mining 
contractors proprietary limited sdm mining contractors proprietary limited remains a joint venture by virtue of the provisions in the 
shareholders’ agreement between the parties
shaft sinkers p40p100indd   66 27042013   0056 shaft sinkers annual financial report 2012
67
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
10 other unlisted investment
  2012 2011
  gbp gbp
shares in rand mutual assurance company limited at fair value  775 845 
the group holds 46900 shares 2011 46900 in rand mutual assurances company limited “rand mutual” rand mutual is a mutual assurer 
as deﬁ ned in the insurance act of south africa the number of shares held is based on the value of policies held in relation to all policies issued 
by rand mutual an adjustment to the shareholding is performed annually by rand mutual at a price determined by rand mutual the shares 
held are at fair value and adjustments to fair value are accounted for through proﬁ t or loss
11 loans receivable   
  2012 2011
  gbp gbp
noncurrent    
 loan receivable  sight power incorporated   320238  
current    
 loan receivable  concrete lining products proprietary limited  36534 39861  
the loan to sight power incorporated was unsecured and bore interest at 2 per annum in terms of an amended agreement between the 
parties the loan was capitalised as part of the investment in other intangible assets refer to note 8 during the current ﬁ nancial period
the loan to concrete lining products proprietary limited is unsecured bears no interest and is repayable on demand the directors expect to 
demand repayment within the ﬁ rst half of the 2013 ﬁ nancial year
12 deferred taxation
  2012 2011
  gbp gbp
balance at beginning of year  1922839 1652859 
current year movement  
 temporary differences recognised in proﬁ t or loss  588016 3454141
 prior year overprovision recognised in proﬁ t or loss  836387 1879
 temporary differences recognised directly in equity  138044 88747
foreign currency translation reserve  273778 30931
balance at end of year  2035476 1922839
deferred tax asset  5383394 4872910
deferred tax liability  7418870 6795749
  2035476 1922839
comprising   
 capital allowances  5625339  6145338 
 stock adjustment on construction contracts  323127   
 prepaid expenses  49739 45052 
 retention debtors  486994 453396 
 deferred revenue  1488824  489181 
 provisions  2741914  3052435 
 loans and borrowings    151963 
 unrealised foreign exchange difference  109172  183278 
 unutilised rebates   229333  
 revaluation reserve  447634   
 tax losses  64519  1118613 
 other  76007  29403 
  2035476  1922839 
shaft sinkers p40p100indd   67 27042013   0056 shaft sinkers annual financial report 2012
68
13 inventories 
  2012 2011
  gbp gbp
consumable stores and spare parts  4159683 14831420
strategic spare parts  585875 1164536
contract work in progress  151430 248529
  4896988 16244485 
consumable stores include electrical wire oils  diesel paint and protective clothing
strategic spare parts include critical parts and consumables utilised in the daytoday servicing of the group’s plant and equipment strategic 
spare parts are managed as items of inventory and are therefore included in the carrying amount of inventories due to the critical nature of 
these items such parts may be on hand for prolonged periods
during the 2012 ﬁ nancial year the write down of inventories to net realisable value amounted to gbp4908 2011 gbp29532 due to 
obsolescence
14 trade and other receivables           
  2012 2011
  gbp gbp
trade receivables  62242994 48467975
impairment allowance  refer to note 282  2589117 2108259
other receivables and amounts not yet billed to clients  1528725 2635798
  61182602 48995514
the group has ceded its trade receivables to standard bank of south africa limited as security for its guarantee and banking facilities refer 
note 203
at 31 december 2012 trade receivables include retentions of gbp3282856 2011gbp1619271 relating to contracts in progress advances 
for which the related work has not yet started are presented as deferred revenue refer note 26 and amounted to gbp15699543 2011 
gbp12769842
included in the trade and other receivables balance at 31 december 2012 is an amount of gbp8084661 which is subject to arbitration as a 
result of a dispute with a former client all the necessary actions have been taken by the directors to recover the amount the recoverability 
of the amount has been considered based on external and internal legal advice and the balance recorded at the reporting date is deemed 
recoverable based on the facts of the matter interest free advances received from the client reduced the gross balance owing by the client it 
is envisaged that these will be settled simultaneously
15 finance lease receivables           
  2012 2011
  gbp gbp
noncurrent ﬁ nance lease receivables  816603 1192644
current ﬁ nance lease receivables  381903 474440
  1196506 1667084
151 leasing arrangements           
the group enters into ﬁ nance leasing arrangements with qualifying employees in respect of motor vehicles that are acquired for use by the 
employees on the group’s projects the average term of ﬁ nance leases entered into is 5 years     
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   68 27042013   0056 shaft sinkers annual financial report 2012
69
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
15 finance lease receivables continued
152 amounts receivable under ﬁ nance leases          
 gross investment in ﬁ nance  unearned present value of
 lease receivable ﬁ nance income minimum lease payments 
 gbp gbp gbp
31 december 2012   
due within one year 476734 94831 381903
due between one and ﬁ ve years 920771 104168 816603
 1397505 198999 1198506 
31 december 2011   
due within one year 613155  138715  474440 
due between one and ﬁ ve years 1379022  186378  1192644 
 1992177  325093  1667084 
the interest rate inherent in the leases is ﬁ xed at the contract date for the entire lease term and is linked to the prime interest rate of south 
africa the average effective interest rate contracted at 31 december 2012 is 97 2011 116 
finance lease receivable balances are secured over the motor vehicles leased
16 cash and cash equivalents       
161 cash and cash equivalents           
  2012 2011
  gbp gbp
call accounts  129650 16683521
current funds at bank  8996195 5590781
cash on hand  8091 24089
  9133936 22298391
comprising
 unrestricted cash and cash equivalents  7240833 22298391
 restricted cash and cash equivalents  1893103 
  9133936 22298391
the majority of current and call accounts are held at standard bank of south africa limited and have been ceded to them as security for 
facilities provided to the group as described in note 203
restricted cash and cash equivalents comprise of funds amounting to usd3 million that are held in a cash collateral account in favour of 
standard bank plc as security for a performance guarantee issued by the group in respect of a project the use of these funds is restricted as 
long as the performance guarantee remains in place
shaft sinkers p40p100indd   69 27042013   0056 shaft sinkers annual financial report 2012
70
17 ordinary share capital           
  2012 2011
  gbp gbp
authorised share capital    
63333333 ordinary shares with no par value    
issued share capital    
47500000 ordinary shares with no par value 2011 47500000 ordinary shares with no par value 56563799  56563799 
reconciliation of share capital    
shares issued on incorporation  1   1 
shares issued on admission  58900000  58900000 
capitalised listing expenses  2336202  2336202 
  56563799  56563799 
the holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at 
meetings of the company at reporting date no shares of the company were held by the group
18 revaluation reserve           
  2012 2011
  gbp gbp
balance at beginning of year  1335757 1271706
movement  185475 323398
foreign currency translation reserve  120879 259347
balance at end of year  1400353 1335757
the revaluation reserve relates to the revaluation of land and buildings net of deferred tax refer note 6 and note 12   
19 earnings per share           
basic earnings per share           
the calculation of basic earnings per share is based on the proﬁ t attributable to ordinary shareholders of gbp2319554 2011 gbp8698114 
and a weighted average number of shares outstanding of 47500 000 2011 47500000
diluted earnings per share
the calculation of diluted earnings per share is based on the proﬁ t attributable to ordinary shareholders of gbp2319554 2011 gbp8698114 
and a weighted average number of shares outstanding of 47688545 2011 47688545  
  2012 2011
  shares shares
weighted average number of ordinary shares at the end of the year
used in the computation of basic earnings per share  47500000 47500000
shares that may potentially be issued in terms of the ltip as described in note 31  188545 188545
weighted average number of ordinary shares at the end of the year  47688545 47688545
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   70 27042013   0056 shaft sinkers annual financial report 2012
71
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
20 interest bearing borrowings         
  2012 2011
201 noncurrent portion  gbp gbp
secured bank loans  3653395 12305185
  3653395 12305185
202 current portion
secured bank loans  7564971 3869001
finance lease obligations   19491
  7564971 3888492
total interest bearing borrowings  11218366 16193677
203  terms and debt repayment   
the secured bank loans relate to loan facilities that have been provided by the standard bank of south africa limited and are secured by the 
following
–  a notarial general covering bond binding all of the moveable property and effects of shaft sinkers proprietary limited of whatever nature 
and description and wheresoever situated both corporeal and incorporeal and both such as it may now own or as it may in the future 
acquire nothing excepted
–  a covering mortgage bond covering the land and buildings of shaft sinkers proprietary limited and
–  a notarial special covering bond binding the winders of shaft sinkers proprietary limited
the secured bank loans are categorised into the following facilities and are subject to the following terms and conditions 
–  a senior amortising facility totalling r530 million gbp39 million 2011 r1030 million gbp82 million bearing interest at the 3 month 
johannesburg interbank agreed rate plus 220 and was repayable quarterly in arrears from 31 december 2010
–  a senior bullet facility totalling r500 million gbp37 million 2011 r500 million gbp40 million bearing interest at the 3 month 
johannesburg interbank agreed rate plus 250 and is repayable on 31 december 2013
–  a mezzanine bullet facility totalling r500 million gbp37 million 2011 r500 million gbp40 million bearing interest at the 3 month 
johannesburg interbank agreed rate plus 675 and is repayable on 31 december 2014
the loan is subject to the following covenants measured on a quarterly basis 
– interest cover ratio required 5
– leverage ratio required  2
– cumulative debt service cover ratio required 12 2011 2 
at 31 december 2012 the group is in compliance with its loan covenants
204 analysis of ﬁ nance lease obligations 
in prior years a portion of the plant and equipment purchased was funded by ﬁ nance lease obligations which were settled during 2012 the 
average term was 3 to 5 years the fair value of the lease obligation approximated the carrying amount of the underlying asset refer note 63
 minimum lease   present value of minimum
 payments due finance charges lease payments due
 gbp gbp gbp
31 december 2011    
due within one year 20507  1016  19491 
due between one and ﬁ ve years        
 20507   1016  19491 
shaft sinkers p40p100indd   71 27042013   0056 shaft sinkers annual financial report 2012
72
21 interest free advances from clients          
  2012 2011
  gbp gbp
opening balance  24433596 19347344
advances received  15768762 10073637
advances offset against debtors invoicing  23374357 5091935
foreign exchange difference on translation  979944 4394173
effect of exchange differences on translation from functional to presentation currency 2337904 4289623
closing balance  15470 041 24433596
comprising   
 noncurrent portion  10781 070 
 current portion  4688 971 24 433 596
  15470 041 24 433 596
the advances received are us dollar denominated contractual working capital advances received from clients during 2012 the balance of one 
of the advances outstanding was applied to reduce the gross amount owing to the group – refer note 14 it is envisaged that these will be 
settled simultaneously with the client
the balance outstanding at 31 december 2012 represents an advance received from a client for a project being performed by the group in 
india the advance is repayable over the period up to june 2017 as a percentage of revenue invoiced
22 subcontractor liabilities          
trade receivables include claims against clients in respect of subcontractor liabilities these liabilities are only settled when payment has been 
received from clients
  2012 2011
  gbp gbp
noncurrent portion  113832 
current portion  979848 
  1093680 
23 related party loans 
  2012 2011
  gbp gbp
231 loan to a related party  current    
loan to bee partner  26040 
the loan to the bee partner was granted during 2012 to assist him to purchase shares in shaft sinkers mining proprietary limited as part of the 
group’s bee strategy in terms of the loan agreement the loan bears interest at the south african prime rate and will be settled during 2013
  2012 2011
  gbp gbp
232 loan from a related party  noncurrent    
loan from sight power incorporated  155166 
the loan made by sight power incorporated is made in terms of the shareholder agreement between sight power incorporated and the 
group the funds will be utilised in the development of the mine shaft inspection technology that is being developed the loan is unsecured 
bears interest at 2 per annum and is repayable in terms of the shareholder agreement repayment is not expected to have to be made within 
the next 12 months and the loan is therefore classiﬁ ed as a noncurrent obligation
  
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   72 27042013   0056 shaft sinkers annual financial report 2012
73
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
24 postretirement beneﬁ t obligations
 2012 2011
 gbp gbp
unfunded obligations    
present value of postretirement medical aid obligations  278535 300948
present value of retirement fund obligations  67330 76122
total postretirement beneﬁ t obligation  345865 377070
movements in the obligation    
opening balance  377070 489063
current service cost – medical aid  29479  19664
current service cost – retirement fund  5721 
medical aid subsidies paid  25876 32364
pension fund subsidies paid  9046 10988
foreign currency translation reserve  31483 88305
closing obligation  345865 377070
recognised in proﬁ t and loss    
current service cost – medical aid  29479 19664
current service cost – retirement fund  5721 
  35200 19664
the group subsidises a closed group of pensioners’ medical aid contributions the monthly subsidies which are reviewed annually by the 
group are charged against the obligation raised the obligation is the estimated present value of the obligation payable over the recipients’ 
remaining lives
the group contributes towards the sentinel mining industry retirement fund in favour of six disability claimants these contributions are 
charged against the obligation raised the obligation is the estimated present value of contributions until retirement date
independent actuarial valuations in respect of these obligations were performed as at 31 december 2012 by momentum specialised 
insurance whose valuator is a fellow of the institute of actuaries it is group policy to perform actuarial valuations annually
the scheme has no plan assets and is an unfunded scheme
the group expects gbp33 554 in subsidies to be contributed to these deﬁ ned beneﬁ ts schemes in 2013
 2012 valuation 2011 valuation
principal actuarial assumptions used in the last actuarial valuation   
longterm rate of investment return  78 90
inﬂ ation rate  63 60
future medical cost increases  68 80
future increases in employer contributions in respect of retirement fund  63 60
shaft sinkers p40p100indd   73 27042013   0056 shaft sinkers annual financial report 2012
74
24 postretirement beneﬁ t obligations continued       
assumptions regarding future mortality are based on published statistics and mortality tables the current longevities underlying the values of 
the obligations in the deﬁ ned beneﬁ t plans are as follows 
        
assumptions speciﬁ cally relating to post retirement medical aid obligation  2012 valuation 2011 valuation
number of members  59 64
average age of members  769 751
assumptions speciﬁ cally in respect of retirement fund subsidies   
number of pensioners  6 6
average age of disability pensioners  522 512
average monthly subsidy rand  119 141
a one percent change in assumed health care cost trend rates has the following effects on proﬁ t or loss    
  one  one 
  increase increase
  2012 2011
  gbp gbp
effect on interest cost  295 197
effect on postretirement beneﬁ t obligation  2920 3240
25 trade and other payables        
  2012 2011
  gbp gbp
trade and other payables  29302471 23905085
annual bonus accrual  1909249 2805504
leave bonus accrual  380964 2206390
leave pay accrual  5146432 5991870
  36739116 34908849
26 deferred revenue           
  2012 2011
  gbp gbp
deferred revenue
 noncurrent  6614 608 4174100
 current  9084 935 8595742
  15699543 12769842
deferred revenue comprises advances received from clients for which the related work has not yet been performed deferred revenue is 
released to the statement of comprehensive income on a stage of completion method as the services to which the deferred revenue relates are 
performed
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012 
shaft sinkers p40p100indd   74 27042013   0056 shaft sinkers annual financial report 2012
75
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
27 commitments           
  2012 2011
  gbp gbp
271 operating lease commitments    
future operating lease charges relating to property
 payable within 1 year  1182752 1239343
 payable between 1 and 5 years  3223252 1522810
  4406004 2762153
future operating lease charges relating to plant and equipment 
 payable within 1 year   1143202
 payable between 1 and 5 years   1401510
   2544712
future operating lease charges relating to ofﬁ ce equipment  
 payable within 1 year  89702 96141
 payable between 1 and 5 years  53879 121300
  143581 217441
total future operating lease charges    
 payable within 1 year  1272454 2478686
 payable between 1 and 5 years  3277131 3045620
  4549585 5524306
future lease charges except for operating leases relating to properties are subject to changes in the prime lending rate of south africa the 
lease agreements continue indeﬁ nitely unless terminated in terms of the agreements which require a three month notice period 
272 capital commitments           
  2012 2011
  gbp gbp
capital expenditure authorised   
– contracted for   1000000
– not yet contracted for  43773881 5507744
  43773881 6507744
   
commitment toward sight power incorporated for the development of
intellectual property contracted for at yearend  947192 970500
the commitments of the group will primarily be funded through funds received from clients as well as through the use of available cash and 
banking facilities of the group
shaft sinkers p40p100indd   75 27042013   0056 shaft sinkers annual financial report 2012
76
28 financial risk instruments and risk management        
the board’s policy is to maintain a strong capital base as to maintain investor creditor and market conﬁ dence having sufﬁ cient and extensive 
capital in the form of plant and equipment is the key to success of the company having the necessary equipment available gives the group a 
competitive edge in the tendering process and avoids delays in the startup of new contracts certain key plant items are scarce in the market 
and have a long lead time from ordering to receiving
the group has exposure to the following risks from its use of ﬁ nancial instruments
 market risk
 credit risk
 liquidity risk
this note presents information about the group’s exposure to each of the above risks the group’s objectives policies and process for 
measuring and managing risk and the group’s management of capital further quantative disclosures are included throughout these 
consolidated ﬁ nancial statements
exposure to currency and credit risk arises in the normal course of the group’s business as the group purchases ﬁ nancial instruments such as 
the interest bearing borrowings in order to ﬁ nance operations and to manage the currency risks that arise from these operations the group 
does not speculate in derivative instruments 
the board of directors has overall responsibility for the establishment and oversight of the group’s risk management the audit committee has 
been mandated with the responsibility of developing and monitoring the group’s risk management policies the committee is assisted in its 
role by internal audit internal audit undertakes both regular and ad hoc reviews of risk managements controls and procedures the results of 
which are reported to the audit committee the group audit committee reports to the board of directors on a regular basis
the group’s risk management policies are established to identify and analyse the risks faced by the group to set appropriate risk limits and 
controls and monitor risks and adherence to limits risk management policies and systems are reviewed regularly to reﬂ ect changes in market 
conditions and the group’s activities the group through its training management and safety standards and procedures aims to develop a 
disciplined and constructive control environment in which all employees understand their roles and obligations as well as the importance of 
maintaining safety standards 
281 market risk
market risk is the risk that changes in the market prices such as foreign exchange rates interest rates and equity prices that will affect the 
group’s income or the value of its holdings of ﬁ nancial instruments the objective of market risk management is to manage and control market 
risk exposures within acceptable parameters while optimising the return
foreign currency risk
the group is exposed to currency risk on contract revenue purchases and borrowings that are denominated in a currency other than the british 
pound primarily the south african rand us dollar usd russian rouble rur the united arab emirate dirham dirham the swiss franc 
chf the euro the indian rupee and the kazakstan tenge
the group ensures that its net exposure is kept to an acceptable level by buying and selling foreign currencies at spot rates where necessary 
to address short term imbalances the group invoices in foreign currencies where possible where its cost base is also in foreign currencies in 
order to achieve a natural hedge position in volatile markets the group will consider using forward exchange contracts to mitigate foreign 
currency risks board approval will however be obtained before the group enters into any forward foreign exchange contracts
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012
shaft sinkers p40p100indd   76 27042013   0056 shaft sinkers annual financial report 2012
77
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
28 financial risk instruments and risk management continued
281 market risk continued           
the group’s exposure to foreign currency risk was as follows        
  zar zar
  2012 2011
finance lease receivables  16402638  20911400 
trade and other receivables  627589150  376259462 
loan to related party  current  1115385   
loans to joint venture partners     
cash and cash equivalents  39250741  115742173 
deferred revenue  98008354   149957170 
interest bearing borrowings   153533 430   203128627 
post retirement beneﬁ t obligations   4733467   4 729 857 
trade and other payables   461989 641  401621761 
gross statement of ﬁ nancial position exposure  33906978 246524380
  usd usd
  2012 2011
trade and other receivables  32893930  22672333 
cash and cash equivalents   7692691   3948243 
loans from related parties   250640  
interest free advances   24988757  37757346 
deferred revenue   12217464   1259566 
trade and other payables  399929   2676042 
subcontracting liabilities  1419438   
gross statement of ﬁ nancial position exposure  1310393   15072378 
  rur rur
  2012 2011
trade and other receivables  183998664  214223403 
cash and cash equivalents  948647  12334040 
trade and other payables  51188979  36349078 
gross statement of ﬁ nancial position exposure  133758332  190208365 
  dirham dirham
  2012 2011
trade and other receivables  10338 
cash and cash equivalents  68147 94895
trade and other payables  218665 
gross statement of ﬁ nancial position exposure  140180 94895
  swiss franc swiss franc
  2012 2010
trade and other payables   18900
gross statement of ﬁ nancial position exposure   18900
shaft sinkers p40p100indd   77 27042013   0056 shaft sinkers annual financial report 2012
78
28 financial risk instruments and risk management continued
281 market risk continued           
   euro euro
  2011 2010
trade and other receivables   19113
cash and cash equivalents  423450 
trade and other payables  272806 31339
gross statement of ﬁ nancial position exposure  150644 12226
  rupee rupee
  2011 2010
trade and other receivables  14997503 
cash and cash equivalents  57345637 2811767
trade and other payables  73150319 
gross statement of ﬁ nancial position exposure  807179 2811767
   tenge tenge
  2011 2010
trade and other receivables  5913133 
cash and cash equivalents  947587 
trade and other payables  10653 
gross statement of ﬁ nancial position exposure  6850067 
the following signiﬁ cant exchange rates applied during the year         
  
 2012 2011
 average rate  reporting date average rate reporting date
 per pa spot rate per pa spot rate
zar 1 0077 0073 0086 0080
usd 1 0631 0619 0623 0647
rur 1 0020 0020 0021 0020
aed 1 0172 0168 0170 0176
chf 1 0673 0677 0706 0688
eur 1 0811 0817 0868 0838
inr 1 0012 0011 0013 0012
kzt 1 0004 0004  
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   78 27042013   0056 shaft sinkers annual financial report 2012
79
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
28 financial risk instruments and risk management continued
281 market risk continued
sensitivity analysis
a 15 strengthening of the british pound against the south african rand us dollar the russian rouble the dirham the franc the euro the 
indian rupee and the kazakstan tenge would have resulted in changes in equity and proﬁ t by the following amounts the analysis assumes all 
variables in particular interest rates remain constant the analysis is performed in the same manner for 2011
  2012 2011
  gbp gbp
     south african rand  370773 2939803
    us dollar  121572 1462774
    russian rouble  407294 573478
    dirham  3541 2507
    franc   1952
    euro  18470 1536
    indian rupee  1368 5019
     kazakstan tenge  4213 
   175867 3825061
 a 15 weakening in the british pound would have had an equal but opposite effect
interest rate risk           
 the group is exposed to interest rate risk as it borrows and invests excess funds at ﬂ oating interest rates the risk is managed by maintaining 
an appropriate mixture between ﬁ xed and ﬂ oating rate borrowings and placings within the market exposure expectations
interest rates used to discount estimated cash ﬂ ows where applicable are based on the bank prime lending rate at reporting date and were as 
follows
variable interest rates
 loans and borrowings – jibar plus 22 to jibar plus 675 per annum
 leases – prime lending rate of south africa to prime lending rate of south africa plus 2 per annum
 amounts due byto related parties – prime lending rate of south africa less 2 per annum
 loan to a related party – prime lending rate of south africa
at the reporting date the interest rate proﬁ le of the group’s interest bearing ﬁ nancial instruments were
  2012 2011
  gbp gbp
financial assets  10358482 24285713
financial liabilities   11373532 16193677
   1015050 8092036
shaft sinkers p40p100indd   79 27042013   0056 shaft sinkers annual financial report 2012
80
28 financial risk instruments and risk management continued
281 market risk continued
cash ﬂ ow sensitivity analysis
 a change of 100 basis points in interest rates at the reporting date would have decreasedincreased proﬁ t or loss by the amounts shown 
below this analysis assumes that all other variables remain constant the analysis is performed on the same basis for 2011
  2012 2011
  gbp gbp
 interest bearing bank loan  112184 161742
finance lease obligations   195
finance lease receivables  11985 16671
loans receivable  260 3202
related party loans  1552  
 cash and cash equivalents  91339 222984
   10152 80920
282 credit risk           
 credit risk is the risk of ﬁ nancial loss to the group if a customer or counterparty to a ﬁ nancial instrument fails to meet its contractual 
obligations and arises principally from the group’s receivables from customers
trade and other receivables
the group’s exposure to credit risk is inﬂ uenced mainly by the individual characteristics of each customer as well as the demographics of the 
group’s customer base including the default risk of the industry and country in which the customers operate
management has established a policy of spreading the customer base outside of africa and into eastern and western europe and india this is 
to optimise geographical concentration of credit risk
the board of directors has established parameters and before these are exceeded prior approval from the board is required before 
submission to the potential new customer these parameters are based on items such as the value of the contract the type of contract and 
location of the contract
the group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables the 
main component of this allowance is a speciﬁ c loss component that relates to individually signiﬁ cant exposure and a collective loss component 
established of similar assets in respect of losses that have been incurred but not yet identiﬁ ed the collective loss allowance is determined 
based on historical data of payment statistics for similar ﬁ nancial assets
impairment losses
the aging and impairment losses thereon at reporting date was
 2012 2011
 gross trade  gross gross trade  gross
 receivables impairment receivables impairment
 gbp gbp gbp gbp
not past due 25244629 65656 24524217  
past due 0 to 30 days 10341601  3953754  
past due 31 to 75 days 1374905  2780050  
 past 75 days 25281859 2523461 17209953  2108259
  62242994 2589117 48467974  2108259
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   80 27042013   0056 shaft sinkers annual financial report 2012
81
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
28 financial risk instruments and risk management continued       
282 credit risk continued
reconciliation of impairment
  2012 2011
  gbp gbp
 reconciliation of impairment
opening balance  2108259 161417
impairments raised during the year  1292680 2784658
impairments reversed during the year  660957 174923
 foreign exchange difference  150865 162893
 closing balance  2589117 2108259 
 current year impairments recognised relate to projects where operations were suspended during the year
management have raised the impairments based on key assumptions and estimates in terms of the contract should management’s estimate of 
the future not reﬂ ect actual events further impairments may be identiﬁ ed
the group believes that no further impairments are necessary other than those raised as above in respect of trade receivables the balance of 
trade receivables relate to customers that have had a good track record with the group in the past
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
 2012 2011
 gross trade  gross gross trade  gross
 receivables impairment receivables impairment
 gbp gbp gbp gbp
south africa 37972 760 65656 33009790 
 rest of the world 24270234 2523461 15458184 2108259
  62242994 2589117 48467974 2108259
 the maximum credit risk exposure by customer type at reporting date was within the mining fertilizer and hydro electrical power industries 
which comprises the full outstanding balance at reporting date
loans and other receivables
the group has provided funding to related parties and employees in the form of loans and ﬁ nance lease receivables respectively these loans 
and other receivables are considered low risk by management as these receivables are mostly secured by the underlying asset in the case of 
ﬁ nance lease receivables no allowances for impairment are therefore deemed necessary for these loans the maximum exposure of the group 
to credit risk relating to loans and other receivables are reﬂ ected by the carrying amount of these instruments and are summarised below
  2012 2011
  gbp gbp
 loans receivable  36534 360099
loan to related party  26040 
 finance lease receivables  1198506 1667 084
   1261080 2027183
cash and cash equivalents     
 management considers the credit risk relating to its cash and cash equivalents to be low due to the fact that all of its cash and cash equivalents 
are invested at reputable ﬁ nancial institutions with good credit ratings which are monitored by the board of directors on an ongoing basis
shaft sinkers p40p100indd   81 27042013   0056 shaft sinkers annual financial report 2012
82
28 financial risk instruments and risk management continued
283 liquidity risk
 liquidity risk is the risk that the group will not be able to meet its ﬁ nancial obligations as they fall due the group’s approach to managing 
liquidity is to ensure as far as possible that it will always have sufﬁ cient cash ﬂ ow and marketable securities to meet its obligations when they 
fall due under both normal and stressed conditions without incurring unacceptable losses or risk damage to the group’s reputation
the group ensures that it has sufﬁ cient cash on hand to meet unexpected operational expenses as they fall due including the servicing 
of ﬁ nancial obligations this excludes the potential impact of extreme circumstances that cannot be reasonably predicted such as natural 
disasters in addition the group maintains overdraft facilities with its bankers to cover periods where high volumes of the operational liabilities 
are expected to fall due
the following are the contractual maturities of ﬁ nancial liabilities undiscounted including interest payments and excluding the impact of 
netting agreements
 carrying amount contractual cash ﬂ ows less than 1 year 1 – 5 years 
 gbp gbp gbp gbp
group
2012     
nonderivative ﬁ nancial instruments     
 interest bearing borrowings – 
standard bank of south africa limited 11218366 13752348 9584738 4167610
loan from a related party 155166 155166  155166
interest free advances received from clients 15470041 15470041 4688971 10781070
subcontractor liabilities 1093680 1093680 1093680 
 trade and other payables 36739118 36739118 36739118  
2011     
nonderivative ﬁ nancial instruments     
 interest bearing borrowings – 
standard bank of south africa limited 16174186 18782561 5403896 13378665
interest bearing borrowings – 
finance lease liabilities 19491 20507 20507 
interest free advances received from clients 24433 596 24433596 24433 596 
 trade and other payables 34908846 34908846 34908846 
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   82 27042013   0056 shaft sinkers annual financial report 2012
83
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
28 financial risk instruments and risk management continued
fair values      
 the fair values of the assets and liabilities approximate the carrying amounts reﬂ ected in the statement of ﬁ nancial position
284 capital risk management
 the group manages its capital to ensure that the entities in the group will be able to continue as a going concern while maximising the return 
to stakeholders through optimisation of the debt and equity balance
the capital structure of the group consists of debt which includes the borrowings as disclosed in note 20 and equity attributable to owners of 
the parent comprising reserves and retained earnings as disclosed
the board reviews the capital structure and as part of this review considers the cost of capital and the risks associated with each class of 
capital
with the exception of the debt covenants imposed by the group’s ﬁ nancier – as per note 20 the group’s capital structure remains unchanged 
since 2011 the group manages its capital in order to ensure that no contravention of the covenants occurs
there has been no change to how the group manages as capital the strategy for capital maintenance from 2011
29  related parties
291 identiﬁ cation of related parties
the subsidiaries and joint venture companies of the group are listed below
a wholly owned subsidiaries directly held
  shaft sinkers management company limited
b wholly owned subsidiaries indirectly held
  capstone 615 proprietary limited
  rossal 126 proprietary limited
  jascoma investments limited
  shaft sinkers proprietary limited
  shaft sinkers international proprietary limited1
  shaft sinkers rus llc registered in russia
  shaft sinkers fze registered in dubai
  capstone international fzco registered in dubai
  shaft sinkers mauritius limited
  shaft sinkers cooperatief ua
  shaft sinkers international bv
  shaft sinkers belgium bvba
c partially owned subsidiary indirectly held
  70 2011 70 in shaft sinkers zimbabwe private limited
1
  74 2011 74 in shaft sinkers mining proprietary limited
  80 2011 nil in gartly resources limited
  25 2011 nil in shaft sinkers kazakstan
2
shaft sinkers p40p100indd   83 27042013   0056 shaft sinkers annual financial report 2012
84
29  related parties continued
d joint venture companies indirectly held
  50 2011 50 in rsvshaft sinkers international proprietary limited
 1
  486 2011 486 in sdm mining contractors proprietary limited
1
 dormant companies
2
 the company is controlled by the group through the shareholder agreement despite of the fact that less than 50 of the shares are held by the company
the directors of the company and other members of the executive management are deﬁ ned as key management
the directors of the company are listed in the directors’ report
the directors’ emoluments are disclosed in note 3
292 material party related transactions          
transactions with related parties           
 transactions with related parties
related party loans – refer note 23
interest paid to and received from related parties – refer note 4
the above transactions were conducted on an arm’s length basis
29  related parties continued
293 transactions with key management personnel
 the group provides non cash beneﬁ ts to key management by way of a long term share incentive plan as described in note 31
key management compensation comprise of
  2012 2011
  gbp gbp
 shortterm employee beneﬁ ts  6126446 5516280
 share based payments – note 31  232333 368566
   5894113 5884846
30 retirement beneﬁ t information
 the group has made provision for various retirement funds covering substantially all permanent employees there are two retirement funds 
all of which are deﬁ ned contributions funds governed by the pension funds act of 1956
the following contributions were made during the year
  2012 2011
  gbp gbp
republic of south africa    
 sentinel mining industry retirement fund  5719133 5387971
  mine employees pension fund   5733412 4979719
   11452545 10367690
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
shaft sinkers p40p100indd   84 27042013   0056 shaft sinkers annual financial report 2012
85
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
31 share based payment arrangements 
description of the share based payment arrangements
 on 23 december 2010 the three executive directors of the company were given awards over a number of ordinary shares of the company 
this share based payment arrangement will be satisﬁ ed at the end of the vesting periods and will be effected through the transfer of ordinary 
shares to the participants this share based payment arrangement is therefore considered to be equity settled as deﬁ ned in ifrs 2 – share 
based payments
terms and conditions of the share based payment arrangements
 the share based payment arrangement comprise of two performance conditions that will be measured in stages over the vesting periods the 
performance conditions described below are independent of each other and therefore have been accounted for as separate share based 
payment arrangements
the performance conditions that are applied for the share based payment arrangements are as follows
 growth in earnings per share of the company “eps”         
 growth in the company’s share price           
eps share based payment arrangement
 in order for the shares attributable to the growth in earning per share of the company to vest the group has to achieve a growth in earnings 
for each of the ﬁ nancial years ending 31 december 2011 to 31 december 2013 of at least 20 per annum in the event that the growth in 
earnings is between 10 and 20 per annum between 50 to 100 of the shares will vest on a straight line basis in the event that the growth in 
earnings is less than 10 none of the shares will vest
in the event that the compounded growth per annum over the three year period is 20 per annum all of the shares will vest to the participants 
despite not having achieved the targeted growth rate in a particular year
share price based payment arrangement
 in order for the shares attributable to the growth in share price of the company to vest the share price of the company has to achieve growth 
of at least 26 per annum for each of the ﬁ nancial years ending 31 december 2011 to 31 december 2013 the base price for the ﬁ nancial year 
ending 31 december 2011 is the placing price at which the company’s shares were listed ie gbp 124 per share in the event that the growth 
in share price is between 13 and 26 per annum between 50 to 100 of the shares will vest on a straight line basis in the event that the share 
price growth rate is less than 13 per annum none of the relevant shares will vest
in the event that the closing share prices over the 30 days following the announcement of the group’s audited results for the ﬁ nancial year 
ending 31 december 2013 is 100 or more above the placing price despite not having achieved the 26 per annum growth in its share price 
in any year the share price performance criteria will be deemed to have been achieved and the participants will be entitled to 100 of the 
share awards
shaft sinkers p40p100indd   85 27042013   0056 shaft sinkers annual financial report 2012
86
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
31 share based payment arrangements continued
inputs for measurement of grant date fair values
 the grant date fair value of the share based payment arrangements was measured based on the monte carlo simulation option pricing 
model volatility was based on the historical share price data of the constituents of the oil services and equipment sector on the london stock 
exchange the inputs used in the measurement of the fair values at grant date of the share based payment arrangements were as follows
 value per assumed vesting share price at number number  weighted average
 share right date grant date of days  of shares   volatility 
description gbp  gbp   
share price growth      
1st tranche 063  10 april 2012 124  474  375000  5251
2nd tranche  052  10 april 2013 124  839  375000  5251
3rd tranche 072  10 april 2014 124  1204  375000  5251
      
eps shares      
1st tranche 122  10 april 2012  474   375000  5251
2nd tranche 111  10 april 2013  839  375000  5251
3rd tranche 099  10 april 2014  1204  375000  5251
  2012 2011
  gbp gbp
employee beneﬁ ts
 reversalexpense arising on share based payment arrangement granted on 23 december 2010 232333 368566
 none of the share rights have vested at 31 december 2012 the fair value of these at grant date is dependent on market conditions and 
nonvesting conditions
  2012 2011
  number of shares number of shares
 reconciliation of outstanding share awards in terms of the long term incentive plan
 share awards held at 1 january  1500000 2250000
 share awards settledforfeited during the year   750000
 share awards held at 31 december   1500000 1500000
 during the prior year rn schroder resigned as a director of the company and therefore forfeited the share awards issued to him the 
remaining share awards are held by a davidov and cm hall
 
shaft sinkers p40p100indd   86 27042013   0056 shaft sinkers annual financial report 2012
87
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012  
32 contingent liabilities          
  2012 2011
  gbp gbp
 321  contractual performance andor retention guarantees and payment bonds held by 
contracted clients and service providers at balance sheet date  22308573 5010092
 322  during the year a former client commenced arbitration proceedings against shaft sinkers proprietary limited with whom the contract 
was signed and rossal no 126 proprietary limited the immediate holding company both of which are wholly owned subsidiaries 
of the group the arbitration is with the swiss chambers’ arbitration institution and the international chamber of commerce on 
substantially the same facts claiming approximately  usd800 million gbp495 million in alleged damages and loss of proﬁ ts based 
on legal advice and review of the claims the board has concluded that the claims have no merit and are defending the matters shaft 
sinkers proprietary limited has further lodged its counter claims for amounts owing to it by the former client with the swiss chambers’ 
arbitration institution and the international chamber of commerce these amounts have been included in trade and other receivables 
– refer note 14 due to the nature of these matters the group expects to incur further legal expenditure over the next ﬁ nancial year in 
defending the matters at hand
    subsequent to the year end the group recovered an amount of rouble 548 million gbp11 million through the disposal of plant and 
equipment that formed part of the claim amount included in note 14
33 notes to the cash ﬂ ow statement
331 cash utilised ingenerated by operating activities before working capital changes
     2012 2011
     gbp gbp
 proﬁ t from operations per statements of comprehensive income  5251911  15325210
adjustments for noncash items included in    
 depreciation of property plant and equipment  5686969  9603430
proﬁ tloss on disposal of property plant and equipment   645763  35060
impairment losses recognised on plant and equipment  346560  
derecognition of items replaced on plant and equipment  459501  
impairment allowance on trade and other receivables raisedreversed  631723  2109735
bad debts written off  10135  
loss on recognition of claim receivable  889646  
raisingreversal of write down of inventory to net realisable value  4908  29532
deferred revenue released during the year  11518703   14123528
raising of impairment loss on loans to joint venture partners     51708
proﬁ tloss on disposal of interest in shaft sinkers mining proprietary limited  105062  117925
fair value gain on revaluation of unlisted investment    126
unrealised foreign exchange difference   84788  4515411
share based payment expense arising on share based payment arrangements   232333  368566
share based payment expense arising on black economic empowerment transaction 
in respect of shaft sinkers mining proprietary limited    244665
increase in retirement beneﬁ t obligation  35200  19664
reversal of provision for demobilisation costs  374339   
 reversal of provision for interest and indirect taxes  903633  
     548068  18297252
shaft sinkers p40p100indd   87 27042013   0056 shaft sinkers annual financial report 2012
88
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012
33 notes to the cash ﬂ ow statement continued
332 income taxation paid    
     2012 2011
     gbp gbp
 amount payable at the beginning of the year   558182   2914624
prior year underover provision  1037 049  222626
amount charged to the statement of comprehensive income  1823 288   1029347
secondary taxation on companies paid     526989
dividend withholding taxes paid  2511  
amount receivablepayable at the end of the year  375839  558182
 foreign currency translation reserve   533227  291539
      678498  4514977
34 segmental reporting
information about reportable segments 
 the group has two reportable segments as described below which are the group’s strategic divisions the strategic divisions of the group 
are geographically different and are managed separately due to the unique challenges and risks that are present when operating in different 
jurisdictions although the mets division is a strategically important part of the business it is not regarded as a separate operating segment as 
deﬁ ned in ifrs 8 due to the fact that the contribution that the mets division contributes to the group is less than 10 of the total contribution 
of the group’s contracting activities
the following describes the group’s operating segments
 south africa – contract services provided to clients within the republic of south africa
 international – contract services provided to clients outside of the borders of the republic of south africa
the group’s international revenues are mostly derived from contract services provided in india and the democratic republic of the congo 
with the revenues generated from india making up the majority of foreign revenues
information regarding the results of each reportable segment is included below performance is measured based on segment proﬁ t before 
income tax as described below performance is measured based on segment proﬁ t before income tax as included in the internal management 
reports that are reviewed by the group’s executive management the information is prepared under ifrs and is consistent with the group’s 
accounting policies segment proﬁ t is used to measure performance as management believes that such information is the most relevant in 
evaluating the results of certain segments taking into consideration the unique risk characteristics of each of these segments
shaft sinkers p40p100indd   88 27042013   0056 shaft sinkers annual financial report 2012
89
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012
34 segmental reporting continued
other corporate activities comprise activities that do not by deﬁ nition form part of the operating segments as well as the head ofﬁ ce activities 
which could not be assigned to an individual segment inter segment transactions are concluded on an arm’s length basis
 south africa international other corporate activities total
 2012 2011 2012 2011 2012 2011 2012 2011
 gbp gbp gbp gbp gbp gbp gbp gbp
external revenues 176464872  183148003  16074076  43391540     192538948  226539543 
gross proﬁ t 18630596  22656713  3961560  15620549      22592156 38277262 
depreciation and
amortisation 5096206  5450145  511154 4066716  79609 86569  5686969   9603430
finance income  316878  357031  109   52193 37819  369180 394850
finance expense 2104089  2201722  80617 12228      2184706  2213950
reportable segment 
proﬁ t before income tax 4526488  11800041  2312740 13048380  3402843 11342311 3436385 13506110
reportable segment
assets 86011384  90559281  32966831 36337219  14532624  16950848  133510839 143847348
capital expenditure 7732634  9252156  4403626  1121182  538970  132229  12675230  10505567
reportable segment 
liabilities 43387485  42562118  30550507 33717202  15845556 19543934  89783548   95823254
35  investment in subsidiaries
     company
     2012 2011
     gbp gbp
 investment in shaft sinkers management company limited  28295890 28295 890
 investment in shaft sinkers cooperatief ua  15339 
      28311 229 28295 890
 the company owns the entire issued share capital of shaft sinkers management company limited and 99 of the issued share capital of shaft 
sinkers cooperatief ua
36   loan to subsidiary
     company
     2012 2011
     gbp gbp
 loan to shaft sinkers management company limited  20670129 20670 129
 the loan is unsecured bears no interest and has no formal terms of repayment
37  other receivables
     company
     2012 2011
     gbp gbp
 refundable deposits  9406 9596
prepaid expenditure  13404 
 vat recoverable  19440 
      42250 9596
shaft sinkers p40p100indd   89 27042013   0056 shaft sinkers annual financial report 2012
90
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2012
 38 related party loans
 381 related party loans receivable  
     company
     2012 2011
     gbp gbp
 shaft sinkers proprietary limited  3206 600 1603589
shaft sinkers cooperatief ua  652 
shaft sinkers international bv  148303 
shaft sinkers belgium bvba  61420 
shaft sinkers free zone enterprise  9135 
 capstone international free zone corporation  30073 
      3456 183 1603589
 the related party loans receivable are unsecured bears no interest and are repayable on demand
382 related party loan payable    
     company
     2012 2011
     gbp gbp
 shaft sinkers management company limited  326109 1041252
 the related party loan payable is unsecured bears no interest and is repayable on demand
39  cash and cash equivalents
     company
     2012 2011
     gbp gbp
 current funds at bank  3474 435 10218591
 the related party loan payable is unsecured bears no interest and is repayable on demand
40  other payables
     company
     2012 2011
     gbp gbp
 accruals   48420 386623
shaft sinkers p40p100indd   90 27042013   0056 shaft sinkers annual financial report 2012
91
shareholder information 
general information
shaft sinkers holdings plc’s shares are quoted on the london stock 
exchange  copies of the group’s annual ﬁ nancial results interim 
results and interim management statements and major presentations 
to analysts and institutional shareholders are available from the 
company secretary
dividends
as noted in the directors’ report on page 23 no ﬁ nal dividend has 
been recommended by the board at the date of this report
registrars and transfer ofﬁ ce
the company’s ordinary share register is maintained by 
computershare investor services iom limited 
international house
castle hill
victoria road
isle of man
im2 4rb
any queries about the administration of holdings of ordinary shares 
such as change of address change of ownership or dividend 
payments should be directed to the company’s registrars
enquiries
shareholders who wish to contact the company on any matter 
relating to their shareholding are invited to contact the company’s 
registrars computershare investor services iom limited at the 
address mentioned above
shareholders may also contact the company secretary  mr  martin peters at
eis advisors limited
millennium house
victoria road
douglas
isle of man
im2 4rw
telephone 44 0 1624 624 100
for other enquiries please contact the company at the registered 
ofﬁ ce or call mr christopher hall on 44 01624 640 689
analysis of ordinary shareholders
as at 15 april 2013
 number of holders  number of shares
11000 shares 36 0 25840
10015000 93 1 288298
5001  50000 158 5 2449883
50001  100000 19 3 1488452
100001  500000 30 13 6235679
500001 and over 15 78 37011848
 351  47500000  
shaft sinkers p40p100indd   91 27042013   0056 shaft sinkers annual financial report 2012
92
corporate information
registered ofﬁ ce
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 1ja
website wwwshaftsinkersgroupcom
telephone 44 01624 640 689
registered in the isle of man
company no 006057v
company secretary
martin peters
eis advisors limited
millennium house
victoria road
douglas
isle of man
im2 4rw
telephone 44 0 1624 624 100
stockbroker
westhouse securities limited
one angel court
london
ec2r 7hj
legal advisors
jones day
21 tudor street
london 
ec4y 0dj
bryan cave
88 wood street
london 
ec2v 7aj 
auditors
kpmg audit llc
heritage court
41 athol street
douglas
isle of man
im99 1hn
shaft sinkers p40p100indd   92 27042013   0056 shaft sinkers annual financial report 2012
93
financial calendar for 2013
the following are provisional dates
annual general meeting and interim management statement friday 7 june 2013
interim results  august 2013
interim management statement november 2013
shaft sinkers p40p100indd   93 27042013   0056 shaft sinkers annual financial report 2012
94
notice of annual general meeting
shaft sinkers holdings plc ‘the company’ 
incorporated in isle of man with company number 6057v
notice is hereby given that the annual general meeting of the company will be held at 21 tudor street london ec4y 0dj at 1100 am 
on 7 june 2013 to consider and if thought ﬁ t pass the following resolutions resolutions 1 to 5 inclusive as ordinary resolutions and resolution 
6 as a special resolution
ordinary business
1  to receive and adopt the audited annual accounts for the ﬁ nancial year ended 31 december 2012 together with the reports of the 
directors and the auditors on those accounts
2  to approve the directors’ remuneration report set out on pages 34 to 38 of the annual report  accounts for the ﬁ nancial year ended 31 
december 2012 
3 to reappoint kpmg audit llc as auditors of the company to hold ofﬁ ce until the conclusion of the next annual general meeting
4 to authorise the directors to determine kpmg audit llc’s remuneration as auditors of the company
5 to approve the recommendation of no ﬁ nal dividend in respect of the 2012 ﬁ nancial year
special business
1  that for the purposes of article 64 of the company’s articles of association the relevant “allotment period” shall be the period from 
the conclusion of this annual general meeting until 30 june 2014 or if sooner the end of the company’s annual general meeting in 2014 
and the relevant “nonpreemption amount” shall be such number of equity securities as shall be equal to 5 per cent of the number of 
ordinary shares in issue as at 25 april 2013
by order of the board
martin peters
secretary
25 april 2013
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 1ja
 
shaft sinkers p40p100indd   94 27042013   0056 shaft sinkers annual financial report 2012
95
notes
proxies
1  a shareholder is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at 
the annual general meeting a shareholder may appoint more than one proxy in relation to the annual general meeting provided that 
each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder a proxy need not also be a 
shareholder of the company
2  a form of proxy is enclosed and to be valid it must be received at the ofﬁ ces of the company’s registrars computershare investor services 
jersey limited co queensway house hilgrove street st helier jersey je1 1es or at the email address infocomputersharecoje  or by 
fax to 44 0 870 873 5851 by 1100 am on friday 31 may 2013 completion and return of a form of proxy will not prevent a shareholder 
from attending and voting at the annual general meeting in person if heshe so wishes
3  a space has been included in the form of proxy to allow shareholders to specify the number of shares in respect of which that proxy is 
appointed shareholders who return the form of proxy duly executed but leave this space blank will be deemed to have appointed the 
proxy in respect of all of their shares shareholders who wish to appoint more than one proxy in respect of their shareholding should 
contact the company’s registrars computershare investor services iom limited on their helpline number 44 0 1534 825230 for 
additional forms of proxy or you may photocopy the form of proxy provided with this document indicating on each copy the name of the 
proxy you wish to appoint and the number of ordinary shares in the company in respect of which the proxy is appointed all forms of 
proxy should be returned together in the same envelope
4  in the case of joint holders any one holder may vote if more than one holder is present at the meeting only the vote of the senior will be 
accepted seniority being determined in the order in which the names appear on the register of shareholders of the company
corporate representatives
5  corporate shareholders may appoint corporate representatives to attend speak and vote on their behalf at the annual general meeting 
where a person is authorised to represent a corporate shareholder at the meeting any director or the secretary may require him to 
produce a certiﬁ ed copy of the resolution from which he derives his authority
right to attend and vote at the annual general meeting
6  to be entitled to attend and vote at the annual general meeting and for the purpose of the determination by the company of the votes 
they may cast shareholders must be registered in the register of members of the company at 11am on friday 31 may 2013 or in the 
event of any adjournment 11am on the date which is two days before the time of the adjourned meeting changes to entries on the 
register of shareholders after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the 
annual general meeting
shaft sinkers p40p100indd   95 27042013   0056 shaft sinkers annual financial report 2012
96
documents on display
7  copies of each director’s service contract or letter of appointment will be available for inspection at the registered ofﬁ ce of the company 
during normal business hours on any weekday public holidays excepted from the date of this notice until the conclusion of the annual 
general meeting and at the ofﬁ ces of jones day 21 tudor street london ec4y 0dj for 15 minutes prior to and during the annual 
general meeting
total number of shares and voting rights
8  as at 11am on 24 april 2013 being the latest practicable date prior to publication of this notice the company’s issued share capital 
comprised 47500000 ordinary shares carrying one vote each therefore the total number of voting rights in the company as at 24 april 
2013 is 47500000
questions at the annual general meeting
9   any shareholder attending the meeting has the right to ask questions the company must cause to be answered any such question 
relating to the business being dealt with at the meeting but no such answer need be given if a to do so would interfere unduly with the 
preparation for the meeting or involve the disclosure of conﬁ dential information b the answer has already been given on a website in the 
form of an answer to a question or c it is undesirable in the interests of the company or the good order of the meeting that the question 
be answered
conduct at meeting
10  we ask all those present at the annual general meeting to facilitate the orderly conduct of the meeting and reserve the right if orderly 
conduct is threatened by a person’s behaviour to require that person to leave for security reasons all hand luggage may be subject to 
examination prior to the entry to the annual general meeting cameras tape recorders laptop computers and similar equipment may not 
be taken into the annual general meeting
shaft sinkers p40p100indd   96 27042013   0056 shaft sinkers annual financial report 2012
97
explanatory notes to the notice of annual general meeting
the notes on the following pages give an explanation of the resolutions
resolutions 1 to 5 are proposed as ordinary resolutions resolution 6 is proposed as a special resolution 
resolution 1 annual report and accounts 2012
the purpose of this resolution is to receive and adopt the directors’ and auditor’s reports and the accounts for the year ended 
31 december 2012
resolution 2 remuneration report
the purpose of this resolution is to approve the directors’ remuneration report set out on pages 34 to 38 of the annual report  accounts
resolutions 3 and 4 auditors
the purpose of these resolutions is to reappoint kpmg audit llc as the company’s auditors and authorise the board to ﬁ x their 
remuneration
resolution 5 dividend
the purpose of this resolution is to approve the recommendation of the board not to declare a ﬁ nal dividend for 2012
resolution 6 authority to allot
the purpose of this resolution is to propose that the period under which directors have authority to allot shares for cash consideration to 
existing shareholders or other person be i extended to 30 june 2014 or if sooner the end of the company’s annual general meeting in 
2014 and ii limited to 2375000 ordinary shares which represents approximately 5 per cent of the number of ordinary shares in issue as at 
today’s date
shaft sinkers p40p100indd   97 27042013   0056 form of proxy – shaft sinkers holdings plc agm 2013
to be valid the form of proxy must be received by post or during normal business hours only by hand by the registrar co computershare 
investor services jersey limited p o box 329 queensway house hilgrove street st helier jersey je1 1es or at the email address 
infocomputersharecoje or by fax to 44 0 870 873 5851 no later than 1100 am on 31 may 2013 or 48 hours preceding the date and 
time for any adjourned meeting
iwe 
of 
being the holders of          ordinary shares
hereby appoint 
of 
or failing him 
of 
or failing him the chairman of the meeting as myour proxy to vote for meus on myour behalf at the annual general meeting of shareholders 
of the company  to be held at 21 tudor street london ec4y 0dj at 1100 am on 7 june 2013 and at every adjournment of that meeting
please indicate with and ‘x’ or tick in the appropriate space below how you wish your votes to be cast
agenda item vote for vote against vote withheld
1  to receive and adopt the group’s audited annual accounts 
for the ﬁ nancial year ended 31 december 2012
2  to approve the directors’ remuneration report for the 
ﬁ nancial year ended 31 december 2012 
3  to reappoint kpmg audit llc as auditors of the company to hold ofﬁ ce until the 
conclusion of the next annual general meeting
4  to authorise the directors to determine kpmg audit llc’s 
remuneration as auditors of the company
5 to approve the board’s recommendation of non payment of a ﬁ nal dividend
special business   
6  authority to allot ordinary shares equal to 5 per cent of the number 
of ordinary shares in issue as at 24 april 2013  
signed at                          on  2013
signatures  
assisted by me where applicable  
full names of signatory if signing in a representative capacity please use block capital letters
shaft sinkers p40p100indd   99 27042013   0056 group overview
highlights 1
board of directors 2
chairman’s statement 4
chief executive officer’s statement 6
business review
financial review 10
internal controls and 
risk management 16
2012 kpis 20
sustainability review and  
corporate social investment 21
directors report
directors’ report – business review 22
directors’ report – corporate 
governance 27
directors’ report – remuneration  34
statement of directors’  
responsibility for the annual  
report and accounts 39
financial statements
independent auditors’ report 40
consolidated income statement 41
consolidated statement of 
comprehensive income 42
consolidated statement  
of financial position 43
parent company statement  
of financial position 44
consolidated statement  
of changes in equity 45
consolidated statement  
of cash flows 46
notes to the consolidated  
annual financial statements  47
information 
shareholder information 91
corporate information 92
financial calendar for 2013 93
notice of annual general meeting 94
proxy form for annual  
general meeting 99
shaftsinkersra2013coverindd   2 27042013   0053 shaft
sinkers
shaft sinkers
annual financial report 2012
shaft
sinkers
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 1ja
telephone 44 01624 624100
email infoshaftsinkersgroupcom
wwwshaftsinkersgroupcom
shaftsinkersra2013coverindd   1 27042013   0053


Summary:
 shaft sinkers annual financial report 2012
6
chief executive ofﬁ cer’s statement
the tough trading environment 
in the mining industry over 
the past year has affected our 
operations and profitability 
our clients have been carefully evaluating 
expansion programs and refocusing on production 
efﬁ ciency whilst this may prolong the project 
decision making process we are still seeing a 
growing trend in demand for deep shafts to access 
increasingly deeper replacement reserves borne 
out by both our latest projects for hindustan zinc 
and kibali goldmine
most of our clients in south africa were severely 
impacted by labour disputes throughout 2012 
and we were unable to escape the effects of the 
disputes in most instances our contracts provide 
cost recovery of work interruption caused by the 
client but typically it excludes or limits recovery of 
proﬁ tability and does not cover low efﬁ ciency work 
restart and rampup period the latter often having 
a bigger impact
our results were further impacted by 
underperformance at certain operations during 
the ﬁ rst half of the year under review our 
operations at impala 16 and 17 suffered from 
inefﬁ ciencies caused by poor planning labour over 
compliments excessive overtime and logistical 
congestion that together culminated in target 
production not being met both projects were 
entering different phases of work which resulted 
in various changes in the operating environment 
which were not handled adequately by us  
change in scope or operating conditions can 
often lead to additional costs which need to be 
recovered by us through variation orders variation 
orders are covered in our contracts with our clients 
and have a deﬁ ned process for their generation 
approval and payment inefﬁ ciencies in the 
variation order process has impacted our ﬁ nancial 
performance in certain projects as well as inﬂ ating 
our receivables and ultimately impacting cash ﬂ ow 
it is therefore imperative as a contractor to be 
much more sensitive and proactive to changes 
and to optimise the variation order recovery 
process in order to address this management 
have started restructuring the business by 
streamlining its control structures and introducing 
the requisite skills in order to better cope with 
change once these measures are implemented 
in 2013 we believe that we will be well placed 
to deal with the changes affecting our business 
the illegal strikes the depreciation of the rand 
the later start date of newly awarded projects and 
operational difﬁ culties all impacted on proﬁ tability   
management is conducting a review of the 
group’s activities with a view to ensuring that 
costs are effectively managed and that the 
group’s support structures are commensurate 
with its level of activity and growth prospects 
management has identiﬁ ed some initial areas 
where cost savings may be achieved 
revenue has decreased by 15  percent and proﬁ t 
from operations has dropped to gbp52 million 
2011 gbp153 million before exceptional item 
of gbp31 million net proﬁ t after tax dropped 
to gbp24 million 2011 gbp87 million after 
exceptional item net cash decreased by gbp85 
million to net debt of gbp21 million due mainly 
to the lower proﬁ tability from operations and an 
increase in accounts receivable
operations
2012 saw a number of new contract wins and 
extensions of contracts including the award by 
hindustan zinc limited part of vedanta of a 
project for the sinking of the main shaft and 
north and south ventilation shafts at the rampura 
agucha mine rajasthan in western india
this is a signiﬁ cant development for shaft sinkers 
and an important step in our international growth 
strategy it is particularly pleasing given our 
shaftsinkersra2013front endindd   6 27042013   0055 7
strong position in india and the potential future 
opportunities that may arise in the subcontinent
in november randgold resources awarded the 
company the vertical shaft contract at the kibali 
gold mine “kibali” in the democratic republic 
of the congodrc the combined mobilisation 
and vertical shaft contracts have an estimated 
total value of gbp823 million  kibali is a joint 
venture between mine operator randgold 
resources 45 anglogold ashanti 45 and 
congolese parastatal sokimo 10 the project 
is situated near doko in the north eastern 
orientale province of the drc
operations – south africa
at impala 16 the equipping of the main shaft 
progressed well during 2012 the development 
however undertaken via the ventilation shaft 
performed below expectation resulting in cost 
overruns as a result of overtime and over
complement of personnel contractual cost 
escalations in addition to the contract duration 
being extended have added a further gbp59 
million to the order book
operational performance at impala 17 was met 
with under recovery of revenue through the low 
rates billed for the fridge shaft which should be 
rectiﬁ ed by the middle of 2013 with a revised 
contract construction activities performed via 
the ventilation shaft proved to be a challenge 
and management has taken decisive action to 
mitigate the situation  the leeuwkop contract 
with afplats performed to management’s 
expectations and we were awarded an extension 
of the contract to sink the main shaft from 488 
metres to a depth of 700 metres below surface 
current depth is a little over 600m and  is 
scheduled to be completed at the end of may 
2013 and adds a total value of gbp70 million to 
the order book a further extension is anticipated
work at the moab project undertaken for 
anglogold ashanti recovered to management’s 
expectations after being negatively affected by 
strike action the rescheduled work programme is 
progressing according to the contract and is now 
achieving average monthly  target rates of 600 
cubic meters
the hernic ferrochrome project at the bokone 
shaft previously named bokfontein performed in 
line with management’s expectations
work at lonmin’s saffy project progressed well in 
line with management’s expectations the proﬁ t 
margin earned was negatively impacted by the 
loss of efﬁ ciency following the illegal strikes  our 
claims for costs were submitted and have mostly 
been settled work at the hossy shaft performed 
to expectation but was deferred due to austerity 
measures within the client’s business karee 3 
shaft work progressed well but more recently 
there has been ﬁ nancial underperformance 
due to historically low rates this has now been 
rectiﬁ ed by changing the contract to an agreed 
target cost atc contract in 2013 
at the styldrift project operations performed 
well in terms of the sinking rate but during the 
last quarter we underrecovered revenue for 
horizontal level development operations due to a 
low rate charged per cubic metre for that section 
of the work this is to be  addressed by seeking 
agreement with the client on revised rates and 
which is expected to be concluded  in the ﬁ rst 
half of 2013
south african labour situation
the group’s operations in south africa have now 
returned to normal from a labour perspective 
however the company is aware of the 
continued sensitivity in the south african labour 
environment we are continuously engaging with 
all our labour representatives in order to ensure 
shaftsinkersra2013front endindd   7 27042013   0055 8
cooperation and stability  at lonmin’s saffy shaft 
workers returned to work from the illegal strike 
on monday 29 october in total 11 working days 
were lost as a result of this action which resulted 
in a negative impact on the project’s margins
at anglogold ashanti’s moab project workers 
reported for duty and operations were back 
to normal on 30 october 2012 in total 25 
working days were lost as a result of this action 
the company is in discussions with the client 
regarding costs incurred during this period
health and safety
the year ended with an improved safety 
performance when compared to the previous 
year in line with the business review we have 
recently undertaken we have introduced various 
structural changes in order to further improve 
safety in the daily operations of the business 
safety will receive the constant attention of 
management the safety department has become 
more independent giving it more oversight into 
the operations our focus on safety is being 
recognised by our clients we were awarded best 
contractor in the safety category by lonmin this 
signiﬁ cant achievement was enhanced by the 
fact that our k3 project at lonmin has recently 
recorded a 4 million fatality free shift mark 
safety remains a strong focus for the group 
and is supported by training and development 
programmes  the group’s lost time injury 
frequency rate ltifr has decreased from 475 
to 408
regrettably on 7 june 2012 the group suffered 
a fatal injury at the impala 17 fridge shaft 
operations after a fall of ground occurred on 
level 21 development 
the group constantly searches for new and 
innovative ways to instil a safety culture at 
every level of the organisation during the last 
quarter of 2012 the “mteto” campaign was 
launched across all the operations the focus 
of this campaign was to get “back to basics” 
and instil adherence to standards in addition 
a longer term safety campaign was  rolled out 
called “snakes for safety” these campaigns 
will be enhanced during 2013 by introducing 
interventions which will address areas where 
the company experienced high incidence of  
accidents during 2012 the group has introduced 
a system of crossaudits between the various sites 
as well as speciﬁ c campaigns to address “material 
handling” and “tools and equipment” related 
injuries during 2012 these two aspects were 
responsible for 60 of injuries an additional 
motivational campaign called “one step more” 
was launched which encourages our employees 
to go the extra mile in ensuring we have safe 
operations
the groups benchmarks for 2013 have been set 
based on the achievements of 2012 and have 
been mapped out as  non lost time injury 
frequency rate nltifr 600 lost time injury 
frequency rate ltifr 35 and the reportable 
injury frequency rate rifr at 25  
operations  international
the hindustan zinc project at the rampura 
agucha mine was awarded in may 2012 and 
work commenced immediately the latter half 
of 2012 saw the project underperform due to 
logistical difﬁ culties encountered mainly with our 
subcontractor onsite various alternative steps 
are being taken to meet the milestones on the 
project and management is conﬁ dent that 2013 
will demonstrate an improved performance
in november 2012 the company was awarded the 
vertical shaft contract at kibali goldmine during the 
startup phase of the project we experienced some 
logistical challenges but after various initiatives were 
taken operations are back on track
 2011 ﬁ gures are restated
shaftsinkersra2013front endindd   8 27042013   0055 shaft sinkers annual financial report 2012
9
our mining engineering and technical services 
mets division continues to ﬁ nd new opportunities 
for design and epcm contracts a team from 
mets was mobilised in 2013 to commence work 
at the poderosa project in peru the cis ofﬁ ce was 
contracted to perform a desktop study for kazzinc 
a subsidiary of glencore in kazakhstan  a very 
important step in our cis strategy
corporate social responsibility
shaft sinkers recognizes corporate social 
responsibility as a business imperative and 
is engaging with clients communities and 
stakeholders to enable the group to meet the 
needs of each territory in which it operates
shaft sinkers implements various initiatives 
ranging from adult based education and training 
abet classes  which is aimed at improving the 
literacy of our unskilled employees to increasing 
employment from the surrounding community 
black economic empowerment 
our bee structure and credentials are in place as 
this becomes an exceedingly important criterion 
for contractor selection in south africa our structure 
has been completed and rated as compliant 
management took care at creating a far reaching 
equitable structure that empowers its work force 
meaningfully the response from the unions was 
extremely positive our new bee partners are a 
good mix of experience enthusiasm and youth 
we are encouraged by the depth and experience 
represented amongst our bee partners   
research and development
our research and development programmes are 
progressing in line with previous announcements 
in this regard development work on the 
sightpower shaft scanning technology we have 
invested in continues and we are nearing the 
introduction of the beta version which will be the 
prototype for marketing to our clients
working capital
at 31 december the group was carrying 
approximately gbp13 million of outstanding 
amounts for variation orders at the last practical 
date of this report there was an amount of 
approximately gbp7 million that remained to be 
collected most of which is scheduled for the end 
of may 2013
order book and tendering activity
at 31 december 2012 the order book stood 
at gbp346 million h1 2012 gpb348 million 
revenue to be billed on committed contracts
the group has £11 billion of outstanding tenders 
or price submissions h1 2012 gbp11 billion on 
16 projects approximately 58 per cent in value 
representing six projects are outside of south 
africa and 75 per cent in value representing nine 
projects are nonplatinum related projects
management continues to actively pursue a 
number of new tenders with geographic and 
commodity diversity  the group believes it is 
well placed to secure a number of these tenders
looking ahead a key focus will be implementing 
more efﬁ cient control structures that will return 
operations to their optimal levels with a stable 
operating environment management will be 
freed to intensify efforts to convert prospects into 
order book we are positive about the prospects 
that the company is pursuing we expect our 
operations in 2013 to improve and look forward 
to achieving our planned growth 
alon davidov
chief executive ofﬁ cer
25 april 2013
shaftsinkersra2013front endindd   9 27042013   0055