shaft sinkers report  accounts 2010
1
shaft
sinkers
shaft sinkers
annual report  accounts 2010 2
group overview
highlights 1
board of directors 2
chairman’s statement 4
chief executive officer’s statement 6
business review
operational review 8
financial review 10
internal controls and  
risk management 17
2010 kpis 20
sustainability review safety health 
environment quality and training 21
corporate social investment 23
directors’ report
directors’ report – business review 24
directors’ report –  
corporate governance 28
directors’ report – remuneration  35
statement of directors’  
responsibility for the  
annual report and accounts 40
finanicial statements
independent auditors’ report 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 consolidated annual  
financial statements 47
information
shareholder information 85
corporate information 86
financial calendar for 2011 87
notice of annual general meeting 88
proxy form for annual  
general meeting 91 shaft sinkers report  accounts 2010
1
highlights
revenue up 24 
earnings per share up 27 
year end net cash  
and cash equivalents of gbp111 million
listed on the london stock exchange 23 december 2010 
award of styldrift contract 
extension to moab contract 
increased tender activity towards end of year 
3000000 fatality free shifts shaft sinkers report  accounts 2010
2
board of directors
amre youness 
nonexecutive chairman age 48
mr youness joined the board as nonexecutive 
chairman in november 2010 having been non
executive chairman of capstone the group’ s 
former south african holding company since 
2008 he is the chief executive ofﬁcer of imr 
management services limited and also chairman 
of samancor chrome an imr investee company 
he was previously in private equity he is a board 
member of various charitable organisations involved 
in subsaharan africa mr youness is a us citizen
alon davidov 
chief executive ofﬁcer age 36
mr davidov joined the board as chief executive 
ofﬁcer 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 ﬂuent russian 
speaker and is also a nonexecutive director of 
samancor chrome mr davidov has dual citizenship 
in south africa and israel
robert schroder 
chief operating ofﬁcer age 41
mr schroder joined the board as chief operating 
ofﬁcer in november 2010 he originally joined 
the group in 2004 as commercial general 
manager and was promoted to managing 
director of shaft sinkers pty the group’s 
principal operating subsidiary in february 2008 
he had previously set up and run his own project 
services consultancy practice in mining and 
heavy engineering for three years and had been 
a partner at venn and milford pqs quantity 
surveyor specialising in mining and heavy 
engineering for three years mr schroder has 
dual citizenship in south africa and the uk
christopher hall 
chief financial ofﬁcer age 51
mr hall joined the board in november 2010 
as chief financial ofﬁcer he originally joined 
the group in 2007 as the chief financial ofﬁcer 
following three years as the chief executive 
ofﬁcer 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 qualiﬁed as a chartered accountant 
and spent four years postqualiﬁcation at 
pricewaterhousecoopers and ernst  young mr 
hall is a south african citizen
stephen oke 
independent nonexecutive director age 56
mr oke joined the board in november 2010 he 
is the senior independent director and chairs 
the remuneration 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 bpcoal 
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 non executive director 
of international ferro metals limited and african 
mining  exploration plc and was previously on 
the boards of nikanor plc katanga mining limited 
and kazakhgold group limited shaft sinkers report  accounts 2010
3
ian watson 
independent nonexecutive director age 67
mr watson joined the board in november 2010 
and chairs the safety committee he is a qualiﬁed 
mining engineer with over 45 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 
ofﬁcer of international ferro metals sa pty 
ltd from 2003  2005 and as chief executive 
ofﬁcer 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 certiﬁcate 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 executive chairman of 
galaxy gold a private company
roger williams 
independent nonexecutive director age 47
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 
ﬁnance after graduating from the university 
of southampton with an honours degree in 
french and spanish he qualiﬁed as a chartered 
accountant with touche ross and joined the 
ﬁnance department of carlton paper in 1997 he 
joined randgold resources working on its london 
stock exchange listing and its later secondary 
listing on nasdaq and was appointed group 
finance director in 2002 during 2002  2007 he 
was part of the management team that oversaw 
its expansion raising debt ﬁnance managing 
its treasury operations and assisting on ma 
and new business he was subsequently chief 
financial ofﬁcer of jselisted aeci limited and 
bsg resources limited a private company both 
involved in the mining industry he is a uk citizen 
each of the directors can be contacted at the 
registered ofﬁce of the company at 18 athol 
street douglas isle of man im1 1ja shaft sinkers report  accounts 2010
4
chairman’s statement
dear shareholders
i am delighted to report a 
strong performance by the 
group in 2010 with significant 
financial strategic and 
operational progress  
unfortunately juxtaposed 
against this are the sad events 
marked by the death of our 
employees mr mojalefa lekoro 
and mr sansao macamo their 
loss is a stark reminder of 
the dangers inherent in our 
business and having come after 
achieving 3 million fatality 
free shifts in south africa we 
remember these two  
employees and will continue 
to reinforce the importance 
of our operational safety 
procedures as well as to strive 
for zero fatalities
financial results
revenue for the year grew 24 to gbp1831 
million 2009  gbp1479 million  proﬁt before 
income tax grew 34 to gbp167 million 2009  
gbp125 million and basic earnings per share 
grew 27 to 30p 2009  24p  the results are 
stated after including a gbp38 million contract 
recovery against an earlier impairment and one
off income less charges of gbp07 million
the group ended the year in a strong ﬁnancial position 
with net cash and cash equivalents of gbp111 million 
2009 net borrowings of gbp66 million
dividends
in line with the dividend policy set out in our 
listing prospectus the board is not proposing a 
ﬁnal dividend for 2010  we continue to expect 
in the absence of unforeseen circumstances to 
commence payment of dividends later this year
strategy
admission of our shares to trading on the london 
stock exchange main list at the end of 2010 
was a major step forward in positioning us to 
achieve our strategic objectives i would like to 
congratulate management on their hard work in 
achieving this milestone
our strategy remains as set out in our prospectus  
we intend to maintain and build on our existing 
strategic and technical strengths to expand 
further into the cis and india and to diversify our 
offering into additional endmarket applications  
we will also remain alert to selective acquisition 
opportunities with the potential to add value to 
our operations
management has done well to secure a new tender 
in styldrift we are pleased to have expanded 
our client base  with the styldrift joint venture 
as it indirectly exposes us to two more clients 
in anglo platinum and royal bafokeng nation 
whilst management has encountered technical  5
difﬁculties on some of the projects such as impala 
16 management is redoubling its efforts and 
there are improvements  eurochem our largest 
single contract is slowly starting to catch up with 
early delays a combination of technical and 
administrative issues was and continuously is 
being proactively addressed by the management 
which culminated in some good progress and 
recommencement of the sinking process 
we have sold our stake in the eureka gold mine 
in zimbabwe and with that ends a chapter in the 
company  owning equity in projects this strategy 
has not worked and in fact was creating drag 
in terms of management time and effort so i 
welcome this divestment 
i would like to congratulate alon davidov on 
his appointment as chief executive ofﬁcer 
alon is well placed to spearhead shaft sinkers’ 
expansion into new territories in particular the 
former soviet union with which he is very familiar 
i would also like to thank the other executive 
colleagues for their efforts rob schroder chief 
operating ofﬁcer has worked hard to improve 
the safety operations and service delivery across 
the business chris hall chief financial ofﬁcer 
has been instrumental in improving the ﬁnancial 
strength of the company and ultimately readying 
the group for listing
i would like to welcome messrs stephen oke 
ian watson and roger williams to our board as 
independent nonexecutive directors stephen 
oke is the senior independent nonexecutive 
director and will chair the remuneration 
committee stephen serves on several listed 
company boards in the mining industry and i look 
forward to working closely with him  ian watson 
who is himself a shaft sinker will make a valuable 
contribution as chairman of our safety committee 
and roger williams will bring his considerable 
experience in executive ﬁnancial roles to bear as 
chairman of our audit committee
outlook
in 2010 we saw a signiﬁcant upturn in the mining 
industry across the globe gold has reached new 
record highs whilst platinum has surged base 
metals prices have also performed well giving 
encouragement to the sometimes deceptive 
global recovery 
with a record year end committed order book 
and the potential to win further new contract 
awards both in south africa and elsewhere 
the directors believe that shaft sinkers is well 
positioned to capitalise fully on the coming 
recovery  we have established a solid footing 
for 2011 and are performing in line with 
expectations we remain conﬁdent of the group’s 
prospects both for 2011 and beyond
finally i would like to welcome all our 
stakeholders to the shaft sinkers family we are a 
south african mining institution having turned 50 
years old this year in today’s instantaneous world 
this is a rare milestone which speaks volumes 
shaft sinkers has successfully developed into a 
world leader in its ﬁeld and now has the platform 
and the resources to grow internationally and 
achieve its full potential so welcome to the shaft 
sinkers family 
amre youness
chairman
13 april 2011 shaft sinkers report  accounts 2010
6
chief executive ofﬁcer’s statement
i am pleased to report that the 
group has exceeded our plan 
for the 2010 financial year 
turnover has grown by 24 
with profit from operations 
increasing by 25 
despite some oneoff items the group’s 
net proﬁt after tax  for the year increased by 
approximately 27 this year marked a new 
chapter in shaft sinkers’ history when on  
23 december the group was admitted to trading 
on to the main board of the london stock 
exchange in line with management’s strategy 
to expand internationally and acquire a basis for 
funding the future growth of the business this 
listing is seen as a crucial step forward 
south african operations
south african operations beneﬁted from 
additional work and oneoff items the group’s 
new contract at styldrift is an important step in 
diversifying the groups’ client base with anglo 
platinum and royal bafokeng nation becoming 
important new clients through a joint venture 
that owns the styldrift mine lonmin’s hossy and 
saffy shafts despite the predicted termination 
of labour supply contracts extended our scope 
of work and we achieved strong performance 
from our operations at those shafts contributing 
to the group’s stronger results our contracts at 
anglogold ashanti’s moab shaft have performed 
well and will be extended in 2011 our project 
at impala’s 16 shaft continues to be a low margin 
contract and some technical difﬁculties were 
encountered there in contrast our project at 
impala’s 17 shaft which is one of the largest 
shaft systems being sunk anywhere in the world 
is progressing on track again despite some 
difﬁculties with winders and ground conditions 
encountered in early 2010 an important contract 
was signed with hernic ferrochrome at their 
bokfontein mine this cost plus contract for two 
decline shafts includes a toll mining element 
the project will grow signiﬁcantly with the future 
expansion of the mine in line with the group’s 
policy for toll mining contractsthe risks of cost 
escalation will be carefully controlled 
the oneoff items that improved results in 2010 
culminated after management took actions to 
redress its contract with kalagadi manganese in 
2009 in 2010 we reached an amicable settlement 
for the recovery of outstanding amounts with 
kalagadi manganese  delta gold zimbabwe 
a whollyowned subsidiary of alpha resources 
which owns the eureka gold mine in zimbabwe 
and which has been shaft sinkers’ only investment 
in a mining operation to the extent of 25 had 
been struggling for several years since the political 
and ﬁnancial situation deteriorated in zimbabwe 
the situation caused the eureka gold mine to 
suffer ﬁnancial losses and was a signiﬁcant drain 
on management time and focus we had resolved 
to divest from eureka in 2009 and achieved in 
the second half of 2010 we have recouped some 
gbp18 million zar20 million of our investment 
more importantly shaft sinkers can now focus on 
its core skill of being a shaft sinking contractor
we have also commenced the preparatory work 
presink for a major shaft complex for an existing 
customer negotiations are still under way to 
secure the main sink for the main and vent shaft
international operations 
despite a stronger rand against the us dollar 
and sterling and approximately half of the 
group’s margin being generated in us dollars 
the groups’ international business showed a 
strong performance eurochem our ﬂagship 
russian contract is a technically challenging 
assignment to sink an 1100m shaft into a 
potash deposit in kotelnikovo 300km from 
volgograd the project team has faced various 
challenges ranging from technical and logistical 
to administrative the project team together 
with management has learned some invaluable 
lessons from these challenges which will 
contribute to the future progress of shaft sinkers 
in this and similar territories towards the end of  7
2010 the project overcame some technical as well 
as administrative hurdles and sinking operations 
resumed the project is facing a delay and we 
are constantly seeking ways to proactively resolve 
issues as they arise and shorten the delays in 
2011 in my new role as chief executive ofﬁcer 
i will be focusing on this project and building 
an even stronger relationship with the client 
eurochem is a key strategic client for us in russia 
and through our strong relationship we should be 
wellplaced to secure long term prospects on the 
current project as well as others 
in india our teesta project has progressed well 
we have almost completed the ﬁrst surge tunnel 
and work has advanced on the second tunnel 
our mining engineering and technical services 
mets division continues to outperform targets 
by signing more engineering procurement 
construction and consulting contracts the outlook 
is positive for shaft sinkers and the industry as a 
whole more projects are being prepared for and 
are drawing closer to commencement
in terms of safety the company is working hard 
to maintain high standards culminating with shaft 
sinkers achieving 3 million fatality free shifts for the 
ﬁrst time in its history in november we experienced 
a fatality at our styldrift project and lost one of our 
colleagues mr mojalefa lekoro and recently in 
april 2011 lost mr sansao macamo at our karee 3 
operations these are stark reminders of the perils 
of our business and the importance of maintaining 
high standards and constant vigilance at every level 
of the organisation
one of the main challenges facing the group is 
skills shortage this is an industrywide problem 
shaft sinkers has developed inhouse learner
ship and training programs in order to assuage 
this shortage we will also be looking to ﬁnd 
appropriate skills in other territories we are 
actively searching for skills in the territories we 
are operating in especially russia furthermore 
we review the level of earnings of our key people 
by comparison to industry averages and we look 
at incentives that will keep our business ahead of 
the industry so that we can attract and retain the 
skills the business needs
for the year ahead the group will experience 
a period of initially settling into the new 
environment of a listed entity and at the same 
time we expect to build on its strengths 
namely people safety and experience to start 
growing the business organically in 2011 the 
strategic focus will be on further improving the 
performances of the south african operations 
and continuing the expansion of shaft sinkers 
internationally it is our intention to strategically 
position the company to undertake new projects 
and as we stated in our listing prospectus we 
will use some of the listing proceeds to refurbish 
key plant which is in our rand yard winders are 
long lead items which can take up to 24 months 
to manufacture shaft sinkers has over the years 
accumulated a signiﬁcant inventory of winders 
which we will selectively recondition in order to 
be strategically well positioned for taking on new 
sinking contracts signiﬁcant ground work has 
been laid both in south africa and beyond for the 
award of new contracts  
i would like to take this opportunity to thank 
our former shareholders mmakau mining and 
holgoun for their past contribution to the 
development of shaft sinkers as an  
international company  
in 2011 shaft sinkers turned ﬁfty this is a 
remarkable achievement and a testament to the 
quality of the company  going forward as a public 
and international company the main challenge 
is to preserve the quality and standards that 
characterised the company for the last ﬁfty years 
whilst we pursue new opportunities in south africa 
and abroad combining our unique south african 
skills with the rigour and transparency of being a 
uk listed company will assist us to deliver value to 
our investors employees and stake holders
alon davidov
chief executive ofﬁcer shaft sinkers report  accounts 2010
8
operational review
market and overview
in general for the 2010 ﬁnancial year we slightly 
exceeded our plans as expected towards the 
end of 2010 there was a noticeable increase in 
the tendering and enquiry activity while most of 
these enquiries seemed to be used to complete 
bankable feasibility studies should the demand for 
metals continue to rise some of the projects may 
be implemented in the short to medium term
within the entire group we subscribe to our culture 
of safety quality integrity people and performance 
which we fondly refer to as “sqipp”
safety
while the group continues to place considerable 
emphasis on its strong safety record and always 
strive for zero harm regrettably on 18 november 
2010 mr lekoro of shaft sinkers pty limited was 
fatally injured during cleaning operations involving 
a mechanical loader at the styldrift main shaft 
we had achieved 3 million fatality free shifts in july 
2010 prior to the fatality we will once again strive 
for zero harm after this unfortunate event we 
had a lost time injury frequency rate of 488 per 
million shifts 
while this is short of our benchmark rate of 36 
and disappointing for us when compared to 
the 2009 overall rate of 334 a number of our 
operations achieved some of their milestones 
and others far exceeded benchmarks set  we will 
continue with our behavioural based systems and 
ongoing commitment to safety as well as looking 
at other external motivational roadshows to strive 
for improvement in 2011 
during 2011 while our lti rate has improved to 
below 369 we have unfortunately had another 
fatality on 8 april 2011 at our karee 3 operations 
mr sansao macamo a construction man fell 
down an ore pass
operations
in our 2010 ﬁnancial year we exceeded our 
budgeted contribution from operations and 
established a solid footing to continue in 2011  
our stoping operations at lonmin’s saffy and 
hossy shafts continued for longer than expected 
and thus increased contribution however this 
was offset in the delays we experienced in 
commissioning the underground belt at lonmin’s 
karee 3 which resulted in lower than budgeted 
contribution  the belt has now been installed 
and we expect production to increase in 2011  
the capital development for both saffy and hossy 
was in line with budget
our deep level development sections at 
anglogold ashanti’s moab khotsong shaft showed 
an improvement in safety and while doing so also 
showed a slight increase in contribution due to a 
small increase in labour and scope 
the several temporary setbacks on our impala 
16 and 17 projects during the ﬁrst half of the year 
were generally rectiﬁed although some additional 
time due to late raise boring and the replacement 
of shaft components due to excessive rust was 
experienced at our impala 16 shaft operations 
which caused additional costs and delays the 
problems with clientsupplied winders at impala 
17 shaft continued into the second half resulting 
in inefﬁcient time  limiting our ability to realise 
a full margin  emphasis has been placed on  9
resolving this issue and the project which is one of 
the largest shaft systems being sunk anywhere in 
the world is now progressing on track  while the 
impala 16 shaft will continue to have challenges 
until 3q when the equipping phase commences 
these have generally been mitigated
we commenced with the styldrift complex joint 
venture between anglo platinum and royal 
bafokeng nation in the second half of 2010 and 
expect to commence the changeover to main sink 
in 2q  while presink cycles are slightly slower 
than budgeted due to a change in methodology 
contribution remains slightly ahead of budget due 
to efﬁciencies in site establishment expenditure
we rented kibble winders to kalagadi manganese 
which was not forecast in 2010 and thus the entire 
contribution is additional compared to budget  
hernic’s bokfontein project contribution was 
slightly less than forecast due to a delay in the 
increase in labour required by the client  2011 
will see a small increase in the labour required by 
the client
at our project for eurochem in russia we 
completed the changeover from presink to main 
sink and cementation has commenced  some 
challenges are still being experienced with 
lengthy delays at customs for strategic equipment 
and cementation materials that are impacting 
on the programme  our client is aware of these 
delays and assisting us wherever possible
our project for teesta in india continued well 
during 2010 with some delays due to shortages  
of clientsupplied material and labour  all delays 
were recovered from the client and the ﬁrst 
pressure shaft is scheduled to  hole in the ﬁrst 
quarter of 2011  the remaining shaft should be 
completed by the end of 2011 
our mets mining engineering technical 
services department also showed some growth 
in the latter half of 2010 speciﬁcally in enquiries 
and potential projects in peru and india
during 2011 we will continue to strive to improve 
safety with various initiatives develop our 
learnership candidates and continue with the 
research and development required to keep us 
at the forefront of new innovations we will also 
implement our recently developed mechanical 
kibble moving in the shaft bottom and mechanical 
kibble tipping in the headgear shaft sinkers report  accounts 2010
10
financial review
basis of preparation
the ﬁnancial information presented has been 
prepared on a basis consistent with that used in 
the preparation of the ﬁnancial statements for the 
2009 ﬁnancial year and the ﬁnancial information 
at 30 june 2010 presented in the prospectus 
there have been no changes in accounting policy 
or new standards applied which have had an 
effect on reported performance in comparison to 
the prior year
in connection with the company’s listing the 
group was restructured and a new isle of man 
holding company introduced  we have used the 
common control method of accounting for the 
business restructuring in order to present group 
consolidated ﬁnancial statements
overview
the 2010 ﬁnancial year has largely been in line 
with our plans to continue to expand the business 
in pursuit of additional contracts and despite 
some oneoff items we have come out a little 
ahead of our budgeted results
the successful admission to the premium listing 
segment of the london stock exchange at 
124p per share has placed the group in a new 
dynamic position to take advantage of growth 
opportunities and has raised the status of the 
ﬁnancial image of the group this achievement 
bodes well for the future evolution of the shaft 
sinkers business
the group remains ﬁnancially sound and has 
proven to be resilient to the economic recession 
felt throughout the world since 2008
the group has improved its cash position 
signiﬁcantly and is on a sure path to improved 
proﬁtability provided the operational challenges 
of skills and safety can continue to be met the 
group is therefore likely to be in a position to pay 
dividends after its interim results in 2011
analysis of results
income statement
proﬁts for the year have increased by 269  in 
gbp terms this is partly due to a strengthening 
of the zar against the gbp from an average 
of zar1314 per gbp in 2009 to zar1134 in 
2010 in zar terms proﬁts have increased by 
approximately 9 the increase in proﬁts is 
largely attributable to a oneoff item amounting 
to gbp38 million in 2010 this arose due to 
the reversal of an impairment of debtors where 
a settlement agreement was reached with one 
of our clients for payment of debts that we had 
impaired in 2009
revenue
revenues grew by 238 in gbp terms in 2010 
from gbp1479 million in 2009 to gbp1831 
million gbp250 million representing 169 out 
of the 238 increase is the zargbp exchange 
rate mentioned above revenues increased 
by 69 in zar terms from zar19429 million 
in 2009 to zar20773 million in 2010 this is 
mainly attributable to higher revenues at our 
various impala projects from additional scope in 
work as well as increases in revenues relating to 
our international projects including eurochem 
and teesta the latter increased as a result of 
revenue in advance being released during the 
2010 ﬁnancial year due to the commissioning 
of winders on the project revenue was further 
increased as a result of the newly awarded 
styldrift contract these increases in revenue were 
offset by the absence of revenue in 2010 from the 
leeuwkop kalagadi and mali projects that came 
to an end during the 2009 ﬁnancial year 11
gross proﬁt
gross proﬁt decreased by 51 in zar terms from 
zar3488 million in 2009 to zar3310 million 
in 2010 although it increased by 99 in gbp 
terms from gbp265 million in 2009 to gbp292 
million in 2010 this decrease in zar terms can 
be ascribed to the following factors
 manganese contract in 2009
 our winder for impala’s leeukop project which 
had previously been deferred
 and 17 shaft projects due to some oneoff 
incidents relating to clientsupplied winders 
and a defective winder rope
offset by
 project with anglo platinum and royal 
bafokeng nation
 project due to it being a cost plus ﬁxedfee 
contract with less revenues being billed 
having passed the initial capital expenditure 
cycle of the project and
 as the deferred revenues relating to the 
provision of our winders started to be brought 
into account following the commissioning of 
the winders
margins in 2010 averaged around 159 
compared to 180 in 2009 
operating income
operating income increased in gbp terms by 
97 in 2010 but in zar  terms decreased by 
53 compared to 2009 this decrease was partly 
due to a loss on disposal of plant and equipment  
in 2010 relating to the lapsed kalagadi 
manganese contract where plant was sold at less 
than book value to the client see below contract 
provision and settlement
operating expense
operating expenses increased by gbp86 million 
due to the following factors
 million discussed in more detail below
 expenses
 overheads not included in direct costs
 the gbp when translating from the zar 
functional currency and
 versus foreign exchange losses in 2009
contract provision and settlement
in 2009 the group’s contract with kalagadi 
manganese lapsed  and there remained amounts 
of approximately gbp30 million owing to 
the group in addition plant and equipment 
belonging to the group with a carrying value of 
approximately gbp25 million remained in the 
custody of the client at the end of the 2009 
ﬁnancial year the group considered it prudent 
to raise an impairment provision against the 
outstanding receivable as well as the plant and 
equipment at site in april 2010 we reached an 
amicable settlement with kalagadi manganese to 
recover a portion of the outstanding debt some 
of the plant and equipment items were sold to 
the client and the remaining plant and equipment 
that was not sold to the client was returned to 
the group these events lead to a reversal of 
the impairment in 2010 to the extent of gbp38 
million in view of their size the impairment and 
reversal thereof are disclosed separately in the 
statement of comprehensive income 12
finance income and costs
with gbp151 million cash ﬂow generated from 
operations and a lower capital expenditure of 
gbp121 million in 2010 as compared to gbp151 
million in 2009 the group managed to reduce 
its interest burden in zar terms from zar 237 
million in 2009 to zar146 million in 2010 an 
improvement of zar91 million the effect of 
the exchange rate on translation to gbp had a 
negative impact reducing the beneﬁt in gbp 
terms to only gbp05 million from gbp18 million 
in 2009 to gbp13 million in 2010 interest rates 
lowered in south africa with the prime interest 
rate in 2010 averaging about 10 compared to 
about 12 in 2009
taxation and vat
in 2009 certain vat related items that had 
previously been claimed were disallowed by the 
authorities provision was made for approximately 
zar105 million gbp09 million in 2009 and a 
further zar112 million gbp09 million in 2010 
management consider these provisions which 
are included under operating expenses to be 
conservative 
the south african tax rate remains unchanged 
in 2010 from 2009 at 28 the secondary tax 
on companies stc in south africa is charged 
at a rate of 10 of dividends paid to persons 
outside of the south african group in theory this 
gives an effective company tax rate of 3456 if 
all current proﬁts after tax were to be declared 
as a dividend effective from 1 april 2012 the 
secondary tax on companies will be replaced by 
a dividend withholding tax of 10
in 2010 the group’s effective tax rate was 244 
reﬂecting the beneﬁt of gbp18 million of non
taxable income which was a partial recoupment 
of its loan account to delta gold zimbabwe a 
wholly owned subsidiary of alpha resources in 
2009 the effective tax rate was 201 reﬂecting 
the group’s write back of overprovisions in prior 
years of gbp10 million
effect of exchange difference on translation 
from functional to presentation currency
the group reports in gbp while the functional 
currency of the main operating subsidiaries of 
the group is zar the average rate of exchange 
for 2010 was zar1134 to the gbp and in 2009 
was zar1314 the spot rate at 31 december 
strengthened even further to zar1023 in 2010 
compared to zar1181 in 2009 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 gives rise to these differences 
resulting in a gain of gbp47 million in 2010 and 
gbp25 million in 2009
ebitda
earnings before interest tax and depreciation 
were gbp252 million in 2010 compared to 
gbp183 million in 2009 an increase of 375 
part of the increase was due to the stronger zar 
against the gbp and in zar terms the increase 
was 187 from zar2406 million in 2009 to 
zar2856 million in 2010 
earnings per share
earnings per share was calculated on a theoretical 
number of shares in issue for the 2009 and 2010 
ﬁnancial years on the basis of a common control 
transaction the actual shares that were issued on 
23 december 2010 which were not intended to 
raise additional cash for the company but rather to 
reﬂect the number of shares that had been issued 
to replace the former holdings of international 
mineral resources and the former minority 
shareholders in the group were used as a basis for  shaft sinkers report  accounts 2010
13
the calculation added to that was the weighted 
average number of shares issued on 23 december 
2010 to raise additional cash for the company 
weighted for a period of 9 days in the year
earnings per share increased from 24 pence in 
2009 to 30 pence in 2010 an increase of 265 
the effect of awarding incentive shares to the 
executive directors of the company reﬂects a 
diluted earnings per share of 26 pence taking 
into account the share price of 150 pence at 31 
december 2010 and comparing it to the target 
growth in price of at least 13 per annum for ltip 
shares to vest each year
dividend policy
the group intends to adopt 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 ﬁnal dividend paid in 
may 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 ﬁnal 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 in the absence of unforeseen circumstances 
the company expects to pay its ﬁrst dividend in 
september 2011 out of its 2011 earnings
financial position
total assets increased from gbp1006 million in 
2009 to gbp1621 million in 2010 and net assets 
from gbp213 million to gbp465 million
interestbearing debt to equity has decreased 
from 708 in 2009 to 525 in 2010 the new 
and increased facilities granted to the group 
by the standard bank of south africa limited 
has given the group the ﬁnancial ability to take 
on more projects as the group plans to expand 
organically each new project requires a degree of 
investment in working capital while the group’s 
business model is for its clients to fund the capital 
equipment costs of a project there is invariably 
growth in working capital required to fund the 
additional labour and consumable materials that 
are required for new projects
the group has gone from net debt deﬁned as 
interest bearing debt minus net cash in 2009 
of gbp66 million an effective gearing ratio of 
313 to net cash of gbp111 million in 2010 
this was largely due to cash from advances from 
clients and cash raised by the issue of shares and 
partly due to cash generated from operations
the group has gone from net current liabilities in 
2009 of gbp101 million to net current assets of 
gbp246 million in 2010 this is mainly attributable 
to an increase in cash of gbp272 million and 
an increase in trade and other receivables of 
gbp210 million with trade payables increasing by 
gbp88 million and shortterm revenue received in 
advance increasing by gbp71 million
ppe
new additions to plant and equipment amounted 
to gbp104 million in 2010 compared to gbp149 
million in 2009 this was largely as a result of 
major plant and equipment being procured on 
the russian eurochem project in 2009 and in 
2010 on the styldrift project which commenced 
towards the last quarter of the year shaft sinkers report  accounts 2010
14
disposals of plant and equipment in 2010 were 
gbp68 million relating mostly to the lapsed 
kalagadi manganese project compared to gbp18 
million in 2009
finance lease receivables
the increase in ﬁnance lease receivables 
represents the procurement and sale of additional 
motor vehicles to site managers during the year 
this increase was partly due to the startup of the 
new styldrift project and partly due to renewal of 
motor vehicles to site managers on other projects
trade and other receivables order book
trade and other receivables increased by 
gbp210 million in 2010 to gbp501 million from 
gbp291 million in 2009 in south africa the start 
up of the new styldrift project accounted for a 
large portion of this increase as did the additional 
revenues from impala in the rest of the world 
segment the eurochem project and the teesta 
project also saw a large increase in receivables
the group’s order book at ﬁnancial reporting 
period 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 
2010 amounted to gbp4882 million which 
represents 267 years’ revenue based on 2010 
revenues the order book at 30 june 2010 was 
calculated as gbp4741 million the projected 
order book has changed as a result of the closing 
zargbp exchange rate at 31 december 2010 
improving the ﬁgure to the extent of gbp551 
million when compared to the listing prospectus 
and the absence of the 2nd half of 2010 in the 
calculation which amounted to gbp856 million 
furthermore the order book increased due to the 
extension of the moab khotsong contract with 
anglogold ashanti
cash
the group ended the 2010 year with a favourable 
cash balance of gbp356 million compared to 
gbp84 million in 2009 the source of the increase 
of gbp272 million was primarily gbp151 million 
net cash from operating activities a net of gbp64 
million from increased borrowing facilities from 
the group’ s bankers gbp49 million from the 
issue of new shares gbp34 million contributed 
by former minority shareholders towards listing 
expenses and the ipo bonus to be paid in 2011 and 
gbp18m recouped from the sale of the group’ s 
equity investment in delta gold zimbabwe net 
investment in property plant and equipment 
after proceeds from sale of assets to kalagadi 
manganese amounted to gbp56 million and other 
ﬁnancing activities amounted to gbp02 million 
net outﬂow the stronger zargbp exchange rate 
accounted for gbp14 million of the increase 15
at 31 december 2010 the group held its cash in 
the following currencies
  gbp22 million
  gbp002 million
 
 emirates dirham aed01 million 
  gbp002 million
  gbp01 million
  gbp251 million
share capital and common control reserve
the company was admitted to trading on the 
london stock exchange under the premium 
listing regime on 23 december 2010 although 
the company was established in the isle of man 
in october 2010 the shaft sinkers group is 
considered to have remained under common 
control since its acquisition by international 
mineral resources bv imr as major shareholder in 
november 2007 until its listing became effective
for the purpose of presenting group 
consolidated ﬁnancial statements the 
restructuring of the group with the newlyformed 
isle of man company as the holding company 
 it was considered appropriate to use the 
common control method of accounting for  
the business restructuring
under this method the equity at the earliest date 
of the comparative information is restated to 
reﬂect the shares that would have been in issue 
had the restructuring taken place at that date 
in this case it is assumed that the 22817524 
shares which were issued on 23 december 2010 
to reﬂect the holding of imr and the 19437150 
shares issued to buy out the former minority 
shareholders were issued retrospectively at 1 
january 2009 the additional shares that were 
issued by the company to raise cash for the 
business are treated as a new share issue from 23 
december 2010
as the comparative balance sheet is presented 
without further alteration besides equity the 
difference between the lower original share 
capital at 1 january 2009 and the higher restated 
share capital gives rise to a debit reserve for 
common control effectively arriving at the same 
net balance the gbp34 million reduction on 
the reserve from 2009 to 2010 arises due to the 
contribution made by former minority shareholders 
in december 2010 towards the ipo bonus of an 
estimated gbp43 million to be paid in 2011 and a 
share in some of the listing expenses
capitalised ipo expenses
listing expenses excluding the ipo bonus to be 
paid and fully accounted for in 2011 amounted 
to approximately gbp34 million of these 
expenses gbp23 million were capitalised as a 
charge to equity and the remaining gbp11 million 
were expensed against proﬁts the basis for the 
capitalisation was a prorated 52 of costs related 
to the listing of shares other than the imr shares 
and the full brokers commission on those shares  shaft sinkers report  accounts 2010
16
deferred revenue
deferred revenue represents the revenues 
received in advance from clients in accordance 
with the groups 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 increased in 2010 by gbp24 
million from gbp210 million in 2009 to gbp234 
million primarily as a result of deferred revenues 
relating to the styldrift project that was entered 
into during 2010
interest bearing borrowings
in december 2010 the group drew down on new 
facilities afforded by the standard bank of south 
africa limited including term debt of zar2500 
million gbp244 million these proceeds were 
used to pay down existing term debt that was 
owed to absa bank limited part of the net 
proceeds will be used to fund expenditures on 
the refurbishing of winders and part will be used 
for growth in working capital
the new loans with standard bank are subject 
to a cash sweep of an amount similar to any 
dividend distribution made by the south african 
subsidiaries to shareholders
interestfree advances from clients
interestfree advances from clients relate to 
advances received for the funding of project 
expenditures in russia the eurochem project 
is based on the model of cost plus a ﬁxed fee 
the logistics involved in shipping plant and 
equipment to russia from south africa and 
the business environment in russia where the 
norm is for suppliers to demand payment in 
advance gave rise to the need for eurochem 
to make advances to the group prior to the 
ﬁnalisation of the regular monthly billing these 
advances are commercial loans for the purpose 
of the project itself and are repaid to the client 
over predetermined times basically over the 
remaining life of the project
use of proceeds from ipo
of the gross amount of gbp65 million raised 
for the company on admission to trading on the 
london stock exchange gbp34 million went 
towards paying for listing expenses and the 
remaining gbp31 million plus the remainder of the 
contribution by former minorities towards these 
expenses will be utilised to refurbish some winders 
to enable the group to be prepared to take up 
potential new contracts with minimum delay and to 
go towards the growth in working capital that would 
be accompanied with any new contract shaft sinkers report  accounts 2010
17
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 identiﬁed by 
the group and the mitigating strategies adopted
internal controls
the group’s internal control system comprising 
the policies procedures and work methods that 
combine to ensure an effective and efﬁcient 
operation they are intended to allow the business 
to respond appropriately to signiﬁcant operational 
ﬁnancial 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 ﬂow 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 ﬁnancial transactions on a regular 
monthly basis
the group has complied with the provisions 
of the combined code and the uk corporate 
governance code on internal controls and the 
relevant parts of the turnbull guidance for the 
ﬁnancial 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 
decisionmaking 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

group
 regards as acceptable for the group to bear

 and impact on the business of risks that may 
materialise through mitigating strategies and
 relative to the beneﬁt thereby obtained in 
managing the related risks
management implement policies set by the board on 
risk and control management identify and evaluate 
the risksfaced 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 shaft sinkers report  accounts 2010
18
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 ﬁnancial performance and 
assets and liabilities is performed on the group’s 
software systems which have appropriate access 
controls all signiﬁcant movements and unusual 
items in data which are submitted are reviewed 
by a senior member of the ﬁnance team key 
consolidation journals relating to data submitted 
by group companies are reviewed within the 
ﬁnance department in accordance with their 
signiﬁcance a reconciliation and analysis of 
consolidation journals is reviewed by the group 
financial reporting ofﬁcer internal ﬁnancial 
reports are produced monthly by the ﬁnance 
department and reviewed by senior members of 
the group’s ﬁnance and operations teams and 
then distributed to management and the board
the ﬁnancial 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 ﬁnance 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 signiﬁcant 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 and is in 
accordance with the turnbull guidance
due to the nature of the group’ s operations 
a signiﬁcant 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 ofﬁcer 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
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 risk 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 
speciﬁc order of ranking
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 ﬁnancial performance shaft sinkers report  accounts 2010
19
safety risk
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 identiﬁed 
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 ﬁnancial disaster in an environment where 
the business is in a growth pattern 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 signiﬁcant ﬁnancial 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 efﬁciency of 
reporting of information and to ensure its tendering 
process has the latest accurate information on costs 
with less time and effort required
for a further discussion on the group’s exposure 
to market risk liquidity risk and credit risk refer 
to notes 261 262 and 263 to the ﬁnancial 
statements on pages 72 to 77
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 ﬁnancial 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 
identiﬁed for implementation at the annual risk 
planning sessions held by the group 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 
ofﬁcer internal audit has unfettered access to all 
areas of the group and follow 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  shaft sinkers report  accounts 2010
20
2010 key performance indicators
lost time injury frequency rate
334
2009 2010
488
revenue £m eps
1479 024
2009 2009 2010 2010
1831 030
gross margin  cash and cash equivalents £m
180
84
2009 2009 2010 2010
159
356
ebitdarevenue order book £m
124
4741
2009 2009 2010 2010
137
4882 shaft sinkers report  accounts 2010
21
sustainability review
introduction
t o 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
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 self sustaining meaningful employment 
opportunities as opposed to “handouts”
the group is involved in advanced discussion 
with the royal bafokeng nation to erect a 
pipe factory near to the styldrift project area 
rustenburg area in the north west province 
this pipe factory would not only provide much 
needed new and real employment opportunities 
within this area but will also provide shaft sinkers 
with top quality pipes for its own operations the 
overall philosophy with this initiative is however 
that the factory must not be dependent on 
shaft sinkers for its survival once shaft sinkers 
has completed the styldrift project this factory 
must be able to sustain itself with orders from 
surrounding mines we go to great lengths 
to ensure that the entrepreneur selection and 
training is properly done and have secured the 
services of a professional service provider to 
assist with this function
shaft sinkers has taken a multi pronged approach 
to the development of the community by also 
investing in microsized enterprises we had 
three fullyequipped food trailers custom built 
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 again on sustainability and therefore 
the trailers were built with a view that they can 
be easily towed with a light vehicle which will 
allow the entrepreneur to integrate into the local 
community once shaft sinkers has completed its 
project as with the pipe factory the selection and 
training of the entrepreneurs for this project was 
professionally conducted through our professional 
service provider tasked with this function
in keeping with the focus on sustainability shaft 
sinkers invested zar 22 million gbp02 million 
in 2010 in enterprise development initiatives 
which included contributing towards the funding 
of seven new businesses for entrepreneur 
development through our professional service 
provider the types of businesses supported 
were diverse and ranged from waste removal oil 
recycling to catering 
one of our more notable success stories 
relates to basadi underground contractors a 
business that was developed from an idea with 
no resources to a fully ﬂedged self sustaining 
business in just under two years what makes 
us particularly proud is that this business is the 
ﬁrst of its kind in south africa doing wetcrete 
applications for underground operations the 
young entrepreneurial owner zanele matome 
has recently secured a long term contract for her 
company with one of our clients she has also 
undertaken several contracts within shaft sinkers 
and is now fully selfsustaining 22
investment in our people 
we acknowledge that our people are the core asset 
of the business and we are therefore continuously 
exploring ways of optimising this asset
competitive salaries and bonus schemes with 
good quality beneﬁts 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 
beneﬁts 
recent developments in distinguishing ourselves 
as the employer of choice include initiatives such 
as accommodation for our junior staff our junior 
staff are now provided with accommodation on 
site allowing two people to a room and visitors’ 
facilities have been created for the wives of our 
employees some of whom work far from home
an employee assistance programme was 
launched in 2010 which provides for the 
debrieﬁng of staff on site by qualiﬁed 
psychologists in the event of a traumatic event 
plans are in place to further extend this service 
to include facetoface counselling for personal 
issues including hiv counselling professional 
assistance with debt management etc
we are exploring a bursary scheme for the 
children of our employees the focus of this 
scheme would be to invest in tertiary studies in 
scarceskill areas such as the various engineering 
disciplines
during 2010 we successfully launched 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 both centres 
have been well supported
at the beginning of 2010 we recruited a further 
11 fulltime engineering learners apprentices 
in various trades this was to build on the 21 
learners that had already passed their training 
we saw 5 learner miners qualify in 2010 in the 
ﬁrst of the new generation 18month study 
programmes we will extend our learnership 
programme further in 2011 shaft sinkers report  accounts 2010
23
corporate social investment
shaft sinkers pty is in the process of 
implementing existing and exploring new 
corporate social responsibility csr initiatives 
such as a tertiary education bursary scheme 
for children of employees employment of 
local labour and local skills development  this 
includes the provision of equipped mobile 
catering trailers which are operated by selected 
historically disadvantaged south african hdsa 
entrepreneurs and the establishment of a pipe 
manufacturing facility which will be constructed on 
property identiﬁed by the royal bafokeng nation 
and once complete operated by the community
during 2010 the group spent zar22 million 
gbp02 million on enterprise development 
the group also partnered with a company called 
raizcorp to select suitable start up businesses 
generally with hdsas and to provide them with 
entrepreneurial training to enable them to become 
self sustainable 
during 2010 the group funded seven businesses 
which varied from catering to waste removal 
companies and also assisted an hdsa to start up 
an underground wetcrete application company 
which has recently become an approved sub
contractor to the group 
the group has budgeted zar6 million gbp06 
million for 2011 in respect of csr the group 
has also commissioned an employee assistance 
programme eap to debrief employees after 
traumatic events and is considering a wider eap 
programme for 2011  shaft sinkers report  accounts 2010
24
directors’ report – business review
the directors have pleasure in presenting 
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 2010
principal activities
the group is a leading diversiﬁed 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 russia and india the group has two 
main service divisions shaft sinking and mining engineering technical 
services mets and two main segments for reporting purposes 
south africa and rest of world
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 the preserving value and strategy for delivering objectives
chairman’s statement on pages 4 and 5
chief executive ofﬁcer’s statement on pages 6 and 7
operational review on pages 8 and 9
financial review on pages 10 to 16
internal controls and risk management on pages 17 to 19
2010 key performance indicators on page 20
sustainability review on pages 21 and 22
corporate social investment on page 23
the business review has been prepared to provide the company’s 
shareholders with a fair review of the business of the company and 
a description of the principal risks and uncertainties facing it it 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 speciﬁc 
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 ﬁnancial 
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 speciﬁc risk factors for the company 
identiﬁed 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 veriﬁed 
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 listing of the company on 
the london stock exchange on 23 december 2010 the award of the 
styldrift contract to the group and the achievement of 3 million fatality
free shifts
dividends
no dividends have been declared during the year the company  
will consider the declaration of its ﬁrst dividend during the 2011 
ﬁnancial year
annual general meeting
the ﬁrst annual general meeting ‘agm’ will be held on wednesday 
8 june 2011 in london details of the resolutions to be presented at 
the agm together with explanations appear in the notice of agm on 
page 88 shaft sinkers report  accounts 2010
25
share capital
as at 31 december 2010 the company’s issued share capital was 
gbp56563799 with 47500000 ordinary shares of no par value in 
issue the ordinary shares are listed on 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 ofﬁce 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 2011 the following shareholders either notiﬁed 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 is 
crossed or reached
 number of voting rights  nature of holding
international mineral  
resources bv  22819266 4804 direct 
jp morgan asset  
management uk limited 4189000 882 indirect
artemis investment  
management llp 2298406 484 direct
aviva plc  its subsidiaries 1583656 333 direct 
ignis asset management 1580500 333 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 beneﬁcial 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 ofﬁcer 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 deﬁned 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
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 non
executive 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 nonexecutive 
independent directors shall not be less than the number of non
independent 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  shaft sinkers report  accounts 2010
26
imr and associates of imr unless there is a bona ﬁde 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 ﬁve 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 ﬁrst offer to the company the chance to take up 
such opportunity and if the company does not conﬁrm 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 the only director appointed by imr is mr 
amre youness
lockin agreement
on 20 december 2010 the company arbuthnot and imr 
entered into a lockin agreement pursuant to which imr agreed 
not to dispose of its ordinary shares or any interest in or right to 
them before the ﬁrst anniversary of admission subject to various 
exceptions a copy of the lockin agreement can be obtained from 
the company secretary
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 ofﬁcer and chief financial ofﬁcer 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 proﬁle 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 senior 
independent nonexecutive director 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 21 to the 
annual ﬁnancial statements loans amounting to zar74 million  
gbp07 million previously made by the group’s subsidiaries shaft 
sinkers pty limited and capstone 615 pty limited to mmakau 
mining pty limited for the acquisition of shares in shaft sinkers 
pty limited and for the acquisition of shares in alpha resources 
limited a previously held investment of the group were both repaid 
during the 2010 ﬁnancial year loans of zar50 million gbp05 
million were made by shaft sinkers pty limited to imr south africa 
pty limited in the 2010 ﬁnancial year prior to admission by the 
company to trading on the london stock exchange these loans 
have subsequently been repaid in 2011 loans made by imr bv 
to capstone 615 pty limited  in 2007 for the acquisition of shares 
in shaft sinkers pty limited remained partially outstanding to the 
extent of zar47 million gbp05 million  at 31 december 2009 and 
zar50 million gbp05 million  at 31 december 2010 these loans 
were subsequently repaid to imr bv in 2011
employees
the group employed 6944 people as at the end of the 2010 
ﬁnancial year further information about employees is disclosed in the 
sustainability review on pages 21 and 22
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 speciﬁc published code or standard on 
payment practice suppliers in russia often require prepayment while 
the standard terms in south africa to which the group generally 
adheres are typically 30 days after monthend statement creditor 
days outstanding for the group in 2010 was 34 days compared to 33 
days in 2009 shaft sinkers report  accounts 2010
27
post balance sheet events
the directors are not aware of any matter or circumstance arising 
since the end of the ﬁnancial year not otherwise dealt with in 
the annual ﬁnancial statements which signiﬁcantly affects the 
ﬁnancial position at 31 december 2010 or the results of the group’s 
operations or cash ﬂows for the year then ended
financial instruments
details of the group’s ﬁnancial risk management objectives and 
policies are described in the internal controls and risk management 
report on pages 17 and 19 and in note 26 to the consolidated 
financial statements on pages 72 to 77
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 charitable donations made by the group during 
the year in south africa amounted to zar50 thousand  gbp5 
thousand 2009 – zar66 thousand gbp7 thousand 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 the group’s funding for these projects 
for the year amounted to zar22million  gbp02 million 2009 – 
zar177 million gbp05 million refer also to the sustainability 
review which can be found on pages 21 and 22 of this annual report
signiﬁcant agreements and other potential legal 
impediments
the following represent signiﬁcant 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

needed to operate the group’s projects are secured through 
competitive tendering in the open market the group in south 
africa is heavily dependent on scaw metals for the supply of 
winder ropes
 number of bank facilities which we believe could be replaced in 
the open market
 arrangements essential to the group’s business in south africa are 
collective agreements with trade unions representing the majority 
of the group’s employees most notably with the national union 
of mineworkers in south africa
signiﬁcant 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 signiﬁcant 
to the group’s business the group’s banking facilities with the 
standard bank of south africa limited amounting to zar250 million 
gbp244 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 ofﬁce or employment 
resulting from a takeover
auditors and disclosure of information to auditors
the group’s external auditors kpmg audit llc have indicated their 
willingness to continue in ofﬁce 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 conﬁrms 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
after making enquiries the directors have reasonable expectations 
that the company and the group have adequate resources to 
continue in operational existence for the foreseeable future for this 
reason they continue to adopt the going concern basis in preparing 
the ﬁnancial statements
the underlying assumptions and considerations in arriving at this 
conclusion include the group’s healthy net cash position at 31 
december 2010 the business model adopted by the group whereby 
clients are required to pay for the major project capital expenditures 
in advance and the policy adopted for several major projects being 
on a costplus basis the controls around cash management referred 
to under financial risk on page 19 and the facilities afforded to the 
group by its bankers as referred to in note 19 on page 67 add further 
support these assumptions shaft sinkers report  accounts 2010
28
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 combined code on 
corporate governance  2008 which is applicable to the company in 
2010 and the  uk corporate governance code the ‘code’ which 
was published in june 2010 by the financial reporting council and 
which will apply to the company from 1 january 2011 throughout 
the company’s reporting period ended 31 december 2010 the 
company has been in compliance with the provisions of the code 
with the exception of provision a31 which requires that ‘the 
chairman should on appointment meet the independence criteria set 
out in b11’ 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 the chairman of the group is also the chief 
executive ofﬁcer of imr bv a major shareholder in the company and 
is therefore not independent the board however is of the view that 
mr youness possesses the requisite leadership skills and experience 
in the mining industry and that the retention of his expertise is of 
signiﬁcant importance in the group’s continuing success and growth  
therefore the board considered it unnecessary to engage an external 
search consultancy to search for an independent chairman
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 beneﬁt of shareholders whilst 
having regard to the interests of other stakeholders at its regular 
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 ﬁnancial performance and its approach 
to risk management and corporate governance in addition it shall 
agree key objectives for the chief executive on an annual basis and 
will monitor performance against these the board evaluates critically 
on a regular basis its own performance that of its committees 
and individual directors the board also reviews management 
performance and succession planning and assesses whether the 
group has the necessary resources in place to meet its objectives 
the board has established a formal schedule of matters which are 
reserved for its attention these include 
 –  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 speciﬁc 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
 –  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
 –  approval of interim and ﬁnal 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 ﬁnal dividend 
 –  approval of any signiﬁcant 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 ﬁnancial derivatives shaft sinkers report  accounts 2010
29
 –  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
 – 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
 –  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 
 –  approval of resolutions and corresponding documentation to 
be put forward to shareholders at a general meeting 
 –  approval of all 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
 –  changes to the structure size and composition of the board 
following recommendations from the nomination committee 
 –  ensuring adequate succession planning for the board and 
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 sufﬁcient training 
resources for their development needs review of which shall be 
undertaken by the chairman on an individual director basis 
 –  terms 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 ofﬁce of directors at the end of their term of 
ofﬁce when they are due to be reelected by shareholders 
at the agm and otherwise as appropriate following 
recommendations by the nomination committee
 –  continuation in ofﬁce 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 
 – appointments to boards of subsidiaries
 – the appointment of the company secretary
 –  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 shaft sinkers report  accounts 2010
30
 –  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 
 –  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 
 – approval of signiﬁcant policies 
 –  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’  ofﬁcers’ liability insurance and 
indemniﬁcation 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 and 3
current directors were appointed on 19 november 2010 as follows

 director


 under the company’s articles of association directors retire by 
rotation and all directors are subject to election at the ﬁrst 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 accordingly the board recommends for reelection and 
the chairman conﬁrms that although no formal internal performance 
evaluation has as yet been carried out due to the recent composition 
of the board and listing of the company on the london stock 
exchange each of the current directors’ individual performance 
continues to be effective and to demonstrate commitment to the 
role mr amre youness mr stephen oke mr roger williams mr ian 
watson mr alon davidov mr robert schroder and mr christopher 
hall offer themselves for reelection
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 the board believes that each 
director seeking election is an effective member of the board and 
demonstrates commitment to their respective role further details 
and biographical information can be found on pages 2 and 3 of 
this annual report and in the notice of meeting accompanying this 
annual report and accounts
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 shaft sinkers report  accounts 2010
31
the following former directors were appointed and resigned as follows
  appointed resigned
talbot directors limited  6 october 2010 29 november 2010
martin peters  8 october 2010 7 december 2010
mr martin peters is appointed as company secretary and was appointed in this role on 6 october 2010 the board has conﬁrmed his 
appointment in this role greystone trust company limited was appointed as registered agent on 6 october 2010
directors’ interests
directors had no beneﬁcial interest in any of the ordinary shares of the company at the date of this report 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
directors’ attendance at board and committee meetings during 2010
during the 2010 ﬁnancial year there were two 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 2010    
amre youness no 22    
stephen oke yes 12  1  
roger williams yes 22  1  
ian watson yes 22  1  
alon davidov no 12    
robert schroder no 22    
christopher hall no 12    
 
as the company was only formed in october 2010 and admitted to 
trading in december 2010 no formal committee meetings were held 
in 2010 instead all signiﬁcant matters affecting the committees were 
dealt with at the two formal board meetings of the company on 19 
november 2010 and 17 december 2010 there were nonetheless 
indepth discussions by the various members of the committees with 
the board to ensure key governance matters were being properly 
addressed by the company
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 board papers are generally distributed 
ﬁve days in advance of meetings to enable directors to obtain a thorough 
understanding of the matters to be discussed the board meets at least 
quarterly to assess the performance of the group all directors have access 
to the advice and services of the company secretary who is responsible 
for advising the board on corporate governance matters and ensuring 
that board procedures and applicable laws and regulations are followed 
the company secretary 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 identiﬁed disclosed and a regular report is presented to the board 
for approval all directors declare their interests in other businesses 
on appointment to the board and a review of any conﬂicts 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 ofﬁcer or the company 
secretary to independent professional advice at the expense of 
the company the company also maintains an appropriate level of 
directors’ and ofﬁcers’ liability insurance  shaft sinkers report  accounts 2010
32
board evaluation
the board is recently formed and has not yet carried out a formal evaluation of its performance it has adopted a policy that it shall monitor on 
a regular basis the group’s performance against an agreed strategy and business plan in addition it shall agree key objectives for the chief 
executive ofﬁcer on an annual basis and will monitor performance against these
the board shall also evaluate critically on a regular basis commencing in 2011 its own performance that of its committees and individual directors
board committees
the board has established four principal committees as follows
 nominations committee remuneration committee audit committee safety committee
chaired by amre youness stephen oke roger williams ian watson
other members stephen oke roger williams stephen oke stephen oke 
 roger williams ian watson ian watson robert schroder 
audit committee
each member of the audit committee is considered to have extensive 
commercial and business leadership experience in particular roger 
williams has relevant and recent ﬁnancial 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 
the chairman of the board shall not be a member of the committee 
only members of the audit committee have the right to attend and 
vote at committee meetings however other individuals such as 
the chairman of the board chief executive ofﬁcer chief financial 
ofﬁcer other directors the head of internal audit and representatives 
from the ﬁnance 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
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
 systems
 procedures
 fraud and bribery and receive reports on noncompliance
 function
 and
 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 ofﬁce 
kpmg audit llc 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 satisﬁed with their effectiveness and independence accordingly the 
audit committee has not considered it necessary to require the ﬁrm to 
tender for its audit work the external auditors are required to rotate 
the audit partner responsible for the group and subsidiary audits every 
ﬁve years and the current lead partner has been in place for the ﬁrst 
time in this 2010 ﬁnancial 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 shaft sinkers report  accounts 2010
33
internal audit
the head of internal audit reports to the audit committee at each 
of its meetings of the principal subsidiary of the group and provides 
assurance independent of the assurance provided by the chief 
financial ofﬁcer that control activities which have been subject to 
audit by his team are operating effectively
the internal audit function follows an internal audit charter 
approved by the committee and has contributed towards the 
improvement of the group’s internal control systems the basis 
of the internal audit charter states that the head of internal audit 
is accountable to the audit committee and is to provide group 
management with the objective of providing positive assurance on 
the effectiveness of internal controls in mitigating inherent risks of 
audited processes or signiﬁcant projects or initiatives the internal 
audit function has a whistleblowing policy which enables employees 
to raise any concerns they may have about workplace fraud or 
mismanagement with local management on a conﬁdential basis the 
complaint is then investigated in the ﬁrst 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 rob schroder the committee will meet at least 
twice a year and will with effect from admission have 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
 requirements associated with health safety environment and 
training matters
 and training and monitoring sustainable development and
 the annual report
further details of the work of the safety committee are set out in the 
sustainability review on pages 21 and 22
nomination committee
the nominations committee shall consist of not less than three 
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 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 ofﬁcer 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

of the board and make recommendations to the board with 
regard to any changes
 other senior executives
 candidates to ﬁll board vacancies as and when they arise
 experience on the board and use open advertising or the services 
of external advisers to facilitate the search for new candidates 
when required

including the time commitment expected
 that relates to the composition of the board and
 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  shaft sinkers report  accounts 2010
34
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
 policy for the remuneration of the group’s chief executive 
ofﬁcer 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
 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
 remuneration policy
 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
 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
 incentive plans operated by the group are compatible with the 
group’s risk policies and systems
 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
 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
 group and have these in mind when setting remuneration policy 
for directors
 beneﬁts structures throughout the group
 chief executive ofﬁcer the chairman and the other directors
 including pensions are fulﬁlled
 criteria selecting appointing and setting the terms of reference 
for any remuneration consultants who advise the committee
 in other companies within the same sector but ensure that 
automatic increases are not implemented and consider relative 
performance judging the implications carefully
 levels of remuneration for the group 
 remuneration policy
 performance criteria
 compensation agreements
 remuneration to be offered to any new executive director and
 exgratia in nature are fully explained justiﬁed and subject to 
shareholder approval prior to payment
the section of the directors’ report entitled “directors’ report – 
remuneration” on pages 35 to 39 shall constitute a remuneration 
report a resolution to approve the remuneration report will be 
proposed at the forthcoming agm shaft sinkers report  accounts 2010
35
directors’ report – remuneration
introduction
the directors have pleasure in presenting their report on directors’ 
remuneration for the year ended 31 december 2010
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
 policy for the remuneration of the group’s chief executive ofﬁcer 
chairman the executive directors the company secretary 
and such other members of the executive management as it is 
designated to consider
 remuneration policy
 limits for any performance related pay schemes operated by the 
group and approve the total annual payments made under such 
schemes and
 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
 the company secretary acts as secretary to the committee the 
chief executive ofﬁcer 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 2011 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 
2010 ﬁnancial year kepler associates have no connection with the 
group other than as consultants
remuneration policy
the group’s remuneration policy is focussed upon providing a level 
of remuneration which attracts retains and motivates directors 
and senior executives of sufﬁcient 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 2011 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 shaft sinkers report  accounts 2010
36
components of executive directors’ remuneration
remuneration packages are structured to provide an appropriate 
balance between ﬁxed and variable elements the main components 
of the three executive directors’ remuneration and the percentage of 
each element as part of the total package are detailed below 
these charts have been calculated on amounts earned in 2010 and 
exclude the onceoff ipo bonus conditionally awarded for 2011 the 
ltip award value is the amount expensed based on a monte carlo 
simulation of the value in 2010 for 9 days of the year since its award 
in december 2010 the ceo was formerly employed in a different 
capacity by the group from 2011 his remuneration structure will 
fall in line with the other executive directors  in the future the ltip 
amount is likely to form a greater proportion of total remuneration
salaries
salaries are reviewed annually by the committee and take account of 
the relevant benchmark data pay quantum and structure
bonuses
for the year ended 31 december 2010 the performance measures 
for the annual bonus were based on a group ﬁnancial performance 
target and on personal performance the bonus arising from the 
performance target is up to 75 of annual salary for the chief 
operating ofﬁcer and 50 of annual salary for the chief financial 
ofﬁcer 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 in 2010 the targets were exceeded by 
more than 10 the bonus arising from personal performance is 
up to 15 of annual salary for both the chief operating ofﬁcer 
and chief financial ofﬁcer speciﬁc ﬁnancial targets have not been 
disclosed as they are considered to be commercially conﬁdential 
but they are deemed to be appropriately challenging the personal 
performance bonus is paid in december of the same year of 
measurement 2010 in this case while the ﬁnancial performance 
target bonus is deferred for 1 year and paid in december of the 
year following measurement 2011 in this case the chief executive 
ofﬁcer was not part of the bonus scheme up to 31 december 2010 
but shall from 1 january 2011 participate in these bonuses at the 
same rate as the chief operating ofﬁcer
provident fund
the group’s principal subsidiary shaft sinkers pty limited 
contributes towards a provident fund the fund is a deﬁned 
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 zar445 million gbp44 
million of which zar134 million gbp13 million will be paid to 
executive directors and senior management and zar311 million  
gbp32 million to other employees these employees will receive 
two cash payments the ﬁrst to be received six months following 
admission june 2011 and the second to be received 1 year 
following admission december 2011 conditional in each such case 
on continued employment by the group at that date the executive 
directors shall receive their ipo bonus as follows
 6 months following 1 year following 
 admission admission total 
 zar zar zar
alon davidov 1785308 1785308 3570616
robert schroder 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 satisﬁed beneﬁts in the ltip are 
not pensionable
the initial awards of 2250000 ordinary shares in the company were 
made as to 750000 to alon davidov750000 to robert schroder and 
750000 to christopher hall 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 which will be reserved for allocation to new executives who 
are given key roles in the group
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 ﬁve per cent of the company’s issued ordinary shares
salaries and fees
provident fund
benefits 
bonuses
value of ltip award
7
2
2 2
37
5
9 91
47
48
5
45
ceo coo cfo shaft sinkers report  accounts 2010
37
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
 eps in respect of the ﬁnancial year ending 31 december 2011 and 
for each of the ﬁnancial 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 ﬁnancial 
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 ﬁnancial 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 ﬁnancial 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 
ﬁnancial year then the eps performance criteria shall be deemed to 
have been achieved and awards shall be capable of vesting in full
share price in respect of the ﬁnancial year ending 31 december 2011 
and for each of the ﬁnancial 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 
ﬁnancial year ending 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 ﬁnancial 
year should the company only achieve between 1326 per cent per 
annum growth in its share price in the ﬁnancial 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 ﬁnancial 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 satisﬁed 
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 beneﬁt 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  474 375000 5251
2nd tranche 111 10 april 2013  839 375000 5251
3rd tranche 099 10 april 2014  1204 375000 5251
       shaft sinkers report  accounts 2010
38
long term incentive plan
 share awards granted during the year share awards settled during the year shares awards held at 31 
december 2010
alon davidov 750000  750000
robert schroder 750000  750000
christopher hall 750000  750000
directors’ remuneration for the period 1 january 2010 to 31 december 2010
the following table gives details of directors’ remuneration for the period 1 january to 31 december 2010
 
   salaries  provident beneﬁts bonuses value of  
   and fees fund   ltip award total 2010 total 2009 
   gbp gbp gbp gbp gbp gbp gbp
executive directors         
alon davidov   79383  1311   6890  87584  65436 
robert schroder   153553  20093  37668  193052  6890 411256  365892 
christopher hall   155397   14689  143972  6890  320948  274496 
   388333  20093  53668  337024  20670  819788 705824 
nonexecutive directors              
amre youness   25578     25578 9132 
stephen oke   12500     12500   
roger williams   10000     10000   
ian watson   10000     10000   
   58078         58078  9132 
total   446411  20093  53668  337024  20670  877866 714956 
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 ﬁxed 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
robert schroder 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
amre youness 20 december 2010 3 years
stephen oke 20 december 2010 3 years
roger williams 20 december 2010 3 years
ian watson 20 december 2010 3 years
the unexpired term is subject to reelection at the next agm of the 
company shaft sinkers report  accounts 2010
39
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 ofﬁce 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 the company repays the reasonable 
expenses that nonexecutive directors incur in carrying out their 
duties as directors
directors fees on an annual basis are as follows
nonexecutive director position annual fees payable 
  gbp
amre youness chairman 90000
stephen oke senior independent  
 nonexecutive director 75000
roger williams independent nonexecutive director 60000
ian watson independent nonexecutive director 60000
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 shaft sinkers report  accounts 2010
40
statement of directors’ responsibility for the  
annual report and accounts
the directors are responsible for preparing the annual report the 
directors report and the ﬁnancial statements in accordance with 
applicable law and regulations in addition the directors have elected 
to prepare the ﬁnancial statements in accordance with international 
financial reporting standards
the ﬁnancial statements are required to give a true and fair view 
of the state of affairs of the group and parent company and of the 
proﬁt or loss of the company for that period 
in preparing these ﬁnancial statements the directors are required to
 consistently

 international financial reporting standards and
 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 sufﬁcient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time its 
ﬁnancial 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 ﬁnancial information included on the company’s 
website legislation governing the preparation and dissemination of 
ﬁnancial statements may differ from one jurisdiction to another
the directors conﬁrm that to the best of our knowledge
 international financial reporting standards give a true and just 
view of the assets liabilities ﬁnancial position and proﬁt or loss of 
the company and
 and performance of the business and position of the company 
together with a description of the principal risks and uncertainties 
that the company faces
by order of the board
alon davidov
chief executive ofﬁcer
13 april 2011 shaft sinkers report  accounts 2010
41
independent auditors’ report
report of the independent auditors kpmg audit 
llc to the members of shaft sinkers holdings plc
we have audited the ﬁnancial statements of shaft sinkers holdings 
plc for the period ended 31 december 2010 which comprise the 
group statement of comprehensive income the group and parent 
company statements of financial position the group statement 
of cash flows and the group statement of changes in equity and 
the related notes  the ﬁnancial reporting framework that has been 
applied in their preparation is applicable law and international 
financial reporting standards ifrss
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 40 the directors are responsible for the preparation 
of ﬁnancial statements that give a true and fair view our 
responsibility is to audit and express an opinion on the ﬁnancial 
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 ﬁnancial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the ﬁnancial statements sufﬁcient to give reasonable 
assurance that the ﬁnancial 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 signiﬁcant accounting 
estimates made by the directors and the overall presentation of the 
ﬁnancial statements
opinion on the ﬁnancial statements
in our opinion the ﬁnancial statements
 company’s affairs as at 31 december 2010 and of the group’s 
proﬁt for the period then ended and
 kpmg audit llc
chartered accountants
heritage court
41 athol street
douglas
isle of man im99 1hn shaft sinkers report  accounts 2010
42
consolidated statement of comprehensive income 
for the year ended 31 december 2010 
   group
 note 2010 2009 
  gbp  gbp
revenue 2  183127629  147865077 
direct expenses  153944705  121316503 
gross proﬁt   29182924  26548574 
operating income  3757264  3425588 
operating expense  18764042  10151345 
contract provision and settlement 31 3819876  5479452 
proﬁt from operations 3 17996022  14343365 
share of loss on equity accounted investees 8   78555 
finance income 4 347778  99845 
finance costs 4 1634953  1903693 
proﬁt before income tax  16708847  12460962 
income tax 5 4075662  2507792 
proﬁt for the year  12633185  9953170 
other comprehensive income    
revaluation of property plant and equipment 5 459483  215770 
foreign currency translation  
differences for foreign operations  4650330  2494839 
income tax on revaluation of  
property plant and equipment 5 103780  26067 
other comprehensive income for the year  5006033  2684542 
total comprehensive income for the year  17639218  12637712 
 
proﬁt for the year attributable to  12633185 9953170
owners of the company  12663185 5374712
noncontrolling interests   4578458
total comprehensive income for the year attributable to  17639218 12637712
owners of the company  17639218 6824364
noncontrolling interests   5813348 
  pence pence
basic earnings per share 18 298 236 
diluted earnings per share 18 296 236
the directors consider all results derived from continuing activities
the accompanying notes to the consolidated annual ﬁnancial statements form an integral part of the consolidated annual ﬁnancial statements shaft sinkers report  accounts 2010
43
consolidated statement of ﬁnancial position 
at 31 december 2010 
   group
 note 2010 2009 
  gbp  gbp
assets   
noncurrent assets   64062857   56394802 
property plant and equipment 6  56499345   48559745 
goodwill 7  2663560   2306785 
other unlisted investment 10  893   774 
loan to related party 211     628502 
deferred taxation 11  4407011   2451762 
finance lease receivables 14  492048   714358 
cash and cash equivalents 151     1732876 
current assets   98072286   44213298 
inventories 12  8312403   7245556 
trade and other receivables 13  50129962   29085172 
finance lease receivables 14  1176329   341011 
loan to related party 212  489587    
loans to joint venture partners 91  59213   23776 
income taxation   2215994   848153 
cash and cash equivalents 152  35688798   6669630 
total assets   162135143   100608100 
equity and liabilities   
equity  46509881   21252214 
ordinary share capital 16  56563799   28295890 
retained earnings   30343814   7709500 
foreign currency translation reserve   7275524   2747890 
common control reserve 32  48965631   24861725 
share based payment reserve 29  20669    
revaluation reserve 17  1271706   466678 
equity attributable to owners of the company  46509881 14358233 
noncontrolling interest   6893981
noncurrent liabilities   42199470   25018948 
deferred taxation 11  2754152   780463 
deferred revenue 24  5908356   10596275 
interest bearing borrowings 191  19883255   11301856 
interest free advances from clients 201  13164644   1892899 
post retirement beneﬁt obligations 22  489063   447455 
current liabilities   73425792   54336938 
trade and other payables including derivatives 23  39423020   30600515 
deferred revenue 24  17510351   10418024 
income taxation   5130618   4330843 
interest bearing borrowings 192  4556896   3745292 
interest free advances from clients 202  6182700   4846416 
loan from related party 213  493039   395848 
bank overdraft 153  129168    
total equity and liabilities   162135143   100608100 
the consolidated annual ﬁnancial statements were approved by the board of directors on 13 april 2011 and were signed on its behalf by
amre youness nonexecutive chairman christopher hall chief financial ofﬁcer 
the accompanying notes to the consolidated annual ﬁnancial statements form an integral part of the consolidated annual ﬁnancial statements shaft sinkers report  accounts 2010
44
parent company
statement of ﬁnancial position 
at 31 december 2010
   company 
 note  2010 
   gbp
assets   
noncurrent assets   48966019 
investment in subsidiary 341   28295890 
loan to subsidiary 342   20670129 
current assets   8197373 
other receivables 35   59861 
related party receivable 36   38590 
cash and cash equivalents 37   8098922 
total assets   57163392 
equity and liabilities    
equity   56712061 
ordinary share capital 38   57261575 
retained earnings   570182 
share based payment reserve   20669 
current liabilities   
other payables 39  451331 
total equity and liabilities    57163392
the consolidated annual ﬁnancial statements were approved by the board of directors on 13 april 2011 and were signed on its behalf by
amre youness nonexecutive chairman christopher hall chief financial ofﬁcer 
the accompanying notes to the consolidated annual ﬁnancial statements form an integral part of these ﬁnancial statements shaft sinkers report  accounts 2010
45
   foreign 
 ordinary  currency common share based 
 share retained translation control payment revaluation noncontrolling  
 capital  earnings reserve reserve reserve reserve interest total 
 gbp gbp gbp gbp gbp gbp gbp gbp
balance at 1 january 2009  28295890 2334788  336295  24861725   280994  2228260 8614502 
proﬁt for the year   5374712       4578458 9953170 
 
other comprehensive income         
revaluation of property  
plant and equipment      116516  99254 215770 
deferred taxation on  
revaluation adjustment       14076  11991  26067 
effect of exchange differences  
on translation from functional  
to presentation currency   2411595    83244    2494839 
total comprehensive  
income for the year     5374712   2411595        185684  4665721  12637712
balance at 31 december 2009  28295890  7709500  2747890   24861725      466678  6893981  21252214 
         
issue of shares 30604111    24103906     6500205 
capitalised listing expenses 2336202       2336202 
share based payment transactions      20669    20669 
acquisition of noncontrolling interest
in capstone 615 pty limited  6567352    326629 6893981 
surplus on acquisition of noncontrolling  
interests realised on listing of shares  3433777       3433777 
proﬁt for the year  12633185        12633185 
         
other comprehensive income         
revaluation of property plant and equipment      459483   459483 
deferred taxation on revaluation adjustment      103780    103780 
effect of exchange differences on  
translation from functional to 
presentation currency    4527634    122696   4650330 
total comprehensive  
income for the year  12633185   4527634    478399   17639218 
balance at 31 december 2010  56563799  30343814  7275524  48965631  20669   1271706   46509881
consolidated statement of changes in equity   
for the year ended 31 december 2010  
foreign currency translation reserve “fctr”
the fctr comprises all foreign currency differences arising from the 
translation of the ﬁnancial statements of foreign operations
common control reserve
the common control reserve arises out of the group restructuring as 
more fully described in note 32
the accompanying notes to the consolidated annual ﬁnancial statements 
form an integral part of the consolidated annual ﬁnancial statements
share based payment reserve
the reserve comprises the fair value movement in respect of shares 
awarded in terms of the group’s long term share incentive scheme as 
per note 29
revaluation reserve
the revaluation reserve relates to the revaluation of land and 
buildings to market value shaft sinkers report  accounts 2010
46
consolidated statement of cash ﬂows   
for the year ended 31 december 2010  
   group
 note 2010 2009 
  gbp  gbp
cash generated by operating  
activities before working capital changes 311  17991757   23580767 
decreaseincrease in inventories  106895  3219036 
increase in trade and other receivables   11190092   8122875 
increase in trade and other payables   3920500   2792729 
increase in deferred revenue and advances from clients  9669216  5207161 
payment of retirement beneﬁt obligations  60304  34218 
cash generated by operations   20437972   20204528  
interest paid   1789704   1871664 
interest received   285443   99845 
income taxation paid 312 4917719  4921430
net cash inﬂow from operating activities   14015992   13511279 
cash ﬂows from investing activities    
property plant and equipment acquired  12093668 15142983 
improvements to land and buildings  37630  19114 
proceeds on disposal of plant and equipment  6577627  3093256 
amount paid by group to acquire minority interest   20670129   
decrease in unlisted investments    193 
increase in ﬁnance lease receivables  405694  948903 
proceeds from disposal of equity accounted investee  1763078   
advances to equity accounted investees    78554 
loans granted to related parties  1001772   
repayments received on related party loans  1277086   
net cash outﬂow from investing activities   24591102  13096105 
cash ﬂows from ﬁnancing activities   
funding received on interest bearing  
borrowings entered into by the group  22038470   
repayments made on interestbearing borrowings   11192402  1617203 
repayments made on ﬁnance lease obligations   4472881  1089955 
proceeds received on issuing of share capital 313  30604111  
listing expenses paid in cash    2336202  
loans advanced torepayment received from joint ventures   28647  342616 
cash inﬂowoutﬂow from ﬁnancing activities    34612449  2364542 
net increasedecrease in cash and cash equivalents  24037339  1949368 
cash and cash equivalents at beginning of year  8402506  9017245 
effect of exchange rate differences on cash and cash equivalents   3119785  1334629 
total cash and cash equivalents at end of year  35559630  8402506 
the accompanying notes to the consolidated annual ﬁnancial statements form an integral part of the consolidated annual ﬁnancial statements shaft sinkers report  accounts 2010
47
notes to the consolidated annual ﬁnancial statements 
for the year ended 31 december 2010  
11 reporting entity    
 the consolidated annual ﬁnancial statements of shaft sinkers holdings plc “the company” as at and for the year ended 31 december 2010 
comprise the company and its subsidiaries together referred to as “the group” and individually as the “group entities” and the group’s 
interest in associates and 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 ﬁnancial statements are prepared in accordance with international financial reporting standards ifrs and international 
financial reporting interpretations committee “ifric” interpretations as adopted by the european union 
the consolidated ﬁnancial statements have been prepared in accordance with the listing rules of the london stock exchange  
122 basis of measurement    
the consolidated ﬁnancial statements have been prepared on the historical cost basis except for the following assets and liabilities   
      derivative ﬁnancial instruments are measured at fair value   
      ﬁnancial instruments at fair value through proﬁt 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 1318  
123 basis of preparation
group restructuring    
for the purposes of the consolidated ﬁnancial statements the group restructuring 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 ﬁgures relate to capstone 
615 proprietary limited
going concern
 the consolidated ﬁnancial statements have been prepared on the going concern basis which assumes that the group will continue to be able 
to meet its liabilities as they fall due for the foreseeable future refer to directors’ report on page 24
presentation currency
the consolidated ﬁnancial statements are presented in british pounds and have been rounded to the nearest pound  
124 use of estimates and judgements     
 the preparation of ﬁnancial statements in conformity with ifrs 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 signiﬁcant areas of estimation uncertainty and critical judgements in applying accounting policies that have a 
signiﬁcant effect on the amounts recognised in the ﬁnancial statements is supplied in the following notes   
       note 62 valuation of land and buildings    
       note 65 useful lives of property plant and equipment    
       note 22 measurement of post retirement beneﬁt obligations   
       note 251 lease classiﬁcation    
       note 1318 valuation of ﬁnancial instruments    
       note 30 contingent liabilities       shaft sinkers report  accounts 2010
48
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010  
125 change in accounting policies    
ias 24  related party disclosures    
 the group has chosen early adoption and implementation of the requirements of the revised ias 24  related party disclosures which only 
becomes effective on 1 january 2011 the application of ias 24  related party disclosures has been applied retrospectively for all annual 
periods beginning on or after 1 january 2009    
all related party disclosures have been included in note 27    
13 signiﬁcant accounting policies    
 the accounting policies set out below have been consistently applied to all periods presented in these consolidated ﬁnancial statements 
except as explained in note 125 which addresses changes in accounting policies      
131 basis of consolidation    
subsidiaries     
 subsidiaries are entities controlled by the group the ﬁnancial statements of subsidiaries are included in the consolidated ﬁnancial 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  
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 the assets and liabilities 
acquired are recognised at the carrying amounts recognised previously in the group controlling shareholder’s consolidated ﬁnancial 
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 
equity accounted investments    
 associates are those entities in which the group has signiﬁcant inﬂuence but no control over the ﬁnancial and operating policies signiﬁcant 
inﬂuence is presumed to exist when the group holds between 20 and 50 percent of the voting power of another entity joint ventures are 
those entities over whose activities the group has joint control established by contractual agreement and requiring unanimous consent for 
strategic ﬁnancial and operating decisions 
 investments in associates and jointly controlled entities are accounted for using the equity method equity accounted investees and are 
recognised initially at cost the group’s investment includes goodwill identiﬁed on acquisition net of any accumulated impairment losses the 
consolidated ﬁnancial statements include the group’s share of the income and expenses and equity movements of equity accounted investees 
after adjustments to align the accounting policies with those of the group from the date that signiﬁcant inﬂuence or joint control commences 
until the date that signiﬁcant inﬂuence or joint control ceases when the group’s share of losses exceeds its interest in an equity accounted 
investee the carrying amount of that interest including any longterm investments is reduced to nil and the recognition of further losses is 
discontinued except to the extent that the group has an obligation or has made payments on behalf of the investee   
special purpose entities    
 the shaft sinkers employee share trust was a conduit for the company’s subsidiary rossal 126 proprietary limited to house the shares in 
terms of the group’s sharebased payment scheme the trustees of the special purpose entity were also directors and key management of 
the subsidiary the special purpose entity is considered to be controlled by the group and therefore the ﬁnancial statements are included 
in the consolidated ﬁnancial statements of the group the trust is in the process of being wound up as the shares were purchased by the 
subsidiary during the 2007 ﬁnancial year and the beneﬁciaries’ share and appreciation rights were settled the group does not have any direct 
shareholding in this entity 
transactions eliminated on consolidation    
 intragroup balances and transactions and any unrealised income and expenses arising from intragroup transactions are eliminated in 
preparing the consolidated ﬁnancial 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     shaft sinkers report  accounts 2010
49
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 proﬁt 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  
foreign operations    
 the assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition are translated to 
british pound at the exchange rates at the reporting date the income and expenses of foreign operations excluding foreign operations in 
hyperinﬂationary 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 reclassiﬁed to proﬁt 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 ﬁnancial assets    
 the group initially recognises loans and receivables and deposits on the date that they are originated all other ﬁnancial assets including assets 
designated at fair value through proﬁt 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 ﬁnancial asset when the contractual rights to the cash ﬂows from the asset expire or it transfers the rights to receive 
the contractual cash ﬂows on the ﬁnancial asset in a transaction in which substantially all risks and rewards of ownership of the ﬁnancial asset are 
transferred any interest in transferred ﬁnancial assets that is created or retained by the group is recognised as a separate asset or liability 
 financial assets and ﬁnancial liabilities are offset and the net amount presented in the statement of ﬁnancial 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 ﬁnancial assets ﬁnancial assets at fair value through proﬁt or loss and loans and receivables 
financial assets at fair value through proﬁt or loss    
 a ﬁnancial asset is classiﬁed at fair value through proﬁt or loss if it is classiﬁed as held for trading or is designated as such upon initial recognition 
financial assets are designated at fair value through proﬁt 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 proﬁt or loss as incurred financial assets at fair value through proﬁt or loss are measured at fair value and 
changes therein are recognised in proﬁt or loss  
loans and receivables    
 loans and receivables are ﬁnancial assets with ﬁxed 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 loan to shareholder loans to related parties and cash and cash equivalents  
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
50
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 ﬂows    
nonderivative ﬁnancial liabilities    
 the group initially recognises debt securities issued and subordinated liabilities on the date that they are originated all other ﬁnancial 
liabilities including liabilities designated at fair value through proﬁt 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 ﬁnancial liability when its contractual obligations are discharged or expire 
 the group has the following nonderivative ﬁnancial liabilities loans and borrowings bank overdrafts and trade and other payables 
such ﬁnancial liabilities are recognised initially at fair value plus any directly attributable transaction costs subsequent to initial recognition 
these ﬁnancial liabilities are measured at amortised cost using the effective interest method    
 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 ﬂows
derivative ﬁnancial instruments    
 the group holds derivative ﬁnancial instruments to hedge its interest rate risk exposure derivatives are recognised initially at fair value attributable 
transaction costs are recognised in proﬁt or loss as incurred subsequent to initial recognition derivatives are measured at fair value and changes in 
the fair value of derivative ﬁnancial instruments that do not qualify for hedge accounting are recognised in proﬁt or loss as they arise  
share capital    
ordinary shares    
 ordinary shares are classiﬁed 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 proﬁt 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 beneﬁts embodied within the part will ﬂow 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 proﬁt or loss as incurred 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
51
depreciation    
 depreciation is calculated over the depreciable amount which is the cost of an asset or other amount substituted for cost less its  
residual value 
 depreciation is recognised in proﬁt 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 reﬂects the expected pattern of consumption of the future economic beneﬁts 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 2010 2009
buildings 50 years 50 years
plant and equipment 120 years 320 years
furniture ﬁttings and ofﬁce equipment 26 years 26 years
motor vehicles 4 years 4 years
 depreciation methods useful lives and residual values are reviewed at each ﬁnancial yearend and adjusted if appropriate estimates in respect 
of certain items of plant and equipment were revised in 2010 – refer to note 6      
135 intangible assets    
goodwill    
 goodwill that arises upon the acquisition of subsidiaries is included in intangible assets goodwill represents the excess of the cost of the 
acquisition over the group’s interest in the recognised amount generally fair value of the identiﬁable assets and liabilities and contingent 
liabilities of the acquirer     
subsequent measurement    
 goodwill is measured at cost less accumulated impairment losses in respect of equity accounted investees the carrying amount of goodwill 
is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset including 
goodwill that forms part of the carrying amount of the equity accounted investee 
136 leased assets    
 leases in terms of which the group assumes substantially all the risks and rewards of ownership are classiﬁed as ﬁnance 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 ﬁnancial position
137 inventories    
 inventories are measured at the lower of cost and net realisable value the cost of inventories is based on the ﬁrstinﬁrstout principle 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 in the case of manufactured inventories and work in progress cost includes an appropriate share of production 
overheads based on normal operating capacity 
 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 identiﬁed 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 proﬁt recognised to date less progress billings and recognises losses cost includes all expenditure related 
directly to speciﬁc projects
 construction work in progress is presented as part of trade and other receivables in the statement of ﬁnancial position for all contracts in which 
costs incurred plus recognised proﬁts exceed progress billings if progress billings exceed costs incurred plus recognised proﬁts then the 
difference is presented as deferred revenue in the statement of ﬁnancial position
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
52
139 impairment    
financial assets    
 a ﬁnancial asset not measured at fair value through proﬁt or loss is assessed at each reporting date to determine whether there is any objective 
evidence that it is impaired a ﬁnancial 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 ﬂows of that asset that can be estimated reliably 
objective evidence that ﬁnancial 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 signiﬁcant or prolonged decline in its fair 
value below its cost is objective evidence of impairment
the group considers evidence of impairment for receivables at both speciﬁc asset and collective level all individually signiﬁcant receivables 
are assessed for speciﬁc impairment all individually signiﬁcant receivables found not to be speciﬁcally impaired are then collectively assessed 
for any impairment that has been incurred but not yet identiﬁed receivables that are not individually signiﬁcant 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 ﬁnancial asset measured at amortised cost is calculated as the difference between its carrying amount and 
the present value of the estimated future cash ﬂows discounted at the asset’s original effective interest rate losses are recognised in proﬁt 
or loss and reﬂected 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 proﬁt or loss 
nonﬁnancial assets    
 the carrying amount of the group’s nonﬁnancial 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 
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 ﬂows are discounted to their present value using a pretax discount rate that reﬂects the current market 
assessments of the time value of money and the risks speciﬁc to the asset for the purpose of impairment testing assets are grouped together 
into the smallest group of assets that generate cash inﬂows from continuing use that are largely independent of the cash inﬂows 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 proﬁt or loss impairment losses recognised in respect of cashgenerating units are allocated ﬁrst 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 a decrease in value is recognised in other comprehensive income
 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 beneﬁts    
shortterm employee beneﬁts    
 shortterm employee beneﬁt 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 proﬁtsharing 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 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
53
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 reﬂect 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 reﬂect such conditions and there is no trueup for differences between expected and actual outcomes
deﬁned contribution plan    
 a deﬁned contribution plan is postemployment plan under which an entity pays ﬁxed contributions into a separate legal entity and will have no 
legal or constructive obligation to pay further amounts obligations for contributions to deﬁned contribution pension plans are recognised as an 
employee beneﬁt expense in proﬁt 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 deﬁned 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 
deﬁned beneﬁt plan    
 a deﬁned beneﬁt plan is a postemployment plan other than a deﬁned contribution plan the group’s net obligation in respect of deﬁned 
beneﬁt plans is calculated separately for each plan by estimating the amount of future beneﬁt that employees have earned in return for their 
service in the current and prior periods that beneﬁt 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 qualiﬁed actuary using the projected unit method 
 the group recognises all actuarial gains and losses arising from deﬁned beneﬁt plans in other comprehensive income
1311 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 outﬂow of economic beneﬁts will be required to settle the obligation provisions are determined by discounting the 
expected future cash ﬂows at a pretax rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the 
liability the unwinding of the discount is recognised as ﬁnance cost
onerous contracts    
 a provision for onerous contracts is recognised when the expected beneﬁts 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    
1312 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 proﬁt 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     
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 proﬁt 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 proﬁt or loss    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
54
1313 lease payments    
 payments made under operating leases are recognised in proﬁt or loss on a straightline basis over the term of the lease   
 minimum lease payments made under ﬁnance leases are apportioned between the ﬁnance expense and the reduction of the outstanding liability 
the ﬁnance 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 speciﬁc asset is the subject of a 
lease if fulﬁlment of the arrangement is dependent on the use of that speciﬁc 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 ﬁnance 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 ﬁnance charge on the liability is recognised using the group’s 
incremental borrowing rate 
1314 finance income and costs     
 finance income comprises interest income of funds invested dividend income gains on the disposal of availableforsale ﬁnancial assets changes 
in fair value of ﬁnancial assets at fair value through proﬁt or loss and gains on hedging instruments that are recognised in proﬁt or loss interest 
income is recognised as it accrues using the effective interest method dividend income is recognised in proﬁt 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 ﬁnancial assets 
at fair value through proﬁt or loss impairment losses recognised on ﬁnancial assets and losses on hedging instruments that are recognised 
in proﬁt or loss borrowing costs that are not directly attributable to the acquisition construction or production of a qualifying asset are 
recognised in proﬁt or loss using the effective interest method foreign currency gains or losses are reported on a net basis 
1315 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 proﬁt or loss except to the extent that it relates to items recognised directly in equity or in other 
comprehensive income 
 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     
 deferred taxation is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for ﬁnancial 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 proﬁt and 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 in addition deferred taxation is 
not recognised for 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 proﬁts 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 beneﬁt will be realised 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
55
1316 earnings per share       
the group presents basic earnings per share data for its ordinary shares basic earnings per share is calculated by dividing the proﬁt 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 proﬁt 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 
1317 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 ﬁnancial 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    
1318 determination of fair values    
 a number of the group’s accounting policies and disclosures require the determination of fair value for both ﬁnancial and nonﬁnancial 
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 speciﬁc to that asset or 
liability 
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   
trade and other receivables    
 the fair value of trade and other receivables excluding construction work in progress is estimated as the present value of future cash ﬂows 
discounted at the market rate of interest at the reporting date the fair value is determined for disclosure purposes   
derivatives    
 the fair value of derivatives is based on their listed market price if available if a listed market price is not available then the fair value is 
estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the 
contract using a riskfree interest rate based on government bonds
 the fair value of interest rate swaps is based on broker quotes those quotes are tested for reasonableness by discounting estimated future 
cash ﬂows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date
 fair values reﬂect the credit risk of the instrument and include adjustments to take account of the credit risk of the group and counterparty 
when appropriate   
nonderivative ﬁnancial liabilities    
 fair value which is determined for disclosure purposes is calculated based on the present value of future principal and interest cash ﬂows 
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 ﬁnance 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 ﬁnancial assets at fair value through proﬁt or loss heldtomaturity investments and availableforsale ﬁnancial 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
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
56
share based payments    
the fair value of the group’s long term share incentive scheme is measured using the monte carlo option pricing 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   
1319 new standards and interpretations    
 a number of new standards amendments to standards and interpretations are not yet effective for the year ended 31 december 2010 and 
have not been applied in preparing these annual ﬁnancial statements none of these is expected to have a material effect on the annual 
ﬁnancial statements of the group
2 revenue
 2010 2009 
 gbp  gbp
contract revenue  
revenue from south african core operations  147331270  110058382 
revenue from rest of world core operations  35796359   37806695 
  183127629   147865077 
3 proﬁt from operations       
 is arrived at after chargingcrediting      
 2010 2009 
 gbp  gbp
auditors’ remuneration 1535478  276958 
   for audit services rendered 1128097   263221 
   for nonaudit services rendered 407381  13737 
impairment allowance on trade and other receivables  3740319  3076262 
   recognised  108375  3076262 
   reversed 3848694   
consulting fees paid 1034118  291567 
depreciation of property plant and equipment  note 61 7180928  4042381 
personnel costs 122823394   86192491 
employee beneﬁts  share based payments 20669   
impairment allowances on equity accounted investees  1021386  990179 
   recognised  741692  990179 
   reversed 1763078  
reversalraising of write down of inventory to net realisable value  58391  73726 
operating lease charges 990981  1255478 
proﬁtloss on foreign exchange differences 111714  1713043 
impairment loss on plant and equipment  1478473  2502829 
   recognised 54199  2502829 
   reversed 1532672   
proﬁt on disposal of plant and equipment 121457  386478 
directors’ emoluments 877865 714956 
provision raised for future retirement beneﬁt obligations relating to past employees  note 22 35413  28322 
          
          
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
57
31 contract provision and settlement      
the group was involved in a dispute with one of its clients towards the end of the 2009 ﬁnancial year due to the nonpayment by the client of 
invoices issued by the group for services rendered at the end of the 2009 ﬁnancial year this client owed the group gbp30 million for services 
rendered by the group and held assets of the group to the value of gbp25 million due to the fact that the dispute had turned into a legal 
matter management considered it prudent to raise an impairment provision against both the outstanding receivable as well as the plant and 
equipment of the group which the client had under its control due to the uncertainty around the recovery of these assets an impairment 
allowance of gbp55 million was therefore raised at 31 december 2009  
in april 2010 the group reached a settlement with the client mentioned above and in terms of the settlement the client agreed to pay a 
portion of its outstanding debts owing to the group as well as purchase a portion of the group’s plant and equipment that was held by the 
client the plant and equipment items that were not acquired by the client were returned to the group the settlement agreement removed 
the conditions that existed at the time on which the impairment allowance was raised and resulted in the reversal of the impairment allowances 
amounting to gbp38 million for the year ended 31 december 2010        
4 finance income and costs       
  2010 2009 
  gbp  gbp
interest on call and current account balances   16779  4851 
fair value adjustments to derivative instruments      76752 
sundry interest received   143747  18242 
interest on ﬁnance lease receivables   124916    
interest on loan to related party   62336    
finance income   347778   99845 
interest paid on ﬁnance lease obligations   419105   421680 
interest paid on interest bearing borrowings   943775   1139722 
fair value adjustments to derivative instruments   110269   
interest on loan from related party   32442   32029 
interest on bank overdraft   129362  310262 
finance costs   1634953   1903693 
net ﬁnance costs recognised in proﬁt or loss   1287175  1803848 
    
    
  
    
    
  
    
  
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
58
5 income tax        
  2010 2009 
  gbp  gbp
current tax expense   
– current year   2275122  7302153 
– prior year underover provision   1644364  411183 
deferred tax   
– current year   1666063  3826972 
– prior year over provision   1509887  556206 
total income tax  4075662 2507792
   
income tax recognised in other comprehensive income  
revaluation of property plant and equipment   
before tax   459483  215770 
tax expense   103780  26067 
net of tax   355703   189703 
reconciliation of effective tax rate   
current year’s charge as a percentage of proﬁt before tax   245  201  
foreign tax rate differential   245   201 
standard taxation rate   00   00 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
59
6 property plant and equipment
61 reconciliation of property plant and equipment 
 plant and    furniture ﬁttings 
 equipment land buildings and ofﬁce equipment motor vehicles total 
 gbp gbp gbp gbp gbp gbp
2010      
cost or valuation      
balance at beginning of year  53325066   2435164   3874310   2248666   667181   62550387 
additions  10433145      37630   415273   1245250   12131298 
revaluation     177680   281803         459483 
disposals  7363916         33910   1000018   8397844 
effect of exchange differences on  
translation from functional to  
presentation currency  8580966   376630   603303   389230   129839   10079968 
balance at end of year  64975261   2989474   4797046   3019259   1042252   76823292 
      
depreciation and impairment losses      
balance at beginning of year  11820918      317255   1590460   262009   13990642 
depreciation  6471243      81341   453961   174383   7180928 
reversal of impairment loss 1532672              1532672 
impairment loss  54199               54199 
disposals  547485         29956   46481   623922 
effect of exchange differences on  
translation from functional to  
presentation currency  850379     57908   292063  54422   1254772
balance at end of year  17116582      456504   2306528   444333   20323947
      
carrying value      
balance at beginning of year  41504148   2435164   3557055  658206  405172   48559745
additions  10433145      37630   415273   1245250   12131298 
revaluation     177680   281803         459483 
disposals  6816431         3954   953537   7773922 
depreciation for the year  6471243      81341   453961   174383   7180928 
reversal of impairment loss  1532672      1532672 
impairment loss  54199               54199 
effect of exchange differences on  
translation from functional to  
presentation currency  7730587  376630   545395   97167   75417  8825196 
balance at end of year  47858679  2989474   4340542  712731   597919   56499345
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
60
6 property plant and equipment continued 
61 reconciliation of property plant and equipment continued 
 plant and    furniture ﬁttings 
 equipment land buildings and ofﬁce equipment motor vehicles total 
 gbp gbp gbp gbp gbp gbp
2009      
cost or valuation      
balance at beginning of year  33564181   1887817   3347167   1612404   828331   41239900 
additions  14921562      19114   362222   813680   16116578 
revaluation     245346   29576         215770 
disposals  1981906         22068   1077718   3081692 
effect of exchange differences on  
translation from functional to  
presentation currency  6821229   302001   537605   296108   102888   8059831 
balance at end of year  53325066   2435164   3874310   2248666   667181   62550387 
      
depreciation and impairment losses      
balance at beginning of year  4657144      235279   1072920   179657   6145000 
depreciation  3471983      39865   321655   208878   4042381 
impairment loss  2502829               2502829 
disposals  203590         10649   160675   374914 
effect of exchange differences on  
translation from functional to 
 presentation currency  1392552      42111   206534   34149   1675346 
balance at end of year  11820918      317255   1590460   262009   13990642 
      
carrying value      
balance at beginning of year  28907037   1887817   3111888   539484   648674  35094900 
additions  14921562      19114   362222   813680   16116578 
revaluation     245346   29576         215770 
disposals  1778316         11419   917043   2706778 
depreciation for the year  3471983      39865   321655   208878   4042381 
impairment loss  2502829               2502829 
effect of exchange differences on  
translation from functional to 
presentation currency  5428677   302001   495494   89574   68739   6384485 
balance at end of year  41504148   2435164   3557055   658206   405172   48559745 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
61
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 ofﬁce buildings   
       portion 305 of the farm scheerpoort no 477 jq including residential buildings and improvements    
the group’s land and buildings are encumbered by a cession to the standard bank of south africa limited as security for its guarantee and 
banking facilities as set out in note 193 the previous cession to absa bank limited was released at the end of 2010 as part of the settlement 
of the group’s obligations to absa bank limited    
the group’s land and buildings were revalued by evaluations enhanced property appraisals proprietary limited an independent sworn 
appraiser on 31 december 2010 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 2010 is gbp6019641 2009 gbp5177199    
63 plant and equipment funded by instalment sale agreements       
plant and equipment with a carrying value of gbp789620 2009 gbp5072134 were funded by instalment sale agreements during the year 
by the group the instalment sale obligations are secured by these assets refer note 193    
64 impairment loss    
certain items of plant and equipment were assessed as having no further useful life during the current ﬁnancial year these items were 
impaired to the residual values resulting in an impairment loss of gbp54199 being recognised in other operating expenditure the 
impairments arose due to the assets reaching both the end of their useful and economic life spans    
during the 2009 ﬁnancial year the group was involved in litigation with one of its clients plant and equipment with a net book value of gbp25 
million were physically under the control of the former client when the litigation commenced and as a result of the uncertainties around 
the recovery of these items it was decided to impair these items resulting in an impairment loss of gbp25 million being recognised in the 
statement of comprehensive income    
during april 2010 a settlement agreement was signed between the group and its client whereby it was agreed that the plant and equipment 
that was previously impaired would either be sold to the client or be returned to the group since the events that originally gave rise to the 
impairment were removed it was deemed appropriate to reverse the impairment loss recognised in 2009 a reversal of impairment amounting 
to gbp15 million was therefore recognised in the statement of comprehensive income    
the impairment losses that were raised and reversed are all allocated to the south african segment of the group   
65 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 gbp09 million 2009 gbp10 million being processed the effect of the change in estimates on future 
periods is expected to be an increase of gbp09 million in depreciation    
the following key assumptions were used during the reassessment of useful lives    
  mechanical stress which refers to forces and loads applied to assets which lead to degradation over time
  electrical loading which refers to stresses such as continuous loading temporary overloading and exposure to short circuit fault current
  operational practices which refers to how frequently an asset is subject to operations
   environmental conditions including pollution salt acid rain humidity and extreme temperature that are prevalent and causes long term 
degradation and
  maintenance practices which refers to the frequency of routine inspection and maintenance that is performed on plant and equipment  
    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
62
7 goodwill     
goodwill arose on the acquisition of rossal 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 identiﬁable assets and liabilities of rossal 126 proprietary limited  
reconciliation of goodwill balances    
  2010 2009 
  gbp gbp
opening balance   2306785  1988652 
foreign currency translation reserve   356775  318133 
closing balance  2663560  2306785 
    
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 2010 on the goodwill balances of the group whereby the recoverable amount of the group’s 
underlying assets was based on its value in use which was determined using a discounted cash ﬂow model
the recoverable amount was compared to the carrying amount of goodwill and it was found that the recoverable amount signiﬁcantly 
exceeded the carrying amount      
key assumptions used in the discounted cash ﬂow projections    
   the budgeted and forecast earnings before interest taxation depreciation and amortisation for the period 2011 to 2015 are consistent 
with budgets and forecasts approved by the board of directors    
  a weighted average cost of capital of 1864 was used as the discount rate in determining the present value of future cash ﬂows 
8 equity accounted investees       
the group held a 25 investment in an associate company alpha resources limited “alpha resources” incorporated in jersey channel 
islands and its wholly owned subsidiary delta gold zimbabwe private limited “delta gold” incorporated in zimbabwe 
on 11 october 2010 the group entered into a sale of shares agreement with mmakau mining proprietary limited whereby the group 
disposed of its 25 interest and loan claims in alpha resources and delta gold for a purchase consideration of zar1 loan amounts owing to 
the group of gbp 18million zar20 million were repaid    
the purchase consideration and loan repayment was received on 27 october 2010  resulting in the derecognition of the group’s investment  
prior to the derecognition of the group’s investment in equity accounted investees the directors fully impaired the investment in the associate
during the 2010 ﬁnancial year an impairment allowance of gbp741692 2009 gbp990179 was raised due to the extent of the uncertainty 
regarding the recoverability of the loans granted by the group to its associate the group’s share of the associate’s loss for the year ended  
31 december 2009 amounted to gbp78555    
the disposal of the group’s shares in alpha resources resulted in a recovery of previously impaired claims against alpha resources and a 
reversal of impairment allowances amounting to gbp1763078 was recognised in the statement of comprehensive income in 2010 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
63
9 investment in and loans to joint venture companies     
91 loans to joint venture partners    
  2010 2009
  gbp gbp
rsvshaft sinkers international proprietary limited    592   791 
sdm mining contractors proprietary limited   58621   22985 
   59213   23776 
the above mentioned loans are unsecured bear no interest and are repayable on demand    
92 joint venture companies – consolidated results    
the group results include the following amounts relating to the group’s interest in joint venture companies
 rsvshaft sinkers international  sdm mining contractors 
 proprietary limited  proprietary limited 
 2010 2009 2010 2009
 gbp gbp gbp gbp
net expenses        2537  15315 
loss before taxation        2537  15315 
taxation        450   436 
net loss for the period        2087  14879 
 
cash and cash equivalents        69   25 
loans payable  26133   22632   175004  100822 
trade and other payables        70914  39517 
income taxation refundable        73230   41988 
interest in equity  26133   22632   172757   98326 
comprising of    
share capital  4   4   65   56 
share of accumulated losses  17617  17617   276367  274280 
foreign currency translation reserve  8520  5019   103545   175898 
  26133  22632   172757   98326 
 
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 2009 – 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    
10 other unlisted investment
  2010 2009
  gbp gbp
shares in rand mutual assurance company limited at fair value   893   774 
number of shares held by the group 469 2009 469   
    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
64
11 deferred taxation   
  2010 2009
  gbp gbp
balance at beginning of year   1671299  2739374 
current year movement   
– temporary differences recognised in proﬁt or loss   1666063   3826972 
– prior year overprovision recognised in proﬁt or loss   1509887   556207 
– temporary differences recognised in other comprehensive income   103780   23437 
foreign currency translation reserve   241516   50931 
balance at end of year   1652859   1671299 
deferred tax asset   4407011   2451762 
deferred tax liability   2754152  780463 
  1652859   1671299 
 
comprising   
– capital allowances   6659063  3467040 
– prepaid expenses   68974  41310 
– retention debtors   571325  158765 
– deferred revenue   4744220   2627919 
– provisions   2886237   3362156 
– loans and borrowings   13928  651661 
– unrealised foreign exchange losses   1289391    
– tax losses   6086    
– other   12359    
  1652859   1671299 
12 inventories  
  2010 2009
  gbp gbp
consumable stores and spare parts   7931315   7241194 
contract work in progress   381088   4362 
   8312403   7245556 
consumable stores include electrical wire oils  diesel paint and protective clothing    
during the 2010 ﬁnanical year inventories previously written down to net realisable value and amounting to gbp58391 were reversed 
during the 2009 ﬁnancial year the write down of inventories to net realisable value amounted to gbp73726
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
65
13 trade and other receivables
  2010 2009
  gbp gbp
trade receivables   46693312   27946880 
impairment allowance   197888  3762713 
other receivables   3634538   4901005 
   50129962   29085172 
the group has ceded its trade receivables to the standard bank of south africa limited as security for its guarantee and banking facilities 
refer note 193
at 31 december 2010 trade receivables include retentions of gbp1684388 2009 gbp 567019 relating to contracts in progress  
advances for which the related work has not yet started are presented as deferred revenue refer note 24 and amounted to gbp23418707 
2009 gbp21014299 
14 finance lease receivables   
  2010 2009
  gbp gbp
noncurrent ﬁnance lease receivables   492048   714358 
current ﬁnance lease receivables   1176329   341011 
   1668377   1055369 
141 leasing arrangements    
the group enters into ﬁnance 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 ﬁnance leases entered into is 5 years  
142 amounts receivable under ﬁnance leases   
 gross investment in ﬁnance  unearned present value of 
 lease receivable ﬁnance income minimum lease payments  
 gbp gbp gbp
31 december 2010   
due within one year  1371256   194927   1176329 
due between one and ﬁve years  640042   147994   492048 
  2011298   342921   1668377 
 
31 december 2009   
due within one year  462025   121014   341011 
due between one and ﬁve years  800901   86543   714358 
  1262926   207557   1055369 
   
the interest rate inherent in the leases is ﬁxed at the contract date for the entire lease term and is linked to the prime interest rate of south 
africa at 31 december 2010 the average effective interest rate contracted is approximately 109 2009 115   
finance lease receivable balances are secured over the motor vehicles leased    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
66
15 cash and cash equivalents 
151 cash and cash equivalents – noncurrent 
  2010 2009
  gbp gbp
restricted cash     1732876 
152 cash and cash equivalents – current
call accounts   28369293   118849 
current funds at bank   7287188   6518187 
cash on hand   32317   32594 
   35688798   6669630 
 
153       bank overdraft  129168   
total cash and cash equivalents  35559630   8402506
guarantees on advances received from clients previously restricted the use of certain cash ﬂows during july 2010 the restrictions on cash and 
cash equivalents were lifted and as a result all cash and cash equivalents are available for use at 31 december 2010  
the majority of current and call accounts are held at the standard bank of south africa limited and have been ceded to them as security for 
facilities provided to the group as described in note 193
16 ordinary share capital
for purposes of the consolidated ﬁnancial statements of the group the restructuring on 23 december 2010 whereby the holding company of 
capstone 615 proprietary limited being international mineral resources bv   received replacement shares in shaft sinkers holdings plc has been 
treated as a group restructuring common control accounting principles have been used to account for the restructuring in such a manner 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 as more fully described in note 32
  2010 2009
  gbp gbp
authorised share capital  
63333333 ordinary shares with no par value    
issued share capital    
47500000 ordinary shares with no par value 2009 nil ordinary shares with no par value 56563799  28295890 
reconciliation of share capital    
shares issued on incorporation  1    
shares issued on admission   58900000    
capitalised listing expenses  2336202   
shares reﬂected on consolidation for common control purposes    28295890
  56563799   28295890 
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
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
67
17 revaluation reserve
  2010 2009
  gbp gbp
balance at beginning of year   466670   280994 
acquisition of noncontrolling interest in capstone 615 proprietary limited  326629 
movement   355703   102440 
foreign currency translation reserve   122696   83244 
balance at end of year   1271706  466670 
the revaluation reserve relates to the revaluation of land and buildings net of deferred tax refer note 6 and note 11
18 earnings per share    
basic earnings per share    
the calculation of basic earnings per share is based on the proﬁt attributable to ordinary shareholders of gbp12633185  
2009 gbp 5374712 and a weighted average number of shares outstanding of 42387157 2009 22819266  
the weighted average number of ordinary shares was calculated as follows      
  2010 2009
  shares shares
shares deemed to be issued at 1 january  22819266  22819266 
effect of share issued to acquire minority interest  19438634 
effect of shares issued during the year to raise additional cash for the company  129257    
weighted average number of ordinary shares at the end of the year   42387157   22819266 
the issued shares at 1 january 2009 represents the shares issued to investors excluding shares issued to raise additional cash for the company 
as more fully described in note 32    
diluted earnings per share        
the calculation of diluted earnings per share is based on the proﬁt attributable to ordinary shareholders of gbp12633185 2009 gbp5374712 
and a weighted average number of shares outstanding of 42689576 2009 gbp22819266 
  2010 2009
  shares shares
weighted average number of ordinary shares at the end of the year  
used in the computation of basic earnings per share    42387157   22819266 
shares that may potentially be issued in terms of the ltip as described in note 29    302419    
weighted average number of ordinary shares at the end of the year    42689576   22819266 
19 interest bearing borrowings 
  2010 2009
  gbp gbp
191      noncurrent portion  
secured bank loans   19819897   8148588 
finance lease obligations   63358   3153268 
   19883255   11301856
192      current portion   
secured bank loans   4478502   2481082 
finance lease obligations   78394   1264210 
   4556896   3745292 
total interest bearing borrowings   24440151   15047148 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
68
19 interest bearing borrowings continued
193 terms and debt repayment    
the secured bank loans relate to loan facilities provided by the standard bank of south africa limited that are secured by the following 
 
–  a notarial general covering bond binding all of the moveable property and effects of shaft sinkers proprietary limited  
–  a covering mortgage bond over 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 that are subject to the terms and conditions detailed below 
–   a senior amortisation facility bearing interest at the 3 month johannesburg interbank agreed rate “jibar” plus 220 and is repayable 
quarterly in arrears from 31 december 2010    
–   a senior bullet facility bearing interest at the 3 month johannesburg interbank agreed rate “jibar” plus 250 and is repayable on  31 
december 2013    
–   a mezzanine bullet facility bearing interest at the 3 month johannesburg interbank agreed rate “jibar” plus 675 and is repayable on 
31 december 2014    
the loan facilities described above were entered into on 28 october 2010 and replaced the loan facilities that the group had with absa bank 
limited the interest bearing borrowings at absa bank limited bore interest at the johannesburg interbank agreed rate “jibar” plus 
175 and was repayable quarterly in arrears     
a portion of the plant and equipment purchased has been funded by instalment sale agreements the average term is 3 to 5 years for the 
year ended 31 december 2010 the average effective borrowing rate was 931 2009 1061 interest rates are linked to the prime interest 
rate in south africa the fair value of the lease obligation approximates the carrying amount of the underlying asset refer note 63   
 
194 analysis of ﬁnance lease obligations     
 minimum lease   present value of minimum 
 payments due finance charges lease payments due 
 gbp gbp gbp
31 december 2010   
due within one year  87472   9078   78394 
due between one and ﬁve years  65011   1653   63358 
  152483  10731   141752 
31 december 2009   
due within one year  1638088   373878   1264210 
due between one and ﬁve years  3622525   469257   3153268 
  5260613   843135   4417478 
20 interest free advances from clients
  2010 2009
  gbp gbp
201       interest free advances – noncurrent   
advances received from client   13164644   1892899 
   
202       interest free advances – current  
advances received from client   6182700   4846416 
total interest free advances   19347344   6739315 
the advances received are us dollar denominated contractual working capital advances received from a client the advances are repayable 
over periods ranging between 3 and 30 months    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
69
21 related party loans
  2010 2009
  gbp gbp
211       loan to related party – noncurrent   
mmakau mining proprietary limited      628502 
   
212       loan to related party  current   
international mineral resources sa proprietary limited   489587    
   
213       loan from related party  current   
international mineral resources bv   493039  395848 
the loan to mmakau mining proprietary limited who held a minority shareholding in the group prior to listing was settled during december 
2010 the loan was unsecured bore no interest and did not have any formal terms of repayment    
the loan to international mineral resources sa proprietary limited is unsecured bears interest at the south african prime lending rate minus 
200 and is repayable on demand international mineral resources sa proprietary limited is a subsidiary of international mineral resources bv 
the loan from international mineral resources bv is unsecured bears interest at the south african prime lending rate minus 200 and is 
repayable on demand international mineral resources bv is a major shareholder of the company
22 post retirement beneﬁt obligations   
  2010 2009
  gbp gbp
unfunded obligations   
present value of post retirement medical aid obligations   383311   357785 
present value of retirement fund obligations   105752   89670 
total post retirement beneﬁt obligation   489063   447455 
   
movements in the obligation   
opening balance   447455   391399 
obligation for future medical aid subsidies provided   29810   21584 
obligation for future pension fund subsidies provided   5603   6738 
medical aid subsidies paid   56697   25312 
pension fund subsidies paid   3607   8906 
foreign currency translation reserve   66499   61952 
closing obligation   489063   447455 
   
recognised in proﬁt and loss   
present value of future medical aid payments   29810   21584 
present value of future pension fund payments   5603   6738 
   35413   28322 
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 seven disability claimants these contributions are 
charged against the obligation raised the obligation is the estimated present value of contributions until retirement date  
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
70
22 post retirement beneﬁt obligations continued 
independent actuarial valuations in respect of these obligations were performed as at 31 december 2010 by r h welham 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 gbp46251 in subsidies to be contributed to these deﬁned contribution schemes in 2011 
  2010 valuation 2009 valuation
principal actuarial assumptions used in the last actuarial valuation performed as at 31 december  
longterm rate of investment return  90 90
inﬂation rate  60 60
future medical cost increases  80 80
future increases in employer contributions in respect of retirement fund  60 60
assumptions regarding future mortality are based on published statistics and mortality tables the current longevities underlying the values of 
the obligations in the deﬁned beneﬁt plans are as follows    
  
assumptions speciﬁcally relating to post retirement medical aid obligation  2010 valuation 2009 valuation
number of females   27   31 
number of males   38   40 
average age of females  746 719
average age of males  754 743
assumptions speciﬁcally in respect of retirement fund subsidies 
number of pensioners  7 7 
average age of disability pensioners  519 509
average monthly subsidiary gbp  141 112
 
assumed health care cost trend rates have a signiﬁcant effect on the amounts recognised in proﬁt or loss a one percentage change in 
assumed health care cost trend rates has the following effects on proﬁt or loss   
 
  1  decrease 1  increase 
  gbp gbp
effect on interest cost   26182  30149 
effect on post retirement beneﬁt obligation   5799   5243 
23 trade and other payables including derivatives 
  2010 2009
  gbp gbp
trade and other payables   28380397   22013823 
annual bonus accrual   5401587   4156636 
leave bonus accrual   508636   374304 
leave pay accrual   5132400   3825948 
interest rate derivative      179737 
accrual for decommissioning of winder      50067 
   39423020   30600515 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
71
24 deferred revenue 
  2010 2009
  gbp gbp
deferred revenue   
– noncurrent   5908356   10596275 
– current   17510351   10418024 
   23418707   21014299 
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   
25 commitments
  2010 2009
  gbp gbp
251       operating lease commitments
future operating lease charges relating to property  
– payable within 1 year   1387137   169133 
– payable between 1 and 5 years   2989849    
   4376986   169133 
future operating lease charges relating to plant and equipment  
– payable within 1 year      8904 
– payable between 1 and 5 years       
      8904 
future operating lease charges relating to ofﬁce equipment  
– payable within 1 year   31652   7183 
– payable between 1 and 5 years   52637    
   84289   7183 
future operating lease charges relating to motor vehicles  
– payable within 1 year   33863   20042 
– payable between 1 and 5 years       
   33863   20042 
total future operating lease charges   
– payable within 1 year   1452652   205262 
– payable between 1 and 5 years   3042486    
   4495138   205262 
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 indeﬁnitely unless terminated in terms of the agreements which typically require a three month notice period 
252 capital commitments
 
  2010 2009
  gbp gbp
capital expenditure authorised   
– not yet contracted for   3893979   11798096 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
72
26 financial instruments and risk management      
the board’s overall policy is to maintain a strong capital base as to maintain investor creditor and market conﬁdence having sufﬁcient and 
extensive capital in the form of plant and equipment is the key to success of the group 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    
–  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 ﬁnancial statements    
exposure to currency and credit risk arises in the normal course of the group’s business forward exchange contracts are used as a means of 
reducing exposure to ﬂuctuations in foreign exchange rates the group generally does not speculate in derivative instruments there were no 
forward exchange rate contracts at the reporting date    
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 management 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 reﬂect 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     
261 market risk    
market risk is the risk that changes in the market prices such as foreign exchange rates interest rates and equity prices will affect the group’s 
income or the value of its holdings of ﬁnancial 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 
respective functional currencies of the group primarily the south african rand zar us dollar usd russian rouble rur the united arab 
emirate dirham dirham the euro and the indian rupee inr    
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 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
73
26 financial instruments and risk management continued
261 market risk continued
the group’s exposure to foreign currency risk was as follows 
  zar zar 
  2010 2009
loan to related party  non current      7425375 
finance lease receivables   17070669   12468552 
trade and other receivables   320997650   271597282 
loan to related party  current   5009394    
loans to joint venture partners   605862   280896 
cash and cash equivalents   258686144   39320653 
deferred revenue   209417616  100999908 
interest bearing borrowings   250069181  179820069 
post retirement beneﬁt obligations   5004043  5323981 
trade and other payables   393663882  367689907 
loan from related party  current   5044726  4491721 
bank overdraft   1321637    
gross statement of ﬁnancial position exposure   262151366  327232828 
  usd usd 
  2010 2009
trade and other receivables   21559406   6115446 
cash and cash equivalents   3318175   6627251 
trade payables     3752 
interest free advances   29782766  10734928 
deferred revenue   4543577  2633475 
gross statement of ﬁnancial position exposure   9448762  629458 
  rur rur 
  2010 2009
trade and other receivables   212324901   203559408 
cash and cash equivalents   793302   33314605 
trade and other payables   22832171  24457196 
gross statement of ﬁnancial position exposure   190286032   212416817 
  dirham dirham 
  2010 2009
trade and other receivables   327413    
cash and cash equivalents   106551   899733 
trade and other payables   44540    
gross statement of ﬁnancial position exposure   389424   899733 
  euro euro 
  2010 2009
trade and other receivables   195682    
trade and other payables   3700    
gross statement of ﬁnancial position exposure   191982   
  rupee rupee 
  2010 2009
cash and cash equivalents   8057625    
gross statement of ﬁnancial position exposure   8057625    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
74
26 financial instruments and risk management continued
261 market risk continued
the following signiﬁcant exchange rates applied during the year 
 2010 2009
 average rate  reporting date average rate reporting date 
 per pa spot rate per pa spot rate
denomination in foreign currency    
zar 1  0088   0097  0076  0085 
usd 1  0647  0645   0639   0606 
rur 1  0021   0021   0020  0021 
dirham 1  0176   0176   0174  0171 
euro 1  0858   0860   0891  0891 
inr 1  0014  0014   0013  0013 
 
sensitivity analysis    
a 15 percent strengthening of the british pound against the south african rand us dollar the russian rouble the dirham the euro and the 
indian rupee would have resulted in changes in equity and proﬁt by the following amounts the analysis assumes all variables in particular 
interest rates remain constant the analysis is performed in the same manner for 2009    
  2010 2009
  gbp gbp
    south african rand  3822167  4172219 
    us dollar   914168  57218 
    russian rouble   602255   669113 
    dirham   2807   23078 
    euro   24777    
    indian rupee   17163    
   4089333  3537246 
a 15 percent weakening in the british pound would have had an opposite effect     
interest rate risk    
the group is exposed to interest rate risk as it borrows and invests excess funds at both ﬁxed and ﬂoating interest rates the risk is managed 
by maintaining an appropriate mixture between ﬁxed and ﬂoating rate borrowings and placings within the market exposure expectations the 
group also uses interest rate swaps where deemed necessary to hedge its exposure to ﬂoating interest rates    
interest rates used to discount estimated cash ﬂows where applicable are based on the bank prime lending rate at reporting date and were as follows 
variable interest rates   
    loans and borrowings are linked to the johannesburg interbank agreed rate “jibar” and ranges between jibar plus 22 and jibar 
plus 675 per annum 2009 jibar plus 175
   finance lease obligation are linked to the prime lending rate of south africa and had an average effective borrowing rate of 931 2009 1060
   loans to and from related parties bears interest at the prime lending rate of south africa less 200 per annum 2009 prime less 200 
per annum  
at the reporting date the interest rate proﬁle of the group‘s interest bearing ﬁnancial instruments were    
    
  2010 2009
  gbp gbp
variable rate instruments
financial assets   29747839   9457875 
financial liabilities   25062358  15442995 
   4685481  5985120 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
75
26 financial instruments and risk management continued
261 market risk continued
cash ﬂow sensitivity analysis    
a change of 100 basis points in interest rates at the reporting date would have increaseddecreased proﬁt 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 2009
    
  2010 2009
  gbp gbp
interest bearing bank loan   242984  106297 
finance lease obligations   1418  44175 
finance lease receivables   16684   10554 
related party loans   35  3958 
cash and cash equivalents   274608   84025 
   46855  59851 
262 exposure to credit risk       
credit risk is the risk of ﬁnancial loss to the group if a customer or counterparty to a ﬁnancial 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 inﬂuenced 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 which if these are to be exceeded prior approval from the board is required before 
submission of a tender 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 speciﬁc loss component that relates to individually signiﬁcant exposure and a collective loss component 
established of similar assets in respect of losses that have been incurred but not yet identiﬁed the collective loss allowance is determined 
based on historical data of payment statistics for similar ﬁnancial assets    
impairment losses    
the ageing and impairment losses thereon at the reporting date was    
 2010 2009
 gross trade  gross gross trade  gross 
 receivables impairment receivables impairment 
 gbp gbp gbp gbp
group    
not past due  40943713      16930451    
past due 0 – 30 days  3125768      4708421   710833 
past due 31 – 75 days        590044    
past 75 days  2623831   197888   5717964  3051880 
  46693312   197888   27946880   3762713 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
76
26 financial instruments and risk management continued
262 exposure to credit risk continued
reconciliation of impairment
  2010 2009
  gbp gbp
opening balance   3762713  294227 
impairments raised during the year   108375  3076262 
impairments reversed during the year   3848694    
foreign currency translation reserve   175494  392224 
closing balance   197888  3762713 
the impairments were raised on customers where payments were not regular andor where payments have been outstanding for more than 
120 days at the date of this report       
in 2009 gbp3076262 of the impairment loss allowance related to contracts which were terminated with a customer the amount arose due to 
a dispute on the settlement of the ﬁnal payment the conditions that resulted in the impairment loss being created in 2009 were resolved in 
2010 resulting in a reversal of impairment allowances amounting to offer gbp3848694      
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 group has ceded its trade receivables to the standard bank of south africa limited as security for its guarantee and banking facilities refer 
note 193 
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was    
 
 2010 2009
 gross trade  gross gross trade  gross 
 receivables impairment receivables impairment 
 gbp gbp gbp gbp
group    
south africa  34001642   197888   25691802   3762713 
rest of world  12691670      2255078    
  46693312   197888   27946880   3762713 
the maximum credit risk exposure by customer type at reporting date was within the mining industry 
loans and other recievables       
the group has provided funding to related parties and employees in the form of loans and ﬁnance 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 
ﬁnance lease receivables no allowances for impairment is therefore deemed necessary for these loans the maximum exposure of the group 
to credit risk relating to loans and other receiavbles are reﬂected by the carrying amount of these instruments and are summarised below
   2010 2009 
   gbp gbp
loan to related party – noncurrent    628502
loan to related party – current   489587 
finance lease receivables   1668377 1055369
loans to joint venture partners  59213 23776 
  2217177 1707647
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
77
26 financial instruments and risk management continued
263 liquidity risk    
liquidity risk is the risk that the group will not be able to meets its ﬁnancial obligations as they fall due the group’s approach to managing 
liquidity is to ensure as far as possible that it will always have sufﬁcient cash ﬂow 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 sufﬁcient cash on hand to meet unexpected operational expenses as they fall due including the servicing of 
ﬁnancial 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 to cover periods where high volumes of the operational liabilities are expected to fall due 
the following are the contractual maturities of ﬁnancial liabilities undiscounted including interest payments and excluding the impact of 
netting agreements    
 carrying amount contractual cash ﬂows less than 1 year 1 – 5 years more than 5 years 
 gbp gbp gbp gbp gbp
group     
2010     
nonderivative ﬁnancial instruments     
interest bearing borrowings –  
the standard bank of south africa limited  24298399   29616907   6601412   23015495    
interest bearing borrowings – ﬁnance lease obligations  141752   152484   87472   65012    
interest free advances received from clients  19347344   19347344   6182700   13164644    
trade and other payables  38969589   38969589   38969589       
derivative ﬁnancial liabilities     
interest rate hedge               
2009     
nonderivative ﬁnancial instruments     
interest bearing borrowings – absa bank limited  10629669   12757001   3352618   9404383    
interest bearing borrowings – ﬁnance lease obligations  4417478   5260613   1638088   3622525    
interest free advances received from clients  6739315   6739315   1892899   4846416    
trade and other payables  30413160   30413160   30413160       
derivative ﬁnancial liabilities     
interest rate hedge  187355   187355   187355       
fair values    
the directors consider the fair values of assets and liabilities to be the same as the carrying amounts reﬂected in the statement of ﬁnancial position 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
78
27 related parties    
271 identiﬁcation of related parties    
the subsidiaries associates 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 mining proprietary limited    
   thomas and pillner proprietary limited     
   shaft sinkers international proprietary limited    
   mining and engineering technical services proprietary limited     
   shaft sinkers rus llc registered in russia    
   shaft sinkers fze registered in dubai    
   capstone international fzco registered in dubai     
c  partially owned subsidiary indirectly held    
    70 2009 70 in shaft sinkers zimbabwe private limited      
d  joint venture companies indirectly held    
    50 2009 50 in rsvshaft sinkers international proprietary limited    
     486 2009 486 in sdm mining contractors proprietary limited by agreement with mmakau mining proprietary limited the 
group accounts for a 667 2009 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  
e  associate companies    
    nil 2009 25 in alpha resources limited and its wholly owned subsidiary delta gold zimbabwe private limited  
 dormant companies    
  companies deregistered during 2009      
the directors of the company and other members of the executive management are deﬁned as key management  
the directors of the company are listed in the directors’ report    
the directors’ emoluments are disclosed in note 3      
272 material party related transactions     
transactions with related parties    
related party loans – refer note 21    
interest paid to and received from related parties – refer note 4
during the 2010 ﬁnancial year the group disposed of its 25 interest and loan claims in alpha resources and delta gold to a previous 
minority shareholder in the capstone 615 proprietary limited group as described in note 8      
 
the above transactions were conducted on an arms length basis   
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
79
27 related parties continued
273 transactions with key management personnel    
the group provides noncash beneﬁts to key management by way of a longterm share incentive plan as described in note 29  
  2010 2009
  gbp gbp
key management compensation comprised  
shortterm employee beneﬁts   3731519   3478966 
28 retirement beneﬁt information    
the group has made provision for various retirement funds covering substantially all permanent employees    
there are two retirement funds all of which are deﬁned contributions funds governed by the pension funds act of 1956 of south africa 
the following contributions to funds were made during the year
  2010 2009
  gbp gbp
republic of south africa    
– sentinel mining industry retirement fund   4457484   3266314 
– mine employees pension fund    4759141   3202403 
   9216625   6468717 
29 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 satisﬁed 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 deﬁned in ifrs 2  share 
based payment    
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 ﬁnancial years ending 31 december 2011 to 31 december 2013 of at least 20 per cent per annum in the event that the growth 
in earnings is between 10 and 20 per cent per annum between 50 and 100 percent of the shares will vest on a straight line basis in the event 
that the growth in earnings is less than 10 percent none of the shares will vest    
in the event that the compounded growth per annum over the three year period is 20 percent per annum all of the shares will vest to the 
participants despite not having achieved the targeted growth rate in a particular year    
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
80
29 share based payment arrangements continued
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 cent per annum for each of the ﬁnancial years ending 31 december 2011 to 31 december 2013 the base price for the 
ﬁnancial year ending 31 december 2011 is the placing price at which the company’s shares were listed ie gbp124 per share in the event 
that the growth in share price is between 13 and 26 percent per annum between 50 and 100 percent 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 ﬁnancial year 
ending 31 december 2013 is 100 percent or more above the placing price despite not having achieved the 26 percent 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 percent of the share awards    
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
  2010 2009
  gbp gbp
employee beneﬁts    
expense arising on share based payment arrangements granted on 23 december 2010 20669   
none of the share rights have vested at 31 december 2010    
30 contingent liabilities
  2010 2009
  gbp gbp
301  south african contractual performance andor retention guarantees and payment  
  bonds held by contracted clients and service providers at the reporting date 5954033   2566511
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
81
31 notes to the cash ﬂow statement   
311 cash generated by operating activities before working capital changes 
  2010 2009
  gbp gbp
proﬁt from operations per statements of comprehensive income   17996022   14343365 
adjustments for noncash items included in    
depreciation of property plant and equipment and impairment   7180928   4042381 
proﬁt on disposal of property plant and equipment    121457  386478 
reversal of impairment loss on property plant and equipment   1532672    
impairment losses raised on plant and equipment   54199    
reversalraising of write down of inventory to net realisable value   58391   73726 
contract provision and settlement   3819876   5479452 
employee beneﬁts  share based payments    20669    
increase in retirement beneﬁt obligation   35413   28321 
reversal of impairment losses on equity accounted investees   1763078    
   17991757   23580767 
 
312 income taxation paid
  2010 2009
  gbp gbp
amount payable at the beginning of the year   3482690  1113963
prior year underover provision   1644364   411181 
amount charged to the statement of comprehensive income   2275122  7302153 
amount payable at the end of the year   2914624   3482690 
foreign currency translation reserve   430167  399185 
   4917719  4921430 
313 proceeds received on issuing of share capital
on 23 december 2010 the company was admitted for trading on the main list of the london stock exchange the proceeds received on 
issuing of share capital was as follows
  2010
  gbp
cash paid to acquire the noncontrolling interest in capstone 615 proprietary limited  20670129 
cash contribution made by noncontrolling shareholders towards listing expenses and ipo bonus expenses  3433777 
gross cash raised on market to acquire noncontrolling interest in capstone 615 proprietary limited  24103906 
cash raised by company for its own purposes    6500205 
     30604111 
32 acquisitions from entities under common control    
on 23 december 2010 the group acquired 100 of the share capital of capstone 615 proprietary limited the south african holding 
company of the shaft sinkers operations the acquisition resulted from the restructuring of the shaft sinkers holdings group which controls 
both the group and capstone 615 pty limited as a result of the acquisition the group following its listing on the london stock exchange is 
expected to expand its business globally
common control accounting principles have been used for the group restructuring in such a manner that the consolidated results of shaft sinkers 
holdings plc have been prepared on the basis that the current group had always existed for the purposes of disclosure of the common control 
transaction in the comparative period shaft sinkers holdings plc will be treated as whollyowned subsidiary of international mineral resources bv 
from 1 january 2009 at this date international mineral resources bv owned 54 of the capstone 615 proprietary limited group  
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
82
international mineral resources bv exchanges its 54 interest in capstone 615 proprietary limited for 22819266  shares in the shaft sinkers 
holdings group at 1 january 2009 this is deemed to be to total issued share capital of shaft sinkers holdings for comparative purposes at a 
price of gbp 124 per share being the listing price
the noncontrolling interest reﬂected on 1 january 2009 relates to the interests of the noncontrolling shareholders in the reserves of capstone 
615 proprietary limited at 1 january 2009
on 23 december 2010 the date of listing the group acquired the remaining 46 interest in the capstone 615 proprietary limited group and 
settles this liability from the proceeds of the listing the group owns 100 of the capstone 615 proprietary limited group from 23 december 
2010 the noncontrolling interest reﬂected in the consolidated statement of changes in equity is transferred to the common central reserve to 
reﬂect the new 100 interest in capstone 615 proprietary limited as this is the date of the actual transaction the reserve now reﬂects the full 
impact of the group restructuring transactions the equity per category as reﬂected in the consolidated statement of changes in equity at 31 
december 2010 reﬂect the true accounting position at that date
the transaction gave rise to a common control reserve as follows 
  2010 2009
  gbp gbp
share capital of capstone 615 pty limited at date of acquisition   144   144 
share premium of capstone 615 pty limited at date of acquisition   3434021   3434021 
   3434165   3434165 
value of shares issued to acquire imr bv interest in capstone 615 pty limited   28295890  28295890 
value of shares issued to acquire noncontrolling interest in capstone 615 pty limited 24103906 
difference taken to common control reserve   48965631  24861725 
33 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
the following describes the group’s operating segments       
  south africa  contract services provided to clients within the republic of south africa    
  rest of world  contract services provided to clients outside of the borders of the republic of south africa    
the group’s foreign revenues are mostly derived from contract services provided in russia and india with the revenues generated from russia 
making up the majority of foreign revenues      
information regarding the results of each reportable segment is included below performance is measured based on segment proﬁt before 
income tax as described below performance is measured based on segment proﬁt 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 proﬁt 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 
other corporate activities comprise activities that do not by deﬁnition form part of the operating segments as well as the head ofﬁce activities 
which could not be assigned to an individual segment inter segment transactions are conducted on an arm’s length basis   
 
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
83
33 segmental reporting continued
     
 south africa rest of world other corporate activities total
 2010 2009 2010 2009 2010 2009 2010 2009 
 gbp gbp gbp gbp gbp gbp gbp gbp
external revenues  147490967   110058382   35636662   37806695           183127629  147865077
gross proﬁt 14065939 13050135 15116985 13498439   29182924 26548574 
depreciation and  
amortisation  6775998  3853342   323589  149174   81341  39865  7180928   4042381 
finance income   280720  99845   66787      271     347778  99845 
finance expense  1631356  1893542   3597  10151           1634953   1903693 
reportable segment  
proﬁt before income tax  11876573  12779119   13722202   9306394   8889928  9624551  16708847   12460962 
reportable segment  
assets  105903169  68322257   41431453  23333787   14800522  8952056  162135143   100608100 
capital expenditure  9997034 10753690   2096635  5343774   37630  19114  12131299   16116578 
reportable segment  
liabilities 70536677  35243972   16606184   25781274   28482401   18330640  115625262   79355886 
     
     
     
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010  
34 investment in subsidiary company
341 investment in subsidiary
   2010 
   gbp
investment in shaft sinkers management company limited    28295890 
the company owns the entire issued share capital of shaft sinkers management company limited     
342 loan to subsidiary company
   2010 
   gbp
shaft sinkers management company limited    20670129 
the loan is unsecured bears no interest and has no formal terms of repayment       
35 other receivables company          
   2010 
   gbp
vat recoverable   59861 
the loan is unsecured leaves no interest and is repayable on demand
36 related party receivable           
   2010 
   gbp
shaft sinkers proprietary limited   38590  shaft sinkers report  accounts 2010
84
37 cash and cash equivalents company         
   2010 
   gbp
current funds at bank    8098922 
38 ordinary share capital company
   2010 
   gbp
authorised share capital 
63333333 ordinary shares with no par value
issued share capital
47500000 oridnary shares with no par value   58900001
reconciliation of share capital
shares issues on incorporation   1
shares issued on admission   58900001
capitalised listing expenses   1638426
   57261575
39 other payables
   2010 
   gbp
accruals    297856 
other payables   153475
   451331
notes to the consolidated annual ﬁnancial statements 
continued 
for the year ended 31 december 2010   shaft sinkers report  accounts 2010
85
shareholder information 
general information
shaft sinkers holdings plc’s shares are quoted on the london stock 
exchange  copies of the group’s annual report and accounts 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 24 no dividend has been 
declared at the date of this report
registrars and transfer ofﬁce
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 
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 ofﬁce
analysis of ordinary shareholders
as at 31 march 2011
 number of holders  number of shares
11000 shares 22  0 15631 
10015000 139  1 439032 
5001  50000 124  4 1712565 
50001  100000 9  1 665893 
100001  500000 18  9 4350229 
500001 and over 15  85 40316650 
 327   47500000  shaft sinkers report  accounts 2010
86
corporate information
registered ofﬁce
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 ja1
website wwwshaftsinkerscoza
telephone 44 01624 624100
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
arbuthnot securities limited
arbuthnot house
20 ropemaker street
london
ec2y 9ar
legal advisors
jones day
21 tudor street
london 
ec4y 0dj
auditors
kpmg audit llc
heritage court
41 athol street
douglas
isle of man
im99 1hn
registrars
computershare investor services iom limited
international house
castle hill
victoria road
isle of man
im2 4rb
public relations
m communications
1 ropemaker street 34th floor
london
ec2y 9aw shaft sinkers report  accounts 2010
87
financial calendar for 2011
the following are provisional dates
annual general meeting and interim management statement wednesday 8 june 2011
interim results and interim dividend declaration tuesday 30 august 2011
exdividend date wednesday 7 september 2011
dividend record date friday 9 september 2011
interim dividend payment date friday 7 october 2011
interim management statement tuesday 15 november 2011
annual information update tuesday 20 december 2011 shaft sinkers report  accounts 2010
88
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 8 june 2011 to consider and if thought ﬁt pass the following resolutions resolutions 1 to 11 inclusive as ordinary resolutions and 
resolution 12 as a special resolution
ordinary business
1  to receive and adopt the audited annual accounts for the ﬁnancial year ended 31 december 2010 together with the reports of the 
directors and the auditors on those accounts
2  to approve the directors’ remuneration report set out on pages 35 to 39 of the annual report  accounts for the ﬁnancial year ended 31 
december 2010 
3 to elect alon davidov as a director of the company
4 to elect robert schroder as a director of the company
5 to elect christopher hall as a director of the company
6 to elect amre youness as a director of the company
7 to elect stephen oke as a director of the company
8 to elect ian watson as a director of the company
9 to elect roger williams as a director of the company
10 to reappoint kpmg audit llc as auditors of the company to hold ofﬁce until the conclusion of the next annual general meeting
11 to authorise the directors to determine kpmg audit llc’s remuneration as auditors of the company
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 2012 or if sooner the end of the company’s annual general meeting in 2012 
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 21 april 2011 
by order of the board
martin peters
secretary
21 april 2011
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 1ja
  shaft sinkers report  accounts 2010
89
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 ofﬁces 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 inforcomputersharecouk or 
by fax to 44 0870 873 5851 by 11am on monday 6 june 2011 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 certiﬁed 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 monday 6 june 2011 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
documents on display
7   copies of each director’s service contract or letter of appointment will be available for inspection at the registered ofﬁce 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 ofﬁces 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 13 april 2011 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  
13 april 2011 is 47500000 shaft sinkers report  accounts 2010
90
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 conﬁdential 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
explanatory notes to the notice of annual general meeting
the notes below give an explanation of the resolutions
resolutions 1 to 11 are proposed as ordinary resolutions resolution 12 is proposed as a special resolution 
resolution 1 annual report and accounts 2010
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 2010
resolution 2 remuneration report
the purpose of this resolution is to approve the directors’ remuneration report set out on pages 35 to 39 of the annual report  accounts
resolutions 3 to 9 directors
the company’s articles of association require all new directors to submit themselves for election by investors in their ﬁrst year following 
appointment as the forthcoming annual general meeting will be the ﬁrst since admission the entire board of directors will submit 
themselves for election by investors in future years in accordance with the company’s articles of association all directors will have to 
submit themselves for reelection at least every three years if they wish to continue serving and are considered by the board to be eligible 
biographical details of the directors presenting themselves for election can be found on pages 2 and 3 of the annual report
resolutions 10 and 11 auditors
the purpose of these resolutions is to reappoint kpmg audit llc as the company’s auditors and authorise the board to ﬁx their 
remuneration
resolution 12 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 2012 or if sooner the end of the company’s annual general meeting in 
2012 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 report  accounts 2010
91
form of proxy – shaft sinkers holdings plc agm 2011
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 info
computersharecoje or by fax to 44 0 870 873 5851 no later than 1100 am on 6 june 2011 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 8 june 2011 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 ﬁnancial year ended  
 31 december 2010   
2 to approve the directors’ remuneration report for the ﬁnancial year ended 31 december 2010    
3 to elect alon davidov as a director of the company   
4 to elect robert schroder as a director of the company   
5 to elect christopher hall as a director of the company   
6 to elect amre youness as a director of the company   
7 to elect stephen oke as a director of the company   
8 to elect ian watson as a director of the company   
9 to elect roger williams as a director of the company   
10 to reappoint kpmg audit llc as auditors of the company to hold ofﬁce until the conclusion  
 of the next annual general meeting 
11 to authorise the directors to determine kpmg audit llc’s remuneration as auditors  
 of the company   
special business   
12 authority to allot ordinary shares equal to 5 per cent of the number of ordinary shares  
 in issue as at 21 april 2011  
signed at                          on  2011
 
signatures  
assisted by me where applicable  
full names of signatory if signing in a representative capacity please use block capital letters   94
shaft
sinkers
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 ja1
telephone 44 01624 624100
email infoshaftsinkerscoza
wwwshaftsinkerscoza


Summary:
 shaft sinkers report  accounts 2010
6
chief executive ofﬁcer’s statement
i am pleased to report that the 
group has exceeded our plan 
for the 2010 financial year 
turnover has grown by 24 
with profit from operations 
increasing by 25 
despite some oneoff items the group’s 
net proﬁt after tax  for the year increased by 
approximately 27 this year marked a new 
chapter in shaft sinkers’ history when on  
23 december the group was admitted to trading 
on to the main board of the london stock 
exchange in line with management’s strategy 
to expand internationally and acquire a basis for 
funding the future growth of the business this 
listing is seen as a crucial step forward 
south african operations
south african operations beneﬁted from 
additional work and oneoff items the group’s 
new contract at styldrift is an important step in 
diversifying the groups’ client base with anglo 
platinum and royal bafokeng nation becoming 
important new clients through a joint venture 
that owns the styldrift mine lonmin’s hossy and 
saffy shafts despite the predicted termination 
of labour supply contracts extended our scope 
of work and we achieved strong performance 
from our operations at those shafts contributing 
to the group’s stronger results our contracts at 
anglogold ashanti’s moab shaft have performed 
well and will be extended in 2011 our project 
at impala’s 16 shaft continues to be a low margin 
contract and some technical difﬁculties were 
encountered there in contrast our project at 
impala’s 17 shaft which is one of the largest 
shaft systems being sunk anywhere in the world 
is progressing on track again despite some 
difﬁculties with winders and ground conditions 
encountered in early 2010 an important contract 
was signed with hernic ferrochrome at their 
bokfontein mine this cost plus contract for two 
decline shafts includes a toll mining element 
the project will grow signiﬁcantly with the future 
expansion of the mine in line with the group’s 
policy for toll mining contractsthe risks of cost 
escalation will be carefully controlled 
the oneoff items that improved results in 2010 
culminated after management took actions to 
redress its contract with kalagadi manganese in 
2009 in 2010 we reached an amicable settlement 
for the recovery of outstanding amounts with 
kalagadi manganese  delta gold zimbabwe 
a whollyowned subsidiary of alpha resources 
which owns the eureka gold mine in zimbabwe 
and which has been shaft sinkers’ only investment 
in a mining operation to the extent of 25 had 
been struggling for several years since the political 
and ﬁnancial situation deteriorated in zimbabwe 
the situation caused the eureka gold mine to 
suffer ﬁnancial losses and was a signiﬁcant drain 
on management time and focus we had resolved 
to divest from eureka in 2009 and achieved in 
the second half of 2010 we have recouped some 
gbp18 million zar20 million of our investment 
more importantly shaft sinkers can now focus on 
its core skill of being a shaft sinking contractor
we have also commenced the preparatory work 
presink for a major shaft complex for an existing 
customer negotiations are still under way to 
secure the main sink for the main and vent shaft
international operations 
despite a stronger rand against the us dollar 
and sterling and approximately half of the 
group’s margin being generated in us dollars 
the groups’ international business showed a 
strong performance eurochem our ﬂagship 
russian contract is a technically challenging 
assignment to sink an 1100m shaft into a 
potash deposit in kotelnikovo 300km from 
volgograd the project team has faced various 
challenges ranging from technical and logistical 
to administrative the project team together 
with management has learned some invaluable 
lessons from these challenges which will 
contribute to the future progress of shaft sinkers 
in this and similar territories towards the end of  7
2010 the project overcame some technical as well 
as administrative hurdles and sinking operations 
resumed the project is facing a delay and we 
are constantly seeking ways to proactively resolve 
issues as they arise and shorten the delays in 
2011 in my new role as chief executive ofﬁcer 
i will be focusing on this project and building 
an even stronger relationship with the client 
eurochem is a key strategic client for us in russia 
and through our strong relationship we should be 
wellplaced to secure long term prospects on the 
current project as well as others 
in india our teesta project has progressed well 
we have almost completed the ﬁrst surge tunnel 
and work has advanced on the second tunnel 
our mining engineering and technical services 
mets division continues to outperform targets 
by signing more engineering procurement 
construction and consulting contracts the outlook 
is positive for shaft sinkers and the industry as a 
whole more projects are being prepared for and 
are drawing closer to commencement
in terms of safety the company is working hard 
to maintain high standards culminating with shaft 
sinkers achieving 3 million fatality free shifts for the 
ﬁrst time in its history in november we experienced 
a fatality at our styldrift project and lost one of our 
colleagues mr mojalefa lekoro and recently in 
april 2011 lost mr sansao macamo at our karee 3 
operations these are stark reminders of the perils 
of our business and the importance of maintaining 
high standards and constant vigilance at every level 
of the organisation
one of the main challenges facing the group is 
skills shortage this is an industrywide problem 
shaft sinkers has developed inhouse learner
ship and training programs in order to assuage 
this shortage we will also be looking to ﬁnd 
appropriate skills in other territories we are 
actively searching for skills in the territories we 
are operating in especially russia furthermore 
we review the level of earnings of our key people 
by comparison to industry averages and we look 
at incentives that will keep our business ahead of 
the industry so that we can attract and retain the 
skills the business needs
for the year ahead the group will experience 
a period of initially settling into the new 
environment of a listed entity and at the same 
time we expect to build on its strengths 
namely people safety and experience to start 
growing the business organically in 2011 the 
strategic focus will be on further improving the 
performances of the south african operations 
and continuing the expansion of shaft sinkers 
internationally it is our intention to strategically 
position the company to undertake new projects 
and as we stated in our listing prospectus we 
will use some of the listing proceeds to refurbish 
key plant which is in our rand yard winders are 
long lead items which can take up to 24 months 
to manufacture shaft sinkers has over the years 
accumulated a signiﬁcant inventory of winders 
which we will selectively recondition in order to 
be strategically well positioned for taking on new 
sinking contracts signiﬁcant ground work has 
been laid both in south africa and beyond for the 
award of new contracts  
i would like to take this opportunity to thank 
our former shareholders mmakau mining and 
holgoun for their past contribution to the 
development of shaft sinkers as an  
international company  
in 2011 shaft sinkers turned ﬁfty this is a 
remarkable achievement and a testament to the 
quality of the company  going forward as a public 
and international company the main challenge 
is to preserve the quality and standards that 
characterised the company for the last ﬁfty years 
whilst we pursue new opportunities in south africa 
and abroad combining our unique south african 
skills with the rigour and transparency of being a 
uk listed company will assist us to deliver value to 
our investors employees and stake holders
alon davidov
chief executive ofﬁcer