shaft
sinkers
shaft sinkers
annual report  accounts 2011
shaft
sinkers
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 ja1
telephone 44 01624 624100
email infoshaftsinkerscoza
wwwshaftsinkerscoza group overview
highlights 1
boa rd of dire ct ors 2
ch a irman’s s tat em ent 4
chie f ex ec ut ive off ic er’s s tat em ent 6
bus in ess review
operat ional r eview 9
fi nanc ial r eview 11
int ernal co nt rols and 
risk mana gem ent 17
2011 k pis 21
su sta ina bil ity r eview and  
corpor at e so c ial in vestm ent 23
d irect ors report dire ct ors’ report – b us in ess r eview 24
dire ct ors’ report – corpor at e 
governance 28
dire ct ors’ report – r em un erat ion  35
s tat em ent of d irect ors’  
res pons ibil ity f or t he ann ual  
report and acc ounts 40
f inanc ial stat em ents ind epend ent a ud it ors’ report 41
co ns ol idat ed inc om e stat em ent 42
co ns ol idat ed stat em ent of 
c om prehens ive inc om e 43
co ns ol idat ed stat em ent  
of f inanc ial pos it ion 44
co ns ol idat ed stat em ent  
of c han ges in eq uity 45
co ns ol idat ed stat em ent  
of cas h fl ows 46
no t es t o t he c ons ol idat ed  
ann ual f inanc ial stat em ents  47
inf ormat ion 
sh a rehold er inf ormat ion 85
corpor at e inf ormat ion 86
fi nanc ial cal enda r f or 2012 87
no t ic e of a nn ual g en eral mee t in g 88
proxy f orm f or a nn ual  
gen eral mee t in g 91 shaft sinkers report  accounts 2011
1
highlights
revenue up by 24 to gbp2265 million 
2010 gbp1831 million
gross proﬁ t margins up by 31 
to gbp383 million 2010 gbp292 million
adjusted proﬁ t before tax up 29 
to gbp166 million 2010 gbp129 million
adjusted eps up 28 to 234p 2010 183p
earnings per share 183p 
2010 298p after exceptional items
maiden interim dividend paid 24p
final dividend recommended 48p
net cash and cash equivalents of 
gbp61 million 2010 gbp111 million
year end committed order book 
gbp3011 million 
gbp2069 million excluding eurochem contract
strong tender pipeline
safety statistics improved
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board of directors
amre youness
nonexecutive chairman age 50
mr youness joined the board as nonexecutive 
chairman in november 2010 having been 
nonexecutive chairman of capstone the 
group’s former south african holding company 
since 2008 he is the chief executive ofﬁ cer 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 ofﬁ cer age 37
mr davidov joined the board as chief executive 
ofﬁ cer in november 2010 having been a 
director of shaft sinkers pty since 2007 he 
had previously worked for imr in its business 
development function since 2003 as imr’s 
south african representative he was responsible 
for imr’s original investment in the group in 
2007 and oversight of the group’s subsequent 
development on behalf of imr he was previously 
finance director of bateman litwin kazakhstan 
from 2003 to 2005 he is a ﬂ uent russian speaker 
and is also a nonexecutive director of samancor 
chrome mr davidov has dual citizenship in 
south africa and israel
christopher hall
chief financial ofﬁ cer age 52
mr hall joined the board in november 2010 
as chief financial ofﬁ cer he originally joined 
the group in 2007 as the chief financial ofﬁ cer 
following three years as the chief executive 
ofﬁ cer of jselisted excellerate holdings he has 
over 13 years’ experience in the oil industry and 
was previously finance director of total south 
africa during which time he spent seven years in 
france he qualiﬁ ed as a chartered accountant 
and spent four years postqualiﬁ cation at 
pricewaterhousecoopers and ernst  young mr 
hall is a south african citizen
stephen oke
independent nonexecutive director age 57
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 bp coal and johannesburg 
consolidated investment company limited 
subsequently he has held senior positions in 
the investment banking industry for smith new 
court merrill lynch nm rothschild and sons 
and standard bank specialising in the metals and 
mining sector where he advised on a number 
of transactions and equity capital fund raisings 
worldwide he is a nonexecutive director of 
international ferro metals limited african mining 
 exploration plc and kolar gold limited and was 
previously on the boards of nikanor plc katanga 
mining limited and kazakhgold group limited
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ian watson
independent nonexecutive director age 68
mr watson joined the board in november 2010 
and chairs the safety committee he is a qualiﬁ ed 
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 
ofﬁ cer of international ferro metals sa pty 
ltd from 2003  2005 and as chief executive 
ofﬁ cer of boynton investments pty ltd until 
his retirement in 2009 he is a professional 
engineer engineering council of south africa 
and holds a national diploma in mining from 
the witwatersrand technical college a mine 
manager’s certiﬁ cate of competency from the 
south african college of mining and has been 
a participant on the 34 general management 
programme at henley management college in 
the uk he is currently nonexecutive chairman of 
galaxy gold a private company
roger williams
independent nonexecutive director age 48
mr williams joined the board in november 
2010 and chairs the audit committee he is 
a uk and south african chartered accountant 
with over 20 years’ international experience 
in mining ﬁ nance after graduating from the 
university of southampton with an honours 
degree in french and spanish he qualiﬁ ed as 
a chartered accountant with touche ross and 
joined the ﬁ nance department of carlton paper 
in 1997 he joined randgold resources and was 
appointed group finance director in 2002 he 
was subsequently chief financial ofﬁ cer of jse
listed aeci limited and bsg resources limited 
a private company both involved in the mining 
industry he is an independent nonexecutive 
director of sylvania platinum limited and african 
mining  exploration plc he is a uk citizen 
each of the directors can be contacted at the 
registered ofﬁ ce of the company at 18 athol 
street douglas isle of man im1 1ja
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chairman’s statement
dear shareholders
i am pleased to report a solid 
performance by the group in 
2011 with significant financial 
strategic and operational 
progress this was achieved 
against the backdrop of a 
challenging project in russia 
where the underground 
conditions proved to be 
extremely adverse
financial results
revenue for the year grew 24 to gbp2265 
million 2010 gbp1831 million proﬁ ts showed 
an improvement in 2011 but were impacted by 
different exceptional items in both 2010 and 
2011 our results for the year were as follows
 2011 2010
 gbp million gbp million
proﬁ t before income 
tax pre exceptional items 166 129 
ipo bonuses 31 
contract provision 
and settlement  38
proﬁ t before income 
tax as reported 135 167
basic earnings per share was 234p on a pre ipo 
bonus basis 2010 208p pre contract settlement 
and actual basic earnings per share after the 
exceptional items was 183p 2010 298p 
the group ended the year in a good ﬁ nancial 
position with net cash and cash equivalents 
of gbp61 million 2010 net cash of gbp111 
million having invested cash in working 
capital requirements
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dividends
in line with our stated progressive dividend 
policy we paid a maiden interim dividend of 
24p per share in october 2011 the board has 
recommended a ﬁ nal dividend from the 2011 
results of 48p per share payable in june 2012 
subject to shareholder approval at the annual 
general meeting the ﬁ nal dividend will be paid 
on 12 june 2012 to shareholders on the register 
as at the close of business on 4 may 2012
strategy
our strategy remains as set out in our prospectus 
at the time of the ipo 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 remain alert to 
selective bolton acquisition opportunities that 
have the potential to add value to our operations
operations
management have worked hard over the past 
year to secure new projects for the company 
the eurochem project proved particularly 
difﬁ cult with the adverse underground conditions 
encountered various alternatives were explored 
with the client to ﬁ nd a more effective way 
of progressing the rate of sinking eurochem 
decided to embark upon its own efforts of 
freezing the shaft and thus suspended our 
grouting efforts in december 2011 we have 
chosen to give advance notice of termination with 
effect from 20 april 2012 
i would like to thank alon davidov our chief 
executive ofﬁ cer and his executive team for 
their efforts in leading the group through 
a challenging past year with the difﬁ culties 
encountered at eurochem and with the extremely 
high level of tender activity to respond to 
outlook
there continues to be an increase in capital 
expenditures in the mining sector globally 
reﬂ ected in the very high level of tender activity 
we are experiencing
we have a record level of tendering activity and 
the potential to win further new contract awards 
we are performing in line with our expectations 
and remain conﬁ dent of the group’s prospects 
both for 2012 and beyond
amre youness
chairman
26 april 2012
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chief executive ofﬁ cer’s statement
revenue has grown by 237 
with profit from operations 
increasing 302 to gbp185 
million before exceptional 
items of the exceptional 
ipo bonus of gbp31 million 
in 2011 and a credit for 
contract settlement in 2010 
of gbp38 million 
after taking account of the exceptional items 
proﬁ t from operations was gbp153 million 2010 
gbp180 million the group’s net proﬁ t after 
tax for the year on a preipo bonus basis was 
gbp111 million 2010 gbp99 million pre contract 
settlement and after the exceptional items was 
gbp87 million 2010 gbp126 million our return 
on capital employed averaged 82 pre the ipo 
bonus 2010 61 pre contract settlement and 
our goal is to see this increase into the double 
digits in the next 3 years through our focussed 
strategy in the cis and india regions 
south african operations
south africa remains the primary region for the 
group and we are conﬁ dent in the continued 
improvement in revenues in this region this 
should be supported by the implementation of 
a black economic empowerment shareholding 
arrangement announced during the year
in the ﬁ rst half of 2011 the impala 16 and 17 
shafts were impacted by standing time which in 
turn impacted gross proﬁ t margins the second 
half saw a recovery at these two projects which 
will improve gross proﬁ t margins to an acceptable 
level after the period end in march 2012 we 
were awarded additional capital development 
contracts at impala 16 which will improve the 
overall margin at that shaft
we progressed well with the presink and 
mobilisation work at afplats’ leeuwkop shaft the 
award of the contract has been phased in stages 
and in march 2012 we were awarded the second 
phase of work to sink to a depth of 3258 meters 
by september 2012
the lonmin shafts at hossy and saffy performed 
well karee 3 has fallen behind plan but measures 
are in place to mitigate operational losses and 
avoid them in the future overall the lonmin 
projects have beneﬁ ted from additional capital 
development work being undertaken
work at the styldrift project suffered low levels 
of production caused mainly by the introduction 
of new safety procedures and a shortage of 
skilled labour which impacted production cycles 
signiﬁ cantly production levels have improved 
in the second half of 2011 and we are currently 
performing close to planned levels although we 
remain behind the overall project schedule 
our project at anglogold ashanti’s moab shaft 
has performed well and is expected to reach 
completion by the end of 2012
work on our project at hernic ferrochrome’s 
bokfontein mine continues to progress at a 
satisfactory pace 
international operations
our project at eurochem’s potash deposit in 
russia suffered setbacks due to the extremely 
difﬁ cult underground conditions making progress 
very slow which in the context of eurochem’s 
broader mine programme was unacceptable 
in early december 2011 eurochem decided 
to suspend our grouting operations and to 
switch to a freezing technique for which the 
shaft is currently being prepared after making 
various proposals to eurochem which were not 
accepted we have decided to give advance 
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notice of termination of the contract with effect 
from 20 april 2012 further information on this 
can be found in the directors’ report under 
principal events for the year on page 24 
in india our t eesta iii hydroelectric project is almost 
complete work on the second surge shaft stopped 
in the latter half of 2011 following an earthquake 
in the vicinity of the site there remained very little 
work to complete the shaft at the time and this last 
remaining work is being ﬁ nalised by the client while 
we demobilise our equipment
our mining engineering and technical 
services mets division continues to ﬁ nd new 
opportunities for design and epcm contracts 
health and safety
our injury frequency rate one of our safety 
indicators has improved to 158 2010 488 
compared to the industry benchmark of 360 
regrettably there were 10 traumatic accidents 
that took place in 2011 including the tragic 
fatality of mr macamo on the 5th of april we 
have redoubled our efforts to improve our safety 
initiatives across all our operations which will 
lead to better awareness of safety across all 
levels in the company in 2011 we were awarded 
“southern africa mine safe 2011 mining 
contractor companies best in safety class” by 
the mine managers association of south africa 
and sa institute of metallurgy we continue to 
face the challenge of skills shortages in being 
prepared to take on the many potential projects 
facing the company at present to this end 
we have been building up our team of skilled 
personnel and we are ensuring that we are at the 
forefront of providing attractive retention policies 
and rewarding our skilled staff appropriately in 
order to cater for our planned growth over the 
forthcoming years we have bolstered the senior 
executive team at the executive committee level 
having added the positions of group business 
development manager chief commercial ofﬁ cer 
country manager cis region chief information 
ofﬁ cer chief operational ofﬁ cer international 
and chief financial ofﬁ cer south africa at the 
same time we are increasing our efforts at staff 
retention and recruitment of skilled engineers and 
artisans while this has added to our operating 
expenses in 2011 and may add a little more to 
2012 we believe we will have reached an optimal 
level of operating support to enable the group 
to take on the challenges of growth presented 
by the record number of tenders we expect to 
largely convert into long term contracts in 2012
black economic empowerment
we have implemented a black economic 
empowerment shareholding arrangement 
in shaft sinkers mining pty ltd one of our 
south african subsidiaries whereby 26 of the 
subsidiary’s shares have been issued to historically 
disadvantaged south africans 16 of the 
shareholding is earmarked to provide a future 
cash beneﬁ t from dividends for the category 3 to 
8 south african employees through an employee 
share trust making this transaction a broadbased 
empowerment transaction for the direct beneﬁ t of 
targeted employees in the group furthermore 
the group is pleased to welcome three 
distinguished businessmen mr mikki xayiya mr 
jabu mabuza and mr aubrey lekwane as minority 
shareholders into the group together holding 
10 of shaft sinkers mining the board believes 
this step which should not materially affect 
expected earnings from existing contracts will be 
beneﬁ cial to the business in securing new contracts 
in south africa and will assist the group in meeting 
the requirements of some of its clients under the 
south african mining charter and enhancing the 
longterm sustainability of the business in south 
africa the share based payment expense arising 
in the 2011 ﬁ nancial results is gbp02 million refer 
to note 321 to the annual ﬁ nancial statement
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order book and tendering activity
at 31 december 2011 the order book stood 
at approximately £301 million 2010 gbp488 
million including gbp94 million in relation to 
eurochem 2010 gbp119 million of remaining 
revenues to be billed on committed contracts
after completing the presink phase of afplats’ 
leeuwkop main shaft which was awarded in 
march 2011 we have been awarded the second 
phase of work to sink to a depth of 3258 meters 
by september 2012 the bulk of the project 
remains subject to the ﬁ nal approval by the 
impala board afplats is a subsidiary of impala 
management anticipates the approval and 
signing of this contract before the end of the ﬁ rst 
half of 2012 
since the last reported results for the half year 
ended 30 june 2011 management has been 
actively pursuing a number of new tenders the 
new business development roles established in 
2011 have culminated in a more concerted effort 
at identifying opportunities and subsequently 
growing our potential pipeline
the group has over £10 billion of outstanding 
tenders or price submissions on a total of 10 
projects as at the date of this report while 
there can be no certainty as to the award of any 
of these contracts management believes the 
company remains well placed to secure a number 
of these tenders when they are awarded the 
current tender pipeline is at a very high level
initiatives 
in 2011 we funded an initial investment in a 
technology business that is developing a laser 
based shaft inspection system that will transform 
the way compulsory shaft inspections are being 
performed today this new system will be much 
safer quicker and more accurate such a system 
would allow shaft sinkers to offer an additional 
service to its clients and create a recurring stable 
revenue ﬂ ow we hope to have a prototype ready 
towards the beginning of 2013 
we will continue our strategic focus to build 
on our strengths namely people safety and 
experience and to seek out and exploit new 
opportunities in the cis region and india while 
continuing to build on our strong base in africa 
in 2011 the strategic focus has been on further 
improving the performances of the south african 
operations and continuing the expansion of shaft 
sinkers internationally we have been using some 
of the listing proceeds to refurbish key plant 
in preparation for new potential contracts the 
availability of our own inventory of reconditioned 
winders remains key to our strategy to be well 
positioned for taking on new sinking contracts
our goals for 2012 and the next few years is 
to improve on the return on capital employed 
and adding value to shareholders this should 
be achieved by being awarded higher margin 
contracts in the cis and india regions on a now 
steady operating cost base having built up our 
operational readiness to take on a higher volume 
of work with a number of exciting opportunities 
on the horizon we remain conﬁ dent of our 
continued growth over the next ﬁ ve years
alon davidov
chief executive ofﬁ cer
26 april 2012
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operational review
market and overview
in general in 2011 there was a noticeable 
increase in the tendering and enquiry activity 
the establishment of a business development 
role and the stronger regional presence have 
contributed to a wider range of enquiries 
this can be attributed to our wider reach and 
intensifying mining activity globally 
safety
safety is of paramount importance for shaft 
sinkers in 2011 we have seen an improvement 
in our lost time injury frequency rate of 158 
down from 488 in 2010 and below the industry 
benchmark of 360 regrettably there were 10 
serious accidents that took place in 2011 with the 
worst being the fatality of mr macamo on the 5th 
of april we will once again strive for zero harm 
after the unfortunate event  
various sites have recorded safety achievements 
by meeting or exceeding their set targets and 
the benchmark and in 2011 we were awarded 
“southern africa mine safe 2011 mining 
contractor companies best in safety class” by 
the mine managers association of south africa 
and sa institute of metallurgy in 2011 numerous 
new initiatives were introduced “snakes for 
safety” campaign uses live snakes to identify 
various safety hazards this campaign has had 
a signiﬁ cant impact on the work force another 
campaign called “unplugged” uses motivational 
speakers and industrial theatre to reinforce 
safety behavioural concepts we are constantly 
searching for new and innovative ways to instil a 
safety culture at every level of the organization
operations
in the ﬁ rst half of 2011 the impala 16 and 
17 shafts had suffered from rope failures and 
winder problems that resulted in standing time 
which has a lower rate therefore impacting 
average gross proﬁ t margins the second half 
saw a recovery on these two projects which will 
improve gross proﬁ t margins to an acceptable 
level we have been awarded additional capital 
development contracts at impala 16 after the 
period end in march 2012 which will improve the 
overall margin at that shaft
we progressed well with the presink and 
mobilisation work at afplats’ leeuwkop shaft the 
award of the contract has been done in stages 
and in march 2012 we were awarded the second 
phase of work to sink to a depth of 3258 meters 
by september 2012 
the lonmin shafts at hossy and saffy performed 
well karee 3 has fallen behind plan due to past 
inefﬁ ciencies and civil construction delays but 
measures are in place to mitigate operational 
losses and avoid them in the future overall the 
lonmin projects have beneﬁ ted from additional 
capital development work being undertaken
work at the styldrift project suffered low levels 
of production caused mainly by the introduction 
of new safety procedures mechanical kibble 
handling and was further aggravated by skilled 
labour shortages these factors impacted 
production cycles signiﬁ cantly cycle times which 
are the daily measurement for sinking progress 
reached an unacceptable level of 60 hours for a 3 
meter advance production levels have improved 
in the second half of 2011 and we are currently 
performing close to planned levels of an average 
of 24 hours per 3 meters sunk although we 
remain behind the overall project schedule 
our project at anglogold ashanti’s moab shaft 
has performed well and is expected to reach 
completion by the end of 2012
work on our project at hernic ferrochrome’s 
bokfontein mine continues to progress at a 
satisfactory pace and we continue to rent out our 
winders to the kalagadi manganese project
225014 shaftsinkersra2012pagesindd   9 26042012   1937 10
our project at eurochem’s potash deposit in 
russia suffered setbacks from the extremely 
difﬁ cult underground conditions with ﬁ ne grained 
and inhomogeneous unconsolidated running 
sands combined with water making progress 
very slow while needing to pump large quantities 
of grouting materials to seal the ingression of 
water and to stabilise the ground surrounding 
the shaft the rate of progress was unacceptable 
to the client in the context of the broader 
mine programme and in early december 2011 
the client decided to suspend our grouting 
operations and to switch to a freezing technique 
for which the shaft is currently being prepared 
after various proposals made by the company 
to eurochem which were not accepted we have 
decided to give advance notice of termination of 
the contract with effect from 20 april 2012 we 
expect to demobilise from the project over the 
next few months
the carrying amounts of net assets in the group’s 
accounts at 31 december 2011 in relation to 
this project are usd63 million a further usd63 
million of expenditures are estimated to have been 
incurred on this project through to the date of this 
report in addition there remains a ﬁ xed fee of 
usd132 million which has not yet been recorded 
in the group’s accounts as income as well as likely 
demobilisation and termination costs all of which 
will be billed to eurochem in 2012 the board is of 
the view that the group’s contract with eurochem 
properly provides for the full recovery of all 
amounts incurred on the project
in india our teesta iii hydroelectric project has 
practically come to an end work on the second 
surge shaft stopped in the latter half of 2011 80 
meters short of holing through on the second 
surge shaft following an earthquake at the site 
there remained very little work to complete the 
shaft at the time and this last remaining work is 
being ﬁ nalised by the client while we demobilise 
our equipment
our mining engineering and technical 
services mets division continues to ﬁ nd new 
opportunities for design and epcm contracts 
most notably in 2011 it had signed a new 
feasibility study for amari’s kongoni manganese 
mine in the kalahari region which now awaits 
the award of the sinking contract this is a good 
example of the strategic value of mets to the 
business development initiatives of shaft sinkers 
during 2012 we will continue to strive to improve 
safety and improve efﬁ ciency at our south african 
operations in anticipation of new international 
contract awards we have placed emphasis on our 
operational readiness for the different regions we 
are targeting we have introduced roles with the 
speciﬁ c task of improving our regional capabilities 
in the cis we established a small ofﬁ ce with 
business development and technical capabilities 
to better serve the region we continue to 
develop our learnership candidates and provide 
constant training to our work force in 2011 we 
have provided skills training in sinking mining 
and engineering techniques to 1089 category a 
employees and 2924 category 38 employees 
we have intensiﬁ ed our emphasis on research 
and development that is required to keep us in 
line with industry requirements for safer sinking 
and mining practices these requirements are 
aimed at the reduction of personnel at the 
bottom of the shaft and reduced exposure to high 
noise levels separately we have advanced funds 
for a new technology development aimed at 
transforming the archaic shaft inspection activity 
it is mandatory to inspect the integrity of the shaft 
at regular intervals in south africa once a week 
typically this activity is carried out manually and 
is time consuming and hazardous sightpower 
the company developing this new technology is 
hoping to replace this activity with an automated 
mechanised scanning device that will be much 
quicker and safer  
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11
financial review
basis of preparation
the ﬁ nancial information presented has been 
prepared on a basis consistent with that used 
in the preparation of the ﬁ nancial statements 
for the 2010 ﬁ nancial year 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 in 2010 
the group was restructured and a new isle of 
man holding company incorporated we have 
used the common control method of accounting 
for the business restructuring in order to present 
group consolidated ﬁ nancial statements
overview
the 2011 ﬁ nancial year has largely been in line 
with our plans to continue to expand the business 
in pursuit of additional contracts and despite 
having seen some of these projects moved out 
to 2012 our actual results are ahead of our 
budgeted results before taking account of the 
exceptional item of an ipo bonus
the group remains ﬁ nancially sound and despite 
the economic slowdown we have seen an ever
increasing number of tender enquiries which 
should add to the order book in the year ahead
the group’s cash position remains strong after 
having utilised part of the funds raised at the 
ipo on winder refurbishment and part to expand 
working capital we have paid a maiden interim 
dividend of 24p per share in october 2011 and 
the board is recommending a ﬁ nal dividend of 
48p per share payable in june 2012
the events surrounding the suspension of our 
project at eurochem’s potash deposit in russia 
has led to a higher inventories trade debtors 
balances and interest free advances at 31 
december 2011 the carrying amounts of net 
assets in the group’s accounts at 31 december 
2011 in relation to this project are usd63 
million a further usd63 million of expenditures 
are estimated to have been incurred on this 
project through to the date of this report in 
addition there remains a ﬁ xed fee of usd132 
million which has not yet been recorded in the 
group’s accounts as income as well as likely 
demobilisation and termination costs all of which 
will be billed to eurochem in 2012 the board 
is of the view that the group’s contract with 
eurochem properly provides for the full recovery 
of all amounts incurred on the project
analysis of results
income statement
proﬁ ts for the year have decreased by 310 in 
gbp terms after taking account of the exceptional 
items in 2010 and 2011 when considered before 
the exceptional items of a credit for contract 
settlement in 2010 of gbp38 million and a charge 
for ipo bonuses in 2011 of gbp31 million and 
after the effective tax impacts of gbp11 million 
and gbp07 million respectively 2011 proﬁ ts 
increased by 126 the effect of the slightly 
weaker zar average exchange rate for the year at 
zar1158 compared to an average of zar1134 in 
2010 is to lower proﬁ t by gbp02 million 
revenue
revenues grew by 237 in 2011 to gbp2265 
million 2010 gbp1831 million the increase is 
mainly attributable to higher revenues at lonmin’s 
saffy and hossy shafts where we have additional 
capital development contracts at anglogold 
ashanti’s moab shaft impala’s 16 shaft anglo 
platinumroyal bafokeng’s styldrift project with 
225014 shaftsinkersra2012pagesindd   11 26042012   1937 shaft sinkers report  accounts 2011
12
the beneﬁ t of a full year of work in 2011 having 
commenced late 2010 the newly awarded 
leeuwkop project for afplats and the eurochem 
project where revenue received in advance was 
recognised following the commissioning of the 
winder offset by lower revenues at the teesta 
project in india drawing to a close
gross proﬁ t
gross proﬁ t increased by 312 to gbp383 
million 2010 gbp292 million this increase can 
be ascribed to the following factors
•  improved gross proﬁ t margins at impala’s 
17 shaft
•  margin from the new leeuwkop project 
for afplats
•  higher gross proﬁ t margins from the russian 
eurochem project
offset by
•  lower gross proﬁ t margins from the teesta 
project in india as it drew to a close
gross proﬁ t margins in 2011 improved to 169 
2010 159 
operating income
operating income increased by gbp14 million 
in 2011 due to a gain in foreign exchange 
differences and a loss on disposal of equipment 
in 2010 
operating expense
operating expenses increased by gbp62 million 
due to the following factors
•  additional costs associated with being a 
listed company 
•  increased salary and performance 
bonus expenses
•  an increase in the provision for potential 
doubtful debts of gbp21 million
ipo bonuses
on admission in december 2010 the group 
announced in its prospectus that it would pay 
an ipo bonus to a range of middle to senior 
management in the amount of zar445 million 
this was accounted for and paid in two tranches 
half accruing at 30 june 2011 and the other 
half at 31 december 2011 the amount paid 
was zar419 million equivalent to gbp31 
million less than initially approved due to some 
individuals no longer being in the company’s 
employ on the qualifying dates
finance expense
in december 2010 the group drew down on 
borrowing facilities provided by the standard 
bank of south africa limited in the amount of 
gbp244 million the interest burden of this debt 
for the full ﬁ nancial year of 2011 has led to the 
increase in ﬁ nance expense to gbp22 million 
2010 gbp16 million the interest bearing debt 
was reduced during the ﬁ nancial year by gbp39 
million the average interest rate paid on this zar 
debt was 93 for the year
taxation 
the south african tax rate remains unchanged 
in 2011 from 2010 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 proﬁ ts after tax were to be declared 
as a dividend effective from 1 april 2012 the 
secondary tax on companies was replaced by a 
dividend withholding tax of 10
in 2011 the group’s effective tax rate was 355 
2010 244 reﬂ ecting the charge of stc 
amounting to gbp05 million on dividends from 
south african subsidiaries
225014 shaftsinkersra2012pagesindd   12 26042012   1937 13
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 
2011 was zar1158 to the gbp 2010 zar1134 
the spot rate at 31 december 2011 strengthened 
even further to zar1254 2010 zar1023 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 a loss of 
gbp70 million 2010 gain of gbp47 million
ebitda
earnings before interest tax and depreciation 
for the year were gbp249 million 2010 
gbp252million a decrease of 12 depreciation 
was higher at gbp96 million 2010 gbp72 
million before exceptional items ebitda was 
gbp281 million 2010 gbp214 million
earnings per share
earnings per share was calculated on the 475 
million shares in issue throughout the year in 2010 
earnings per share was calculated on a theoretical 
number of shares in issue for that ﬁ nancial year 
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 reﬂ ect 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 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 that year
earnings per share decreased to 183 pence 
2010 298 pence a decrease of 384 the 
effect of awarding incentive shares to the 
executive directors of the company is reﬂ ected in 
a diluted earnings per share of 182 pence taking 
into account the share price 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 and a net proﬁ t target growth rate 
of 20 per annum
dividend policy
the group has adopted a progressive dividend 
policy with dividends moving broadly in line with 
earnings over time dividends are expected to be 
paid semiannually in respect of each year with an 
interim dividend for each year paid in september 
and a ﬁ nal dividend paid in june of the following 
year in each case subject to the satisfaction of the 
solvency test 
interim dividends are expected to represent 
around one third and ﬁ nal dividends around 
two thirds of the full year dividend for each year 
annual dividends per share are expected to be 
covered some 25–30 times by earnings per share 
financial position
total assets decreased to gbp1438 million 2010 
gbp1621 million and net assets increased to 
gbp480 million 2010 gbp465 million
interestbearing debt to equity has decreased to 
337 2010 525 the facilities granted to the 
group by standard bank of south africa limited 
in december 2010 have been reduced by gbp39 
million in accordance with the amortisation 
schedule of the facilities
225014 shaftsinkersra2012pagesindd   13 26042012   1937 14
the group’s net cash deﬁ ned as interest bearing 
debt minus net cash has decreased to gbp61 
million 2010 net cash of gbp111 million 
this was largely due to a lack of new cash from 
advances from clients with no new major projects 
having started in 2011 and cash utilised in the 
increase in working capital notably inventories
the group’s net current assets decreased 
to gbp168 million 2010 net current assets 
gbp246 million 
ppe
new additions to plant and equipment amounted 
to gbp105 million 2010 gbp121 million 
this was largely as a result of project plant and 
equipment still being procured for the styldrift 
project which only commenced towards the 
last quarter of 2010 and expenditures on the 
refurbishment of winders
disposals of plant and equipment in 2011 were 
gbp10 million 2010 gbp68 million relating 
mostly to the lapsed kalagadi manganese project
inventories
inventories increased to gbp162 million 
2010 gbp83 million due primarily to the 
increase in grouting materials required for the 
eurochem project
trade and other receivables
trade and other receivables decreased to 
gbp490 million 2010 gbp501 million as a 
result of not starting any new major contracts 
in 2011 an amount of gbp23 million has 
been raised for impairment of trade and other 
receivables 2010 gbp01 million
order book
the group’s order book at ﬁ nancial reporting 
period end is calculated to represent the total 
value of estimated outstanding project revenues 
for contractually committed projects excluding 
any escalation which is typically built into the 
contracts the order book at 31 december 2011 
amounted to gbp3011 million 2010 gbp4882 
million the decrease is due to a lack of award of 
new major contracts in 2011 having consumed a 
signiﬁ cant portion of the order book by billing the 
company’s clients during the year
cash
the group ended the year with a favourable cash 
balance of gbp223 million 2010 gbp356 million 
the cash utilisation went towards working capital 
increases of gbp185 million of which inventories 
accounted for gbp103 million and accounts 
receivable gbp109 million further expenditures 
on interest and taxes of gbp65 million and 
dividends of gbp11 million reduced cash on hand 
interest bearing debt was repaid to the extent of 
gbp39 million the expenditures for projectrelated 
committed order book   gbp million
250
150
50
200
100
0
2012 2013 2014
225014 shaftsinkersra2012pagesindd   14 26042012   1937 shaft sinkers report  accounts 2011
15
capital equipment of gbp105 million were more 
than offset by advance revenue received from 
clients in the amount of gbp122 million
at 31 december 2011 the group held its cash in 
the following currencies
• british pounds   
 gbp102 million
•  united states dollars  
usd39 million   gbp26 million
•  russian roubles  
rur123 million  gbp02 million
•  united arab emirates dirham 
aed01 million  gbp001 million
•  indian rupees   
inr28 million  gbp001 million
•  south african rands  
zar1157 million gbp92 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 
ﬁ nancial 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 
reﬂ ect 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 
reinstate 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 were treated as a new share issue from 
23 december 2010
as the comparative balance sheet for 2009 was 
presented without further alteration besides 
equity the difference between the lower original 
share capital at 1 january 2009 and the higher 
restated share capital gave rise to a debit reserve 
for common control effectively arriving at the 
same net balance 
capitalised ipo expenses
listing expenses in 2010 amounted to 
approximately gbp34 million of these expenses 
gbp23 million were capitalised as a charge to 
share capital in 2010 and the remaining gbp11 
million were expensed against proﬁ ts in 2010 
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 
225014 shaftsinkersra2012pagesindd   15 26042012   1937 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 in the statement of ﬁ nancial 
position decreased to gbp128 million 2010 
gbp234 million primarily as a result of the 
recognition of a portion of the revenues received 
in advance in earlier years without the award of 
any new major contract which would have added 
to the balance
deferred revenues released to proﬁ ts during 
the year amounted to gbp141 million 2010 
gbp44 million against cash received from clients 
for advance revenue of gbp122 million 2010 
gbp152 million
interest bearing borrowings
in december 2010 the group drew down on new 
facilities provided by the standard bank of south 
africa limited including term debt of zar2500 
million gbp244 million during the 2011 
ﬁ nancial year a total of gbp39 million was repaid 
from these facilities
the loans with standard bank are subject to a 
“cash sweep” a right for the bank to receive 
an advance repayment of an amount similar 
to any dividend distribution made by the 
whollyowned south african subsidiaries to the 
group shareholders despite the contractual 
commitment by the company to a cash sweep 
standard bank did not require a cash sweep for 
the zar600 million dividend distributed by the 
south african subsidiary to the holding company 
in 2011
interestfree advances from clients
interestfree advances from clients relate to 
advances received for the funding of project 
expenditures in russia the nature of the contract 
is a cost reimbursable contract with a ﬁ xed fee our 
client eurochem agreed to advance funds to the 
company for project expenditures on the basis of 
evidence of the expenditure about to be incurred 
with a cap on the total amount of these advances 
and for the advances to be set off against regular 
monthly billing for those same expenditures 
although these advances may be set off against 
amounts not yet paid by the client they have been 
treated as loans for accounting purposes
at 31 december 2011 total interest free 
advances outstanding amounted to gbp244 
million 2010 gbp193 million
225014 shaftsinkersra2012pagesindd   16 26042012   1937 shaft sinkers report  accounts 2011
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 identiﬁ ed 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 
efﬁ cient operation they are intended to allow 
the business to respond appropriately to 
signiﬁ cant operational ﬁ nancial compliance 
and other business risks facing the group on 
a daily basis this includes stringent safety 
procedures procedures for the safeguarding 
of assets against loss and fraud and managing 
exposure to liabilities where possible so as to 
ensure the sustainability of the group’s ongoing 
business the group’s systems of information 
ﬂ ow are critical to ensure that no unnecessary 
risks arise from lack of or poor communication 
the group is vigilant to ensure it complies with 
applicable laws and regulations and keeps 
abreast of developments in these areas the 
group monitors the effectiveness of the systems 
of internal control on a regular basis through 
its internal audit function the external audit 
function an annual review of risk approved by 
the board and through ongoing reconciliations 
and reviews of ﬁ nancial transactions on a regular 
monthly basis
the group has complied with the provisions 
of the uk corporate governance code on 
internal controls and the relevant parts of the 
turnbull guidance for the ﬁ nancial periods 
under review internal controls form an integral 
part of the group’s culture while the system of 
internal control mitigates it cannot eliminate 
the possibility of poor judgement in decision
making human error control processes being 
deliberately circumvented by employees and 
others management overriding controls and 
the occurrence of unforeseeable circumstances 
it can only therefore provide reasonable but not 
absolute assurance that the control objectives 
are met it cannot provide guaranteed protection 
against the group failing to meet its business 
objectives or avoiding all material errors losses 
fraud or breaches of laws or regulations
responsibilities
the board of directors acknowledges its 
responsibility for the group’s system of internal 
control it has set appropriate policies on internal 
control and seeks regular assurance that the 
system is functioning effectively the board 
endeavours to ensure that the system of internal 
control is effective in managing risks in the 
manner which it has approved
the board considers the following factors in 
determining the adequacy of the group’s system 
of internal control
•  the nature and extent of the risks facing 
the group
•  the extent and categories of risk that it 
regards as acceptable for the group to bear
•  the likelihood of the risks concerned 
materialising
•  the group’s ability to reduce the incidence 
and impact on the business of risks that may 
materialise through mitigating strategies and
•  the costs of operating particular controls 
relative to the beneﬁ t thereby obtained in 
managing the related risks
225014 shaftsinkersra2012pagesindd   17 26042012   1937 18
management implement policies set by the 
board on risk and control management identify 
and evaluate the risks faced by the group for 
consideration by the board and design operate 
and monitor a suitable system of internal control 
which implements the policies adopted by 
the board
the group’s employees share the responsibility 
for internal control as part of their accountability 
for achieving objectives they participate in 
setting and carrying out the group’s objectives 
and assist in designing the mitigating strategies 
to avoid the risks the group faces
reviewing the effectiveness of 
internal control
the board reviews the effectiveness of internal 
control on a regular annual basis the board 
forms its own view on the effectiveness of the 
system of internal control after due and careful 
enquiry based on the information and assurances 
provided to it management is accountable to 
the board for monitoring the system of internal 
control and provides assurance to the board that 
it has done so the role of each of the board 
committees in the review process including that 
of the audit committee has been set out by the 
board the various board committees report 
to the board at each quarterly board meeting 
on the matters set out in their respective terms 
of reference and the board carefully considers 
these reports the board takes responsibility for 
the disclosures on internal control in the annual 
report and accounts
process of preparing consolidated accounts
the consolidation of ﬁ nancial performance and 
assets and liabilities is performed on the group’s 
software systems which have appropriate access 
controls all signiﬁ cant movements and unusual 
items in data which are submitted are reviewed 
by a senior member of the ﬁ nance team key 
consolidation journals relating to data submitted 
by group companies are reviewed within the 
ﬁ nance department in accordance with their 
signiﬁ cance a reconciliation and analysis of 
consolidation journals is reviewed by the chief 
financial ofﬁ cer for the country concerned 
internal ﬁ nancial reports are produced monthly by 
the ﬁ nance department and reviewed by senior 
members of the group’s ﬁ nance and operations 
teams and then distributed to management and 
the board
the ﬁ nancial department produces quarterly 
instructions and an annual timetable to be 
followed by group companies in the preparation 
of monthly and quarterly forecasts and the 
annual budget the ﬁ nance department monitors 
compliance with the instructions and timetable 
and follow up any cases of noncompliance
risk management
the group has an ongoing process for identifying 
evaluating and managing the signiﬁ cant risks 
faced by the group that has been in place for the 
year under review and up to the date of approval 
of the annual report and accounts this process 
is regularly reviewed by the board and is in 
accordance with the turnbull guidance
the executive management of the group 
conducts regular monthly operational reviews for 
each site and for each operational department 
against measurable performance targets budgets 
and other key performance indicators to ensure 
risks are being communicated and managed
risk assessment
the principal risks faced by the group are 
considered and formally reviewed by the board 
on an annual basis the key risks faced by the 
group are summarised below without any 
speciﬁ c order of ranking
225014 shaftsinkersra2012pagesindd   18 26042012   1937 shaft sinkers report  accounts 2011
19
strategic risk
the risk of ineffective or poorly executed strategy 
failing to meet shareholder objectives is one of 
the primary risks facing the group the board 
gets involved in setting the broad strategic 
objectives and monitors executive management’s 
performance against these annually set goals by 
frequent communication and regular quarterly 
review of ﬁ nancial performance
safety risk
due to the nature of the group’s operations 
a signiﬁ cant part of our risk relates to safety a 
dedicated safety health environment quality 
and training department sheqt monitors safety 
statistics and events on a daily basis each site 
has a dedicated safety ofﬁ cer responsible for 
managing safety matters including monitoring 
the progress of action plans reporting on safety 
incidents and ensuring the group’s policies in 
this regard are being adhered to in this way the 
group ensures accountability and responsibility 
for these matters remains with the operational 
management team the safety committee of the 
board meets quarterly to review reports from the 
sheqt department
safety is one of the cornerstones of the group’s 
success as a result executive management adopt 
a daily monitoring of safety statistics with weekly 
presentations should any incident arise resulting 
in lost time injuries the safety committee reviews 
the performance on a quarterly basis and reports 
to the board with recommendations should 
they be required a comprehensive set of safety 
procedures are regularly reviewed and updated for 
any new risks identiﬁ ed 
financial risk
the risk of inadequately funding or 
inappropriately managing the funding of the 
business is one of the primary risks that could 
lead to ﬁ nancial adversity 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 signiﬁ cant ﬁ nancial risks include the 
safeguarding of assets inappropriate tendering 
prices that could cause the group to lose 
potential contracts corrupt procurement practices 
resulting in excessive costs and mismanagement 
of expenditures for each of these the group 
has implemented appropriate policies and 
procedures and executive management regularly 
reviews performance against set targets 
the group is in the process of upgrading its 
information systems to further enhance controls 
improve the efﬁ ciency of reporting of information 
and to ensure its tendering process has the latest 
accurate information on costs with less time and 
effort required
legal and regulatory breach
we are aware that some of the jurisdictions in 
which the group operates pose particular and 
often heightened reputational issues that need 
to be managed appropriately we are conscious 
of the risk of failure to comply with antibribery 
225014 shaftsinkersra2012pagesindd   19 26042012   1937 shaft sinkers report  accounts 2011
20
anticorruption antimoney laundering andor 
sanctions laws and regulations which could lead 
to share price devaluation ﬁ nancial penalties and 
criminal prosecutions
we are committed to high standards of corporate 
responsibility we adhere to the principles of self
regulation backed by appropriate policies and 
management review we are developing a group
wide antibribery and corruption compliance 
function the rolling out of an enhanced 
compliance framework is in progress
for a further discussion on the group’s exposure 
to market risk liquidity risk and credit risk refer 
to notes 271 272 and 273 to the ﬁ nancial 
statements on pages 73 to 78
external risk
the political social or economic environment 
in any jurisdiction may change leading to the 
inability to realise the expected results from our 
projects by diversifying into other industrial 
applications and geographic regions the board 
has sought to mitigate these risks to the extent 
possible through the strategic direction of the 
business the group is aware of the political 
risks in some of the geographies in which it 
operates and has implemented appropriate risk 
mitigating strategies both on a ﬁ nancial and 
legal framework level
operational risks
the risk of operating below best industry 
standards could lead to lost contracts in the 
long run or could lead to shortterm costs to the 
group the contracting models of the group 
have been established to mitigate some of these 
risks but strong disciplines within the operations 
departments and the focus on attracting and 
retaining key skills is a vital part of the strategy 
of the group regular planning by executive 
management on securing the appropriate resources 
for current and future projects is part of the 
mitigating strategies constantly receiving attention 
at all levels of management and the board
internal audit
the internal audit function of the group 
reviews the various business cycles of the 
group throughout the year on a cyclical basis 
and follows up on all risk mitigating strategies 
identiﬁ ed for implementation at the annual risk 
planning sessions held by the group the group 
has retained the services of deloitte as internal 
auditors for the larger assignments the group’s 
internal audit manager has a direct reporting line 
to the chairman of the audit and risk committee 
and also a reporting line to the chief financial 
ofﬁ cer internal audit has unfettered access to all 
areas of the group and follows an annual plan set 
by the audit and risk committee internal audit 
encourages employees to make use of a whistle
blowing facility on an anonymous basis 
225014 shaftsinkersra2012pagesindd   20 26042012   1937 shaft sinkers report  accounts 2011
21
2011 key performance indicators
revenue £m
1831
2010 2011
2265
eps pence
2980
2010 2011
1830
gross margin 
159
2010 2011
169
pre exceptional items 
ebitdarevenue 
117
2010 2011
124
ebitdarevenue
137
2010 2011
110
pre exceptional items 
eps pence
2081
2010 2011
2343
225014 shaftsinkersra2012pagesindd   21 26042012   1937 shaft sinkers report  accounts 2011
22
2011 key performance indicators
return on capital employed 
order book £m
lost time injury frequency rate
78
4741
488
2010
2010
2010
2011
2011
2011
60
3011
158
pre exceptional items  
return on capital employed 
cash and cash equivalents £m
61
356
2010
2010
2011
2011
82
223
225014 shaftsinkersra2012pagesindd   22 26042012   1937 shaft sinkers report  accounts 2011
23
sustainability review and corporate 
social investment
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
while remaining at the forefront of the industry 
in terms of our remuneration levels to retain and 
attract scarce skills this comes at a price of facing 
more severe competition on price from within 
the territories where we compete in the market 
or alternatively from competitors bidding for the 
same work at a lower cost of labour one of the 
primary concerns to us is the safety and quality 
of our operations and our investment in people 
is testimony to our track record which often 
counts more to potential clients than the direct 
cost of labour in the long term a quality product 
delivered to our clients is more sustainable and 
yields better economics 
community
the group has adopted a focussed approach since 
the latter part of 2009 to invest in carefully selected 
initiatives within the communities surrounding our 
operations the focus is to create selfsustaining 
meaningful employment opportunities
the company has taken a multi pronged 
approach to the development of the community 
by investing in microsized enterprises some 
initiatives have included for example the building 
of three fullyequipped food trailers with a view to 
providing our employees access to refreshments 
close to their place of work and at the same time 
providing employment to an entrepreneur from 
the local community the focus is on sustainability 
which will allow the entrepreneurs to integrate 
into the local community once shaft sinkers has 
completed its project 
in keeping with the focus on sustainability 
shaft sinkers invests in enterprise development 
initiatives which include contributing towards 
the funding of several new businesses for 
entrepreneur development through a professional 
service provider the types of businesses 
supported are diverse and range from wetcrete 
applications for underground operations waste 
removal oil recycling to catering 
investment in our people 
we acknowledge that our people are the core 
asset of the business and we are therefore 
continuously exploring ways of maintaining and 
building on this asset
competitive salaries and bonus schemes with 
good quality beneﬁ ts are minimum requirements 
to ensure good quality skills are obtained 
and retained the differentiating factors to be 
the employer of choice are often hidden in 
other beneﬁ ts 
we provide for the debrieﬁ ng of staff on site by 
qualiﬁ ed psychologists in the event of a traumatic 
event and includes facetoface counselling 
for personal issues including hiv counselling 
professional assistance with debt management etc
we have two adult based education training 
abet centres with two fulltime abet 
facilitators which provides adult basic education 
to employees after work hours at our impala and 
lonmin projects 
we engage fulltime engineering learners 
apprentices in various trades to ensure a 
constant supply of these scarce resources to our 
business and to help develop the communities in 
which we operate
225014 shaftsinkersra2012pagesindd   23 26042012   1937 shaft sinkers report  accounts 2011
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 2011
principal activities
the group is a leading diversiﬁ ed shaft sinking and underground 
excavation group providing services in the areas of shaft sinking 
engineering design tunnelling large underground storage caverns 
contract mining and mine operations assets are principally located 
in the republic of south africa 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 preserving value and for delivering objectives
chairman’s statement on pages 4 and 5
chief executive ofﬁ cer’s statement on pages 6 to 8
operational review on pages 9 and 10
financial review on pages 11 to 16
internal controls and risk management on pages 17 to 20
2011 key performance indicators on pages 21 and 22
sustainability review and 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 speciﬁ c 
topic should not be taken as implying that it is not being addressed
the business review and other sections of this report contain forward
looking statements by their nature forwardlooking statements involve 
a number of risks uncertainties and future assumptions because they 
relate to events and  or depend on circumstances that may or may 
not occur in the future and could cause actual results and outcomes 
to differ materially from those expressed in or implied by the forward
looking statements no assurance can be given that the forward
looking statements in the business review will be realised statements 
about the directors’ expectations beliefs hopes plans intentions 
and strategies are inherently subject to change and they are based on 
expectations and assumptions as to future events circumstances and 
other factors which are in some cases outside the company’s control 
the information contained in the business review has been prepared 
on the basis of the knowledge and information available to directors at 
the date of its preparation and the company does not undertake any 
obligation to update or revise the business review during the ﬁ nancial 
year ahead it is believed that the expectations set out in these 
forwardlooking statements are reasonable but they may be affected 
by a wide range of variables which could cause actual results or trends 
to differ materially the forwardlooking statements should be read in 
particular in the context of the speciﬁ c risk factors for the company 
identiﬁ ed in the business review the company’s shareholders 
are cautioned not to place undue reliance on the forwardlooking 
statements shareholders should note that the business review has not 
been audited or otherwise independently veriﬁ ed 
principal events of the year
the principal events of the year are covered in the business review 
the key event during the year was the suspension of grouting efforts 
on the eurochem project
events that led to the suspension of our grouting efforts on the 
eurochem project and our decision to give advance notice of 
termination of the contract are more fully described in the chief 
executive ofﬁ cer’s statement on pages 6 to 7 and the operational 
review on page 10 the carrying amounts of net assets after allowing 
for advance payments in the group’s accounts at 31 december 2011 
in relation to this project are usd63 million a further usd63 million 
of expenditures are estimated to have been incurred on this project 
through to the date of this report in addition there remains a ﬁ xed fee 
of usd132 million which has not yet been recorded in the group’s 
accounts as income as well as likely demobilisation and termination 
costs all of which will be billed to eurochem in 2012 the board is of 
the view that the group’s contract with eurochem properly provides for 
the full recovery of all amounts incurred on the project 
dividends
the company paid its maiden interim dividend of 24 pence per 
share in october 2011 in the absence of unforeseen circumstances 
and subject to shareholder approval the company is recommending 
a ﬁ nal dividend of 48 pence per share in respect of the 2011 results 
payable in june 2012
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25
annual general meeting
the second annual general meeting ‘agm’ will be held on friday 
1 june 2012 in london details of the resolutions to be presented at 
the agm together with explanations appear in the notice of agm on 
page 88
share capital
as at 31 december 2011 the company’s issued share capital was 
gbp58900001 with 47500000 ordinary shares of no par value in 
issue share capital in the statement of ﬁ nancial position is stated 
after deduction of capitalised ipo expenses of gbp2336202 the 
ordinary shares are listed on the london stock exchange the rights 
and obligations attaching to the company’s shares in addition to 
those conferred on their holders by law are set out in the articles of 
association a copy of which can be obtained from the company’s 
registered agent and the company secretary at the company’s 
registered ofﬁ ce the holders of ordinary shares are entitled to 
receive all shareholder documents to attend and speak at general 
meetings of the company to appoint proxies and to exercise all 
voting rights and to participate in distributions of income or capital 
amendments to the articles of association
the company’s articles of association may only be amended by a 
special resolution at a general meeting of the shareholders
major interests in shares
as at 31 march 2012 the following shareholders either notiﬁ ed the 
company or the company is aware of major interests in shares where 
the threshold of 3 of the issued share capital of the company was 
crossed or reached
 number of voting rights  nature of holding
international mineral 
resources bv 22819266 4804 direct
henderson global investors 4437607 934 indirect
artemis investment 
management llp 1753680 369 direct
j o hambro investment 
management 1675522 353 indirect
aviva plc  its subsidiaries 1366631 288 direct
national farmers union 1065500 224 indirect
jp morgan asset 
management uk limited 921220 194 indirect
relationship agreements
international mineral resources bv “imr” and the company 
entered into a relationship agreement on 20 december 2010 the 
‘‘relationship agreement’’ which regulates the ongoing relationship 
between imr and the group with a view to ensuring that the group 
is capable of carrying on its business independently of imr and that 
transactions and relationships between the group and imr are at 
arm’s length and on a normal commercial basis
imr its direct and indirect beneﬁ cial owners and any subsidiary 
not including the company are referred to in this paragraph as its 
‘‘shareholder group’’ for the purposes of the relationship agreement 
an “independent director” broadly means a director of the company 
who is not a current or recent director ofﬁ cer employee or shareholder 
of or consultant to or a person having a relationship association or 
interest which is material to him with or in or who has been nominated 
by imr or any associate as deﬁ ned in the relationship agreement of 
imr or with or in any person having a relationship which is material to it 
or him with imr or any associate of imr
under the relationship agreement imr and the company agree 
inter alia that
a   imr shall not vote on any shareholder resolution that is required 
pursuant to applicable law or regulation to alter the company’s 
articles or memorandum of association which would be contrary 
to the maintenance of the company’s ability to manage and run 
its business independently of imr and the shareholder group 
unless such resolution is supported by the votes of the majority of 
independent directors
b   there shall at all times be a majority of independent directors 
on the board whose number shall not be less than the number 
of directors nominated by imr in addition the number of 
nonexecutive independent directors shall not be less than the 
number of nonindependent directors imr shall exercise the 
voting rights attaching to the ordinary shares held from time to 
time directly or indirectly by it andor by any of its shareholder 
group and shall use reasonable efforts to procure so far as it 
is able that the nonindependent directors shall exercise their 
voting rights on the board so that if it becomes aware that an 
independent director ceases to be an independent director 
of the company for any reason that independent director will 
insofar as may be necessary to ensure that there continues to 
be a majority of independent directors on the board and that 
the number of nonexecutive independent directors shall not be 
less than the number of nonindependent directors be replaced 
or supplemented as the case may be by a new executive or 
nonexecutive director as the case may be who is also an 
independent director
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26
c   save to the extent required by law or as otherwise contemplated 
in the relationship agreement they shall exercise their powers 
in a manner which shall not prevent the company from being 
managed in accordance with the principles and provisions set out 
in the uk corporate governance code
d   they shall and shall respectively use reasonable efforts to procure 
that all subsidiaries of imr and the company respectively shall 
conduct all transactions and relationships with imr and all 
subsidiaries of imr as the case may be on arms’ length terms
e   no material agreement arrangement or transaction between the 
group and any associate of the controlling shareholder shall be 
entered into novated varied abrogated nor shall any agreement 
be materially amended unless approved by a resolution of the 
board which has been voted for by a majority of the independent 
directors the group must enforce the terms of agreements with 
imr and associates of imr unless there is a bona ﬁ de commercial 
reason not to do so and such action has been approved by 
resolution of the board which has been voted for by a majority of 
the independent directors
f   if within ﬁ ve years of the date on which the relationship 
agreement is executed imr is presented with an opportunity to 
develop or acquire a business principally concerned with shaft 
sinking it will ﬁ rst offer to the company the chance to take up 
such opportunity and if the company does not conﬁ rm in writing 
within 14 days of being so informed that it wishes to pursue the 
opportunity then it shall be deemed to have declined it and
g   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
relations with shareholders
the group aims to provide a high level of transparency and 
communication to investors and analysts on a regular and timely 
basis through announcements meetings and seminars the group 
seeks to develop a regular dialogue with investors and analysts and 
to respond to their challenges and to understand their sentiments 
and concerns
all shareholders have the opportunity to attend and raise questions at 
the company’s annual general meeting the group aspires to have 
an investor relations programme that meets the aspirations of all of its 
current and potential shareholders and that lends itself to the growth 
of the group’s business and future sustainability
the chief executive ofﬁ cer and chief financial ofﬁ cer aim to meet 
all major shareholders at least twice a year and to meet with a 
wide range of shareholders and prospective investors in the united 
kingdom these discussions will focus on the results and businesses 
of the group but will also seek to learn of any concerns amongst 
investors and to gain a deeper understanding of their strategic 
objectives the group will also seek to meet with sellside analysts to 
raise the group’s proﬁ le and to build the research coverage
the chairman and nonexecutive directors are encouraged to attend 
investor relations meetings or to request meetings with investors 
or analysts independent of the group’s management the 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 22 to the 
annual ﬁ nancial 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 ﬁ nancial year loans of zar50 million gbp05 million 
were made by shaft sinkers pty limited to imr south africa pty 
limited in the 2010 ﬁ nancial year prior to admission by the company 
to trading on the london stock exchange these loans have 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 to 
the extent of zar50 million gbp05 million at 31 december 2010 
were repaid to imr bv in 2011 
employees
the group employed approximately 7100 people as at the end 
of the 2011 ﬁ nancial year further information about employees is 
disclosed in the sustainability review on page 23
creditor payment policy
the group’s policy is to agree terms of trading with suppliers in 
advance and to make payment in accordance with these terms the 
group does not follow any speciﬁ c published code or standard on 
payment practice 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 
225014 shaftsinkersra2012pagesindd   26 26042012   1937 shaft sinkers report  accounts 2011
27
post balance sheet events
the directors are not aware of any other matter or circumstance not 
disclosed in this report and arising since the end of the ﬁ nancial 
year not otherwise dealt with in the annual ﬁ nancial statements 
which signiﬁ cantly affects the ﬁ nancial position at 31 december 2011 
or the results of the group’s operations or cash ﬂ ows for the year 
then ended
financial instruments
details of the group’s ﬁ nancial risk management objectives and 
policies are described in the internal controls and risk management 
report on page 19 and in note 27 to the consolidated financial 
statements on pages 73 to 78
charitable and political donations
no political donations were made during the year and no donations 
were made to any political party representative or candidate in any 
part of the world during the year the group pledged a donation to 
the bhavishya bharat fund for the rehabilitation of the earthquake 
struck sikkim province in india furthermore the group funded a 
number of long term corporate social investment projects in south 
africa as part of its corporate social responsibility programme refer 
also to the sustainability review which can be found on page 23 of 
this annual report
signiﬁ cant agreements and other potential legal 
impediments
the following represent signiﬁ cant agreements and other potential 
legal impediments which may entitle the counterparties to exercise 
termination or other rights in the event of a change of control of the 
company the remaining essential contractual arrangements can be 
summarised as follows
•   contracts for the purchase of inputs – while most of the supplies 
needed to operate the group’s projects are secured through 
competitive tendering in the open market the group in south 
africa is largely dependent on scaw metals for the supply of 
winder ropes
financing arrangements – the company and group have a number 
of bank facilities which we believe could be replaced in the open 
market
•   contracts relating to labour and services – the principal 
arrangements essential to the group’s business in south africa 
are collective agreements with trade unions representing the 
majority of the group’s employees most notably with the 
national union of mineworkers in south africa
signiﬁ cant agreements – change of control
a number of agreements take effect alter or terminate upon a 
change of control of the company following a takeover bid such as 
borrowing facilities and contracts with clients these are deemed to 
be signiﬁ cant to the group’s business the group’s banking facilities 
with standard bank of south africa limited “standard bank”
amounting to zar250 million gbp199 million require the approval 
of standard bank in the event of a change of ultimate control of its 
subsidiaries shaft sinkers pty limited or capstone 615 pty limited 
the group does not have agreements with any director or employee 
that would provide compensation for loss of ofﬁ ce or employment 
resulting from a takeover
auditors and disclosure of information to auditors
the group’s external auditors kpmg audit llc have indicated their 
willingness to continue in ofﬁ ce and a resolution seeking to reappoint 
them will be proposed at the forthcoming agm each of the directors 
at the date of approval of this report conﬁ rms that
1   so far as the director is aware there is no relevant audit 
information of which the group’s auditors are unaware and
2   the director has taken all the steps that he ought to have 
taken as a director to make himself aware of any relevant audit 
information and to establish that the group’s auditors are aware 
of the information
going concern
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 the group continues to adopt the going concern basis in 
preparing the ﬁ nancial statements
the underlying assumptions and considerations in arriving at this 
conclusion include the group’s favourable net cash position at 31 
december 2011 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 cost plus 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 20 on pages 68 and 69 
add further support these assumptions
225014 shaftsinkersra2012pagesindd   27 26042012   1937 shaft sinkers report  accounts 2011
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 uk corporate 
governance code the ‘code’ which was published in june 2010 by 
the financial reporting council and which applies to the company 
since 1 january 2011 throughout the company’s reporting period 
ended 31 december 2011 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 ofﬁ cer of imr management services limited a company 
related to imr bv which is 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 
signiﬁ cant importance in the group’s continuing success and growth 
role of the board
the board is responsible for promoting the longterm success of 
the company and ensuring that its principal aim is to enhance the 
company’s longterm value for the beneﬁ t of shareholders whilst 
having regard to the interests of other stakeholders at its 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 ﬁ nancial performance and its approach 
to risk management and corporate governance in addition it agrees 
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 
• strategy and management
 – responsibility for the overall management of the group 
 –  approval of the group’s long term objectives and commercial 
strategy 
 –  approval of the annual operating and capital expenditure 
budgets and any material changes to them
 –  approval of any speciﬁ c key expenditures falling within pre
approved budget levels
 – oversight of the group’s operations
 –  review of performance in the light of the group’s strategy 
objectives business plans and budgets and ensuring that any 
necessary corrective action is taken 
 –  extension of the group’s activities into new business or 
geographic areas
 –  any decision to cease to operate all or any material part of 
the group’s business
• structure and capital
 –  changes relating to the group’s capital structure including 
reduction of capital share issues except under employee 
share plans share buy backs including the use of treasury 
shares
 – major changes to the group’s corporate structure
 –  changes to the constitutional documents of the company or 
any of its subsidiaries
 – changes to the group’s management and control structure
 –  any changes to the company’s or any other listed or 
public company in the group listing or its status as a public 
company
• financial reporting and controls
 –  approval of interim and ﬁ nal results and any preliminary 
announcement of such results following the recommendation 
of the audit committee
 –  approval of the annual report and accounts including the 
corporate governance statement and remuneration report 
following the recommendation of the audit committee
 –  approval of the dividend policy 
 –  declaration of the interim dividend and recommendation of 
the ﬁ nal dividend 
 –  approval of any signiﬁ cant changes in accounting policies 
or practices following the recommendation of the audit 
committee
 –  approval of treasury policies including foreign currency 
exposure and the use of ﬁ nancial derivatives
• internal controls
 –  ensuring maintenance of a sound system of internal control 
and risk management 
 –  approving an appropriate statement for inclusion in the 
annual report following the recommendation of the audit 
committee
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29
• contracts
 – major capital projects
 – c ontracts 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 speciﬁ ed amount and material acquisitions or 
disposals of ﬁ xed assets
 –  borrowings by group companies in excess of two times 
adjusted capital and reserves deﬁ ned 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 
• communication
 –  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
• board membership and other appointments
 –  changes to the structure size and composition of the board 
following recommendations from the nomination committee 
 –  ensuring adequate succession planning for the board and 
senior management 
 –  appointments to the board following recommendations by 
the nomination committee 
 –  appointment of key senior management with family ties to 
shareholders 
 –  selection of the chairman of the board and the chief 
executive 
 – appointment of the senior independent director
 –  ensuring that directors especially nonexecutive directors 
have access to independent professional advice at the 
company’s expense where they judge it necessary in order to 
discharge their responsibilities as directors 
 –  ensuring that directors have access to sufﬁ cient training 
resources for their development needs review of which shall be 
undertaken by the chairman on an individual director basis 
 –  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 ofﬁ ce of directors at the end of their term of 
ofﬁ ce when they are due to be reelected by shareholders 
at the agm and otherwise as appropriate following 
recommendations by the nomination committee
 –  continuation in ofﬁ ce of any director at any time including 
the suspension or termination of service of an executive 
director as an employee of the company subject to the law 
and their service contract following recommendations by the 
nomination committee
 –  appointment or removal of the company secretary 
 –  appointment reappointment or removal of the external 
auditor to be put to shareholders for approval following 
recommendations of the audit committee 
 – appointments to boards of subsidiaries
 – the appointment of the company secretary
• remuneration
 –  approval of the remuneration policy for the directors 
company secretary and other senior executives following 
recommendations of the remuneration committee
 –  approval of the remuneration of the nonexecutive directors 
subject to the articles of association and shareholder approval 
as appropriate 
 –  approval of the remuneration of auditors
 –  the introduction of new share incentive plans or major changes 
to existing plans to be put to shareholders for approval 
following recommendations of the remuneration committee
• delegation of authority
 –  the division of responsibilities between the chairman the 
chief executive and if applicable other executive directors 
which should be in writing 
 –  approval of terms of reference of board committees 
 –  receiving reports from board committees on their activities
 – a pproval of the delegation of authorities to the executive 
management and to subsidiary boards 
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30
• corporate governance matters
 –  undertaking a formal and rigorous review annually of its own 
performance that of its committees and individual directors 
 – determining the independence of directors 
 –  considering the balance of interests between shareholders 
employees customers and the community
 –  review of the group’s overall corporate governance 
arrangements
 –  receiving reports on the views of the company’s 
shareholders 
• policies 
 – approval of policies
• other
 – the making of political donations
 –  approval of the appointment of the group’s principal 
professional advisers
 –  prosecution defence or settlement of litigation being 
material to the interests of the group as a whole
 –  approval of the overall levels of insurance for the group 
including directors’  ofﬁ cers’ liability insurance and 
indemniﬁ cation of directors
 –  approval of the arrangements related to any group pension 
scheme
 –  ensuring that matters requiring an approval of the company 
in a general meeting are referred to such meeting 
 – this schedule of matters reserved for board decisions
directors
details of the current directors of the company and their biographies 
are set out on pages 2 and 3
current directors were reappointed on 8 june 2011 details of 
reappointment and resignation of directors are as follows
•  amre youness was reappointed nonexecutive chairman of the 
group
•  stephen oke was reappointed senior independent non
executive director
•  roger williams was reappointed independent nonexecutive 
director
•  ian watson was reappointed as independent nonexecutive 
director
•  alon davidov was reappointed as chief executive ofﬁ cer
•   robert schroder was reappointed as chief operating ofﬁ cer and 
resigned with effect from 31 august 2011
• christopher hall was reappointed as chief financial ofﬁ cer
under the company’s articles of association directors retire by 
rotation and all directors are subject to election at the ﬁ rst annual 
general meeting after their appointment and to reelection at intervals 
of no more than three years in accordance with the recommendations 
and requirements of the uk corporate governance code of june 2010 
published by the financial reporting council the “code” all directors 
should be subject to annual election by the shareholders unless the 
company is a smaller company below the ftse 350 the chairman 
conﬁ rms that 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 
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 believed that each director 
who sought election on 8 june 2011 was an effective member of 
the board and demonstrated commitment to their respective role 
further details and biographical information can be found on pages 2 
and 3 of this annual report
the board considers that stephen oke roger williams and 
ian watson are independent directors in accordance with the 
requirements of the code the terms and conditions of their 
appointment are available for inspection at the company’s registered 
address
the following former director resigned
 appointed resigned
robert schroder 19 november 2010 31 august 2011
mr martin peters is appointed as company secretary and was 
appointed in this role on 6 october 2010 the board has conﬁ rmed 
his appointment in this role greystone trust company limited was 
appointed as registered agent on 6 october 2010
directors’ interests
directors had no beneﬁ cial 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
225014 shaftsinkersra2012pagesindd   30 26042012   1937 shaft sinkers report  accounts 2011
31
directors’ attendance at board and committee meetings during 2011
during the 2011 ﬁ nancial year there were three formal scheduled board meetings of the company the attendance of individual directors at 
these board meetings and the board committee meetings is shown in the table below
 independent formal scheduled audit remuneration nominations safety
   board meetings  committee committee committee committee
  attended 2011    
amre youness no 33    
stephen oke yes 33 22 33  22
roger williams yes 33 22 33  
ian watson yes 33 22 33  22
alon davidov no 33 22   
robert schroder no 12    12
christopher hall no 33    
 mr robert schroder resigned prior to the third board meeting
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 ﬁ ve days in advance of meetings to enable directors to 
obtain a thorough understanding of the matters to be discussed 
the board strives to meet 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 identiﬁ ed 
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 conﬂ icts of interest is carried out at 
each board meeting on appointment directors are provided with 
adequate information to ensure that they fully understand the business 
of the group and their legal and regulatory responsibilities as a director 
of the company the board undertakes an annual review of its own 
performance
the board has put in place a procedure whereby all directors 
have access through the chief executive ofﬁ cer or the company 
secretary to independent professional advice at the expense of 
the company the company also maintains an appropriate level of 
directors’ and ofﬁ cers’ liability insurance 
board evaluation
the 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 ofﬁ cer on an annual basis and will 
monitor performance against these
the board shall also evaluate critically on a regular basis 
commencing in 2012 its own performance that of its committees 
and individual directors
board committees
the board has established four principal committees as follows
nominations  remuneration audit safety
committee committee committee 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
audit committee
each member of the audit committee is considered to have 
extensive commercial and business leadership experience in 
particular roger williams and stephen oke have relevant and recent 
ﬁ nancial skills and experience 
under its terms of reference which are available from the company 
secretary the audit committee shall consist of at least three 
members all of whom shall be independent nonexecutive directors 
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 
225014 shaftsinkersra2012pagesindd   31 26042012   1937 shaft sinkers report  accounts 2011
32
vote at committee meetings however other individuals such as 
the chairman of the board chief executive ofﬁ cer chief financial 
ofﬁ cer other directors the head of internal audit and representatives 
from the ﬁ nance function may be invited to attend all or part of any 
meeting as and when appropriate the external auditors will be 
invited to attend meetings of the committee on a regular basis
appointments to the committee shall be for a period of up to 
three years which may be extended for further three year periods 
provided the director remains independent
the company secretary or their nominee shall act as the secretary 
of the committee the secretary shall also act as a coordinating 
intermediary between the board and the committee
the primary responsibilities of the audit committee include the 
following
• to monitor the integrity of the group’s ﬁ nancial statements
•   to review the group’s internal control and risk management 
systems
•   to review the group’s whistle blowing and fraud prevention 
procedures
•   to review the group’s systems and controls for the prevention of 
fraud and bribery and receive reports on noncompliance
•   to monitor the effectiveness of the group’s internal audit 
function and
•   to oversee the relationship with the group’s external auditors
external audit
the overall performance of the external auditors is reviewed annually 
by the audit committee the audit committee is responsible to the 
board for ensuring that the external auditors remain independent 
of the company in all material respects and that kpmg audit llc 
as external auditors are adequately resourced so as to enable 
the delivery of an objective audit to the shareholders the audit 
committee is also responsible for making formal recommendations 
each year to the board in respect of the continuation of the external 
auditors in ofﬁ ce kpmg have been the group’s auditors since 2007 
and before it was listed on the london stock exchange in december 
2010 the group underwent a formal tendering process in 2008 and 
kpmg was chosen as the group’s worldwide auditors the audit 
committee is satisﬁ ed with their effectiveness and independence 
accordingly the audit committee has not considered it necessary to 
require the ﬁ rm to tender for its audit work the external auditors are 
required to rotate the audit partner responsible for the group and 
subsidiary audits every ﬁ ve years and the current lead partner has 
been in place for the ﬁ rst time from the 2010 ﬁ nancial year
the audit committee also reviews the level and nature of any non
audit work to be performed during the year and considers whether it 
is appropriate for this work to be carried out by the external auditors 
the external auditors are precluded from engaging in nonaudit 
services that would compromise their independence and objectivity 
or violate any laws or regulations affecting their appointment as 
external auditors
internal audit
the 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 ofﬁ cer 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 signiﬁ cant projects or initiatives the internal 
audit function has through the services of deloitte a whistleblowing 
policy which enables employees to raise any concerns they may have 
about workplace fraud or mismanagement with local management 
on a conﬁ dential basis the complaint is then investigated in the 
ﬁ rst instance and a decision taken about further steps feedback is 
provided to the person making the complaint written records are 
kept of all whistleblowing incidents and a regular status report is 
presented at each audit committee meeting
safety committee
the safety committee is chaired by ian watson and its other member 
is stephen oke the committee will meet at least twice a year and has 
responsibility for making recommendations to the board to ensure a safe 
and healthy workplace is created and maintained for all employees
the role of the safety committee is to assist the board in its oversight 
of the following
•  safety health environment quality and training
•   the group’s compliance with applicable legal and regulatory 
requirements associated with health safety environment and 
training matters
•   the group’s performance in relation to health safety environment 
and training and monitoring sustainable development and
•   the preparation of a report by the committee to be included in 
the annual report
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33
further details of the work of the safety committee are set out in the 
sustainability review on page 23
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 judgement the chairman of the committee shall be 
either the chairman of the board or an independent nonexecutive 
director who shall be appointed by the board the chairman of 
the board shall not chair the committee when it is dealing with the 
matter of succession to the chairmanship appointments to the 
committee shall be for a period of up to three years which may be 
extended for a further three year periods provided the majority of 
the committee remains independent
only members of the committee shall have the right to attend and 
vote at committee meetings however other individuals such as 
the chief executive ofﬁ cer of the company the company’s head 
of human resources and external advisers of the company may 
be invited to attend for all or part of any meeting as and when 
appropriate the committee shall meet at least twice a year and at 
such other times as the chairman of the committee shall require
the main duties of the nominations committee include
•   to regularly review the structure size diversity and composition 
of the board and make recommendations to the board with 
regard to any changes
•   to give full consideration to succession planning for directors and 
other senior executives
•   to identify and nominate for the approval of the board 
candidates to ﬁ ll board vacancies as and when they arise
•   to evaluate the balance of skills knowledge independence and 
experience on the board and use open advertising or the services 
of external advisers to facilitate the search for new candidates 
when required
•   for the appointment of a chairman to prepare a job speciﬁ cation 
including the time commitment expected
•   to review the results of the board performance evaluation process 
that relates to the composition of the board and
•   generally to provide recommendations to the board on matters 
regarding the appointments to the various committees
remuneration committee
the role of the committee is to establish a framework for setting and 
maintaining at appropriate levels the remuneration of the group’s 
executive directors and senior management in general and for setting 
the remuneration for the executive directors in particular
the committee shall be made up of at least three members all of 
whom shall be independent nonexecutive directors the chairman 
of the board may also serve on the committee as an additional 
member if he or she was considered independent on appointment as 
chairman the chairman of the board shall not be chairman of the 
committee appointments to the remuneration committee shall be 
for a period of up to three years which may be extended for further 
threeyear periods provided the director still meets the criteria for 
membership of the committee
only members of the remuneration committee have the right to 
attend and vote at committee meetings however other individuals 
such as the chief executive the head of human resources and 
external advisers may be invited to attend for all or part of any 
meeting as and when appropriate
no member of the board or of the remuneration committee shall 
attend meetings of the remuneration committee where his or her 
own remuneration arrangements are determined
the duties of the remuneration committee includes
•  to determine and agree with the board the framework or broad 
policy for the remuneration of the group’s chief executive 
ofﬁ cer chairman the executive directors the company 
secretary and such other members of the executive management 
as it is designated to consider the remuneration of non
executive directors shall be a matter for the chairman and the 
executive members of the board
•  to ensure that members of the executive management of the 
group are provided with appropriate incentives to encourage 
enhanced performance and are in a fair and responsible manner 
rewarded for their individual contributions to the success of the 
group
•  to review the ongoing appropriateness and relevance of the 
remuneration policy
•  to approve the design of and determine targets and upper 
limits for any performance related pay schemes operated by the 
group and approve the total annual payments made under such 
schemes ensuring that any performance based remuneration 
arrangements are clearly aligned with business strategy and 
objectives and are regularly reviewed
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34
•  to review the design of all share incentive plans for approval by 
the board and shareholders for any such plans determine each 
year whether awards will be made and if so the overall amount 
of such awards the individual awards to executive directors and 
other senior executives and the performance targets to be used
•  to ensure that any performance related pay schemes or share 
incentive plans operated by the group are compatible with the 
group’s risk policies and systems
•  to ensure that contractual terms on termination and any 
payments made are fair to the individual and the group that 
failure is not rewarded and that the duty to mitigate loss is fully 
recognised
•  within the terms of the agreed policy and in consultation with 
the chairman andor chief executive as appropriate determine 
the total individual remuneration package of each executive 
director senior executives and other members of the executive 
management including bonuses incentive payments and share 
options or other share awards
•  to review and note annually the remuneration trends across the 
group and have these in mind when setting remuneration policy 
for directors
•  to be aware of and oversee any major changes in employee 
beneﬁ ts structures throughout the group
•  to agree the policy for authorising claims for expenses from the 
chief executive ofﬁ cer the chairman and the other directors
•  to ensure that all provisions regarding disclosure of remuneration 
including pensions are fulﬁ lled
•  to be exclusively responsible for establishing the selection 
criteria selecting appointing and setting the terms of reference 
for any remuneration consultants who advise the committee
•  to obtain reliable uptodate information about remuneration 
in other companies within the same sector but ensure that 
automatic increases are not implemented and consider relative 
performance judging the implications carefully
•  to give guidance to the executive management in setting the 
levels of remuneration for the group 
•  to obtain shareholder approval before departing from the stated 
remuneration policy
•  to work with the company’s audit committee in evaluating 
performance criteria
•  to review and consider all executive and management 
compensation agreements
•  to work closely with the nomination committee in relation to the 
remuneration to be offered to any new executive director and
•  to ensure that any material payments that may be viewed as 
exgratia in nature are fully explained justiﬁ ed and subject to 
shareholder approval prior to payment
the section of the directors’ report entitled “directors’ report – 
remuneration” on pages 35 to 39 shall constitute a remuneration 
report a resolution to approve the remuneration report will be 
proposed at the forthcoming agm
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35
directors’ report – remuneration
introduction
the directors have pleasure in presenting their report on directors’ 
remuneration for the year ended 31 december 2011
role of the remuneration committee
the remuneration committee is a formal committee of the board its 
remit is set out in terms of reference formally adopted by the board in 
december 2010 the terms of reference are designed to enable the 
committee to comply with the requirements relating to remuneration 
policy set out in the code a copy of the terms of reference can be 
obtained from the company secretary
the principal responsibilities of the remuneration committee are
•  to determine and agree with the board the framework or broad 
policy for the remuneration of the group’s chief executive ofﬁ cer 
chairman the executive directors the company secretary 
and such other members of the executive management as it is 
designated to consider
•  to review the ongoing appropriateness and relevance of the 
remuneration policy
•  to approve the design of and determine targets and upper limits for 
any performance related pay schemes operated by the group and 
approve the total annual payments made under such schemes and
•  to review the design of all share incentive plans for approval by 
the board and shareholders for any such plans determine each 
year whether awards will be made and if so the overall amount 
of such awards the individual awards to executive directors and 
other senior executives and the performance targets to be used
membership of the remuneration committee
the members of the committee all of whom are independent non
executive directors and were appointed on 19 november 2010 are 
as follows
•  stephen oke chairman
•  roger williams
•  ian watson
the company secretary acts as secretary to the committee the 
chief executive ofﬁ cer and the head of human resources and 
external advisors also attend committee meetings by invitation but 
none is present when the committee discusses issues relating to their 
own remuneration
advisors to the remuneration committee
the remuneration committee has retained the services of kepler 
associates in 2011 and 2012 to carry out a review of the senior 
executive remuneration and to provide advice in relation to the long 
term incentive plan ‘ltip’ other than as described above no other 
service was provided by kepler associates to the group during the 
2010 and 2011 ﬁ nancial years kepler associates have no connection 
with the group other than as consultants
remuneration policy
the group’s remuneration policy is focused upon providing a level of 
remuneration which attracts retains and motivates directors and senior 
executives of sufﬁ cient calibre to achieve the group’s strategic goals 
and enhance shareholder value whilst ensuring that remuneration is 
consistent with best practice and provides an appropriate alignment 
with personal and business performance the committee recognises 
that there is a competitive market for successful executives with 
experience in the mining industry and that the provision of appropriate 
rewards for superior performance is important for the continued growth 
of the business the committee’s aim in formulating remuneration 
policy is to assess relevant benchmark data from sources such as other 
companies listed on the london stock exchange of a similar size and 
complexity international mining companies and the market generally 
in setting remuneration within this framework the committee aims to 
give senior executives every encouragement to enhance the group’s 
performance whilst ensuring that they are fairly but responsibly 
rewarded for their personal contributions 
the committee believes that it is important to benchmark the 
remuneration packages of senior executives in april 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 a similar review was again requested 
in april 2012
components of executive directors’ remuneration
remuneration packages are structured to provide an appropriate 
balance between ﬁ xed and variable elements the main components 
of the two executive directors’ and one former executive director’s 
remuneration and the percentage of each element as part of the 
total package are detailed below the group chief operating ofﬁ cer 
position was vacated and remains so since the resignation of robert 
schroder which became effective 31 december 2011 following his 
notice period
  
 
salaries and fees
provident fund
benefits 
bonuses
value of ltip award
33
31
18
36
72
36
10
34
29
1
ceo coo cfo
225014 shaftsinkersra2012pagesindd   35 26042012   1937 shaft sinkers report  accounts 2011
36
these charts have been calculated on amounts earned in 2011 and 
exclude the onceoff ipo bonus awarded for 2011 the ltip award 
value is the amount expensed based on a monte carlo simulation of 
the value in 2011 since its award in december 2010 the ceo was 
formerly employed in a different capacity by the group from 2011 his 
remuneration structure fell in line with the other executive directors 
salaries
salaries are reviewed annually by the committee and take account of 
the relevant benchmark data pay quantum and structure
bonuses
for the years ended 31 december 2011 and 2010 the performance 
measures for the annual bonus were based on a group ﬁ nancial 
performance target and on personal performance the bonus 
arising from the performance target is up to 75 of annual salary 
for the chief operating ofﬁ cer and 50 of annual salary for the 
chief financial ofﬁ cer with a potential to earn an additional 15 if 
targets are exceeded by 10 if performance is 10 below target 
no target performance bonus is paid in 2011 and 2010 the targets 
were exceeded by more than 10 the bonus arising from personal 
performance is up to 15 of annual salary for the chief executive 
ofﬁ cer the chief operating ofﬁ cer and the chief financial ofﬁ cer 
speciﬁ c ﬁ nancial targets have not been disclosed as they are 
considered to be commercially conﬁ dential but they are deemed 
to be appropriately challenging the personal performance bonus 
is paid in december of the same year of measurement while the 
ﬁ nancial performance target bonus is deferred for 1 year and paid in 
december of the year following measurement the chief executive 
ofﬁ cer was not part of the bonus scheme up to 31 december 2010 
but has participated from 1 january 2011
provident fund
the group’s principal subsidiary shaft sinkers pty limited 
contributes towards a provident fund the fund is a deﬁ ned 
contribution fund the group contributes 15 of a base salary for 
each eligible member
ipo bonus
pursuant to admission to trading on the london stock exchange 
the group declared a bonus “ipo bonus” of an estimated zar445 
million gbp44 million of which an estimate zar134 million gbp13 
million would be paid to executive directors and senior management 
and an estimated zar311 million gbp31 million to other 
employees these employees were to receive two cash payments 
the ﬁ rst payment six months following admission june 2011 and 
the second payment one year following admission december 2011 
conditional in each such case on continued employment by the 
group at that date the executive directors received their ipo bonus 
as follows
 6 months following 1 year following
 admission admission total
 zar zar zar
alon davidov 1785308 1785308 3570616
robert schroder 1785308  1785308
christopher hall 1479342 1479342 2958684
long term incentive plan ‘ltip’
the ltip allows the committee to make awards which are 
a conditional right to receive shares in the company for nil 
consideration an award will normally vest ie become exercisable 
over a three year period from the date of its grant with a third being 
eligible for vesting each year to the extent that the applicable 
performance conditions have been satisﬁ ed beneﬁ ts in the ltip are 
not pensionable
the initial awards of 2250000 ordinary shares in the company were 
made as to 750000 to alon davidov 750000 to robert schroder 
and 750000 to christopher hall following the resignation of robert 
schroder in 2011 he has forfeited his rights to receive these ltip 
shares the ltip consists of a total of 2500000 ordinary shares the 
remuneration committee will determine the allocation and offer of 
awards over the balance of 250000 ordinary shares
the total number of ordinary shares issued under the ltip on 
any date of issue when aggregated with the number of ordinary 
shares issued or issuable under any other share scheme for senior 
employees of the group in any rolling ten year period may not 
exceed ﬁ ve per cent of the company’s issued ordinary shares
if an award is forfeited or becomes incapable of vesting the ordinary 
shares subject to that award may not be reallocated for future awards
the performance conditions applicable to these initial awards are 
measured in stages over each of the vesting periods and are linked to
•   growth in earnings per share of the company ‘‘eps’’ and
•   growth in the company’s share price
eps in respect of the ﬁ nancial year ending 31 december 2011 and 
for each of the ﬁ nancial years ending 31 december 2012 and 31 
december 2013 the company will need to achieve growth in eps of 
at least 20 per cent per annum in comparison to the previous ﬁ nancial 
year for the relevant proportion of awards to be capable of vesting 
225014 shaftsinkersra2012pagesindd   36 26042012   1937 shaft sinkers report  accounts 2011
37
in full should the company only achieve between 1020 per cent 
per annum growth in eps in the ﬁ nancial year under measurement 
between 50100 per cent of the relevant proportion of awards will 
be capable of vesting on a straight line basis between those two 
growth points should the company not achieve at least 10 per cent 
per annum growth in eps in the ﬁ nancial year under measurement 
none of the relevant proportion of awards will be capable of vesting 
if however over the full three years’ vesting periods the company 
has achieved a compound average growth in eps of 20 per cent per 
annum despite not having achieved that growth rate in any particular 
ﬁ nancial year then the eps performance criteria shall be deemed to 
have been achieved and awards shall be capable of vesting in full
share price in respect of the ﬁ nancial year ending 31 december 
2011 and for each of the ﬁ nancial years ending 31 december 2012 
and 31 december 2013 the company will need to achieve a growth 
in its share price of at least 26 per cent per annum for the relevant 
proportion of awards to be capable of vesting in full the base 
share price for the ﬁ nancial year 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 ﬁ nancial year should the company only 
achieve between 1326 per cent per annum growth in its share price 
in the ﬁ nancial year under measurement between 50100 per cent 
of the relevant proportion of awards will be capable of vesting on 
a straight line basis between those two growth points should the 
company not achieve at least 13 per cent per annum growth in 
share price in the ﬁ nancial year under measurement none of the 
relevant proportion of awards will be capable of vesting if however 
the average of the company’s closing share prices over the 30 days 
following announcement of the company’s audited results for the 
year ending 31 december 2013 is 100 per cent or more above the 
placing price despite not having achieved a 26 per cent growth in its 
share price in any particular year then the share price performance 
criteria shall be deemed to have been achieved and awards shall be 
capable of vesting in full
each award is split into three equal annual tranches within each 
annual tranche vesting of 50 per cent of that tranche will be subject 
to the eps performance criteria and 50 per cent to the share price 
performance criteria the remuneration committee will determine 
whether and to what extent the applicable performance conditions 
have been satisﬁ ed shortly after the announcement of the company’s 
audited results for each of the years ending 31 december 2011 
31 december 2012 and 31 december 2013 respectively and if 
applicable to total eps or share price growth over the full 3 year 
vesting period
the remuneration committee may at any time amend the ltip 
in any respect provided that the prior approval of the company in 
general meeting is obtained for amendments to the provisions of 
the ltip relating to eligibility the overall limits on the issue of new 
shares the maximum entitlement for any participant and the basis for 
determining that entitlement where such changes are to the material 
advantage of participants shareholder approval is not however 
required for minor amendments to beneﬁ t the administration of the 
ltip  to take account of changes in legislation or to obtain or maintain 
favourable taxation or regulatory treatment for participants or for any 
member of the group
the grant date fair value of the ltip was measured based on the 
monte carlo simulation option pricing model volatility was based on 
the historical share price data of the constituents of the oil services 
and equipment sector on the london stock exchange the inputs 
used in the measurement of the fair values at grant date of the ltip 
were as follows
description value per  assumed share price number number of weighted
 share right vesting date at grant date of days shares average volatility
 gbp  gbp   
share price growth shares      
1st tranche 063 10 april 2012 124 474 375000 5251
2nd tranche 052 10 april 2013 124 839 375000 5251
3rd tranche 072 10 april 2014 124 1204 375000 5251 
eps shares      
1st tranche 122 10 april 2012 124 474 375000 5251
2nd tranche 111 10 april 2013 124 839 375000 5251
3rd tranche 099 10 april 2014 124 1204 375000 5251
 
225014 shaftsinkersra2012pagesindd   37 26042012   1937 shaft sinkers report  accounts 2011
38
for the ﬁ nancial year 2011 the following parameters were used in valuing the eps shares that could potentially be earned under this ltip
description value per share right assumed vesting date number of days number of shares
 gbp   
eps shares    
1st tranche 107 10 april 2012 474 
2nd tranche 098 10 april 2013 839 250000
3rd tranche  088 10 april 2014 1204 500000
long term incentive plan
 shares awards held  share awards granted share awards settled shares awards held
 at 31 december 2010 during the year forfeited during the year at 31 december 2011
alon davidov 750000   750000
robert schroder 750000  750000 
christopher hall 750000   750000
directors’ remuneration for the period 1 january 2011 to 31 december 2011
the following table gives details of directors’ remuneration for the period 1 january to 31 december 2011
      total total
 salaries  provident beneﬁ ts bonuses value of  remuneration remuneration ipo bonus
 and fees fund   ltip award 2011 2010 2011 total 2011 total 2010 
  gbp gbp gbp gbp gbp gbp gbp gbp gbp
executive directors
alon davidov 216642   197730 184283 598655 87584 284654 883309 87584
robert schroder 156388 20873 39380   216641 411256 142327 358968 411256
christopher hall 175616  3650 145472 184283 509021 320948 235870 744891 320948
 548646 20873 43030 343202 368566 1324317 819788 662851 1987168 819788
nonexecutive directors          
amre youness 90000     90000 25578  90000 25578
stephen oke 75000     75000 12500  75000 12500
roger williams 60000     60000 10000  60000 10000
ian watson 60000     60000 10000  60000 10000
 285000     285000 58078  285000 58078
total 833646 20873 43030 343202 368566 1609317 877866 662851 2272168 877866
225014 shaftsinkersra2012pagesindd   38 26042012   1937 shaft sinkers report  accounts 2011
39
directors’ contracts
executive directors
the executive directors have service agreements which can be 
terminated by either the group or the executive director giving 
at least 6 months’ notice under the terms of the agreements the 
group reserves the right in its absolute discretion to terminate an 
executive director’s employment by making a payment in lieu of 
notice in the event of a contract being terminated the remuneration 
committee would determine the level of any compensation to be 
paid normally by reference to ﬁ xed elements of remuneration and 
the notice period any annual bonus payment or vesting of shares 
under the ltip would be dealt with in accordance with the rules of 
the particular scheme payments would normally be prorated and 
subject to the performance conditions under which the awards were 
granted the executive directors are subject to restrictive covenants 
which seek to prevent them from soliciting customers or employees 
andor competing with the company’s business for six months 
following termination of employment
dates of the service agreements are
name date of agreement notice period
alon davidov 20 december 2010 6 months
christopher hall 20 december 2010 6 months
nonexecutive directors
nonexecutive directors do not have service agreements with the 
company but each has a letter of appointment details of the 
letters of appointment are summarised below
name effective date of appointment unexpired term
amre youness 20 december 2010 2 years
stephen oke 20 december 2010 2 years
roger williams 20 december 2010 2 years
ian watson 20 december 2010 2 years
the unexpired term is subject to reelection at the agm of the 
company following the 3rd anniversary of appointment
copies of all executive directors’ service agreements and the 
letters of appointment of the nonexecutive directors are available 
for inspection during normal business hours at the ofﬁ ce of the 
company secretary
nonexecutive directors’ fees
the remuneration of the nonexecutive directors other than the 
chairman is a matter for the chairman and the executive directors 
fees are designed to ensure that the company attracts and retains 
high calibre individuals they are reviewed on an annual basis 
and account is taken of the level of fees paid by other companies 
of a similar size and complexity nonexecutive directors do not 
participate in any annual bonus plan longterm incentive plan or 
pension arrangements 
directors’ fees including committee fees on an annual basis are 
as  follows
  annual fees payable
nonexecutive director position gbp
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
225014 shaftsinkersra2012pagesindd   39 26042012   1937 shaft sinkers report  accounts 2011
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statement of directors’ responsibility for the 
annual report and accounts
the directors are responsible for preparing the annual report the 
directors report and the ﬁ nancial statements in accordance with 
applicable law and regulations in addition the directors have elected 
to prepare the ﬁ nancial statements in accordance with international 
financial reporting standards as issued by the international 
accounting standards board
the ﬁ nancial statements are required to give a true and fair view of 
the state of affairs of the group and of the proﬁ t or loss of the group 
for that period 
in preparing these ﬁ nancial statements the directors are required to
•  select suitable accounting policies and then apply them 
consistently
• make judgements and estimates that are reasonable and prudent 
•  state whether they have been prepared in accordance with 
international financial reporting standards and
•  prepare the ﬁ nancial statements on the going concern basis 
unless it is inappropriate to presume that the group and parent 
company will continue in business
the directors are responsible for keeping proper accounting records 
that are sufﬁ cient to show and explain the parent company’s 
transactions and disclose with reasonable accuracy at any time its 
ﬁ nancial position they have general responsibility for taking such 
steps as are reasonably open to them to safeguard the assets of the 
group and to prevent and detect fraud and other irregularities
the directors are responsible for the maintenance and integrity of 
the corporate and ﬁ nancial information included on the company’s 
website legislation governing the preparation and dissemination of 
ﬁ nancial statements may differ from one jurisdiction to another
the directors conﬁ rm that to the best of our knowledge
•  the ﬁ nancial statements prepared in accordance with 
international financial reporting standards give a true and just 
view of the assets liabilities ﬁ nancial position and proﬁ t or loss of 
the group and
•  the directors report includes a fair view of the development and 
performance of the business and position of the group together 
with a description of the principal risks and uncertainties that the 
group faces
by order of the board
alon davidov
chief executive ofﬁ cer
26 april 2012
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41
independent auditors’ report
report of the independent auditors kpmg audit 
llc to the members of shaft sinkers holdings plc
we have audited the ﬁ nancial statements of shaft sinkers holdings 
plc for the period ended 31 december 2011 which comprise the 
group statement of comprehensive income the group statements 
of financial position the group statement of cash flows and the 
group statement of changes in equity and the related notes 
the ﬁ nancial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting 
standards as issued by the international accounting standards 
board ifrs’s
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 ﬁ nancial statements that give a true and fair view our 
responsibility is to audit and express an opinion on the ﬁ nancial 
statements in accordance with applicable law and international 
standards on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s apb’s ethical standards 
for auditors
scope of the audit of the ﬁ nancial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the ﬁ nancial statements sufﬁ cient to give reasonable 
assurance that the ﬁ nancial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of signiﬁ cant accounting 
estimates made by the directors and the overall presentation of the 
ﬁ nancial statements
opinion on the ﬁ nancial statements
in our opinion the ﬁ nancial statements
•  give a true and fair view of the state of the group’s affairs as at 
31 december 2011 and of the group’s proﬁ t for the year then 
ended and
• have been properly prepared in accordance with ifrss
kpmg audit llc
chartered accountants
heritage court
41 athol street
douglas
isle of man im99 1hn
26 april 2012
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42
consolidated income statement 
for the year ended 31 december 2011 
  year ended year ended
  31 dec 2011 31 dec 2010
 note audited audited
  gbp  gbp
revenue  2  226539543  183127629 
direct expenses  188262281 150124829
gross proﬁ t   38277262  33002800 
operating income  5190993   3757264 
operating expense  28143045 18764042
proﬁ t from operations 3 15325210  17996022 
finance income 4 394850  347778 
finance expense 4 2213950 1634953
proﬁ t before income tax  13506110  16708847 
income tax 5 4789730 4075662
proﬁ t for the year  8716380  12633185 
attributable to    
owners of the company  8698114   12633185 
noncontrolling interests  18266      
proﬁ t for the year  8716380   12633185 
  
earnings per share    pence   pence 
basic earnings per share 19  183   298 
diluted earnings per share 19  182   296 
the directors consider all results derived from continuing activities
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
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43
consolidated statement of comprehensive income
for the year ended 31 december 2011 
  year ended year ended
  31 dec 2011 31 dec 2010
 note audited audited
  gbp  gbp
proﬁ t for the year   8716380   12633185 
other comprehensive income   
revaluation of land and buildings 61  412145   459483 
foreign currency translation differences for foreign operations   6960314  4650330 
income tax on revaluation of property plant and equipment 5  88747 103780
other comprehensive income for the year net of tax   6636916  5006033 
total comprehensive income for the year   2079464   17639218 
   
attributable to   
owners of the company   2061198   17639218 
noncontrolling interests   18266    
total comprehensive income for the year   2079464   17639218  
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
225014 shaftsinkersra2012pagesindd   43 26042012   1937 shaft sinkers report  accounts 2011
44
consolidated statement of ﬁ nancial position 
at 31 december 2011 
  year ended year ended
  31 dec 2011 31 dec 2010
 note audited audited
  gbp  gbp
assets   
noncurrent a ssets   54892004   64062857 
property plant and equipment 6  46332700   56499345 
goodwill 7  2172667   2663560 
other unlisted investments 10  845   893 
loans receivable 11  320238    
deferred taxation 12  4872910   4407011 
finance lease receivables 15  1192644   492048 
current assets   88955344   98072286 
inventories 13  16244485   8312403 
trade and other receivables 14  48995514   50129962 
finance lease receivables 15  474440   1176329 
loan to related party 221     489587 
loans receivable 11  39861    
loans to joint venture partners 91     59213 
income taxation   902653   2215994 
cash and cash equivalents 161  22298391   35688798 
total assets   143847348   162135143 
equity and liabilities   
equity     48024094   46509881 
ordinary share capital  17  56563799   56563799 
retained earnings   37901928   30343814 
foreign currency translation reserve   574557   7275524 
common control reserve 33  48965631  48965631
share based payment reserve 30  389235   20669 
revaluation reserve 18  1335757   1271706 
equity attributable to owners of the company   47799645   46509881 
noncontrolling interest   224449    
noncurrent liabilities   23652104   42199470 
deferred taxation  12  6795749   2754152 
deferred revenue 25  4174100   5908356 
interest bearing borrowings  201  12305185   19883255 
interest free advances from clients 21     13164644 
post retirement beneﬁ t obligation 23  377070   489063 
current liabilities   72171150   73425792 
trade and other payables including derivatives 24  34908849   39423020 
deferred revenue 25  8595742   17510351 
income taxation   344471   5130618 
interest bearing borrowings  202  3888492   4556896 
interest free advances from clients 21  24433596   6182700 
loan from related party 222       493039 
bank overdraft 162     129168 
total equity and liabilities   143847348   162135143  
the consolidated annual ﬁ nancial statements were approved by the board of directors on 26 april 2012 and were signed on its behalf by
amre youness nonexecutive chairman christopher hall chief financial ofﬁ cer 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
225014 shaftsinkersra2012pagesindd   44 26042012   1937 shaft sinkers report  accounts 2011
45
    foreign
  ordinary  currency common share based
  share retained translation control payment revaluation noncontrolling 
  capital  earnings reserve reserve reserve reserve interest total
 note gbp gbp gbp gbp gbp gbp gbp gbp
balance at 1 january 2010   28295890   7709500   2747890   24861725     466678   6893981   21252214 
issue of shares    30604111     24103906     6500205 
capitalised listing expenses   2336202          2336202
share based payment transactions 30      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 
proﬁ t for the year    12633185        12633185 
other comprehensive income           
revaluation of property plant 
and equipment        459483    459483 
deferred taxation on property 
plant and equipment        103780   103780
foreign currency translation 
differences for foreign operations     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 
share based payment transactions 30      368566     368566 
dividend paid    1140000       1140000
acquisition of noncontrolling interest
in shaft sinkers mining pty limited by 
black economic empowerment partners       206183   206183
proﬁ t for the year    8698114       18266   8716380  
other comprehensive income         
revaluation of property 
plant and equipment 6       412145    412145 
deferred taxation on 
revaluation adjustment 5       88747   88747
foreign currency translation 
differences for foreign operations 18    6700967    259347   6960314
total comprehensive 
income for the year      8698114   6700967        64051   224449   2079464
balance at 31 december 2011   56563799   37901928   574557   48965631  389235   1335757   224449   48024094 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
consolidated statement of changes in equity   
for the year ended 31 december 2011  
225014 shaftsinkersra2012pagesindd   45 26042012   1937 shaft sinkers report  accounts 2011
46
consolidated statement of cash ﬂ ows   
for the year ended 31 december 2011  
  year ended year ended
  31 dec 2011 31 dec 2010
  audited restated
 note  audited
  gbp  gbp
cash generated by operating activities before working capital changes 321  18297252   12510891 
increase  decrease in inventories   10285447  106895 
increase in trade and other receivables   10884495  11190092
increase decrease in trade and other payables   2690170   3920500 
increase in deferred revenue and advances from clients   12242558   15150083 
payment of retirement beneﬁ t obligation   43352  60304
cash generated by operations   12016686   20437973 
interest paid   1969425  1789704
interest received    394850   285443 
dividend paid   1140000   
income taxation paid  322  4514977  4917719
net cash inﬂ ow from operating activities   4787134   14015993 
cash ﬂ ows from investing activities   
property plant and equipment acquired 61  10373338  12093668
improvements to land and buildings 61  132229  37630
proceeds from disposal of property plant and equipment   1012458   6577627 
proceeds from disposal of noncontrolling interest in subsidiary   107039    
loans granted to third parties   363434   
increase in ﬁ nance lease receivables   331807  405694
repayments received from joint venture partners   634    
proceeds from disposal of equity accounted investee      1763078 
loans granted to related parties      1001772
repayments received on related party loans   432770   1277086 
amount paid by group to acquire noncontrolling interest      20670129
net cash outﬂ ow from investing activities   9647907  24591102
cash ﬂ ows from ﬁ nancing activities   
funding received on interest bearing borrowings entered into by the group      22038470 
repayments made on interest bearing borrowings   3943731  11192402
repayments made on ﬁ nance lease obligations   117308  4472881
proceeds received on issuing of share capital  323     30604111 
repayments made on related party loan   435822   
listing expenses paid in cash      2336202
loans advanced to joint ventures      28647
net cash outﬂ ow  inﬂ ow from investing activities   4496861  34612449 
net decrease  increase in cash and cash equivalents   9357634  24037340 
cash and cash equivalents at the beginning of the year   35559630   8402506 
effect of exchange rate differences on cash and cash equivalents   3903605  3119784 
total cash and cash equivalents at the end of the year   22298391   35559630 
the accompanying notes to the consolidated annual ﬁ nancial statements form an integral part of the consolidated annual ﬁ nancial statements
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47
notes to the consolidated annual ﬁ nancial statements 
for the year ended 31 december 2011  
11 reporting entity      
the consolidated annual ﬁ nancial statements of shaft sinkers holdings plc “the company” as at and for the year ended 31 december 2011 
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 ﬁ nancial statements are prepared in accordance with international financial reporting standards ifrs and international 
financial reporting interpretations committee “ifric” interpretations as issued by the international accounting standards board “iasb” 
the consolidated ﬁ nancial statements have been prepared in accordance with the listing rules of the london stock exchange  
122 basis of measurement      
the consolidated ﬁ nancial statements have been prepared on the historical cost basis except for the following material items in the 
consolidated statement of ﬁ nancial position      
 derivative ﬁ nancial instruments are measured at fair value      
 ﬁ nancial instruments at fair value through proﬁ t or loss are measured at fair value      
 land and buildings are measured at fair value      
the methods used to measure fair value are discussed further in note 1320      
123 basis of preparation      
group restructuring      
for the purposes of the consolidated ﬁ nancial 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 ﬁ gures relate to capstone 
615 proprietary limited      
going concern      
the consolidated ﬁ nancial 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 27    
presentation currency      
the consolidated ﬁ nancial statements are presented in british pounds which is the functional and presentation currency of the holding company
124 use of estimates and judgements       
the preparation of ﬁ nancial 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 signiﬁ cant areas of estimation uncertainty and critical judgements in applying accounting policies that have a 
signiﬁ cant effect on the amounts recognised in the ﬁ nancial statements is supplied in the following notes     
       note 62 valuation of land and buildings      
       note 65 useful lives of property plant and equipment      
       note 23 measurement of post retirement beneﬁ t obligations      
       note 261 lease classiﬁ cation      
       note 1320 valuation of ﬁ nancial instruments      
       note 31 contingent liabilities      
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48
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
13 signiﬁ cant accounting policies      
the accounting policies set out below have been consistently applied to all periods presented in these consolidated ﬁ nancial statements 
131 basis of consolidation      
subsidiaries       
subsidiaries are entities controlled by the group the ﬁ nancial statements of subsidiaries are included in the consolidated ﬁ nancial statements 
from the date that control commences until the date that control ceases the accounting policies of subsidiaries are aligned with the policies 
adopted by the group       
noncontrolling interests in the net assets of consolidated subsidiaries are identiﬁ ed separately from the group’s equity therein non
controlling interests consist of the amount of those interests at the date of the original business combination and the noncontrolling interest’s 
share of changes in equity since the date of the combination losses applicable to the noncontrolling interest in excess of the noncontrolling 
interest’s share of changes in equity are allocated against the interests of the group except to the extent that the noncontrolling interest has a 
binding obligation and is able to make an additional investment to cover the losses       
acquisitions from entities under common control      
business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the group are 
accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or if later at the date that 
common control was established the assets and liabilities acquired are recognised at the carrying amounts recognised previously in the 
group controlling shareholder’s consolidated ﬁ nancial statements the components of equity of the acquired entities are added to the same 
components within group equity and any gain  loss arising is recognised directly in equity    
equity accounted investments      
associates are those entities in which the group has signiﬁ cant inﬂ uence but no control over the ﬁ nancial and operating policies signiﬁ cant 
inﬂ uence 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 ﬁ nancial 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 identiﬁ ed on acquisition net of any accumulated impairment losses the 
consolidated ﬁ nancial 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 signiﬁ cant inﬂ uence or joint control commences 
until the date that signiﬁ cant inﬂ uence 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   
acquisition of noncontrolling interest      
acquisitions of noncontrolling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is 
recognised as a result adjustments to noncontrolling interests arising from transactions that do not involve the loss of control are based on a 
proportionate amount of the net assets of the subsidiary      
special purpose entities      
special purpose entities classiﬁ ed as such in accordance with sic 12 consolidation – specialpurpose entities special purpose entities are 
those companies in which the group has an interest of 50 or more of the voting rights or otherwise has the power to exercise control over 
the operations and derive the beneﬁ ts there from due to the fact that a special purpose entity is deemed to be controlled by the group the 
ﬁ nancial statements of a special purpose entity are included in the consolidated annual ﬁ nancial statements   
transactions eliminated on consolidation      
intragroup balances and transactions and any unrealised income and expenses arising from intragroup transactions are eliminated in 
preparing the consolidated ﬁ nancial statements unrealised gains arising from transactions with equity accounted investees and joint ventures 
are eliminated against the investment to the extent of the group’s interest in the investee unrealised losses are eliminated in the same way as 
unrealised gains but only to the extent that there is no evidence of impairment      
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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 proﬁ t or loss nonmonetary items that are measured in 
terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction  
foreign operations      
the assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition are translated to british 
pounds at the exchange rates at the reporting date the income and expenses of foreign operations excluding foreign operations in 
hyperinﬂ ationary economics are translated to british pound at exchange rates at the dates of the transactions   
foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve 
“translation reserve” in equity when a foreign operation is disposed of such that control is lost the cumulative amount in the translation 
reserve related to that foreign operation is reclassiﬁ ed to proﬁ t or loss as part of the gain or loss on disposal when the group disposes of only 
part of its interest in a subsidiary that includes a foreign operation while retaining control the relevant proportion of the cumulative amount is 
reattributed to noncontrolling interests      
when the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable 
future foreign exchange gains and losses arising from such monetary item are considered to form part of a net investment in a foreign 
operation and are recognised in other comprehensive income       
133 financial instruments      
nonderivative ﬁ nancial assets      
the group initially recognises loans and receivables and deposits on the date that they are originated all other ﬁ nancial assets including 
assets designated at fair value through proﬁ t or loss are recognised initially on the trade date at which the group becomes a party to the 
contractual provisions of the instrument      
the group derecognises a ﬁ nancial asset when the contractual rights to the cash ﬂ ows from the asset expire or it transfers the rights to receive 
the contractual cash ﬂ ows on the ﬁ nancial asset in a transaction in which substantially all risks and rewards of ownership of the ﬁ nancial asset are 
transferred any interest in transferred ﬁ nancial assets that is created or retained by the group is recognised as a separate asset or liability 
financial assets and liabilities are offset and the net amount presented in the statement of ﬁ nancial position when and only when the group 
has a legal right to offset the amounts and intends to either settle on a net basis or to realise the asset and settle the liability simultaneously
the group has the following nonderivative ﬁ nancial assets ﬁ nancial assets at fair value through proﬁ t or loss and loans and receivables
financial assets at fair value through proﬁ t or loss      
a ﬁ nancial asset is classiﬁ ed at fair value through proﬁ t or loss if it is classiﬁ ed as held for trading or is designated as such upon initial 
recognition financial assets are designated at fair value through proﬁ t or loss if the group manages such investments and makes purchase 
and sale decisions based on their fair value in accordance with the group’s risk management and investment strategy upon initial recognition 
attributable transaction costs are recognised in proﬁ t or loss as incurred financial assets at fair value through proﬁ t or loss are measured at fair 
value and changes therein are recognised in proﬁ t or loss        
loans and receivables      
loans and receivables are ﬁ nancial assets with ﬁ xed or determinable payments that are not quoted in an active market such assets are 
recognised initially at fair value plus any directly attributable transaction costs subsequent to initial recognition loans and receivables are 
measured at amortised cost using the effective interest method less any impairment losses   
loans and receivables comprise trade and other receivables loans receivable loans to related parties and cash and cash equivalents
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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50
133 financial instruments continued
cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less bank overdrafts that are 
repayable on demand and form an integral part of the group’s cash management are included as a component of cash and cash equivalents 
for the purpose of the statement of cash ﬂ ows      
nonderivative ﬁ nancial liabilities      
the group initially recognises debt securities issued and subordinated liabilities on the date that they are originated all other ﬁ nancial 
liabilities including liabilities designated at fair value through proﬁ t or loss are recognised initially on the trade date at which the group 
becomes a party to the contractual provisions of the instrument      
the group derecognises a ﬁ nancial liability when its contractual obligations are discharged cancelled or expire   
the group has the following nonderivative ﬁ nancial liabilities loans and borrowings bank overdrafts and trade and other payables
such ﬁ nancial liabilities are recognised initially at fair value plus any directly attributable transaction costs subsequent to initial recognition 
these ﬁ nancial liabilities are measured at amortised cost using the effective interest method    
bank overdrafts that are repayable on demand and form an integral part of the group’s cash management are included as a component of 
cash and cash equivalents for the purpose of the statement of cash ﬂ ows      
derivative ﬁ nancial instruments      
the group holds derivative ﬁ nancial instruments to hedge its interest rate risk exposure derivatives are recognised initially at fair value 
attributable transaction costs are recognised in proﬁ t or loss as incurred subsequent to initial recognition derivatives are measured at fair 
value and changes in the fair value of derivative ﬁ nancial instruments that do not qualify for hedge accounting are recognised in proﬁ t or loss 
as they arise      
share capital      
ordinary shares      
ordinary shares are classiﬁ ed as equity incremental costs directly attributable to the issue of ordinary shares and share options are recognised 
as a deduction from equity net of any tax effects      
when share capital recognised as equity is repurchased the amount of the consideration paid including any directly attributable costs is 
recognised as a deduction from equity      
134 property plant and equipment      
recognition and measurement      
items of plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses 
cost includes expenditure that is directly attributable to the acquisition of the asset the cost of selfconstructed assets includes the cost of 
materials and direct labour and any other costs directly attributable to bringing the asset to a working condition for its intended use and the 
costs of dismantling and removing items and restoring the site on which they are located      
property comprising land and buildings is measured at fair value at the date of revaluation less for buildings accumulated depreciation since 
the date of revaluation      
any revaluation reserve will be realised to retained earnings once the underlying properties are disposed of rather than realising the reserve 
systematically through usage      
when parts of an item of property plant and equipment have different useful lives they are accounted for as separate items major 
components of property plant and equipment      
gains and losses on disposal of an item of property plant and equipment are determined by comparing the proceeds from disposal with the 
carrying amount of property plant and equipment and are recognised net within other income in proﬁ t or loss when revalued assets are sold 
the amounts included in the revaluation reserve are transferred to retained earnings      
subsequent costs      
the cost of replacing a part of an item of property plant and equipment is recognised in the carrying amount of the item if it is probable that 
the future economic beneﬁ ts embodied within the part will ﬂ ow to the group and its cost can be measured reliably the carrying amount of the 
replaced part is derecognised the cost of daytoday servicing of property plant and equipment are recognised in proﬁ t or loss as incurred
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
225014 shaftsinkersra2012pagesindd   50 26042012   1937 shaft sinkers report  accounts 2011
51
134 property plant and equipment continued
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 proﬁ t or loss on a straightline basis over the estimated useful lives of each part of an item of property plant 
and equipment since this most closely reﬂ ects the expected pattern of consumption of the future economic beneﬁ ts embodied in the asset 
leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the group will obtain 
ownership by the end of the lease term land is not depreciated      
the estimated useful lives are 2011 2010
buildings 50 years 50 years
plant and equipment 120 years 120 years 
furniture ﬁ ttings and ofﬁ ce equipment 26 years 26 years
motor vehicles 4 years 4 years
depreciation methods useful lives and residual values are reviewed at each ﬁ nancial yearend and adjusted if appropriate estimates in respect 
of certain items of plant and equipment were revised in 2011 – refer to note 65 
135 intangible assets      
goodwill      
goodwill that arises upon the acquisition of subsidiaries is included in intangible assets for measurement of goodwill at initial recognition see 
note 131      
subsequent measurement      
goodwill is measured at cost less accumulated impairment losses 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 classiﬁ ed as ﬁ nance leases upon initial 
recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease 
payments subsequent to initial recognition the asset is accounted for in accordance with the accounting policy applicable to that asset 
other leases are operating leases and the leased assets are not recognised in the group’s statement of ﬁ nancial position  
137 inventories      
inventories are measured at the lower of cost and net realisable value the cost of inventories is based on the ﬁ rstinﬁ rstout 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 identiﬁ ed on a regular basis and are written down to their estimated net realisable values 
138 construction work in progress      
construction work in progress represents the gross unbilled amount expected to be collected from customers for contract work performed to 
date it is measured at cost plus proﬁ t recognised to date less progress billings and recognises losses cost includes all expenditure related 
directly to speciﬁ c projects      
construction work in progress is presented as part of trade and other receivables in the statement of ﬁ nancial position for all contracts in which 
costs incurred plus recognised proﬁ ts exceed progress billings if progress billings exceed costs incurred plus recognised proﬁ ts then the 
difference is presented as deferred revenue in the statement of ﬁ nancial position      
139 impairment      
financial assets      
a ﬁ nancial asset not carried at fair value through proﬁ t or loss is assessed at each reporting date to determine whether there is any objective 
evidence that it is impaired a ﬁ nancial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition 
of the asset and that the loss event had a negative effect on the estimated future cash ﬂ ows of that asset that can be estimated reliably
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
225014 shaftsinkersra2012pagesindd   51 26042012   1937 shaft sinkers report  accounts 2011
52
139 impairment continued
objective evidence that ﬁ nancial assets including equity securities are impaired include default or delinquency by a debtor restructuring of an 
amount due to the group on terms that the group would not consider otherwise indications that a debtor or issuer will enter bankruptcy the 
disappearance of an active market for a security in addition for an investment in an equity security a signiﬁ cant or prolonged decline in its fair 
value below its cost is objective evidence of impairment      
the group considers evidence of impairment for receivables at both speciﬁ c asset and collective level all individually signiﬁ cant receivables 
are assessed for speciﬁ c impairment all individually signiﬁ cant receivables found not to be speciﬁ cally impaired are then collectively assessed 
for any impairment that has been incurred but not yet identiﬁ ed receivables that are not individually signiﬁ cant are collectively assessed for 
impairment by grouping together receivables with similar risk characteristics      
in assessing collective impairment the group uses historical trends of the probability of default timing of recoveries and the amount of loss 
incurred adjusted for management’s judgement as to whether the current economic and credit conditions are such that the actual losses are 
likely to be greater or less than suggested by historical trends      
an impairment loss in respect of a ﬁ nancial asset measured at amortised cost is calculated as the difference between its carrying amount and the present 
value of the estimated future cash ﬂ ows discounted at the asset’ s original effective interest rate losses are recognised in proﬁ t or loss and reﬂ ected in 
an allowance account against receivables interest on the impaired asset continues to be recognised through the unwinding of the discount when a 
subsequent event causes the amount of impairment loss to decrease the decrease in impairment loss is reversed through proﬁ t or loss
nonﬁ nancial assets      
the carrying amount of the group’s nonﬁ nancial assets other than inventories and deferred tax assets are reviewed at each reporting date to 
determine whether there is an indication of impairment if any such indication exists then the assets recoverable amount is estimated 
the recoverable amount of an asset or cashgenerating unit is the greater of its value in use and its fair value less costs to sell in assessing the 
value in use the estimated future cash ﬂ ows are discounted to their present value using a pretax discount rate that reﬂ ects the current market 
assessments of the time value of money and the risks speciﬁ c to the asset for the purpose of impairment testing assets are grouped together 
into the smallest group of assets that generate cash inﬂ ows from continuing use that are largely independent of the cash inﬂ ows of other assets 
or groups of assets the “cashgenerating unit”          
an impairment loss is recognised if the carrying amount of an asset or its cashgenerating unit exceeds its estimated recoverable amount 
impairment losses are recognised in proﬁ t or loss impairment losses recognised in respect of cashgenerating units are allocated ﬁ rst to 
reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit group 
of units on a pro rata basis in the case of land and buildings the revaluation decrease is recognised directly in other comprehensive income 
against the revaluation reserve      
an impairment loss in respect of goodwill is not reversed in respect of other assets impairment losses recognised in prior periods are assessed at 
each reporting date for any indications that the loss has decreased or no longer exists an impairment loss is reversed if there has been a change 
in the estimates used to determine the recoverable amount an impairment loss is reversed only to the extent that the asset’s carrying amount 
does not exceed the carrying amount that would have been determined net of depreciation if no impairment loss had been recognised 
1310 employee beneﬁ ts      
shortterm employee beneﬁ ts      
shortterm employee beneﬁ t obligations are measured on an undiscounted basis and are expensed as the related service is provided
a liability is recognised for the amount expected to be paid under shortterm cash bonus or proﬁ tsharing plans if the group has a present legal 
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably 
share based payment transactions      
the grantdate fair value of sharebased payment awards granted to employees is recognised as an employee expense with a corresponding 
increase in equity over the period that the employees unconditionally become entitled to the awards the amount recognised as an expense 
is adjusted to reﬂ ect the number of awards for which the related service and nonmarket vesting conditions are expected to be met such that 
the amount ultimately recognised as an expense is based on the number of awards that meet the related service and nonmarket performance 
conditions at the vesting date for sharebased payment awards with nonvesting conditions the grantdate fair value of the sharebased 
payment is measured to reﬂ ect such conditions and there is no trueup for differences between expected and actual outcomes 
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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53
1310 employee beneﬁ ts continued
deﬁ ned contribution plan      
a deﬁ ned contribution plan is postemployment plan under which an entity pays ﬁ xed contributions into a separate legal entity and will have no 
legal or constructive obligation to pay further amounts obligations for contributions to deﬁ ned contribution pension places are recognised as an 
employee beneﬁ t expense in proﬁ t or loss in the periods during which services are rendered by employees prepaid contributions are recognised 
as an asset to the extent that a cash refund or a reduction in future payments is available contributions to a deﬁ ned contribution plan that is due 
more than 12 months after the end of the period in which the employees render the services are discounted to their present value
deﬁ ned beneﬁ t plan      
a deﬁ ned beneﬁ t plan is a postemployment plan other than a deﬁ ned contribution plan the group’s net obligation in respect of deﬁ ned 
beneﬁ t plans is calculated separately for each plan by estimating the amount of future beneﬁ t that employees have earned in return for their 
service in the current and prior periods that beneﬁ t is discounted to determine its present value any unrecognised past service costs and the 
fair value of any plan assets are deducted the calculation is performed annually by a qualiﬁ ed actuary using the projected unit method
the group recognises all actuarial gains and losses arising from deﬁ ned beneﬁ t plans in proﬁ t or loss 
1311 black economic empowerment bee transactions
where the group disposes of a portion of a south african based subsidiary or operation to a bee company or employee beneﬁ t trust at 
a discount to fair value the transaction is considered to be a share based payment in line with the principles contained in south africa 
interpretation ac503 accounting for black economic empowerment bee transactions the discount provided or value given is calculated in 
accordance with ifrs 2 share based payments and included in the determination of the proﬁ t or loss on disposal 
1312 provisions      
a provision is recognised if as a result of a past event the group has a present legal or constructive obligation that can be estimated reliably 
and it is probable that an outﬂ ow of economic beneﬁ ts will be required to settle the obligation provisions are determined by discounting the 
expected future cash ﬂ ows at a pretax rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c to the 
liability the unwinding of the discount is recognised as ﬁ nance cost      
onerous contracts      
a provision for onerous contracts is recognised when the expected beneﬁ ts to be derived by the group from a contract are lower than the 
unavoidable cost of meeting its obligations under the contract the provision is measured at the present value of the lower of the expected 
cost of terminating the contract and the expected net cost of continuing with the contract before a provision is established the group 
recognises any impairment loss on the assets associated with that contract 
1313 interest free advances
interest free advances are received from clients primarily to enable the group to meet its procurement obligations in respect of the contract 
interest free advances are offset against normal monthly invoices issued to the client and are reﬂ ected in the statement of ﬁ nancial position as 
an undiscounted amount     
1314 revenue      
revenue comprises the net invoiced value of contracts and other services rendered excluding value added tax   
services      
revenue from services rendered is recognised in proﬁ t or loss in proportion to the stage of completion of the transaction at the reporting date 
the stage of completion is assessed by reference to surveys of work performed      
contract revenue      
contract revenue includes the initial amount agreed in the contract plus any variations in contract work claims and incentive payments to 
the extent that it is probable that they will result in revenue and can be measured reliably as soon as the outcome of the contract can be 
estimated reliably contract revenue and expenses are recognised in proﬁ t or loss in proportion to the stage of completion of the contract 
contract expenses are recognised as incurred unless they create an asset related to future contract activity    
the stage of completion is assessed by reference to surveys of work performed when the outcome of the contract cannot be estimated 
reliably contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable an expected loss on a 
contract is recognised immediately in proﬁ t or loss      
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
225014 shaftsinkersra2012pagesindd   53 26042012   1937 shaft sinkers report  accounts 2011
54
1315 lease payments      
payments made under operating leases are recognised in proﬁ t or loss on a straightline basis over the term of the lease  
minimum lease payments made under ﬁ nance leases are apportioned between the ﬁ nance expense and the reduction of the outstanding 
liability the ﬁ nance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the 
remaining balance of the liability      
determining whether an arrangement contains a lease      
at inception of an arrangement the group determines whether such an arrangement is or contains a lease a speciﬁ c asset is the subject of a 
lease if fulﬁ lment of the arrangement is dependent on the use of that speciﬁ c asset an arrangement conveys the right to use the asset if the 
arrangement conveys to the group the right to control the use of the underlying asset      
at inception or upon reassessment of the arrangement the group separates payments and other consideration required by such an 
arrangement into those for the lease and those for other elements on the basis of their relative fair values if the group concludes for a ﬁ nance 
lease that it is impracticable to separate the payments reliably an asset and a liability are recognised at an amount equal to the fair value of the 
underlying asset subsequently the liability is reduced as payments are made and an imputed ﬁ nance charge on the liability is recognised using 
the group’s incremental borrowing rate      
1316 finance income and costs       
finance income comprises interest income of funds invested dividend income gains on the disposal of availableforsale ﬁ nancial assets 
changes in fair value of ﬁ nancial assets at fair value through proﬁ t or loss and gains on hedging instruments that are recognised in proﬁ t or 
loss interest income is recognised as it accrues using the effective interest method dividend income is recognised in proﬁ t or loss on the date 
that the group’s right to receive payment is established      
finance costs comprise interest expense on borrowings unwinding of the discount on provisions changes in the fair value of ﬁ nancial assets 
at fair value through proﬁ t or loss impairment losses recognised on ﬁ nancial assets and losses on hedging instruments that are recognised 
in proﬁ t or loss borrowing costs that are not directly attributable to the acquisition construction or production of a qualifying asset are 
recognised in proﬁ t or loss using the effective interest method foreign currency gains or losses are reported on a net basis  
1317 income tax      
income tax expense comprises current taxation deferred taxation and secondary taxation on companies being a south african taxation on 
dividends income tax expense is recognised in proﬁ t or loss except to the extent that it relates to items recognised directly in equity or in 
other comprehensive income      
current 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 ﬁ nancial reporting 
purposes and the amounts used for taxation purposes      
deferred taxation is not recognised for the following temporary differences the initial recognition of assets and liabilities in a transaction that 
is not a business combination and that affects neither accounting nor taxable proﬁ t 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 proﬁ ts will be available against which the temporary difference can be utilised deferred taxation assets are reviewed at 
each reporting date and are reduced to the extent that it is no longer probable that the related taxation beneﬁ t will be realised 
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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55
1318 earnings per share      
the group presents basic earnings per share data for its ordinary shares basic earnings per share is calculated by dividing the proﬁ t or loss 
attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the year 
adjusted for the company’s own shares diluted earnings per share is determined by adjusting proﬁ t or loss attributable to the ordinary 
shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held and for the effects of all diluted 
potential ordinary shares which may comprise convertible notes and share options granted to employees   
1319 segment reporting      
an operating segment is a component of the group that engages in business activities from which it may earn revenues and incur expenses 
including revenues and expenses that relate to transactions with any of the group’s other components all operating segments‘ operating 
results are reviewed regularly by the group’s executive management to make decisions about resources to be allocated to the segment and to 
assess its performance and for which discrete ﬁ nancial information is available      
segment results that are reported to executive management include items directly attributable to a segment as well as those that can be 
allocated on a reasonable basis unallocated items comprise mainly corporate overhead expenses and income tax assets and liabilities 
segment capital expenditure is the total cost incurred during the year to acquire property plant and equipment and intangible assets other 
than goodwill      
1320 determination of fair values      
a number of the group’s accounting policies and disclosures require the determination of fair value for both ﬁ nancial and nonﬁ nancial 
assets and liabilities fair values have been determined for measurement andor disclosure purposes based on the following methods when 
applicable further information about the assumptions made in determining fair values is disclosed in the notes speciﬁ c to that asset or liability
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 ﬂ ows 
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 ﬂ ows based on the terms and maturity of each contract and using market interest rates for a similar instrument at the measurement date
fair values reﬂ ect the credit risk of the instrument and include adjustments to take account of the credit risk of the group and counterparty 
when appropriate      
nonderivative ﬁ nancial liabilities      
fair value which is determined for disclosure purposes is calculated based on the present value of future principal and interest cash ﬂ ows 
discounted at the market rate of interest at the reporting date in respect of the liability component of convertible notes the market rate of 
interest is determined by reference to similar liabilities that do not have a conversion option for ﬁ nance leases the market rate of interest is 
determined by reference to the rate per the agreement which is linked to the prime lending rate of south africa   
investments in equity      
the fair value of ﬁ nancial assets at fair value through proﬁ t or loss heldtomaturity investments and availableforsale ﬁ nancial assets is 
determined by reference to their quoted bid price at the reporting date the fair value of heldtomaturity investments is determined for 
disclosure purposes only      
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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56
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
1320 determination of fair values continued
share based payments      
the fair value of the group’s long term share incentive scheme is measured using monte carlo simulation model measurement inputs include 
the share price at measurement date the expected volatility based on an evaluation of the company’s historic volatility particularly over the 
historic period commensurate with the expected term of the instruments the expected term of the instruments expected dividends and the 
risk free interest rates based on government bonds service and nonmarket performance conditions attached to the transactions are not taken 
into account in determining fair value      
1321 new standards and interpretations      
a number of new standards amendments to standards and interpretations are not yet effective for the year ended 31 december 2011 and 
have not been applied in preparing these consolidated annual ﬁ nancial statements none of these is expected to have a signiﬁ cant effect on 
the consolidated annual ﬁ nancial statements of the group       
2 revenue
 2011 2010
 gbp  gbp
contract revenue  
revenue from south african core operations  185051420   147331270  
revenue from rest of world core operations   41488123   35796359  
   226539543   183127629  
3 proﬁ t from operations          
  is arrived at after taking into account          
 2011 2010
 gbp  gbp
auditors’ remuneration 684276   1535478 
   for audit services rendered 646629   1128097 
   for nonaudit services rendered 37647   407381 
impairment allowance on trade and other receivables  note 272 2109735   3740319 
   raised 2284658   108375 
   reversed 174923   3848694 
consulting fees paid 688491   1034118 
depreciation of property plant and equipment  note 61 9603430   7180928 
personnel costs 137315395   122823394 
employee beneﬁ ts  share based payments  note 30  368566   20669
share based payment expense arising on black economic empowerment transaction in respect of
shaft sinkers mining proprietary limited  note 30 244665 
impairment allowances on equity accounted investees  note 8   1021386 
   raised     741692 
   reversed    1763078 
write down  reversal of write down of inventory to net realisable value due to obsolesence  note 13 29532   58391 
operating lease charges  1426507   990981 
proﬁ t on foreign exchange differences  912766   111714 
impairment loss on plant and equipment    1478473 
   recognised    54199 
   reversed   1532672 
lossproﬁ t on disposal of plant and equipment  35061   121457 
directors’ fees 285000   58078 
provision raised for future retirement beneﬁ t obligations relating to past employees  note 23 19664   35413 
           
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57
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
31 proﬁ t from operations before exceptional items
the results of the group were affected by exceptional items during both the 2011 and 2010 ﬁ nancial years a reconciliation has therefore 
been prepared below whereby the proﬁ t from operations as reﬂ ected in the consolidated income statement is reconciled to the proﬁ t from 
operations before exceptional items details around the nature of the exceptional items are more fully described below
    
  2011 2010
 note gbp  gbp
proﬁ t from operations as per consolidated income statement  15325210 17996022
adjusted for exceptional items
 contract provision and settlement  included in direct expenses 32    3819876
  ipo bonusses  included in operating expenses 33  3 133771    
proﬁ t from operations before exceptional items   18458981 14176146
32 contract provision and settlement      
the group was involved in a dispute with one of its clients towards the end of the 2009 ﬁ nancial year due to the nonpayment by the client 
of invoices issued by the group for services rendered at the end of the 2009 ﬁ nancial year this client owed the group gbp 30 million for 
services rendered by the group and held assets of the group to the value of gbp 25 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 
provision of gbp 55 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 were held by the 
client the plant and equipment items that were not acquired by the client was returned to the group the settlement agreement removed 
the conditions that existed at the time on which the impairment provision was raised and resulted in the reversal of impairment provisions 
amounting to gbp 38 million for the year ended 31 december 2010      
33 ipo bonusses      
the group announced in its propsectus that it would pay a onceoff ipo bonus to a range of middle to senior management the amount was 
accrued for and paid in two tranches ie 30 june 2011 and 31 december 2011 the amount paid amounted to zar 419 million which is 
equivalent to gbp31 million      
4 finance income and costs       
  2011 2010
  gbp  gbp
interest on call and current account balances  185056   16779 
fair value adjustments to derivative instruments        
sundry interest received   6318   143747 
interest on ﬁ nance lease receivables   189521   124916 
interest on loan receivable   2649  
interest on loan to related party   11306   62336 
finance income  394850   347778 
interest paid on ﬁ nance lease obligations   46836   419105 
interest paid on interest bearing borrowings   1806070   943775 
fair value adjustments to derivative instruments   51631   110269 
interest on loan from related party       32442 
interest on bank overdraft   70658   129362 
sundry interest paid   238755     
finance costs   2213950   1634953 
net ﬁ nance costs recognised in proﬁ t and loss  1819100   1287176  
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58
5 income tax        
  2011 2010
  gbp  gbp
current tax expense    
– current year   1029347  2275122  
– prior year over  under provision   222626   1644364  
secondary tax on companies  526989 
deferred tax    
– current year   3454141   1666063  
– prior year under  over provision   1879   1509887 
total income tax   4789730   4075662  
income tax recognised in other comprehensive income   
revaluation of property plant and equipment    
before tax   412145   459483  
tax expense   88747   103780  
net of tax   323398   355703  
   
reconciliation of effective tax rate    
current year’s charge as a percentage of proﬁ t before tax  355 245
nondeductible expenditure  41 65
nontaxable income  13 91
secondary tax on companies  48 
prior year overunder provision  20 08
utilisation of taxable losses not previously raised as deferred tax assets  07 04
unutilised assessed losses raised as deferred tax asset  31 
foreign tax rate differential  337 267
isle of man corporate tax rate    
the group’s foreign tax rate differential increased to 337 in 2011 from 267 in 2010 the increase in the foreign tax rate differential is primarily due 
to secondary tax on companies “stc” that is levied in south africa on dividends that are declared stc charged on dividends declared by capstone 
615 proprietary limited amounted to gbp05 million during 2011 which directly contributed to the increase in the foreign tax rate differential
the company is subject to tax in the isle of man at the standard tax rate of 0 2010 0
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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59
6 property plant and equipment
61 reconciliation of property plant and equipment 
 plant and    furniture ﬁ ttings
 equipment land buildings and ofﬁ ce equipment motor vehicles total
 gbp gbp gbp gbp gbp gbp
2011       
cost or valuation
balance at beginning of year 64975261  2989474  4797046  3019259  1042252  76823292 
additions 8393584     132229  829690  1150064  10505567 
revaluation    190373  221772        412145 
disposals 347111      17179  946634   1310924 
effect of exchange differences on 
translation from functional to 
presentation currency 12596189  565657  911427  619183  207794   14900250 
balance at end of year 60425545  2614190  4239620  3212587  1037888   71529830 
      
depreciation and impairment losses       
balance at beginning of year 17116582     456504  2306528  444333   20323947 
depreciation 8752425    86498  477221  287286   9603430 
disposals 184686       11136  67584   263406 
effect of exchange differences on 
translation from functional to 
presentation currency 3816096    90812  461080  98853   4466841 
balance at end of year 21868225     452190  2311533  565182   25197130 
carrying value      
balance at beginning of year 47858679  2989474  4340542  712731  597919   56499345 
additions 8393584    132229  829690  1150064   10505567 
revaluation    190373  221772        412145 
disposals 162425      6043  879050  1047518 
depreciation for the year 8752425     86498  477221  287286  9603430 
effect of exchange differences on 
translation from functional to 
presentation currency 8780093  565657  820615  158103  108941  10433409 
balance at end of year 38557320  2614190  3787430  901054  472706  46332700 
     
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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60
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
6 property plant and equipment continued
61 reconciliation of property plant and equipment continued 
 plant and    furniture ﬁ ttings
 equipment land buildings and ofﬁ ce equipment motor vehicles total
 gbp gbp gbp gbp gbp gbp
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 
 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 
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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 ofﬁ ce 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 standard bank of south africa limited as security for its guarantee and 
banking facilities as set out in note 203 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 2011 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 2011 is gbp6 057 271 2010 – gbp6 019 641 it is the group’s policy to revalue its land 
and buildings on an annual basis      
63 plant and equipment funded by instalment sale agreements      
plant and equipment with a carrying value of gbp61 146 2010 – gbp789 620 were funded by instalment sale agreements during the year by 
the group the instalment sale obligations are secured by these assets refer note 203      
64 impairment loss      
no impairment indicators arose which indicated that any of the group’s property plant and equipment was impaired during the year during 
the 2010 ﬁ nancial year an impairment loss of gbp54 199 was recognised in other operating expenditure   
no reversals of impairment losses were made during the 2011 ﬁ nancial year however during april 2010 a settlement agreement was signed 
between the company and its client whereby it was agreed that the plant and equipment that was impaired during the 2009 ﬁ nancial year 
would either be sold to the client or be returned to the company a reversal of impairment amounting to gbp15 million was therefore 
recognised in the statement of comprehensive income during the 2010 ﬁ nancial year       
the impairment losses that were 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 gbp10 million 2010 gbp09 million being processed the effect of the change in estimates on future 
periods is expected to be an increase of gbp 10 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 ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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62
7 goodwill     
goodwill arose on the acquisition of rossal 126 proprietary limited by the group during 2007 it represents the excess of the cost of the 
acquisition over the fair value of the identiﬁ able assets and liabilities of rossal 126 proprietary limited   
reconciliation of goodwill balances     
   2011 2010 
   gbp gbp
opening balance    2663560 2306785 
foreign currency translation reserve   490893  356775 
closing balance   2172667 2663560 
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 2011 on the goodwill balance 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 ﬂ ow model  
the recoverable amount was compared to the carrying amount of goodwill and it was found that the recoverable amount exceeded the 
carrying amount       
key assumptions used in the discounted cash ﬂ ow projections      
the budgeted and forecast earnings before interest taxation depreciation and amortisation for the period 2012 to 2014 are consistent with 
budgets and forecasts approved by the board of directors and   
a weighted average cost of capital of 1827 was used as the discount rate in determining the present value of future cash ﬂ ows
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 loans amounts owing to 
the group of gbp 18m zar 20 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 ﬁ nancial year an impairment allowance of gbp 741692 was raised due to the extent of the uncertainty regarding the 
recoverability of the loans granted by the group to its associate       
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 gbp 1763078 was recognised in the statement of comprehensive income in 2010
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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63
9 investment in and loans to joint venture companies      
91 loans to joint venture partners    
  2011 2010
  gbp gbp
rsvshaft sinkers international proprietary limited   22076  27007 
sdm mining contractors proprietary limited  47233  58621 
  69309  85628 
impairment losses raised  69309  26415 
      59213  
the above mentioned loans are unsecured bear no interest and are repayable on demand in 2010 the impairment losses related solely to the 
loan granted to rsvshaft sinkers international proprietary limited     
92 joint venture companies – consolidated results    
the consolidated 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 
 2011 2010 2011 2010
 gbp gbp gbp gbp
sundry income        13211    
net expenses        436  2537 
proﬁ t  loss before taxation        12775  2537 
taxation           450 
net proﬁ t  loss for the year        12775  2087 
cash and cash equivalents           69 
loans payable  42633   26133   188864  175004 
trade and other payables          70914 
income taxation refundable        59734   73230 
interest in equity  42633   26133   129130  172757 
    
comprising of    
share capital  4   4   65   65 
share of accumulated losses  17617   17617   263592  276367 
foreign currency translation reserve  25020   8520   134397   103545 
  42633   26133   129130  172757
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      
      
      
          
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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64
10 other unlisted investment
  2011 2010
  gbp gbp
shares in rand mutual assurance company limited at fair value  845   893 
the group holds 46 900 shares 2010 46 900 in rand mutual assurances company limited “rand mutual” rand mutual is a mutual assurer 
as deﬁ ned in the insurance act of south africa the number of shares held is based on the value of policies held in relation to all policies 
issued by rand mutual an adjustment to the shareholding is performed annually by rand mutual at a price determined by rand mutual the 
shares held are at fair value and adjustments to fair value are accounted for through proﬁ t or loss 
11 loans receivable   
  2011 2010
  gbp gbp
noncurrent    
 loan receivable  sight power incorporated  320238     
  320238      
current    
 loan receivable  concrete lining products proprietary limited  39861     
  39861     
the loan to sight power incorporated is unsecured and bears interest at 2 percent per annum in terms of the agreement between the parties 
the group will not demand repayment before 1 june 2012 and that the loan is repayable within 18 months subsequent to the date when 
demand for repayment is made the directors do not anticpate the repayment of the loan will be received before 31 december 2012
the loan to concrete lining products proprietary limited is unsecured bears no interest and is repayable on demand the directors expect to 
demand repayment within the ﬁ rst half of the 2012 ﬁ nancial year        
12 deferred taxation
  2011 2010
  gbp gbp
balance at beginning of year  1652859  1671299 
current year movement  
– temporary differences recognised in proﬁ t or loss  3454141  1666063 
– prior year overprovision recognised in proﬁ t or loss   1879  1509887 
– temporary differences recognised directly in equity  88747  103780 
foreign currency translation reserve   30931  241516 
balance at end of year  1922839   1652859 
deferred tax asset  4872910   4407011 
deferred tax liability  6795749  2754152 
  1922839   1652859 
comprising   
– capital allowances  6145338  6659063 
– prepaid expenses  45052  68974 
– retention debtors  453396  571325 
– deferred revenue  489181  4744220 
– provisions  3052435  2886237 
– loans and borrowings  151963  13928 
– unrealised foreign exchange losses  183278  1289391 
– tax losses  1118613   6086 
– other  29403  12359 
   1922839  1652859
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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65
13 inventories 
  2011 2010
  gbp gbp
consumable stores and spare parts  14831420  7021491 
strategic spare parts  1164536  909824 
contract work in progress  248529  381088 
  16244485  8312403 
consumable stores include electrical wire oils  diesel paint and protective clothing      
strategic spare parts include critical parts and consumables utilised in the daytoday servicing of the group’s plant and equipment strategic 
spare parts are managed as items of inventory and are therefore included in the carrying amount of inventories due to the critical nature of 
these items such parts may be on hand for prolonged periods        
during the 2011 ﬁ nancial year the write down of inventories to net realisable value amounted to gbp29 532 due to obsolesence  
during the 2010 ﬁ nancial year inventories previously written down to net realisable value and amounting to gbp58 391 were reversed 
14 trade and other receivables           
  2011 2010
  gbp gbp
trade receivables  48467975  46693312 
impairment allowance  refer to note 272  2108259  197888 
other receivables  2635798  3634538 
  48995514  50129962 
the group has ceded its trade receivables to standard bank of south africa limited as security for its guarantee and banking facilities refer 
note 203   
at 31 december 2011 trade receivables include retentions of gbp1 619 271 2010 gbp1 684 388 relating to contracts in progress advances 
for which the related work has not yet started are presented as deferred revenue refer note 25 and amounted to gbp12 769 842 2010 
gbp23 418 707    
15 finance lease receivables           
  2011 2010
  gbp gbp
noncurrent ﬁ nance lease receivables  1192644  492048 
current ﬁ nance lease receivables  474440  1176329 
  1667084  1668377 
151 leasing arrangements           
the group enters into ﬁ nance leasing arrangements with qualifying employees in respect of motor vehicles that are acquired for use by the 
employees on the group’s projects the average term of ﬁ nance leases entered into is 5 years      
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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66
15 finance lease receivables continued
152 amounts receivable under ﬁ nance leases          
 gross investment in ﬁ nance  unearned present value of
 lease receivable ﬁ nance income minimum lease payments 
 gbp gbp gbp
31 december 2011   
due within one year 613155  138715  474440 
due between one and ﬁ ve years 1379022  186378  1192644 
 1992177  325093  1667084 
31 december 2010    
due within one year 1371256 194927  1176329
due between one and ﬁ ve years 640042  147994   492048 
 2011298  342921   1668377 
the interest rate inherent in the leases is ﬁ xed at the contract date for the entire lease term and is linked to the prime interest rate of south 
africa at 31 december 2011 the average effective interest rate contracted is approximately 116 2010 109   
finance lease receivable balances are secured over the motor vehicles leased    
16 cash and cash equivalents       
161 cash and cash equivalents           
  2011 2010
  gbp gbp
call accounts  16683521  28369293 
current funds at bank  5590781  7287188 
cash on hand  24089  32317 
   22298391  35688798 
162     bank overdraft    
    129168 
total cash and cash equivalents  22298391   35559630 
the majority of current and call accounts are held at standard bank of south africa limited and have been ceded to them as security for 
facilities provided to the group as described in note 203         
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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67
17 ordinary share capital           
for purposes of the consolidated ﬁ nancial 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 33
  2011 2010
  gbp gbp
authorised share capital    
63333333 ordinary shares with no par value    
issued share capital    
47500000 ordinary shares with no par value 2010 47500000 ordinary shares with no par value 56563799  56563799 
reconciliation of share capital    
shares issued on incorporation  1   1 
shares issued on admission  58900000  58900000 
capitalised listing expenses  2336202  2336202 
  56563799  56563799 
the holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at 
meetings of the company at reporting date no shares of the company were held by the group    
18 revaluation reserve           
  2011 2010
  gbp gbp
balance at beginning of year   1271706  466678 
acquisition of noncontrolling interest in capstone 615 proprietary limited     326629 
movement  323398  355703 
foreign currency translation reserve  259347  122696 
balance at end of year  1335757  1271706 
the revaluation reserve relates to the revaluation of land and buildings net of deferred tax refer note 6 and note 12   
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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68
19 earnings per share           
basic earnings per share           
the calculation of basic earnings per share is based on the proﬁ t attributable to ordinary shareholders of gbp8 698 114 2010 gbp12 633 185 
and a weighted average number of shares outstanding of 47 500 000 2010 42 387 157       
    
  2011 2010
  shares shares
the weighted average number of ordinary shares was calculated as follows    
shares deemed to be issued at 1 january  47500000  22819266 
effect of shares 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  47500000  42387157 
diluted earnings per share    
the calculation of diluted earnings per share is based on the proﬁ t attributable to ordinary shareholders of gbp8 698 114 2010 gbp12 633 185 
and a weighted average number of shares outstanding of 47 688 545 2010 42 689 576  
  2011 2010
  shares shares
weighted average number of ordinary shares at the end of the year 
used in the computation of basic earnings per share  47500000  42387157 
shares that may potentially be issued in terms of the ltip as described in note 30  188545  302419 
weighted average number of ordinary shares at the end of the year  47688545  42689576
20 interest bearing borrowings         
  2011 2010
201 noncurrent portion  gbp gbp
secured bank loans  12305185  19819897 
finance lease obligations     63358 
  12305185  19883255 
202 current portion
secured bank loans  3869001  4478502 
finance lease obligations  19491  78394 
   3888492  4556896 
total interest bearing borrowings  16193677  24440151 
203  terms and debt repayment   
the secured bank loans relate to loan facilities provided by 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           
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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69
20 interest bearing borrowings  continued
203  terms and debt repayment continued
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 were 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 2011 the average effective borrowing rate was 93 2010 93 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  
the secured bank loan is subject to the following covenants which are measured on a quarterly basis    
– interest cover ratio must be larger or equal to 5 times        
– leverage ratio must be smaller than or equal to 2 times         
– cumulative debt service cover ration must be larger than 2 times        
at 31 december 2011 the group is in compliance with its loan covenants        
           
204 analysis of ﬁ nance lease obligations          
 minimum lease   present value of minimum
 payments due finance charges lease payments due
 gbp gbp gbp
31 december 2011    
due within one year 20507  1016  19491 
due between one and ﬁ ve years         
 20507   1016  19491 
31 december 2010     
due within one year 87472  9078   78394 
due between one and ﬁ ve years  65011  1653  63358 
 152483  10731  141752 
21 interest free advances from clients          
  2011 2010
  gbp gbp
opening balance  19347344  6739315 
advances received  10073637  17251799 
advances offset against debtors invoicing  5091935  5747360 
foreign exchange difference on translation  4394173  1072385 
 effect of exchange differences on translation from functional to presentation currency 4289623  2175975 
closing balance  24433596  19347344 
comprising    
 noncurrent portion       13164644 
 current portion  24433596  6182700 
  24433596  19347344 
the advances received are us dollar denominated contractual working capital advances received from a client the advances have been 
classiﬁ ed as a current liability pending current negotiations with the client  
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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70
22 related party loans 
  2011 2010
  gbp gbp
221 loan to related party  current    
international mineral resources sa proprietary limited     489587  
   
222 loan from related party  current    
international mineral resources bv    493039 
the loan to international mineral resources sa proprietary limited was unsecured bore interest at the south african prime lending rate minus 
200 and was repayable on demand the loan was recovered during the 2011 ﬁ nancial year     
the loan from international mineral resources bv was unsecured bore interest at the south african prime lending rate minus 200 and was 
repayable on demand the loan was repaid during the 2011 ﬁ nancial year       
  
23 post retirement beneﬁ t obligations          
  2011 2010
  gbp gbp
unfunded obligations    
present value of post retirement medical aid obligations  300948  383311 
present value of retirement fund obligations  76122  105752 
total post retirement beneﬁ t obligation  377070  489063 
movements in the obligation    
opening balance  489063  447455 
obligation for future medical aid subsidies provided  19664  29810 
obligation for future pension fund subsidies provided    5603 
medical aid subsidies paid  32364  56697
pension fund subsidies paid  10988  3607 
foreign currency translation reserve  88305  66499 
closing obligation  377070  489063 
recognised in proﬁ t and loss    
present value of future medical aid payments  19664  29810 
present value of future pension fund payments     5603 
  19664  35413 
the group subsidises a closed group of pensioners’ medical aid contributions the monthly subsidies which are reviewed annually by the 
group are charged against the obligation raised the obligation is the estimated present value of the obligation payable over the recipients’ 
remaining lives           
the group contributes towards the sentinel mining industry retirement fund in favour of six disability claimants these contributions are 
charged against the obligation raised the obligation is the estimated present value of contributions until retirement date 
independent actuarial valuations in respect of these obligations were performed as at 31 december 2011 by momentum specialised 
insurance whose valuator is a fellow of the institute of actuaries it is group policy to perform actuarial valuations annually 
the scheme has no plan assets and is an unfunded scheme        
the group expects gbp11 812 in subsidies to be contributed to these deﬁ ned beneﬁ ts schemes in 2012    
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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71
23 post retirement beneﬁ t obligations continued       
 
  2011 valuation 2010 valuation
principal actuarial assumptions used in the last actuarial valuation performed as at 31 december  
longterm rate of investment return  90 90
inﬂ ation 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 deﬁ ned beneﬁ t plans are as follows 
        
assumptions speciﬁ cally relating to post retirement medical aid obligation  2011 valuation 2010 valuation
number of members  64  65 
average age of members  751 750
assumptions speciﬁ cally in respect of retirement fund subsidies   
number of pensioners  6 7
average age of disability pensioners  512 519
average monthly subsidy gbp  141  141
assumed health care cost trend rates have a signiﬁ cant effect on the amounts recognised in proﬁ t or loss a one percentage change in 
assumed health care cost trend rates has the following effects on proﬁ t or loss    
  one  one 
  increase increase
  2011 2010
  gbp gbp
effect on interest cost  197  331 
effect on post retirement beneﬁ t obligation  3240   3833 
   
24 trade and other payables including derivatives        
  2011 2010
  gbp gbp
trade and other payables  23905085  28380397 
annual bonus accrual  2805504  5401587 
leave bonus accrual  2206390  508636 
leave pay accrual  5991870  5132400 
  34908849  39423020 
25 deferred revenue           
  2011 2010
  gbp gbp
deferred revenue    
– noncurrent  4174100  5908356 
– current  8595742  17510351 
  12769842  23418707 
deferred revenue comprises advances received from clients for which the related work has not yet been performed deferred revenue is 
released to the statement of comprehensive income on a stage of completion method as the services to which the deferred revenue relates are 
performed 
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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72
26 commitments           
  2011 2010
  gbp gbp
261 operating lease commitments    
future operating lease charges relating to property    
– payable within 1 year  1239343  1387137 
– payable between 1 and 5 years  1522810  2989849 
  2762153  4376986 
future operating lease charges relating to plant and equipment    
– payable within 1 year  1143202   
– payable between 1 and 5 years  1401510   
  2544712    
future operating lease charges relating to ofﬁ ce equipment    
– payable within 1 year  96141  31652 
– payable between 1 and 5 years  121300  52637 
  217441  84289 
future operating lease charges relating to motor vehicles    
– payable within 1 year    33863 
– payable between 1 and 5 years      
    33863 
total future operating lease charges    
– payable within 1 year  2478686  1452652 
– payable between 1 and 5 years  3045620  3042486 
  5524306  4495138 
future lease charges except for operating leases relating to properties are subject to changes in the prime lending rate of south africa the 
lease agreements continue indeﬁ nitely unless terminated in terms of the agreements which require a three month notice period 
262 capital commitments           
  2011 2010
  gbp gbp
capital expenditure authorised    
– contracted for  1000000    
– not yet contracted for  5507744   3893979 
commitment toward sight power incorporated for the development of 
intelectual property contracted for at yearend   970500      
the commitments of the group will primarily be funded through funds received from clients as well as through the use of available cash and 
banking facilities of the group           
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
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73
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
27 financial risk instruments and risk management        
the board’s overall policy is to maintain a strong capital base as to maintain investor creditor and market conﬁ dence having sufﬁ cient and 
extensive capital in the form of plant and equipment is the key to success of the 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 ﬁ nancial 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 ﬂ uctuations 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 managements controls and procedures the results of 
which are reported to the audit committee the group audit committee reports to the board of directors on a regular basis  
the group’s risk management policies are established to identify and analyse the risks faced by the group to set appropriate risk limits and 
controls and monitor risks and adherence to limits risk management policies and systems are reviewed regularly to reﬂ ect changes in market 
conditions and the group’s activities the group through its training management and safety standards and procedures aims to develop a 
disciplined and constructive control environment in which all employees understand their roles and obligations as well as the importance of 
maintaining safety standards           
271 market risk           
market risk is the risk that changes in the market prices such as foreign exchange rates interest rates and equity prices that will affect the 
group’s income or the value of its holdings of ﬁ nancial instruments the objective of market risk management is to manage and control market 
risk exposures within acceptable parameters while optimising the return       
foreign currency risk           
the group is exposed to currency risk on contract revenue purchases and borrowings that are denominated in a currency other than the 
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 swiss franc chf the euro and the indian rupee rupee      
the group ensures that its net exposure is kept to an acceptable level by buying and selling foreign currencies at spot rates where necessary 
to address short term imbalances the group invoices in foreign currencies where possible where its cost base is also in foreign currencies in 
order to achieve a natural hedge position in volatile markets the group will consider using forward exchange contracts to mitigate foreign 
currency risks board approval will however be obtained before the group enters into any forward foreign exchange contracts  
225014 shaftsinkersra2012pagesindd   73 26042012   1937 shaft sinkers report  accounts 2011
74
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
27 financial risk instruments and risk management continued
271 market risk continued           
the group’s exposure to foreign currency risk was as follows        
  zar zar
  2011 2010
finance lease receivables  20911400   17070669 
trade and other receivables  376259462  320997650 
loan to related party  current    5009394 
loans to joint venture partners     605862 
cash and cash equivalents  115742173  258686144 
deferred revenue  149957170  209417616 
interest bearing borrowings  203128627  250069181 
post retirement beneﬁ t obligations  4729857  5004043 
trade and other payables  401621761  393663882 
loan from related party  current    5044726 
bank overdraft     1321637 
gross statement of ﬁ nancial position exposure  246524380  262151366 
  usd usd
  2011 2010
trade and other receivables  22672333  21559406 
cash and cash equivalents  3948243  3318175 
interest free advances  37757346  29782766 
deferred revenue  1259566  4543577 
trade and other payables  2676042    
gross statement of ﬁ nancial position exposure  15072378  9448762 
  rur rur
  2011 2010
trade and other receivables  214223403  212324901 
cash and cash equivalents  12334040  793302 
trade and other payables  36349078  22832171 
gross statement of ﬁ nancial position exposure  190208365  190286032 
  dirham dirham
  2011 2010
trade and other receivables    327413 
cash and cash equivalents  94895  106551 
trade and other payables     44540 
gross statement of ﬁ nancial position exposure  94895  389424 
  chf chf
  2011 2010
trade and other payables  18900      
gross statement of ﬁ nancial position exposure  18900      
  euro euro
  2011 2010
trade and other receivables  19113   195682 
trade and other payables  31339   3700 
gross statement of ﬁ nancial position exposure  12226   191982 
  rupee rupee
  2011 2010
cash and cash equivalents  2811767  8057625 
gross statement of ﬁ nancial position exposure   2811767  8057625 
225014 shaftsinkersra2012pagesindd   74 26042012   1937 shaft sinkers report  accounts 2011
75
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
27 financial risk instruments and risk management continued
271 market risk continued           
the following signiﬁ cant exchange rates applied during the year         
  
 2011 2010
 average rate  reporting date average rate reporting date
 per pa spot rate per pa spot rate
denomination in foreign currency     
zar 1 0086  0080  0088  0097 
usd 1 0623  0647   0647   0645 
rur 1 0021  0020  0021   0021 
dirham 1 0170  0176  0176   0176 
swiss franc 1 0706  0688           
euro 1 0868   0838   0858  0860 
inr 1 0013  0012   0014  0014 
sensitivity analysis           
a 15 percent strengthening of the british pound against the south african rand us dollar the russian rouble the dirham the franc the 
euro and the indian rupee would have resulted in changes in equity and proﬁ t by the following amounts the analysis assumes all variables in 
particular interest rates remain constant the analysis is performed in the same manner for 2010     
  2011 2010
  gbp gbp
    south african rand   2939803  3822167 
    us dollar  1462774  914168 
    russian rouble   573478  602255 
    dirham  2507   2807 
    franc   1952    
    euro  1536   24777 
    indian rupee  5019   17163 
  3825061   4089333 
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 ﬁ xed and ﬂ oating interest rates the risk is managed 
by maintaining an appropriate mixture between ﬁ xed and ﬂ oating rate borrowings and placings within the market exposure expectations the 
group also uses interest rate swaps where deemed necessary to hedge its exposure to ﬂ oating interest rates    
interest rates used to discount estimated cash ﬂ ows where applicable are based on the bank prime lending rate at reporting date and were as 
follows           
variable interest rates           
   loans and borrowings are linked to the johannesburg interbank agreed rate jibar and ranges between jibar plus 22 to jibar plus 68
   finance lease obligation are linked to the prime lending rate of south africa and had an average effective borrowing rate of 93 2010 93
   loans to and from related parties bears interest at the prime lending rate of south africa less 200 per annum   
at the reporting date the interest rate proﬁ le of the group‘s interest bearing ﬁ nancial instruments were     
      
            
225014 shaftsinkersra2012pagesindd   75 26042012   1937 shaft sinkers report  accounts 2011
76
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
27 financial risk instruments and risk management continued
271 market risk continued           
  2011 2010
  gbp gbp
financial assets  24285713  29747839 
financial liabilities  16193677 25062358 
  8092036  4685481 
cash ﬂ ow sensitivity analysis
a change of 100 basis points in interest rates at the reporting date would have decreasedincreased proﬁ t or loss by the amounts shown 
below this analysis assumes that all other variables remain constant the analysis is performed on the same basis for 2010 
  2011 2010
  gbp gbp
interest bearing bank loan  1617418  242984 
finance lease obligations  1949   1418 
finance lease receivables  166708  16684 
loans receivable  32024  
related party loans    35 
cash and cash equivalents  2229839   274608 
  809204  46855 
272 exposure to credit risk           
credit risk is the risk of ﬁ nancial loss to the group if a customer or counterparty to a ﬁ nancial instrument fails to meet its contractual 
obligations and arises principally from the group’s receivables to customers 
trade and other receivables           
the group’s exposure to credit risk is inﬂ uenced mainly by the individual characteristics of each customer as well as the demographics of the 
group’s customer base including the default risk of the industry and country in which the customers operate   
management has established a policy of spreading the customer base outside of africa and into eastern and western europe and india this is 
to optimise geographical concentration of credit risk        
the board of directors has established parameters 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 speciﬁ c loss component that relates to individually signiﬁ cant exposure and a collective loss component 
established of similar assets in respect of losses that have been incurred but not yet identiﬁ ed the collective loss allowance is determined 
based on historical data of payment statistics for similar ﬁ nancial assets       
impairment losses           
the ageing and impairment losses thereon at reporting date was 
 2011 2010
 gross trade  gross gross trade  gross
 receivables impairment receivables impairment
 gbp gbp gbp gbp
group 24524217       40943713    
past due 0 – 30 days 3953754      3125768   
past due 31 – 75 days 2780050          
past 75 days 17209954  2108259  2623831   197888 
  48467975  2108259  46693312   197888
225014 shaftsinkersra2012pagesindd   76 26042012   1937 shaft sinkers report  accounts 2011
77
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
27 financial risk instruments and risk management continued       
272 exposure to credit risk continued          
reconciliation of impairment           
    
  2011 2010
  gbp gbp
opening balance  161417  3762713 
impairments raised during the year  2284658  108375 
impairments reversed during the year  174923  3848694 
foreign currency   162893  175494 
closing balance  2108259  197888 
the impairment raised during the current year relate to projects where operations were suspended during the year and was raised based on 
management’s assessment           
management have raised impairments based on key assumptions and estimates in terms of the contract should management estimates of the 
future not reﬂ ect actual events further impairments may be necessary    
the group believes that no further impairments are necessary other than those raised 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 standard bank of south africa as security for its guarantee and banking facilities refer note 203
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was    
 2011 2010
 gross trade  gross gross trade  gross
 receivables impairment receivables impairment
 gbp gbp gbp gbp
group     
south africa 33009790   34001642  197888 
rest of world 15458185  2108259  12691670    
 48467975  2108259  46693312  197888 
the maximum credit risk exposure by customer type at reporting date was within the mining fertiliser and hydro electrical power industries 
which comprises the full outstanding balance at the reporting date        
loans and other recievables           
the group has provided funding to related parties and employees in the form of loans and ﬁ nance lease receivables respectively these loans 
and other receivables are considered low risk by management as these receivables are mostly secured by the underlying asset in the case of 
ﬁ nance lease receivables no allowances for impairment is therefore deemed necessary for these loans the maximum exposure of the group 
to credit risk relating to loans and other receiavbles are reﬂ ected by the carrying amount of these instruments and are summarised below 
  2011 2010
  gbp gbp
loan to related party – current     489587 
finance lease receivables  1667084  1668377 
loans to joint venture partners    59213 
  1667084  2217177 
cash and cash equivalents     
management considers the credit risk relating to its cash and cash equivalents to be low due to the fact that all of its cash and cash equivalents 
are invested at reputable ﬁ nancial institutions with good credit ratings which are monitored by the board of directors on an ongoing basis 
225014 shaftsinkersra2012pagesindd   77 26042012   1937 shaft sinkers report  accounts 2011
78
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
27 financial risk instruments and risk management continued       
273 liquidity risk           
liquidity risk is the risk that the group will not be able to meets its ﬁ nancial obligations as they fall due the group’s approach to managing 
liquidity is to ensure as far as possible that it will always have sufﬁ cient cash ﬂ ow and marketable securities to meet its obligations when they 
fall due under both normal and stressed conditions without incurring unacceptable losses or risk damage to the group’s reputation
the group ensures that it has sufﬁ cient cash on hand to meet unexpected operational expenses as they fall due including the servicing of 
ﬁ nancial obligations this excludes the potential impact of extreme circumstances that cannot be reasonably predicted such as natural disasters 
in addition the group maintains overdraft facilities to cover periods where high volumes of the operational liabilities are expected to fall due
the following are the contractual maturities of ﬁ nancial liabilities undiscounted including interest payments and excluding the impact of 
netting agreements           
 carrying amount contractual cash ﬂ ows less than 1 year 1 – 5 years more than 5 years
 gbp gbp gbp gbp gbp
group
2011       
nonderivative ﬁ nancial instruments       
interest bearing borrowings – 
standard bank of south africa limited 16174186  18782561  5403896  13378665  
interest bearing borrowings – ﬁ nance lease obligations 19491  20507  20507        
interest free advances received from clients 24433596  24433596  24433596       
trade and other payables 34908849  34908849  34908849        
derivative ﬁ nancial liabilities      
interest rate hedge               
2010       
nonderivative ﬁ nancial instruments       
interest bearing borrowings – 
standard bank of south africa limited 24298399  29616907  6601412  23015495     
interest bearing borrowings – ﬁ nance lease obligations 141752  152484  87472  65012     
interest free advances received from clients 19347344  19347344  6182700  13164644     
trade and other payables 38969589  38969589  38969589        
derivative ﬁ nancial liabilities      
interest rate hedge             
fair values      
 the directors consider the fair values of assets and liabilities to be the same as the carrying amounts reﬂ ected in the statement of ﬁ nancial position
274 capital risk management           
the group manages its capital to ensure that the entities in the group will be able to continue as a going concern while maximising the return 
to stakeholders through optimisation of the debt and equity balance
the capital structure of the group consists of debt which includes the borrowings as disclosed in note 20 and equity attributable to owners of 
the parent comprising reserves and retained earnings as disclosed
the board reviews the capital structure and as part of this review considers the cost of capital and the risks associated with each class of 
capital in addition the board of directors considers the liquity and solvency of the group on an ongoing basis
with the exception of the debt covenants imposed by the group’s ﬁ nancier  as per note 20 the group’s capital structure remains unchanged 
since 2010 the group manages its capital in order to ensure that no contravention of the covenants occurs
there has been no change to how the group manages as capital the strategy for capital maintenance from 2010    
225014 shaftsinkersra2012pagesindd   78 26042012   1937 shaft sinkers report  accounts 2011
79
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
28  related parties           
281 identiﬁ cation 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 international proprietary limited         
  shaft sinkers rus llc registered in russia         
  shaft sinkers fze registered in dubai          
  capstone international fzco registered in dubai         
  shaft sinkers mauritius limited           
c  partially owned subsidiary indirectly held           
  70 2010 70 in shaft sinkers zimbabwe private limited        
  84 2010 100 in shaft sinkers mining proprietary 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       
dormant companies           
the directors of the company and other members of the executive management are deﬁ ned as key management  
the directors of the company are listed in the directors’ report        
the directors’ emoluments are disclosed in note 3        
282 material party related transactions          
transactions with related parties           
related party loans – refer note 22           
interest paid to and received from related parties – refer note 4      
during the 2010 ﬁ nancial year the group disposed of its 25 interest and 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        
225014 shaftsinkersra2012pagesindd   79 26042012   1937 shaft sinkers report  accounts 2011
80
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
28  related parties continued
283 transactions with key management personnel          
the group provides non cash beneﬁ ts to key management by way of a long term share incentive plan as described in note 30  
    
  2011 2010
  gbp gbp
key management compensation comprised    
shortterm employee beneﬁ ts  5516280  3731519 
share based payments  note 30  368566  20669 
  5884846  3752188 
29 retirement beneﬁ t information         
the group has made provision for various retirement funds covering substantially all permanent employees   
there are two retirement funds all of which are deﬁ ned contributions funds governed by the pension funds act of 1956  
the following contributions to the two funds were made during the year       
  2011 2010
  gbp gbp
republic of south africa    
– sentinel mining industry retirement fund  5387971   4457484 
– mine employees pension fund   4979719   4759141 
  10367690   9216625 
30 share based payment arrangements 
long term share incentive plan “ltip”        
description of the share based payment arrangements        
on 23 december 2010 the three executive directors of the company were given awards over a number of ordinary shares of the company 
this share based payment arrangement will be satisﬁ ed at the end of the vesting periods and will be effected through the transfer of ordinary 
shares to the participants this share based payment arrangement is therefore considered to be equity settled as deﬁ ned in ifrs 2  share 
based payments           
terms and conditions of the share based payment arrangements        
the share based payment arrangement comprise of two performance conditions that will be measured in stages over the vesting periods the 
performance conditions described below are independent of each other and therefore have been accounted for as separate share based 
payment arrangements            
the performance conditions that are applied for the share based payment arrangements are as follows    
 growth in earnings per share of the company “eps”         
 growth in the company’s share price           
eps share based payment arrangement           
in order for the shares attributable to the growth in earning per share of the company to vest the group has to achieve a growth in earnings 
for each of the ﬁ nancial years ending 31 december 2011 to 31 december 2013 of at least 20 per cent per annum in the event that the growth 
in earnings is between 10 and 20 per cent per annum between 50 to 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  
225014 shaftsinkersra2012pagesindd   80 26042012   1937 shaft sinkers report  accounts 2011
81
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
30 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 ﬁ nancial years ending 31 december 2011 to 31 december 2013 the base price for the 
ﬁ nancial year ending 31 december 2011 is the placing price at which the company’s shares were listed ie gbp 124 per share in the event 
that the growth in share price is between 13 and 26 percent per annum between 50 to 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 ﬁ nancial 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  tues 10 april 12 124  474  375000  5251
2nd tranche  052  wed 10 april 13 124  839  375000  5251
3rd tranche 072  thurs 10 april 14 124  1204  375000  5251
      
eps shares      
1st tranche 122  tues 10 april 12  474   375000  5251
2nd tranche 111  wed 10 april 13  839  375000  5251
3rd tranche 099  thurs 10 april 14  1204  375000  5251
  2011 2010
  gbp gbp
employee beneﬁ ts 
expense arising on share based payment arrangements granted on 23 december 2010 368566   20669 
none of the share rights have vested at 31 december 2011 the fair value of these at grant date is dependent on market conditions and non
vesting conditions      
  2011 2010
  number of shares number of shares
reconciliation of outstanding share awards in terms of the long term incentive plan   
share awards held at 1 january  2250000     
share awards granted during the year      2250000 
share awards settled  forfeited during the year  750000      
share awards held at 31 december   1500000   2250000 
during the year under review rn schroder resigned as a director of the company and therefore forfeited the share awards issued to him the 
remaining share awards are held by a davidov and cm hall 
225014 shaftsinkersra2012pagesindd   81 26042012   1937 shaft sinkers report  accounts 2011
82
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
30 share based payment arrangements continued
black economic empowerment transaction
shaft sinkers mining proprietary limited issued shares amounting to 16 of the issued shares of that company to an employee trust that will 
hold these shares for the beneﬁ t of the category 3  8 employees comprising mostly of historically disadvantaged individuals in south africa 
of the group the shares were issued at a nominal value which is customary for transactions of this nature in south africa the difference 
between the market value of these shares which were based on a valuation performed by an independent valuator using a discounted cash 
ﬂ ow model and the nominal value against which the shares were issued amounted to gbp244665 this amount was recognised as a share 
based payment expense in the consolidated income statement  refer to note 3
31 contingent liabilities          
  2011 2010
  gbp gbp
south african contractual performance andor retention guarantees and 
payment bonds held by contracted clients and service providers at balance sheet date 5010092  5954033 
32 notes to the cash ﬂ ow statement       
321 cash generated by operating activities before working capital changes
     2011 2010
    note gbp gbp
      restated
proﬁ t from operations per statements of comprehensive income  15325210  17996022 
adjustments for noncash items included in    
depreciation of property plant and equipment and impairment  9603430  7180928 
loss  proﬁ t on disposal of property plant and equipment   35060  121457 
reversal of impairment loss on property plant and equipment    1532672 
impairment losses raised on plant and equipment     54199 
impairment allowance on trade and other receivables raisedreversed  2109735    
raisingreversal of write down of inventory to net realisable value  29532  58391 
contract provision and settlement    3819876 
deferred revenue released during the year 324 14123528  4408480 
raising of impairment loss on loans to joint venture partners  51708    
loss on disposal of interest in shaft sinkers mining proprietary limited  117925    
fair value gain on revaluation of unlisted investment  126    
unrealised foreign exchange difference  4515411  1072386 
share based payment expense arising on share based payment arrangements   30 368566  20669 
share based payment expense arising on black economic empowerment 
transaction in respect of shaft sinkers mining proprietary limited 30  244665   
increase in retirement beneﬁ t obligation  19664   35413 
reversal of impairment losses on equity accounted investees    1763078 
     18297252  12510891 
322 income taxation paid    
     2011 2010
     gbp gbp
amount payable at the beginning of the year  2914624   3482690 
prior year under  over provision  222626  1644364 
amount charged to the statement of comprehensive income  1029347   2275122 
secondary taxation on companies paid  526989    
amount receivable  payable at the end of the year  558182   2914624 
foreign currency translation reserve  291539  430167 
     4514977   4917719 
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83
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
32 notes to the cash ﬂ ow statement continued
323 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 
324 reclassiﬁ cation of cash ﬂ ows relating to deferred revenues and advances from clients      
during 2011 cash ﬂ ows received in advance has been disclosed separately from revenues released to the statement of comprehensive income 
this accounting treatment has subsequently also been applied to the 2010 cash ﬂ ows presented above the effect of the reclassiﬁ cation on the 
2010 cash ﬂ ows is           
   2010
   gbp
receipt of deferred revenue and advances from clients per statement of cash ﬂ ow  15150083 
 deferred revenue recognised in the statement of comprehensive income per note 321  4408480
unrealised foreign exchange differences on translation of interest free advances   1072386
effect of reclassiﬁ cation on the 2010 cash ﬂ ows   9669217 
previously reported in the 2010 consolidated annual ﬁ nancial statements   9669217 
difference    
33 acquisitions from entities under common control note to the annual ﬁ nancial statements    
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 business combination 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         
the business combination gave rise to a common control reserve as follows       
  2011 2010
  gbp gbp
share capital of capstone 615 proprietary limited at date of acquisition      144 
share premium of capstone 615 proprietary limited at date of acquisition      3434021 
    3434165 
value of shares issued to acquire imr bv interest in capstone 615 pty limited    28295890 
value of shares issued to acquire noncontrolling interest in capstone 615 pty limited   24103906 
difference taken to common control reserve    48965631 
225014 shaftsinkersra2012pagesindd   83 26042012   1937 shaft sinkers report  accounts 2011
84
notes to the consolidated annual ﬁ nancial statements 
continued 
for the year ended 31 december 2011  
34 segmental reporting           
information about reportable segments           
the group has two reportable segments as described below which are the group’s strategic divisions the strategic divisions of the group 
are geographically different and are managed separately due to the unique challenges and risks that are present when operating in different 
jurisdictions although the mets division is a strategically important part of the business it is not regarded as a separate operating segment as 
deﬁ ned in ifrs 8 due to the fact that the contribution that the mets division contributes to the group is less than 10 of the total contribution 
of the group’s contracting activities           
the following describes the group’s operating segments        
 south africa  contract services provided to clients within the republic of south africa     
 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 proﬁ t before 
income tax as included in the internal management reports that are reviewed by the group’s executive management the information is 
prepared under ifrs and is consistent with the group’s accounting policies segment proﬁ t is used to measure performance as management 
believes that such information is the most relevant in evaluating the results of certain segments taking into consideration the unique risk 
characteristics of each of these segments
other corporate activities comprise activities that do not by deﬁ nition form part of the operating segments as well as the head ofﬁ ce activities 
which could not be assigned to an individual segment inter segment transactions are concluded on an arm’s length basis  
   
 south africa rest of world other corporate activities total
 2011 2010 2011 2010 2011 2010 2011 2010
 gbp gbp gbp gbp gbp gbp gbp gbp
external revenues  183148003  147490967   43391540  35636662        226539543   183127629 
gross proﬁ t  22656713  14065939   15620549  15116985        38277262  29182924 
depreciation and
 amortisation  5450145  6775998  4066716  323589  86569   81341   9603430   7180928 
finance income   357031  280720    66787  37819  271  394850   347778 
finance expense  2201722  1631356  12228   3597       2213950   1634953 
reportable segment 
proﬁ t before income tax  11800041  11876573  13048380  13722202  11342311  8889928 13506110   16708847 
reportable segment
assets  90559281  105903169  36337219  41431453   16950848  14800522  143847348   162135144 
capital expenditure  9252156   9997033  1121182   2096635  132229   37630  10505567   12131298 
reportable segment 
liabilities  42562118  70536677  33717202  16606184  19543934   28482401   95823254   115625262  
     
225014 shaftsinkersra2012pagesindd   84 26042012   1937 shaft sinkers report  accounts 2011
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 a ﬁ nal dividend of 48 
pence has been recommended by the board at the date of this report
registrars and transfer ofﬁ ce
the company’s ordinary share register is maintained by 
computershare investor services iom limited 
international house
castle hill
victoria road
isle of man
im2 4rb
any queries about the administration of holdings of ordinary shares 
such as change of address change of ownership or dividend 
payments should be directed to the company’s registrars
enquiries
shareholders who wish to contact the company on any matter 
relating to their shareholding are invited to contact the company’s 
registrars computershare investor services iom limited at the 
address mentioned above
shareholders may also contact the company secretary mr martin 
peters at
eis advisors limited
millennium house
victoria road
douglas
isle of man
im2 4rw
telephone 44 0 1624 624 100
for other enquiries please contact the company at the registered 
ofﬁ ce or call mr christopher hall on 27 11 445 4407
analysis of ordinary shareholders
as at 31 march 2012
 number of holders  number of shares
11000 shares 28  0 18497
10015000 116 1 357594
5001  50000 162 5 2330518
50001  100000 20 3 1517634
100001  500000 20 9 4061196
500001 and over 18 83 39214561
 364   47500000 
225014 shaftsinkersra2012pagesindd   85 26042012   1937 shaft sinkers report  accounts 2011
86
corporate information
registered ofﬁ ce
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 ja1
website wwwshaftsinkersgroupcom
telephone 44 01624 620711
registered in the isle of man
company no 006057v
company secretary
martin peters
eis advisors limited
millennium house
victoria road
douglas
isle of man
im2 4rw
telephone 44 0 1624 624 100
stockbroker
westhouse securities limited
one angel court
london
ec2r 7hj
legal advisors
jones day
21 tudor street
london 
ec4y 0dj
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
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financial calendar for 2012
the following are provisional dates
exdividend date wednesday 2 may 2012
final dividend record date friday 4 may 2012
annual general meeting and interim management statement friday 1 june 2012
final dividend payment date tuesday 12 june 2012
interim results  august 2012
interim management statement november 2012
annual information update december 2012
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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 1 june 2012 to consider and if thought ﬁ t 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 ﬁ nancial year ended 31 december 2011 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 ﬁ nancial year ended 31 
december 2011 
3 to reappoint kpmg audit llc as auditors of the company to hold ofﬁ ce until the conclusion of the next annual general meeting
4 to authorise the directors to determine kpmg audit llc’s remuneration as auditors of the company
5 to approve the ﬁ nal dividend of 48 pence per share payable in june 2012
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 2013 or if sooner the end of the company’s annual general meeting in 2013 
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 20 april 2012
by order of the board
martin peters
secretary
20 april 2012
shaft sinkers holdings plc
18 athol street
douglas
isle of man
im1 1ja
 
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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 ofﬁ ces of the company’s registrars computershare investor services 
jersey limited co queensway house hilgrove street st helier jersey je1 1es or at the email address infocomputersharecoje or by 
fax to 44 0 870 873 5851 by 1100 am on friday 25 may 2012 completion and return of a form of proxy will not prevent a shareholder 
from attending and voting at the annual general meeting in person if heshe so wishes
3   a space has been included in the form of proxy to allow shareholders to specify the number of shares in respect of which that proxy is 
appointed shareholders who return the form of proxy duly executed but leave this space blank will be deemed to have appointed the 
proxy in respect of all of their shares shareholders who wish to appoint more than one proxy in respect of their shareholding should 
contact the company’s registrars computershare investor services iom limited on their helpline number 44 0 1534 825230 for 
additional forms of proxy or you may photocopy the form of proxy provided with this document indicating on each copy the name of the 
proxy you wish to appoint and the number of ordinary shares in the company in respect of which the proxy is appointed all forms of 
proxy should be returned together in the same envelope
4   in the case of joint holders any one holder may vote if more than one holder is present at the meeting only the vote of the senior will be 
accepted seniority being determined in the order in which the names appear on the register of shareholders of the company
corporate representatives
5   corporate shareholders may appoint corporate representatives to attend speak and vote on their behalf at the annual general meeting 
where a person is authorised to represent a corporate shareholder at the meeting any director or the secretary may require him to 
produce a certiﬁ ed copy of the resolution from which he derives his authority
right to attend and vote at the annual general meeting
6   to be entitled to attend and vote at the annual general meeting and for the purpose of the determination by the company of the votes 
they may cast shareholders must be registered in the register of members of the company at 11am on friday 25 may 2012 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 ofﬁ ce of the company 
during normal business hours on any weekday public holidays excepted from the date of this notice until the conclusion of the annual 
general meeting and at the ofﬁ ces of jones day 21 tudor street london ec4y 0dj for 15 minutes prior to and during the annual 
general meeting
total number of shares and voting rights
8   as at 11am on 17 april 2012 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 17 april 
2012 is 47500000
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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 conﬁ dential information b the answer has already been given on a website in the 
form of an answer to a question or c it is undesirable in the interests of the company or the good order of the meeting that the question 
be answered
conduct at meeting
10   we ask all those present at the annual general meeting to facilitate the orderly conduct of the meeting and reserve the right if orderly 
conduct is threatened by a person’s behaviour to require that person to leave for security reasons all hand luggage may be subject to 
examination prior to the entry to the annual general meeting cameras tape recorders laptop computers and similar equipment may not 
be taken into the annual general meeting
explanatory notes to the notice of annual general meeting
the notes on the following pages give an explanation of the resolutions
resolutions 1 to 5 are proposed as ordinary resolutions resolution 6 is proposed as a special resolution 
resolution 1 annual report and accounts 2011
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 2011
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 and 4 auditors
the purpose of these resolutions is to reappoint kpmg audit llc as the company’s auditors and authorise the board to ﬁ x their 
remuneration
resolution 5 dividend
the purpose of this resolution is to approve the ﬁ nal dividend of 48 pence per ordinary share payable in june 2012
resolution 6 authority to allot
the purpose of this resolution is to propose that the period under which directors have authority to allot shares for cash consideration to 
existing shareholders or other person be i extended to 30 june 2013 or if sooner the end of the company’s annual general meeting in 
2013 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
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form of proxy – shaft sinkers holdings plc agm 2012
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 25 may 2012 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 1 june 2012 and at every adjournment of that meeting
please indicate with and ‘x’ or tick in the appropriate space below how you wish your votes to be cast
agenda item vote for vote against vote withheld
1 to receive and adopt the group’s audited annual accounts for the ﬁ nancial 
year ended 31 december 2011
2 to approve the directors’ remuneration report for the ﬁ nancial year ended 
31 december 2011 
3 to reappoint kpmg audit llc as auditors of the company to hold ofﬁ ce until the 
conclusion of the next annual general meeting
4 to authorise the directors to determine kpmg audit llc’s remuneration 
as auditors of the company
5 to approve the ﬁ nal dividend of 48 pence per share payable in june 2012
special business   
6 authority to allot ordinary shares equal to 5 per cent of the number of 
ordinary shares in issue as at 20 april 2012  
signed at                          on  2012
signatures  
assisted by me where applicable  
full names of signatory if signing in a representative capacity please use block capital letters
225014 shaftsinkersra2012pagesindd   91 26042012   1937 group overview
highlights 1
boa rd of dire ct ors 2
ch a irman’s s tat em ent 4
chie f ex ec ut ive off ic er’s s tat em ent 6
bus in ess review
operat ional r eview 9
fi nanc ial r eview 11
int ernal co nt rols and 
risk mana gem ent 17
2011 k pis 21
su sta ina bil ity r eview and  
corpor at e so c ial in vestm ent 23
d irect ors report dire ct ors’ report – b us in ess r eview 24
dire ct ors’ report – corpor at e 
governance 28
dire ct ors’ report – r em un erat ion  35
s tat em ent of d irect ors’  
res pons ibil ity f or t he ann ual  
report and acc ounts 40
f inanc ial stat em ents ind epend ent a ud it ors’ report 41
co ns ol idat ed inc om e stat em ent 42
co ns ol idat ed stat em ent of 
c om prehens ive inc om e 43
co ns ol idat ed stat em ent  
of f inanc ial pos it ion 44
co ns ol idat ed stat em ent  
of c han ges in eq uity 45
co ns ol idat ed stat em ent  
of cas h fl ows 46
no t es t o t he c ons ol idat ed  
ann ual f inanc ial stat em ents  47
inf ormat ion 
sh a rehold er inf ormat ion 85
corpor at e inf ormat ion 86
fi nanc ial cal enda r f or 2012 87
no t ic e of a nn ual g en eral mee t in g 88
proxy f orm f or a nn ual  
gen eral mee t in g 91 shaft
sinkers
shaft sinkers
annual report  accounts 2011
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 2011
6
chief executive ofﬁ cer’s statement
revenue has grown by 237 
with profit from operations 
increasing 302 to gbp185 
million before exceptional 
items of the exceptional 
ipo bonus of gbp31 million 
in 2011 and a credit for 
contract settlement in 2010 
of gbp38 million 
after taking account of the exceptional items 
proﬁ t from operations was gbp153 million 2010 
gbp180 million the group’s net proﬁ t after 
tax for the year on a preipo bonus basis was 
gbp111 million 2010 gbp99 million pre contract 
settlement and after the exceptional items was 
gbp87 million 2010 gbp126 million our return 
on capital employed averaged 82 pre the ipo 
bonus 2010 61 pre contract settlement and 
our goal is to see this increase into the double 
digits in the next 3 years through our focussed 
strategy in the cis and india regions 
south african operations
south africa remains the primary region for the 
group and we are conﬁ dent in the continued 
improvement in revenues in this region this 
should be supported by the implementation of 
a black economic empowerment shareholding 
arrangement announced during the year
in the ﬁ rst half of 2011 the impala 16 and 17 
shafts were impacted by standing time which in 
turn impacted gross proﬁ t margins the second 
half saw a recovery at these two projects which 
will improve gross proﬁ t margins to an acceptable 
level after the period end in march 2012 we 
were awarded additional capital development 
contracts at impala 16 which will improve the 
overall margin at that shaft
we progressed well with the presink and 
mobilisation work at afplats’ leeuwkop shaft the 
award of the contract has been phased in stages 
and in march 2012 we were awarded the second 
phase of work to sink to a depth of 3258 meters 
by september 2012
the lonmin shafts at hossy and saffy performed 
well karee 3 has fallen behind plan but measures 
are in place to mitigate operational losses and 
avoid them in the future overall the lonmin 
projects have beneﬁ ted from additional capital 
development work being undertaken
work at the styldrift project suffered low levels 
of production caused mainly by the introduction 
of new safety procedures and a shortage of 
skilled labour which impacted production cycles 
signiﬁ cantly production levels have improved 
in the second half of 2011 and we are currently 
performing close to planned levels although we 
remain behind the overall project schedule 
our project at anglogold ashanti’s moab shaft 
has performed well and is expected to reach 
completion by the end of 2012
work on our project at hernic ferrochrome’s 
bokfontein mine continues to progress at a 
satisfactory pace 
international operations
our project at eurochem’s potash deposit in 
russia suffered setbacks due to the extremely 
difﬁ cult underground conditions making progress 
very slow which in the context of eurochem’s 
broader mine programme was unacceptable 
in early december 2011 eurochem decided 
to suspend our grouting operations and to 
switch to a freezing technique for which the 
shaft is currently being prepared after making 
various proposals to eurochem which were not 
accepted we have decided to give advance 
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notice of termination of the contract with effect 
from 20 april 2012 further information on this 
can be found in the directors’ report under 
principal events for the year on page 24 
in india our t eesta iii hydroelectric project is almost 
complete work on the second surge shaft stopped 
in the latter half of 2011 following an earthquake 
in the vicinity of the site there remained very little 
work to complete the shaft at the time and this last 
remaining work is being ﬁ nalised by the client while 
we demobilise our equipment
our mining engineering and technical 
services mets division continues to ﬁ nd new 
opportunities for design and epcm contracts 
health and safety
our injury frequency rate one of our safety 
indicators has improved to 158 2010 488 
compared to the industry benchmark of 360 
regrettably there were 10 traumatic accidents 
that took place in 2011 including the tragic 
fatality of mr macamo on the 5th of april we 
have redoubled our efforts to improve our safety 
initiatives across all our operations which will 
lead to better awareness of safety across all 
levels in the company in 2011 we were awarded 
“southern africa mine safe 2011 mining 
contractor companies best in safety class” by 
the mine managers association of south africa 
and sa institute of metallurgy we continue to 
face the challenge of skills shortages in being 
prepared to take on the many potential projects 
facing the company at present to this end 
we have been building up our team of skilled 
personnel and we are ensuring that we are at the 
forefront of providing attractive retention policies 
and rewarding our skilled staff appropriately in 
order to cater for our planned growth over the 
forthcoming years we have bolstered the senior 
executive team at the executive committee level 
having added the positions of group business 
development manager chief commercial ofﬁ cer 
country manager cis region chief information 
ofﬁ cer chief operational ofﬁ cer international 
and chief financial ofﬁ cer south africa at the 
same time we are increasing our efforts at staff 
retention and recruitment of skilled engineers and 
artisans while this has added to our operating 
expenses in 2011 and may add a little more to 
2012 we believe we will have reached an optimal 
level of operating support to enable the group 
to take on the challenges of growth presented 
by the record number of tenders we expect to 
largely convert into long term contracts in 2012
black economic empowerment
we have implemented a black economic 
empowerment shareholding arrangement 
in shaft sinkers mining pty ltd one of our 
south african subsidiaries whereby 26 of the 
subsidiary’s shares have been issued to historically 
disadvantaged south africans 16 of the 
shareholding is earmarked to provide a future 
cash beneﬁ t from dividends for the category 3 to 
8 south african employees through an employee 
share trust making this transaction a broadbased 
empowerment transaction for the direct beneﬁ t of 
targeted employees in the group furthermore 
the group is pleased to welcome three 
distinguished businessmen mr mikki xayiya mr 
jabu mabuza and mr aubrey lekwane as minority 
shareholders into the group together holding 
10 of shaft sinkers mining the board believes 
this step which should not materially affect 
expected earnings from existing contracts will be 
beneﬁ cial to the business in securing new contracts 
in south africa and will assist the group in meeting 
the requirements of some of its clients under the 
south african mining charter and enhancing the 
longterm sustainability of the business in south 
africa the share based payment expense arising 
in the 2011 ﬁ nancial results is gbp02 million refer 
to note 321 to the annual ﬁ nancial statement
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order book and tendering activity
at 31 december 2011 the order book stood 
at approximately £301 million 2010 gbp488 
million including gbp94 million in relation to 
eurochem 2010 gbp119 million of remaining 
revenues to be billed on committed contracts
after completing the presink phase of afplats’ 
leeuwkop main shaft which was awarded in 
march 2011 we have been awarded the second 
phase of work to sink to a depth of 3258 meters 
by september 2012 the bulk of the project 
remains subject to the ﬁ nal approval by the 
impala board afplats is a subsidiary of impala 
management anticipates the approval and 
signing of this contract before the end of the ﬁ rst 
half of 2012 
since the last reported results for the half year 
ended 30 june 2011 management has been 
actively pursuing a number of new tenders the 
new business development roles established in 
2011 have culminated in a more concerted effort 
at identifying opportunities and subsequently 
growing our potential pipeline
the group has over £10 billion of outstanding 
tenders or price submissions on a total of 10 
projects as at the date of this report while 
there can be no certainty as to the award of any 
of these contracts management believes the 
company remains well placed to secure a number 
of these tenders when they are awarded the 
current tender pipeline is at a very high level
initiatives 
in 2011 we funded an initial investment in a 
technology business that is developing a laser 
based shaft inspection system that will transform 
the way compulsory shaft inspections are being 
performed today this new system will be much 
safer quicker and more accurate such a system 
would allow shaft sinkers to offer an additional 
service to its clients and create a recurring stable 
revenue ﬂ ow we hope to have a prototype ready 
towards the beginning of 2013 
we will continue our strategic focus to build 
on our strengths namely people safety and 
experience and to seek out and exploit new 
opportunities in the cis region and india while 
continuing to build on our strong base in africa 
in 2011 the strategic focus has been on further 
improving the performances of the south african 
operations and continuing the expansion of shaft 
sinkers internationally we have been using some 
of the listing proceeds to refurbish key plant 
in preparation for new potential contracts the 
availability of our own inventory of reconditioned 
winders remains key to our strategy to be well 
positioned for taking on new sinking contracts
our goals for 2012 and the next few years is 
to improve on the return on capital employed 
and adding value to shareholders this should 
be achieved by being awarded higher margin 
contracts in the cis and india regions on a now 
steady operating cost base having built up our 
operational readiness to take on a higher volume 
of work with a number of exciting opportunities 
on the horizon we remain conﬁ dent of our 
continued growth over the next ﬁ ve years
alon davidov
chief executive ofﬁ cer
26 april 2012
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