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Bateman Engineering N.V.

('Bateman Engineering' or 'the Company')

Half year results for the six months ended 31 December 2008

The Board of Bateman Engineering announces the consolidated financial results for the six months ended 31 December 2008. 

Financial Summary (US$m)

	December 2008	December 2007
Revenue	243.8	295.8
Results from operating activities	(42.3)	7.6
(Loss)/profit before tax	(37.9)	11.6
(Loss)/profit for the period attributable to equity holders of the parent	(40.0)	9.8
Net cash (utilised)/generated from operating activities	(41.9)	57.0
Net cash and cash equivalents at end of the period	50.3	126.4
Shareholders' equity after minorities	71.0	118.7

Results were affected by a number of noteworthy items including:

• US$33.4m provision for costs to complete problematic legacy projects

• US$6.2m provision for bad debts

• US$4.8m interest charge on unwinding costs related to acquisitions

• US$7.5m goodwill impairment charge

Operational highlights:

• Full senior management team and operating structures in place

• Balanced order book with less emphasis on pure LSTK projects

• Globally focused technology expertise and focused centers of excellence

• Good prospects in specific regions, technologies and commodities

Rick Menell, Chairman of Bateman Engineering said:

'While it is expected  that the Company will continue to face a difficult trading environment in the second half of this financial year, the Board is confident that the provisions for losses it has made in these half year results are realistic.  

'With the recent appointments to its senior management, the Company now has its full management team in place and this is expected to considerably strengthen the leadership of the Company and its performance going forward.

'The board has been approached by its largest shareholder, Global Minerals B.V. to consider delisting the company from the AIM market of the London Stock Exchange. Global Minerals B.V. further requested that an EGM be called at which shareholders can vote on a resolution for the companies delisting. A circular and notice of EGM to all shareholders will be issued as soon as practical.'

 

 Eddie du Rand, Chief Executive Officer of Bateman Engineering, said:

'We are confident that the strategic actions taken since the start of this financial year and the continued focus on costs and operational excellence will ensure that the Group is well positioned during these difficult times and, importantly, is ready to take advantage of the anticipated recovery of the natural resources market.'  

16 March 2008

ENQUIRIES:

Bateman Engineering	Tel: +31 (0) 20 502 2370
Eddie du Rand, CEO
Philippe Monier, CFO (designate)
Shore Capital and Corporate Limited	Tel: +44 (0) 20 7408 4090
Christian Littlewood
Edward Mansfield
College Hill	Tel: +44 (0) 20 7457 2020
Mark Garraway
Adam Aljewicz

Copies of this press release, together with a presentation to analysts and investors, can be downloaded in pdf format from the Bateman Engineering website at www.BatemanEngineering.com or is otherwise available from Amsteldijk 166, 1079LH Amsterdam, The Netherlands.

NOTE FOR EDITORS:

Bateman Engineering is a technology-driven engineering-project house serving the minerals and metals industries worldwide. Bateman Engineering's shares (BATE.L) are traded on AIM, a market of the London Stock Exchange. 

 

Chairman's Statement

Overview

The past six months continued to be challenging for the Bateman Engineering Group ('the Group') with stressed world markets as well as ongoing close out problems on legacy lump-sum turnkey ('LSTK') projects. However, the Board anticipates that these projects will be substantially completed by June 2009 and that the strategic measures now in place, focusing on project execution and greater alignment between the individual business units, should avoid a repeat of these problems on future projects. 

Safety, Health and the Environment

Whilst the Bateman Engineering Projects and Bateman Engineered Technologies SBUs achieved excellent safety results over the period with major safety milestones achieved on both Zambia's Lumwana Copper and Madagascar's Ambatovy Nickel projects, we regret to report one fatality at the Bateman Mineral Recovery SBU's Mashila Metal Recovery site in South Africa. The Group remains committed to improving the safety, health and environment of its employees and contractors.

Human Capital

As a technologically-driven engineering-project house, Bateman Engineering is reliant on the intellectual capital in the business. Due to the downturn in the economic market, emphasis has been placed on various strategic initiatives to help ensure the future sustainability of the Group, including rightsizing the organisation so that resource capacity is in line with changed market conditions. A priority of these measures has been to ensure that critical skills remain available to the Group. 

Technology

Bateman Engineering's position as a leading project house in the natural resources sector is underpinned by its capability to offer differentiated, project-specific process technology solutions. A focused initiative to broaden the process technology portfolio of the Group and improve the effectiveness of technology commercialisation is in place, with a number of global Centres of Excellence to develop, nurture and licence proprietary process technology.

Corporate Governance

Bateman Engineering is committed to high standards of corporate governance, complying substantially with the principles and best practices of the Dutch corporate governance code (the Tabaksblat Code) and the provisions set out for AIM companies published by the Quoted Companies Alliance.

Outlook

While it is expected that the Company will continue to face a difficult trading environment in the second half of this financial year, the Board is confident that the provisions for losses it has made in these half year results are realistic.  

With the recent appointments to its senior management, the Company now has its full management team in place and this is expected to considerably strengthen the leadership of the Company and its performance going forward.

The board has been approached by its largest shareholder, Global Minerals B.V. to consider delisting the company from the AIM market of the London Stock Exchange. Global Minerals B.V. further requested that an EGM be called at which shareholders can vote on a resolution for the companies delisting. A circular and notice of EGM to all shareholders will be issued as soon as practical.

RICK MENELL

Chairman

16 March 2009

Chief Executive Officer's Report

Introduction

On 16 December 2008 the Group released a trading update notifying shareholders that the changed macro-economic environment had led to markedly more difficult trading conditions, particularly in the minerals and metals sector. The economic downturn and the continued focus on closing out the remaining four legacy LSTK projects have resulted in the Group reporting an operating loss of US$42m for the six months ended 31 December 2008.  The total additional provision made for these three contracts during the period amounted to US$33m.  These figures are in line with the previous announcements.

Trading Environment

Global financial market conditions have severely impacted the natural resource sector with lower demand for commodities and limited funding available for projects. For the minerals and metals sector, project deferrals, delays and cancellations have been the order of the day, while the Mining Houses come to grips with the changed market conditions.  There are still opportunities in certain regions and commodities, with prospects in gold, coal, uranium and iron ore being dominant.  Clients are also taking this opportunity to invest more in upfront studies and position themselves for capital investment once there is a clearer direction in the global finance and commodity markets.  

Operational Review

Bateman Engineering Projects (BEP)

BEP has experienced a reduction in its order book in the Sub-Saharan and Australia regions, while the outlook for the Commonwealth of Independent States ('CIS') and Indian regions remains positive. BEP's structure enables skills and experience residing in Sub-Saharan Africa and Australia to provide significant input into future CIS and Indian projects over the medium term.  BEP continues to focus on providing global technology and know how with local execution capability, with an emphasis on securing reimbursable and hybrid work.  The legacy LSTK contracts covered in previous reports remain challenging and continue to be closely monitored. It is anticipated that these projects will be substantially completed by the end of the financial year.

Bateman Engineered Technologies (BET)

Performance for the period ending 31 December 2008 has been positive, with significant demand experienced in the power and energy sector within South Africa.  The recently-acquired Delkor group is integrating well and synergies are being driven.

Bateman Mineral Recovery (BMR)

The significant decline in ferrochrome prices has led to many of the producers worldwide having shut down all or some of their production capacity, resulting in a significant reduction in revenue for BMR. BMR has placed a number of its plants on care and maintenance and has cost initiatives underway to further reduce ongoing costs.

The Group has undertaken a review of all of its operational units in light of the current economic climate.  A reduction in the Group headcount has taken place in specific regions and operational units.  The Group will continue to ensure that it is appropriately sized to match the demand in the various regions in which it operates and tightly manages its requirements for working capital.  

Management Appointments

In line with the revised operating structure announced last year, key executive appointments have been made. Philippe Monier has been appointed as Chief Financial Officer (designate) and brings a wealth of experience gained in the international natural resources sector. Pieter du Plessis has been appointed as Chief Executive Officer of the BEP strategic business unit ('SBU') and will be responsible for this SBU globally, driving operational efficiencies and synergies. Arnold Matthee, Chief Executive Officer of the BET SBU, together with Philippe Monier will be nominated to the Board as Executive Directors at an extraordinary general meeting to be held in June 2009.

Outlook

Looking forward, the legacy LSTK contracts should be substantially completed by the end of this financial year. The risk in the order book has been reduced with a more balanced portfolio of reimbursable and hybrid versus pure LSTK contracts. The Group's focus on technology (and in particular in pyrotechnology - both DC and AC furnaces) is showing results. We are confident that the strategic actions taken since the start of the financial year and the continued focus on costs and operational excellence will ensure that the Group is well positioned during these difficult times and, importantly, is ready to take advantage of the inevitable recovery of the natural resources market.

EDDIE DU RAND

Chief Executive Officer

16 March 2009

Chief Financial Officer's Report

Overview

The Group's unaudited half year consolidated results to 31 December 2008 reflect the effects of the current difficult trading conditions within the industry and the financial consequences of the closing out actions on problematic legacy LSTK projects. 

The results include the following noteworthy items, totalling US$51.9m, consistent with the trading update issued on 16 December 2008:

• US$33.4m provision for costs to complete legacy problematic projects in the BEP strategic business unit,

• US$6.2m provision for bad debts,

• US$4.8m interest charge on unwinding costs related to acquisitions, and

• US$7.5m goodwill impairment charge. 

After accounting for these items, the Group posted a consolidated loss after tax of US$40m for the first half of the 2009 fiscal year.  Management believes it has acted prudently in the review of the Group's financial position.  

 

As of 31 December 2008, the Group's consolidated net asset value amounted to US$71m and showed a positive cash balance of US$50m. 

Financial Performance

Bateman Engineering Projects (BEP)

	December 2008	December 2007
Revenue	177	244
(Loss)/Profit before tax	(23)	8
(Loss)/Profit before tax margin	(12.7%)	3.5%

The BEP Strategic Business Unit came under severe strain for the first six months mainly due to the legacy projects being worked out.

Bateman Engineered Technologies (BET)

	December 2008	December 2007
Revenue	128	108
Profit before tax	5	5
Profit before tax margin	3.6%	4.5%

BET experienced favourable trading conditions.  BET is benefiting from the sustained demand in the power related business through the provision of bulk material handling solutions to this sector. 

Bateman Mineral Recovery (BMR)

	December 2008	December 2007
Revenue	5	10
(Loss)/Profit before tax	(6)	1
(Loss)/Profit before tax margin	(128.5%)	13.7%

BMR's business faced adverse trading conditions in the first six months of the fiscal 2009 year, mainly as a result of the impact of low commodity prices (especially ferrochrome) on its clients.  Currently, it is not viable to operate at full production on certain dumps and some clients have requested BMR to place some of its toll facilities on care and maintenance. 

Order Book

The Group's order book has declined from US$360m as at 30 June 2008 to US$306m at 31 December 2008.  The fall was due to a combination of an unfavourable external environment and the Group's move away from pure LSTK projects.  The order book nonetheless provides forward visibility for the balance of the financial year. 

Cash Flow and Financing Requirements

Liquidity and cash management are a key focus for management in the changed trading environment. Management is closely monitoring its debtors' book and ensuring that payments due are collected on a timely basis to minimise the risk of bad debt.

Outlook

The Group has had a very difficult six months of trading; however, the Group's recent focus on energy related sectors such as coal materials handling and uranium is expected to bolster the order book by the fiscal year end, especially in the Southern African region.  The Group's current rightsizing effort will reduce the Group's cost structure and better position it for the future.

PIETER DU PLESSIS

Chief Financial Officer

16 March 2009

Consolidated income statement 

These condensed consolidated interim financial statements are unaudited

		December		December
		2008		2007
		US$'000		US$'000
Revenue		243,773		295,818
Cost of revenue		(241,645)		(266,794)
Gross profit		2,128		29,024
Other income		605		660
Selling, general and administrative expenses		(36,210)		(21,980)
Other expenses		(8,821)		(73)
Result from operating activities		(42,298)		7,631
Net finance income		4,354		3,992
(Loss)/profit before tax		(37,944)		11,623
Income tax expense		(2,054)		(1,743)
(Loss)/profit for the period		(39,998)		9,880
Attributable to:
Equity holders of the parent		(40,027)		9,792
Minority interests		29		88
		(39,998)		9,880
		US cents		US cents
Earnings per share
(Loss)/ Earnings from continuing operations
Basic		(94.90)		23.54
Diluted		(94.90)		22.74

Consolidated balance sheet

These condensed consolidated interim financial statements are unaudited

		December		June
		2008		2008
		US$'000		US$'000
ASSETS
Intangible assets		43,280		53,780
Property, plant and equipment		20,758		18,046
Investment in equity accounted investees		62		62
Loans to equity accounted investees		209		2,668
Other investments		314		261
Non current receivables		2,446		2,847
Finance lease asset - non current portion		9,269		11,470
Receivable from controlling shareholder		5,325		5,190
Deferred taxation		4,598		5,506
Non current assets		86,261		99,830
Construction and engineering contracts in progress		50,497		34,008
Inventories		4,449		5,323
Trade and other receivables		117,540		141,617
Finance lease asset - current term portion		2,748		3,042
Interest receivable		10		287
Income tax receivable		4,768		2,971
Cash and cash equivalents		53,918		132,430
Current assets		233,930		319,678
Total assets		320,191		419,508
EQUITY AND LIABILITIES
Issued capital		680		671
Share premium		95,419		95,071
Foreign currency translation reserve		(17,676)		(6,804)
Accumulated (loss)/ profits		(7,541)		31,997
Equity attributable to equity holders of the parent		70,882		120,935
Minority interests		145		137
Total equity		71,027		121,072
Non - current liabilities		7,103		20,501
Deferred taxation		1,217		838
Non-current liabilities		8,320		21,339
Construction and engineering contract liabilities		110,644		106,608
Trade payables, other payables and accruals		123,503		164,101
Income tax payable		3,034		3,968
Bank overdrafts		3,663		2,420
Current liabilities		240,844		277,097
Total liabilities		249,164		298,436
Total equity and liabilities		320,191		419,508

 

Consolidated statement of changes in capital and reserves

These condensed consolidated interim financial statements are unaudited

	Attributable to equity holders of the parent					Minority	Total
						Interest	Equity
			Foreign
			Currency	Accumulated
	Issued	Share	Translation	Profits/
	Capital	Premium	Reserve	(Losses)	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance at 30 June 2007	563	94,861	(2,375)	17,869	110,918	-	110,918
Revaluation of issued capital	54				54		54
Foreign exchange translation	-	-	634	-	634	( 1)	633
Total income and expense  recognised directly in equity	54	-	634	-	688	( 1)	687
Result for the period	-	-	-	9,792	9,792	88	9,880
Total recognised income and   expense	54	-	634	9,792	10,480	87	10,567
Shares taken up in Employee Share Ownership Plan	4	190	-	-	194	-	194
Share based payment	-	-	-	1,222	1,222	-	1,222
Dividends paid	-	-	-	(4,176)	(4,176)	-	(4,176)
Balance at 31 December 2007	621	95,051	(1,741)	24,707	118,638	87	118,725
Revaluation of issued capital	47				47	-	47
Foreign exchange translation		-	(5,063)	-	(5,063)	(6)	(5,069)
Total income and expense recognised directly in equity	47	-	(5,063)	-	(5,016)	(6)	(5,022)
Result for the period				6,459	6,459	56	6,515
Total recognised income and expense	47	-	(5,063)	6,459	1,443	50	1,493
Shares taken up in Employee Share Ownership Plan	3	20	-	-	23	-	23
Share based payment	-	-	-	831	831	-	831
Balance at 30 June 2008	671	95,071	(6,804)	31,997	120,935	137	121,072
Foreign exchange translation	-	-	(10,872)	(51)	(10,923)	(21)	(10,944)
Total income and expense recognised directly in equity	-	-	(10,872)	(51)	(10,923)	( 21)	(10,944)
Result for the period				(40,027)	(40,027)	29	(39,998)
Total recognised income and expense	-	-	(10,872)	(40,078)	(50,950)	8	(50,942)
Shares taken up in Employee    Share Ownership Plan	9	348	-	-	357	-	357
Share based payment	-	-	-	540	540	-	540
Balance at 31 December 2008	680	95,419	(17,676)	(7,541)	70,882	145	71,027

 

Consolidated cash flow statement

These condensed consolidated interim financial statements are unaudited

		December 2008		December 2007
		US$'000		US$'000
Cash flows from operating activities
Result from operating activities - continuing operations		(42,298)		7,631
Non-cash adjustments		25,064		5,024
Changes in operating assets		8,708		(49,676)
Changes in operating liabilities		(32,918)		90,307
Net finance income		3,686		3,909
Income tax paid		(4,171)		(190)
Net cash (utilised ) / generated from operating activities		(41,929)		57,005
Cash flows from investing activities
Property, plant and equipment purchased net additions		(5,063)		(4,559)
Other investments purchased		(56)		-
Proceeds on disposal of other investments		6		-
Subsidiary (acquired) disposed		(23,481)		(16,343)
(Increase) Decrease in loans to equity accounted investees		(15)		73
Net cash utilised in investing activities		(28,609)		(20,829)
Cash flows from financing activities
Proceeds from long-term liabilities		618		560
Share capital taken up in Employee Share Ownership Plan		357		194
Advances of long term receivable		(296)		(1,018)
Finance lease receivable repayments		1,080		484
Dividends paid		-		(4,176)
Net cash generated / (utilised) from financing activities		1,759		(3,956)
(Decrease)/increase in cash and cash equivalents		(68,779)		32,220
Cash and cash equivalents at the beginning of the year		130,010		93,370
Exchange losses on cash and bank overdrafts		(10,976)		(866)
Net cash acquired in subsidiaries		-		1,658
Net cash and cash equivalents at end of the period		50,255		126,382

  

 

Notes to the consolidated half year financial statements

('000)    

1. Reporting entity

Bateman Engineering N.V. ('Company') is a company domiciled in the Netherlands. The condensed consolidated interim financial statements of the Company as at and for the six months ended 
31 December 2008 comprise the Company and its subsidiaries (together referred to as the 'Group') and the Group's interests in equity accounted investees and jointly controlled entities.

The consolidated financial statements of the Group as at and for the year ended 30 June 2008 are available upon request from the Company's registered office at Rivierstaete Building, Amsteldijk 166, 1079 LH, Amsterdam, The Netherlands or at web site address: www.BatemanEngineering.com.

2. Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 June 2008.

These condensed consolidated interim financial statements were approved by the Board of Directors on 
12 March 2009.

3. Significant accounting policies

The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 June 2008.

4. Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were influenced by the global financial crisis. Management consider their estimates to be reasonable and prudent taking into account current economic conditions.

5. Financial risk management

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 30 June 2008.

 6. Segment reporting

For the six months ended 31 December 2008 (US$'000): 

2008
	Bateman Engineering Projects		Bateman Engineered Technologies		Bateman Mineral Recovery		Corporate, Other & Eliminations		Total
Income Statement
Revenue
External sales	153,193		85,984		4,596		-		243,773
Inter-segment sales	24,305		41,517		-		(65,822)		-
Total revenue	177,498		127,501		4,596		(65,822)		243,773
Result
Segment Result	(26,961)		5,030		(7,072)		(13,295)		(42,298)
Net Finance Income	4,355		(441)		1,166		(726)		4,354
(Loss)/Profit before income tax	(22,606)		4,589		(5,906)		(14,021)		(37,944)
Income tax expense									(2,054)
Loss for the period									(39,998)
2007
	Bateman Engineering Projects		Bateman Engineered Technologies		Bateman Mineral  Recovery		Corporate, Other & Eliminations		Total
Income Statement
Revenue
External sales	222,035		63,749		10,034		-		295,818
Inter-segment sales	21,914		44,348		-		(66,262)		-
Total revenue	243,949		108,097		10,034		(66,262)		295,818
Result
Segment Result	7,419		4,390		1,241		(5,419)		7,631
Net Finance Income	987		455		137		2,413		3,992
Profit before income tax	8,406		4,845		1,378		(3,006)		11,623
Income tax expense									(1,743)
Profit for the period									9,880

The Group currently has three operating segments - Bateman Engineering Projects, Bateman Engineered Technologies and Bateman Mineral Recovery. These segments are the basis on which the Group reports its primary segment information.

Principal activities are:

Bateman Engineering Projects	minerals and metals process engineering and project management.
Bateman Engineered Technologies	bulk-materials handling, environmental protection and water and effluent treatment.
Bateman Mineral Recovery	recovery of minerals from slag dumps and waste streams.

    

Segment information about the Group's continuing operations is presented above. 

 7. Income tax expense

Although the Group incurred a loss for the period, the Group still incurred a tax charge for the period of US$2,054. This was as a result of profits being earned in higher effective tax rate jurisdictions as opposed to losses being made in lower effective tax rate jurisdictions. 

8. Earnings per share

Earnings per share for the six months ended 31 December 2008 have been calculated on the basis of loss for the period of US$40,027 (2007: US$9,792 profit) and the average number of shares in issue 42,178,191 (2007: 41,585,471).

Diluted earnings per share have been calculated on the basis of 42,178,191 (2007: 43,061,943) shares. The potential dilutive effect of certain share options has been disregarded due to the significant losses incurred by the Group during the six months ended 31 December 2008. 

9. Intangible assets

Intangible assets have decreased by US$10,500 to US$43,280 as a result of a total impairment of goodwill of US$7,471. The following impairment losses were charged to goodwill arising as a result of acquisitions:

• US$4,293 on Metplant Engineering Pty Ltd;

• US$1,921 on the Atoll group of companies; and

• US$1,257 on the Mining Process division of Intertech Trading Corporation.

During the period, intangible asset amortisation of US$1,247 has also been charged to the income statement.  Adjustments for earn-out payments and subsequent movements in the expected purchase price, as well as exchange differences make up the balance of the movement. 

10. Property, plant and equipment

During the six months ended 31 December 2008, the Group acquired assets with a cost of US$5,214. 

Other assets disposed of during the six months ended 31 December 2008 resulted in a profit on disposal of US$4, which is included in other income.

11. Dividends

No interim dividend will be recommended by the Group. 

12. Senior management and director share incentive plan

The Company has three share option schemes for all key employees of the Group, the pre IPO plan and the post IPO plan 2005 and 2006.

The pre IPO plan is a closed plan with no further options to be issued and all options are fully vested. The exercise price under the pre IPO plan is 21.6 UK pence. Under the post IPO plans the exercise price is equal to the average closing price for the three days preceding the grant date.

Historical practice under the 2005 and 2006 post IPO option plans was that three-quarters of the options granted to employees shall vest in half year intervals over a three year period. One quarter of options granted to employees shall vest in half year intervals over the fourth year.

Historical practice has been that the performance criteria under the 2005 and 2006 post IPO option plans are as follows: 50% will vest subject to continued employment; and 50% will be subject to an EPS performance target whereby, in order for the shares to vest, the Group shall obtain an annual EPS growth of at least 10% (calculated on a cumulative basis).

Options are forfeited if the employee leaves the Group before the options vest. 

 

13. Acquisition of subsidiaries

On 1 July 2008 Bateman Mineral Recovery SBU acquired the remaining 50% of the shareholding in Jiggings Technologies LLC (USA) from its joint venture partner for a consideration of US$1,700. Jiggings Technologies LLC (USA) is now a wholly owned subsidiary of the Group and its financial statements have been fully consolidated into the Group's results since the acquisition date. The acquisition is not subject to any purchase price amendments.

The Group made no further acquisitions during the period. 

During the 2008 financial year the Group made a number of acquisitions where a portion of the acquisition price was structured on an earn-out basis which included criteria such as the performance of the acquired entity and retention of key management. 

During the period the Group paid a further US$11,101 (AUD11,653) as part of the acquisition price for Metplant Engineering Services Pty Ltd, acquired in July 2007. The total estimated purchase price is    AUD33,171.

The Group also paid US$10,381 during the period as part of the acquisition price for the Delkor group of companies acquired in April 2008. The total estimated purchase price is US$21,475.

The third acquisition subject to an earn-out structure is the Mining Process Division of Intertech Trading Corporation, acquired in September 2007. During the period the Group paid US$300. The total estimated purchase price is US$17,314.

The net present value of outstanding earn out payments have been raised as liabilities on the Group's balance sheet.

14. Related Party Transactions

During the period, Group entities entered into the following trading transactions with related parties that are not members of the Group:

	Project Revenue	Interest Received	Amounts Owed by Related parties
Minority Shareholders in Bateman Africa (Pty) Ltd	9	-	-
Global Minerals B.V	-	135	5,325

15. Exchange rates

The exchange rates used in converting the financial information from their source currencies to the presentation currency are as follows:

	2008	2008	2007	2007
Currency	half year end rate	average half year end rate	half year end rate	average half year end rate
ZAR to US$	9.4649	8.8718	6.8547	6.9566
CHF to US$	1.0561	1.1153	1.1267	1.1732
AUD to US$	1.4487	1.3094	1.1419	1.1529
GBP to US$	0.6910	0.5830	0.5009	0.4921
EURO to US$	0.7095	0.7124	0.6794	0.7094
INR to US$	49.7178	46.8839	39.4350	40.0184

 

16. Subsequent event

Subsequent to 31 December 2008, the Group determined that a rightsizing exercise of the organisation would take place, which is currently in progress.  The costs related to this are not yet fully quantified but are expected to be fully included in the full year results.

ENDIR GRGDXDDBGGCL