RNS Number : 1875V
MDM Engineering Group Ltd
06 July 2009
MDM ENGINEERING GROUP LIMITED
('MDM' or the 'Group')
FULL YEAR RESULTS TO THE 31 MARCH, 2009
MDM Engineering Group Limited (AIM:MDM) is pleased to announce its audited results for the year ended 31st March 2009. MDM Engineering is an African-focused engineering and project management group which provides a range of value added services to the mining industry, including project evaluation, process engineering, design and project management.
2009 Highlights
Financial
-
Revenue up 164% to US$35.9 million (2008: US$13.6m)
-
Gross profit up 146% to US$16.7 million (2008: US$6.8m)
-
Net profit up 144% to US$7.8 million (2008: US$3.2m)
-
Pre-tax profit up 158% to US$11.6 million (2008: US$4.5m)
-
Cash and cash equivalents of US$14.0 million (2008: US$5.20m)
-
Basic earnings per share of US21.15 cents per share (2008: US12.94 cents)
-
Final dividend of US7.5 cents (2008: US4 cents for the 16 months ended 31 March 2008)
-
Full dividend of US11.25 cents (2008: US4 cents)
-
Strong balance sheet with virtually no gearing
-
Dividend cover of 1.9 times
Operational
-
Strong pipeline of studies ranging from scoping studies to bankable feasibility studies
-
Project value under execution at year-end of US$300million
-
Staff retention rate high with current headcount at 144
-
Two major new projects awarded since 31 March 2009
Corporate
Overview
The 2009 year has been one of significant growth for MDM as evidenced by the growth in earnings. Net profit for the year showed an increase of 144% to US$7.8 million (2008: US$ 3.2 million) with earnings per share showing an increase of 63% to US21.15 cents (2008: US12.94 cents). This was mainly driven by the increase and peaking of the current execution projects under MDM's management. MDM has continued to maintain a strong gross profit margin of 46% (2008: 50%) for the year under review.
The Group's balance sheet has been enhanced with the equity attributable to its shareholders increasing by US$11.4 million to US$15.9 million. The increase resulted from funds raised at the Group's listing in May 2008 as well as the cash generated by operations over the last financial year.
The Group's cash generated by operations increased by 42% to US$5.8 million (2008: US$4.1 million) after taking a taxation payment of US$4.4 million into account. This is further evidence of the cash generative nature of MDM's business. The balance sheet shows strong cash on hand at year end to the value of US$13.9 million.
Summary of Financial Results
Consolidated net earnings for the 12 month period to the 31st March 2009 was US$7.8million, which equates to basic earnings per share of US21.15 cents.
The Directors of MDM Engineering have declared a final dividend of US7.5 cents per share payable on the 10th of August 2009 to shareholders registered on the 17th of July 2009. This is in line with the stated dividend policy whereby approximately 50% of earnings will be paid out as a dividend.
MDM Engineering CEO Grant Lowman commented:
'The growth in profits over the year in such a tough operating environment is a satisfying result for MDM and testament to our business model and the hard work and dedication of the team. While we have felt the impact of the global economic crisis through the stalling and cancellation of mining projects over the last six months, whilst we are seeing some activity pick up, the commodity market will probably continue to reflect difficult trading conditions for some time: we are well placed to capitalise on a recovery in the sector when it occurs. '
For further information:
|
MDM Engineering Group Limited
Grant Lowman/George Bennett
Dominique de la Roche
Tel: +27 (11) 993 4300
Numis Securities Limited
John Harrison (Nominated Adviser)
Tel: +44 (0) 207 260 1000
James Black (Corporate Broker)
Tel: +44 (0) 207 260 1000
|
Pelham PR
Candice Sgroi
Tel: +44 (0) 207 337 1533
James MacFarlane
Tel : +44 (0) 207 337 1527
|
Chairman's statement
I am pleased to present to you your company's second annual report for the 12 months ending 31 March 2009. Following last year's listing on London's Alternative Investment Market (AIM), MDM Engineering Group Limited ('MDM') continues to grow, both in-house and across the range of services we provide and minerals we can process. However, the past 12 months have seen the global economy undergo unprecedented turmoil and although the world in which we operate is almost unrecognisable from that of a year ago, we are quietly confident of our ability to meet our shareholder and client expectations.
A muted commodities market
Our progress over the year has to be viewed against the backdrop of a global economic meltdown, with the availability of credit severely restricted and demand for the commodities our clients produce dampened. It is this very dire commodity scenario which has informed our strategy to reach out to clients and potential clients to seek solutions for both their projects and our business growth. Many of our clients face situations in which the market for the commodity they produce has collapsed, impacting their projects and timelines. MDM responded quickly and decisively to the changing situation. The very nature of the work we do, which involves careful strategic planning with our clients and long lead times, means that being a nimble operator is key. We believe that the flexibility that our Engineering, Procurement, Construction Management (EPCM) business model offers, puts MDM in a strong position to operate in the current challenging environment.
Given the scenario, I am quite satisfied with our financial performance for the year. In November 2008 we alerted the market to our revised earnings estimates as a result of certain projects being pushed into the next reporting year due to clients' financial concerns. Despite the challenging market conditions experienced in the past year, this has encouragingly translated into a healthy growth in revenue from US$13.6 million in FY08 to US$35.9 million in FY09. Profit before tax for the period of US$7.8 million is below initial targets, however it still represents a 144% increase on the previous financial year (2008: US$3.2million). In an environment when many companies have not paid dividends to their shareholders, this profit has allowed MDM to declare a full year dividend of US11.25 cents per share (2008: US4 cents).
Our share price has declined over the period since listing, however post the financial year end it has recovered well and is now trading steadily around the 95-105 pence mark. When tracked against the FTSE 350 Mining Index, the general downward trend of the AIM mining sector becomes apparent, but what is possibly more interesting is the slight lag of MDM's share price behind the sector in both downward and upward trends. We feel this is a reflection of our role as a service provider to mining companies; we will tend to feel the effects of a slowdown in the market only once projects are put on hold.
Pursuing our goals: safety and stability
The foundation of MDM's strategic vision has been underpinned by our ability to deliver services to our clients, which meet their requirements on time and within budget. Meeting, or even exceeding, their expectations drives our business model, yet there are two key areas of focus that I would like to address.
Our primary goal is safety. Operating in a mining environment is a risky proposition and we strive to ensure that all our employees, whether full time or contractors, work in a safe and responsible manner. Our safety performance for the year has been outstanding with no fatalities, and we have had five lost-time injuries on site for the period under review. We are very proud of our achievement of one million lost-time injury free hours on both sites, achieved in no small part because of our well-established relationship with First Uranium.
Our second area of strategic focus is on stability and which, in the case of our business purposes, I believe there are two angles. Firstly, there needs to be stability within the company. Despite our expansion to the current head office staff complement of 144 employees, our associated core staff turnover rate remains low. This reflects the excellent morale levels within the company, and also the MDM culture. We strive to expand our business intellectually and work with our clients to meet their requirements. Secondly, MDM needs to be stable within a commodity sector experiencing a rollercoaster ride. We have healthy cash balances, a solid project pipeline and have declared a modest dividend. We believe this to be the best way to maintain our growth and create value for our shareholders.
Thank you
I would like to take this opportunity to thank our out-going non-executive Financial Director, Mark Summers. Mark will remain on the MDM board in a non-executive capacity, and his time and dedication to the company are much appreciated. Dominique de la Roche was appointed as Executive Financial Director in October 2008, a direct reflection of the Group's expansion and increasing financial and regulatory requirements, and I look forward to working with him as we continue MDM's journey.
Prospects
We remain cautiously optimistic, dedicated to preserving value for our shareholders and creating growth for our clients. Our business model of providing services of an engineering and project management nature in a reduced global economy remains relevant, we feel increasingly so, as companies downsize but still seek the same level of technological know-how and intellectual capacity. Prudence is our motto, and when the commodity cycle moves back into the upward part of the growth curve, we will be well-placed to thrive.
Bill Nairn
Non-executive Chairman
6th July 2009
CEO's review
Despite the turmoil experienced in the global markets, this financial year has been a successful one for MDM. The group's continued growth needs to be contrasted against a sector in which revenues, market capitalisation and commodity prices have diminished over the past year. This growth has increased MDM's intellectual capacity, cash position and client base, all of which are significant achievements in the current market environment.
Key highlights for the year include:
-
Net Profit of US$7.8 million, up 144% from US$3.2 million in FY08;
-
A strong project value on hand of some US$300 million at year end, with a robust study pipeline in place;
-
Increase in earnings per Share to US21.15 cents from US12.94 cents in FY08;
-
Dividend paid of US11.25 cents per share versus US4cents per share in FY08;
-
The appointment of Dominique de la Roche as Executive Financial Director.
The business model - a proven success
MDM continues to provide African-focused process engineering solutions, project study and execution services to mining companies, centred on a high level of technical and professional expertise generated from an expanded and experienced staff base. The global slowdown has had an impact on the way in which the group operates, mostly to the benefit of employees, clients and shareholders. The difficulties in recruiting suitable personnel during the commodities boom were well documented. The downturn in the market, however, has eased the skills shortage situation and the company has taken advantage of these circumstances and sourced premium staff to grow the in-house knowledge base and intellectual capacity. MDM's preferred operating method remains one of consistency, working with clients through the lifetime of a project, from feasibility studies through to EPCM contracts. The group's track record is strong in this regard, and reinforces our belief that we can add value through a strong partnership with our clients. This is increasingly relevant in today's market as most of our clients are junior or mid-cap mining companies with capacity constraints - whether that be in project capacity, staff complement and expertise or cash. MDM prides itself on offering a product that is affordable, especially in today's market, delivered on-time and within budget.
This success is reflected in the group's financial performance during the year; the steady increases from the prior period, across the income statement and balance sheet in terms of revenue, profit, earnings per share and cash and cash equivalents, reflect management's prudent approach and an increased presence in the market.
Economic climate - inherent change for MDM
The resources sector has been particularly badly affected by the global financial crisis. Decreased demand for commodities has resulted in mining projects being placed on hold or abandoned completely. Despite the decreased activity in our industry, MDM has continued to grow, albeit at a slower rate. An interesting side effect of the economic slowdown has been the reduction of input costs for mining projects, a welcome relief for the sector. This has resulted in many projects becoming more affordable as input costs reduce and as the market equilibrium is steadily restored, the natural economic laws of supply and demand will re-establish themselves and bring balance back to the mining sector. No downturn is forever, the commodities markets move in cycles, and MDM is well-poised for the next upturn in the global economy with a liquid balance sheet and a policy of cash preservation.
Safety - striving for zero harm
Health and safety continues to be a primary area of focus for MDM and it is the responsibility of all employees to maintain safety standards and act responsibly on site. The group's safety record during the year has been excellent, with no fatalities. Whilst we have had a total of 5 lost time injuries. I am proud to announce that we have reached a milestone of a million injury free hours on both sites. These achievements are well-within the globally accepted five-star rating system, testament to the close work MDM does with its clients to ensure that all legislative requirements are met in terms of safety. Regular health and safety audits are conducted on site.
Uranium - creating a market niche
The much anticipated commissioning of the Ezulwini Uranium Plant is a significant event in South Africa's mining industry. It is one of only a few greenfield uranium plants to be commissioned internationally in the last decade. The successful production of yellow cake from the Ezulwini Plant is testament to the high level of technological expertise within MDM and a reflection of the innovation the group can provide its clients. The uranium market is slowly recovering after a sharp fall in prices during the latter half of 2008, and all the major gold companies in southern Africa are re-establishing their presence in this market. MDM is strongly placed to benefit from this commodity's upturn.
The year ahead
The new world of reduced demand and restricted cash flows has forced all mining companies to evaluate their structures and possibilities. The Group is currently running adequate execution projects and studies for the next financial year. Any additional execution projects obtained through the conversion of past studies, or other opportunities, will result in upside to the earnings for the year. MDM has shown its ability to adapt in trying times, and the year ahead will further entrench the Group as a niche provider of process and project management solutions across established markets and into new commodities. These are challenging times, and a conservative approach will continue to pay dividends to all stakeholders.
Lastly, a word of thanks to all of MDM's staff members, who have shown dedication and hard work during difficult times.
Grant Lowman
Chief Executive Officer
6th July 2009
Financial Statements
|
MDM ENGINEERING GROUP LTD
|
|
|
|
|
|
CONSOLIDATED Balance sheet
|
|
|
|
|
|
at 31 March 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 March
|
31 March
|
|
|
|
|
2009
|
2008
|
|
|
|
Notes
|
US$
|
US$
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
1 384 450
|
1 179 271
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
3
|
457 442
|
858 612
|
|
Intangible asset
|
|
4
|
40 687
|
54 382
|
|
Deferred tax
|
|
5
|
886 321
|
266 277
|
|
|
|
|
|
|
|
Current assets
|
|
|
21 039 146
|
7 600 375
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
6
|
7 071 832
|
2 453 436
|
|
Cash and cash equivalents
|
|
7
|
13 967 314
|
5 146 939
|
|
|
|
|
|
|
|
Total assets
|
|
|
22 423 596
|
8 779 646
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Capital and reserves
|
|
|
15 989 992
|
4 527 204
|
|
|
|
|
|
|
|
Share capital
|
|
8
|
374 591
|
340 090
|
|
Share premium
|
|
9
|
5 516 210
|
1 335 130
|
|
Treasury Shares
|
|
10
|
(177 276)
|
-
|
|
Foreign currency translation reserve
|
|
11
|
(1 417 287)
|
(335 174)
|
|
Accumulated profit
|
|
|
11 693 754
|
3 187 158
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
31 280
|
621 158
|
|
|
|
|
|
|
|
Interest bearing liability
|
|
12
|
31 280
|
621 158
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
6 402 324
|
3 631 284
|
|
|
|
|
|
|
|
Trade and other payables
|
|
13
|
4 014 597
|
1 560 050
|
|
Current portion of interest bearing liability
|
|
12
|
24 488
|
53 673
|
|
Provisions
|
|
14
|
687 945
|
403 834
|
|
Income tax payable
|
|
|
1 675 294
|
1 613 727
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
|
22 423 596
|
8 779 646
|
|
MDM ENGINEERING GROUP LTD
|
|
|
|
|
CONSOLIDATED Income Statement
|
|
|
|
|
for the year ended 31 March 2009
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
16 Months
|
|
|
|
Ended
|
Ended
|
|
|
|
31 March
|
31 March
|
|
|
|
2009
|
2008
|
|
|
Notes
|
US$
|
US$
|
|
|
|
|
|
|
Revenue
|
|
35 916 889
|
13 610 004
|
|
|
|
|
|
|
Cost of sales
|
|
(19 252 389)
|
(6 830 213)
|
|
|
|
|
|
|
Gross profit
|
|
16 664 500
|
6 779 791
|
|
|
|
|
|
|
Operating expenses
|
|
(6 206 283)
|
(2 536 361)
|
|
Other income
|
|
265 572
|
46 688
|
|
Waiver of loan
|
|
-
|
156 421
|
|
|
|
|
|
|
Profit from operations
|
|
10 723 789
|
4 446 539
|
|
|
|
|
|
|
Financial income
|
15
|
894 834
|
140 536
|
|
|
|
|
|
|
Financial expense
|
16
|
(38 062)
|
(57 711)
|
|
|
|
|
|
|
Profit before taxation
|
17
|
11 580 561
|
4 529 364
|
|
|
|
|
|
|
Taxation
|
18
|
(3 741 039)
|
(1 342 206)
|
|
|
|
|
|
|
Profit for the year/period
|
|
7 839 522
|
3 187 158
|
|
|
|
|
|
|
Basic earnings per share - US cents
|
19
|
21.15
|
12.94
|
|
Diluted earnings per share - US cents
|
19
|
19.32
|
12.94
|
|
MDM ENGINEERING GROUP LTD
|
|
CONSOLIDATED Statement of changes in equity
|
|
for the year ended 31 March 2009
|
|
|
|
|
Share capital
|
|
Share premium
|
|
Foreign currency translation reserve
|
|
Accumulated profit
|
|
Treasury
Shares
|
|
Total
|
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
-
|
|
-
|
|
-
|
|
3 187 158
|
|
-
|
|
3 187 158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
-
|
|
-
|
|
(335 174)
|
|
-
|
|
-
|
|
(335 174)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recognised income and expenses
|
|
|
-
|
|
-
|
|
(335 174)
|
|
3 187 158
|
|
-
|
|
2 851 984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital
|
|
|
340 090
|
|
1 335 130
|
|
-
|
|
-
|
|
-
|
|
1 675 220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 March 2008
|
|
|
340 090
|
|
1 335 130
|
|
(335 174)
|
|
3 187 158
|
|
-
|
|
4 527 204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 April 2008
|
|
|
340 090
|
|
1 335 130
|
|
(335 174)
|
|
3 187 158
|
|
-
|
|
4 527 204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
-
|
|
-
|
|
-
|
|
7 839 522
|
|
-
|
|
7 839 522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
-
|
|
-
|
|
(1 082 113)
|
|
-
|
|
-
|
|
(1 082 113)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recognised income and expenses
|
|
|
-
|
|
-
|
|
(1 082 113)
|
|
7 839 522
|
|
-
|
|
6 757 409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of share capital
|
|
|
34 501
|
|
9 734 865
|
|
-
|
|
-
|
|
-
|
|
9 769 366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue costs
|
|
|
-
|
|
(2 650 566)
|
|
-
|
|
-
|
|
-
|
|
(2 650 566)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share option charge
|
|
|
-
|
|
-
|
|
-
|
|
667 074
|
|
-
|
|
667 074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury shares
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(177 276)
|
|
(177 276)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
-
|
|
(2 903 219)
|
|
-
|
|
-
|
|
-
|
|
(2 903 219)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as 31 March 2009
|
|
|
374 591
|
|
5 516 210
|
|
(1 417 287)
|
|
11 693 754
|
|
(177 276)
|
|
15 989 992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MDM ENGINEERING GROUP LTD
|
|
|
|
|
CONSOLIDATED cash flow statement
|
|
|
|
|
for the year ended 31 March 2009
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
16 Months
|
|
|
|
Ended
|
Ended
|
|
|
|
31 March
|
31 March
|
|
|
|
2009
|
2008
|
|
|
Notes
|
US$
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
5 786 240
|
4 101 398
|
|
Cash generated by operations
|
20
|
5 786 240
|
4 101 398
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
1 132 080
|
(203 443)
|
|
Disposal / (acquisition) of property, plant and equipment
|
|
275 308
|
(224 704)
|
|
Acquisition of intangible asset
|
|
-
|
(61 564)
|
|
Net interest received
|
|
856 772
|
82 825
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
3 419 243
|
1 248 984
|
|
Net proceeds received on shares issued
|
|
9 769 366
|
1 675 220
|
|
Costs directly related to issue of shares
|
|
(2 650 566)
|
(426 236)
|
|
Purchase of treasury shares
|
|
(177 276)
|
-
|
|
Dividends paid
|
|
(2 903 219)
|
-
|
|
Long term loans repaid
|
|
(619 062)
|
-
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
10 337 563
|
5 146 939
|
|
Foreign exchange differences
|
|
(1 517 188)
|
-
|
|
Cash and cash equivalents at the start of the year/period
|
|
5 146 939
|
-
|
|
Cash and cash equivalents at end of year/period
|
|
13 967 314
|
5 146 939
|
|
|
|
|
|
1 Basis of preparation
The financial information set out in this preliminary statement does not constitute the group's financial statements for the year ended 31 March 2009, but is derived from those financial statements. The auditors have reported on these financial statements and have issued an unqualified report.
2 Conformity with International Finance Reporting Standards ('IFRS')
The preparation of the financial statements is in conformity with IFRS and requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements.
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
|
3
|
Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building
|
|
|
|
|
|
|
Cost
|
|
|
-
|
595 916
|
|
|
Accumulated depreciation
|
|
|
-
|
-
|
|
|
Net book value
|
|
|
-
|
595 916
|
|
|
Computer equipment
|
|
|
|
|
|
|
Cost
|
|
|
340 099
|
176 233
|
|
|
Accumulated depreciation
|
|
|
(111 240)
|
(21 728)
|
|
|
Net book value
|
|
|
228 859
|
154 505
|
|
|
Furniture and fittings
|
|
|
|
|
|
|
Cost
|
|
|
103 511
|
56 065
|
|
|
Accumulated depreciation
|
|
|
(22 637)
|
(9 418)
|
|
|
Net book value
|
|
|
80 874
|
46 647
|
|
|
Lease improvements
|
|
|
|
|
|
|
Cost
|
|
|
62 296
|
10 100
|
|
|
Accumulated depreciation
|
|
|
(8 258)
|
(1 852)
|
|
|
Net book value
|
|
|
54 038
|
8 248
|
|
|
Motor vehicles
|
|
|
|
|
|
|
Cost
|
|
|
77 267
|
50 052
|
|
|
Accumulated depreciation
|
|
|
(17 361)
|
(6 036)
|
|
|
Net book value
|
|
|
59 906
|
44 016
|
|
|
Office equipment
|
|
|
|
|
|
|
Cost
|
|
|
36 373
|
8 558
|
|
|
Accumulated depreciation
|
|
|
(5 949)
|
(1 279)
|
|
|
Net book value
|
|
|
30 424
|
7 279
|
|
|
Plant and equipment
|
|
|
|
|
|
|
Cost
|
|
|
4 680
|
2 610
|
|
|
Accumulated depreciation
|
|
|
(1 339)
|
(609)
|
|
|
Net book value
|
|
|
3 341
|
2 001
|
|
|
Property, plant and equipment
|
|
|
|
|
|
|
Aggregate cost
|
|
|
624 226
|
899 534
|
|
|
Aggregate accumulated depreciation
|
|
|
(166 784)
|
(40 922)
|
|
|
Aggregate net book value
|
|
|
457 442
|
858 612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
Property, Plant and Equipment (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
Net book value
1 April
2008
|
Additions
|
Disposals
|
Depreciation
|
Translation reserve
|
Net book value
31 March 2009
|
|
|
Building
|
595 916
|
|
(545 734)
|
-
|
(50 182)
|
-
|
|
|
Computer Equipment
|
154 505
|
199 329
|
(2 886)
|
(89 512)
|
(32 577)
|
228 859
|
|
|
Furniture and fittings
|
46 647
|
63 154
|
(4 866)
|
(13 219)
|
(10 842)
|
80 874
|
|
|
Lease improvements
|
8 248
|
61 921
|
(4 409)
|
(6 406)
|
(5 316)
|
54 038
|
|
|
Motor vehicles *
|
44 016
|
36 043
|
-
|
(11 325)
|
(8 828)
|
59 906
|
|
|
Office equipment
|
7 279
|
31 367
|
(338)
|
(4 670)
|
(3 214)
|
30 424
|
|
|
Plant and equipment
|
2 001
|
2 524
|
-
|
(730)
|
(454)
|
3 341
|
|
|
Total
|
858 612
|
394 338
|
(558 233)
|
(125 862)
|
(111 413)
|
457 442
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
Net book value
1 April
2007
|
Additions
|
Disposals
|
Depreciation
|
Translation reserve
|
Net book value
31 March 2008
|
|
|
Building
|
595 916
|
-
|
-
|
-
|
-
|
595 916
|
|
|
Computer Equipment
|
176 233
|
-
|
-
|
(21 728)
|
-
|
154 505
|
|
|
Furniture and fittings
|
56 065
|
-
|
-
|
(9 418)
|
-
|
46 647
|
|
|
Lease improvements
|
10 100
|
-
|
-
|
(1 852)
|
-
|
8 248
|
|
|
Motor vehicles *
|
50 052
|
-
|
-
|
(6 036)
|
-
|
44 016
|
|
|
Office equipment
|
8 558
|
-
|
-
|
(1 279)
|
-
|
7 279
|
|
|
Plant and equipment
|
2 610
|
-
|
-
|
(609)
|
-
|
2 001
|
|
|
Total
|
899 534
|
-
|
-
|
(40 922)
|
-
|
858 612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
US$
|
US$
|
|
4
|
Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Designs and Processes
|
|
|
|
|
|
|
|
Balance at the beginning of the year/period
|
|
54 382
|
-
|
|
|
Acquisitions
|
|
-
|
61 564
|
|
|
Amortisation
|
|
(5 638)
|
(7 182)
|
|
|
Translation difference
|
|
(8 057)
|
-
|
|
|
Balance at the end of the year/period
|
|
40 687
|
54 382
|
|
|
|
|
|
|
|
|
5
|
Deferred Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
Temporary timing differences
|
|
|
886 321
|
266 277
|
|
|
|
|
|
886 321
|
266 277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
|
5
|
Deferred Tax (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of deferred tax assets
|
|
|
|
|
|
|
Balance at the beginning of the year/period
|
|
|
266 277
|
-
|
|
|
Deferred tax credited for the year/period
|
|
|
722 767
|
266 277
|
|
|
Translation difference
|
|
|
(102 723)
|
-
|
|
|
Balance at the end of the year/period
|
|
|
886 321
|
266 277
|
|
|
|
|
|
|
|
|
|
The above deferred tax assets have been recognized as management are of the opinion that the Group will generate adequate future profits against which these deferred tax assets can be reversed.
|
|
|
|
|
|
|
|
|
6
|
Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
6 901 126
|
1 817 975
|
|
|
Prepayments
|
|
118 601
|
512 478
|
|
|
Other
|
|
52 105
|
122 983
|
|
|
|
|
7 071 832
|
2 453 436
|
|
|
|
|
|
|
|
7
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
Bank Balances
|
|
3 921 851
|
2 695 866
|
|
|
Short term deposits
|
|
10 038 252
|
2 447 565
|
|
|
Cash on hand
|
|
7 211
|
3 508
|
|
|
|
|
13 967 314
|
5 146 939
|
|
|
Included in the cash and cash equivalents is a restricted amount of $4 594 175 which is placed as performance guarantees with South African financial institutions against the Group's current execution projects.
|
|
|
|
|
|
|
|
|
8
|
Share capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised
|
|
|
|
|
|
|
|
|
|
|
|
|
200 000 000 ordinary shares of USD 0.01 cents each
|
2 000 000
|
2 000 000
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
|
|
|
|
|
|
|
|
|
|
37 459 107 ordinary shares of USD 0.01 each issued and fully paid
|
374 591
|
340 090
|
|
|
|
|
|
|
|
|
|
Reconciliation of the number of shares outstanding:
|
|
|
|
|
Opening balance
|
34 009 107
|
-
|
|
|
Shares issued
|
3 450 000
|
34 009 107
|
|
|
Closing balance
|
37 459 107
|
34 009 107
|
|
|
3 450 000 ordinary shares were issued at 145 pence per share as part of the Company's initial public offering on AIM on 12th May 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
9
|
Share premium
|
|
|
|
|
|
|
|
|
|
Opening balance
|
1 335 130
|
-
|
|
|
Proceeds on shares issued
|
9 734 865
|
-
|
|
|
Expenses on shares issued
|
(2 650 566)
|
1 335 130
|
|
|
Dividends paid
|
(2 903 219)
|
-
|
|
|
Closing balance
|
5 516 210
|
1 335 130
|
|
|
The share premium represents the amount above the par value less any costs associated with the shares issued and any dividends paid.
|
|
|
|
|
|
|
|
|
|
Under the BVI Business Companies Act 2004 ('the Act') and the memorandum and articles of association of the Company, the share premium can, subject to the solvency requirements of the Act, be used for distribution purposes. The Company has chosen to apply the share premium to dividend payments made in the year.
|
|
|
|
|
|
|
|
|
10
|
Treasury shares
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance
|
|
-
|
-
|
|
|
Acquisitions
|
|
177 276
|
-
|
|
|
Closing balance
|
|
177 276
|
-
|
|
|
|
|
|
|
|
|
At the annual general meeting held on 4th November 2008 the company was authorised to purchase its own shares. In March 2009 the company bought back a total of 200 000 shares at a price of 62 pence per share. These shares are currently held as treasury shares.
|
|
|
|
|
|
|
|
|
11
|
Foreign currency translation reserve
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance
|
|
335 174
|
-
|
|
|
Translation loss for the year/period
|
|
1 082 113
|
335 174
|
|
|
Closing balance
|
|
1 417 287
|
335 174
|
|
|
The translation reserve comprises all foreign exchange differences arising on the translation of the financial statements of foreign operations that do not have a US$ functional currency.
|
|
|
|
|
|
|
|
|
|
|
12
|
Interest bearing liability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instalment sales:
|
|
|
|
31 280
|
27 270
|
|
|
Amount owing
|
|
|
|
55 768
|
49 829
|
|
|
Less: amount payable within 1 year included in current liabilities
|
(24 488)
|
(22 559)
|
|
|
|
|
|
|
|
|
|
The instalment sales bear interest at South African prime bank overdraft rate, plus a margin. These rates currently range from 13% to 14.775% depending on the structure of the agreement.
|
|
|
|
|
The loans are secured by motor vehicles with a book value of USD59 906. The loans are repayable in monthly instalments of USD2 552, exclusive of interest. Refer to note 3 for details of the assets pledged.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
|
|
12
|
Interest bearing liability (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond for building:
|
|
|
|
-
|
593 888
|
|
|
Amount owing
|
|
|
|
-
|
625 002
|
|
|
Less: amount payable within 1 year included in current liabilities
|
-
|
(31 114)
|
|
|
|
|
|
|
|
|
|
The facility carried interest at South African prime bank overdraft rate, minus 1%. The rate was 14.5%. Security was provided by MJ Nunn and GSJ Bennett in equal portions of USD307 821 and USD615 642 by Foneworx Holdings Ltd. The facility was repayable over 120 months in monthly instalments of USD5 519, exclusive of interest.
The building was sold on the 30th of June 2008 adn the bond assumed by the purchaser.
|
|
|
|
|
|
|
|
|
31 280
|
621 158
|
|
|
|
|
|
|
|
|
|
|
Due in less than 1 year
|
|
|
|
24 488
|
53 672
|
|
|
Due later than one year but not later than 5 years
|
31 280
|
621 158
|
|
|
Total Interest bearing liability
|
|
|
|
55 768
|
674 830
|
|
|
|
|
|
|
|
|
|
13
|
Trade and other payables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
|
2 067 106
|
864 877
|
|
|
Other payables
|
|
|
|
958 211
|
244 481
|
|
|
Accruals
|
|
|
|
989 280
|
450 692
|
|
|
|
|
|
|
4 014 597
|
1 560 050
|
|
|
|
|
|
|
|
|
|
14
|
Provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonuses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening Balance
|
|
|
|
403 834
|
-
|
|
|
Provided for the year/period
|
|
|
|
829 966
|
403 834
|
|
|
Utilised for the year/period
|
|
|
|
(419 828)
|
-
|
|
|
Translation difference
|
|
|
|
(126 027)
|
-
|
|
|
Closing Balance
|
|
|
|
687 945
|
403 834
|
|
|
|
|
|
|
|
|
|
|
Bonus provisions are made up of leave pay bonuses as well as project completion bonuses. Leave pay bonuses are paid in December every year whereas project completion bonuses at this point will be paid once a project has been completed successfully.
Leave pay bonuses are provided for on a monthly basis whereas project completion bonuses are provided as a percentage of margins earned during the life of a project.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
|
|
15
|
Net financing income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
894 834
|
140 536
|
|
|
|
|
|
|
894 834
|
140 536
|
|
|
|
|
|
|
|
|
|
16
|
Net financing expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
38 062
|
57 711
|
|
|
|
|
|
|
38 062
|
57 711
|
|
|
|
|
|
|
|
|
|
17
|
Profit before taxation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation is stated after charging :
|
|
|
|
|
|
Amortisation
|
|
|
|
5 638
|
7 182
|
|
|
Auditors remuneration - audit services
|
|
|
93 599
|
70 703
|
|
|
Auditors remuneration - non audit services
|
|
|
9 516
|
134 855
|
|
|
Consulting fees
|
|
|
|
38 376
|
23 191
|
|
|
Depreciation
|
|
|
|
125 862
|
40 922
|
|
|
Operating lease expenses
|
|
|
|
221 594
|
154 748
|
|
|
Total employee costs
|
|
|
|
3 024 067
|
1 918 372
|
|
|
Share based payments
|
|
|
|
667 074
|
-
|
|
|
Exchange rate differences
|
|
|
|
923 713
|
-
|
|
|
|
|
|
|
|
|
|
|
And after crediting:
|
|
|
|
|
|
|
|
Exchange rate differences
|
|
|
|
-
|
49 368
|
|
|
|
|
|
|
|
|
|
18
|
Taxation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Africa normal - current
|
|
|
|
4 463 806
|
1 608 483
|
|
|
- deferred
|
|
|
|
(722 767)
|
(266 277)
|
|
|
|
|
|
|
3 741 039
|
1 342 206
|
|
|
|
|
|
|
|
|
|
Statutory Tax rate
|
|
|
28%
|
29%
|
|
|
|
|
|
|
|
|
|
Permanent differences :
|
|
|
|
|
|
|
Non-deductible expenses
|
|
|
4.61%
|
0.9%
|
|
|
Non-taxable income
|
|
|
(0.64%)
|
(0.88%)
|
|
|
Capital gains tax
|
|
|
0.32%
|
0.44
|
|
|
Effective tax rate
|
|
|
32.29%
|
29.46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
|
19
|
Basic and diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share is based on the Group's net profit for the year/period attributable to equity shareholders divided by the weighted average number of ordinary shares in issue during the year/period.
|
|
|
|
|
|
|
|
|
|
|
|
Net profit attributable to equity holders
|
|
|
7 839 522
|
3 187 158
|
|
|
|
|
|
|
|
|
|
Basic earnings
|
|
|
7 839 522
|
3 187 158
|
|
|
|
|
|
|
|
|
|
Basic weighted number of ordinary shares
|
|
|
37 062 121
|
24 624 165
|
|
|
Diluted weighted number of ordinary shares
|
|
|
40 578 985
|
24 624 165
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (US cents)
|
|
|
21.15
|
12.94
|
|
|
Diluted earnings per share (US cents)
|
|
|
19.32
|
12.94
|
|
|
|
|
|
|
|
Reconciliation of basic weighted average number of ordinary shares to diluted weighted average number of ordinary shares:
|
|
|
|
|
Basic weighted average number of ordinary shares
|
|
37 062 121
|
24 624 165
|
|
|
Dilutive effect of weighted average share options
|
|
3 516 864
|
-
|
|
|
Diluted weighted average number of ordinary shares
|
|
40 578 985
|
24 624 165
|
|
|
|
|
|
|
|
|
20
|
Note to the cash flow statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated by operations
|
|
|
|
|
|
|
Profit before taxation
|
|
|
11 580 561
|
4 529 364
|
|
|
Depreciation and amortisation
|
|
|
131 500
|
48 104
|
|
|
Provisions
|
|
|
829 966
|
-
|
|
|
Share based payments
|
|
|
667 074
|
-
|
|
|
Net interest received
|
|
|
(856 772)
|
(82 825)
|
|
|
Taxation paid
|
|
|
(4 402 240)
|
-
|
|
|
Foreign currency translation adjustment
|
|
|
-
|
(329 929)
|
|
|
|
|
|
7 950 089
|
4 164 714
|
|
|
|
|
|
|
|
|
|
Working capital changes
|
|
|
(2 163 849)
|
(63 316)
|
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
(4 618 396)
|
(2 027 200)
|
|
|
Trade and other payables
|
|
|
2 454 547
|
1 963 884
|
|
|
|
|
|
|
|
|
|
Cash generated by operations
|
|
|
5 786 240
|
4 101 398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
Share Based Payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On the 30th April 2008, the company adopted the Group Global Share Option Plan ('Plan Options'), to allow individuals to be granted the right to acquire ordinary shares in the company. The Board may grant options under the Plan Options to any director, employee of the Group or consultants and contractors providing services to the Group selected by the Board. Plan Options may be granted by the Board at any time when dealing in the ordinary shares is not restricted by law, regulation or applicable guidelines.
Options may be exercised over a period of three years, calculated from the first anniversary of the granting of the options and in three equal tranches, with the Plan Options lapsing on the fifth anniversary of the grant date. A maximum of 15% of the company's issued ordinary shares in any 10 year period when added to any other options granted under all group employee share schemes and similar share option agreements are available under the scheme.
|
|
|
|
|
|
|
|
|
|
The number and weighted average exercise price of the share options is as follows:
|
|
|
2009 Share Options
|
|
|
|
|
|
|
|
|
Weighted average exercise price (pence/share)
|
Number of options
|
|
|
Outstanding at the beginning of the year
|
|
|
-
|
-
|
|
|
Granted during the year
|
|
|
129
|
3 661 000
|
|
|
Forfeited during the year
|
|
|
145
|
(55 000)
|
|
|
Exercised during the year
|
|
|
-
|
-
|
|
|
Outstanding at the end of the year
|
|
|
127
|
3 606 000
|
|
|
|
|
|
|
|
|
|
Exercisable at the end of the year
|
|
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Options granted during the year
|
|
Number of options
|
Option Price Pence
|
Fair Value - Pounds
|
|
|
12 May 2008
|
|
2 721 000
|
145
|
3 945 450
|
|
|
12 May 2008
|
|
750 000
|
58
|
435 000
|
|
|
1 October 2008
|
|
90 000
|
146.5
|
131 850
|
|
|
20 October 2008
|
|
100 000
|
146.5
|
146 500
|
|
|
Total
|
|
3 661 000
|
|
4 658 800
|
|
|
|
|
|
|
|
|
|
The options outstanding at 31 March 2009 have an exercise price in the range of 58 pence to 146.5 pence and a weighted average contractual life of 4.06years. The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of the share options granted is calculated using the Black-Scholes model. Options are stated in Pounds sterling as the company is listed on the AIM market of the London Stock Exchange.
|
|
|
|
|
|
|
|
|
|
The fair values were calculated using the Black and Scholes option pricing model. The inputs into the model were as follows:
|
|
|
|
Share Price
|
|
|
|
58p - 147p
|
|
|
Exercise Price
|
|
|
|
58p - 147p
|
|
|
Expected volatility
|
|
|
|
30%
|
|
|
Expected life (years)
|
|
|
|
4 - 5 years
|
|
|
Risk-free rate (%)
|
|
|
|
4.5%
|
|
|
Expected dividend yield (%)
|
|
|
|
7%
|
|
|
|
|
|
|
|
|
|
The Group recognised total expenses of USD 667 074 (2008: USD nil) related to equity share-based payment transactions during the year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
Financial Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group manages its capital to ensure that the Group will be able to continue as a going concern while maximizing the return to stakeholders through the optimization of equity balances. The Group's overall strategy remains unchanged from 2008.
|
|
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
|
|
Capital Risk Management
|
|
|
|
|
|
|
Interest bearing debt
|
|
|
(55 768)
|
(674 830)
|
|
|
Cash and cash equivalents
|
|
|
13 967 314
|
5 146 939
|
|
|
Net funds
|
|
|
13 911 546
|
4 472 109
|
|
|
Equity
|
|
|
15 989 992
|
4 527 204
|
|
|
|
|
|
|
|
|
|
Categories of Financial Instruments
|
|
|
|
|
|
|
Financial Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
13 967 314
|
5 146 939
|
|
|
Receivables
|
|
|
7 071 832
|
2 453 436
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
At amortised cost
|
|
|
4 070 365
|
2 234 880
|
|
|
|
|
|
|
|
|
|
In the opinion of the directors, the fair value of all financial instruments are not materially different from their book values at year/period end.
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents all have a maturity of less than 3 months. Financial liabilities repayable within 1 year amount to $4 039 085 and the balance of
$31 280 is repayable after the 1 year period.
|
|
|
|
|
|
|
|
|
|
|
|
Financial Risk Management objectives
|
|
|
|
|
|
|
Credit Risk
|
|
|
|
|
|
|
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk.
The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of any allowances for doubtful receivables of $nil (2008: $ nil), estimated by the Group's management based on the current economic environment and the payment track records. The Group has amounts from major customers that represent more than 80% of the trade receivables balance. The Group does not consider this to be a significant credit risk as the specific counterparties receivable balance is current.
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
US$
|
US$
|
|
|
|
|
|
|
|
Trade Receivables past due but not impaired
|
|
|
|
|
Current trade receivables
|
4 759 344
|
1 697 872
|
|
|
Amounts in 30 to 60 days
|
584 503
|
67 416
|
|
|
Amounts in 60 to 90 days
|
364 633
|
52 687
|
|
|
Amounts in 90 days +
|
1 192 646
|
-
|
|
|
Total
|
6 901 126
|
1 817 975
|
|
|
|
|
|
|
22
|
Financial Instruments (Continued)
|
|
|
|
|
|
Market risk
|
|
|
The Group's activities expose it primarily to risk in changes to commodity prices. The risk of these changes is that possible execution by potential clients in the market are slowed down, postponed or stopped until such time that the commodity market recovers. Currently the Group has adequate execution projects, to negate this as an immediate risk. Management through active marketing look to further reduce this risk on the Groups business.
|
|
|
|
|
|
Foreign currency risk
|
|
|
The Group undertakes certain transactions in foreign currencies. Hence, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters. The impact on profit and loss should there be a 10% movement on currency is $340 703.
Further to the above the Group operates a foreign operation with a functional currency of ZAR and a 10% movement on the currency will have a $ 122 538 impact on equity.
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
US$
|
US$
|
|
|
Cash and cash equivalents are held in the following currencies:
|
|
|
|
|
US Dollars
|
1 222 130
|
1 706 573
|
|
|
Euros (Euro:US$ = 1.2677)
|
3 808 375
|
-
|
|
|
AUS Dollars (AUS $: US$ - 1.4448)
|
45 576
|
-
|
|
|
South African Rand (R: US$ = 9.6266)
|
8 891 233
|
3 440 366
|
|
|
|
13 967 314
|
5 146 939
|
|
|
|
|
|
|
|
Interest rate risk
|
|
|
|
|
|
The Group is exposed to interest rate risk as entities within the Group borrow funds at floating interest rates. Management however believe this amount to be immaterial due to the value of the interest bearing debt on the balance sheet.
|
|
|
|
|
|
Liquidity risk
|
|
|
Ultimate responsibility for liquidity risk management rests with the Board of directors, which has built an appropriate liquidity risk management framework for the management of the Group's short term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continually monitoring forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.
|
|
|
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
US$
|
US$
|
|
23
|
Directors emoluments
|
|
|
|
|
|
|
|
|
|
|
|
Executive directors
|
|
|
|
|
|
Emoluments
|
|
607 696
|
374 842
|
|
|
Share based payment
|
|
469 283
|
-
|
|
|
Total
|
|
1 076 979
|
374 842
|
|
|
Non-executive directors
|
|
|
|
|
|
Fees
|
|
81 000
|
38 500
|
|
|
Share based payment
|
|
35 640
|
-
|
|
|
Total
|
|
116 640
|
38 500
|
|
|
Total
|
|
1 193 619
|
413 342
|
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
|
US$
|
US$
|
|
23
|
Directors Emoluments (Continued)
|
|
|
|
|
|
|
|
|
|
|
|
Individual director's emoluments
|
|
|
|
|
|
Executive
|
Basic Salary
|
Bonuses
|
Vehicle Allowances
|
Total
|
Total
|
|
|
Mr G Lowman
|
240 000
|
20 000
|
-
|
260 000
|
239 713
|
|
|
Mr G Bennett
|
240 000
|
20 000
|
-
|
260 000
|
135 129
|
|
|
Mr D C de la Roche *
|
65 159
|
19 458
|
3 079
|
87 696
|
-
|
|
|
Total
|
545 159
|
59 458
|
3 079
|
607 696
|
374 842
|
|
|
|
|
|
|
|
|
Non-executive
|
|
Fees for Services
|
Total
|
Total
|
|
|
Mr W Nairn #
|
|
48 000
|
48 000
|
-
|
|
|
Mr M Summers
|
|
33 000
|
33 000
|
38 500
|
|
|
Total
|
|
81 000
|
81 000
|
38 500
|
|
|
|
|
|
|
|
|
*Appointed, effective 20 October 2008
|
|
|
|
|
|
#Appointed, effective 1 April 2008
|
|
|
|
|
|
|
|
|
|
|
|
2009 Share Options
|
Total
1 April
2008
|
Options granted
|
Options Exercised
|
Average option price pence
|
Total
31 March 2009
|
|
|
Mr G Lowman
|
-
|
1 250 000
|
-
|
92.80
|
1 250 000
|
|
|
Mr G Bennett
|
-
|
600 000
|
-
|
145.00
|
600 000
|
|
|
Mr DC de la Roche
|
-
|
100 000
|
-
|
146.50
|
100 000
|
|
|
Mr M Summers
|
-
|
250 000
|
-
|
145.00
|
250 000
|
|
|
Total
|
-
|
2 200 000
|
-
|
|
2 200 000
|
|
|
|
|
|
|
|
|
|
|
Directors' interest in shares
|
|
|
|
|
|
|
|
|
As at the 31 March 2009, none of the directors held any shares in the capital of MDM Engineering Group Limited, other than Mr Bill Nairn who held 75 000 ordinary shares (2008: nil)
|
|
|
|
|
|
The directors are the only key management of the Group.
|
|
|
|
|
|
|
|
24
|
Related parties
|
|
|
|
|
|
|
|
|
The Group paid consulting fees of US$24 239 (2008: US$45 605) to Amari Services (Pty) Limited, a company associated with the major shareholder.
|
|
|
The Group paid rent of US$76 590 (2008: US$126 743) to Four Rivers Trading 123 (Pty) Ltd. Mr MJ Nunn, an indirect shareholder and MR GSJ Bennett, a director and indirect shareholder, provided security to the company as detailed in note 12.
|
|
|
The remuneration of directors is determined by the Remuneration Committee having regard to their performance and market trends. The remuneration of the directors is disclosed under note 23.
|
|
|
|
|
25
|
Post Balance sheet events
|
|
|
|
|
|
There are no significant events between 31 March 2009 and the date of this report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
|
Group Entities
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Country of incorporation
|
Ownership
|
Principle activity
|
|
|
MDM Technical Africa (Pty) Limited
|
South Africa
|
100%
|
Mineral process engineering
|
|
|
|
|
|
|
|
|
MDM Engineering International Limited
|
British Virgin Islands
|
100%
|
Mineral process engineering
|
|
|
|
|
|
|
|
|
MDM Engineering Projects International Limited
|
British Virgin Islands
|
100%
|
Mineral process engineering
|
|
|
|
|
|
|
|
|
During the year the Group sold its 50% holding in Four Rivers trading 123 (PTY) Ltd, a joint venture property company.
|
|
|
|
|
27
|
Operating lease commitments
|
|
|
|
Year
Ended
31 March
2009
|
16 Months
Ended
31 March
2008
|
|
|
|
US$
|
US$
|
|
|
The Group has entered into a lease commitment to rent premises. The breakdown of the future commitment is as follows:
|
|
|
|
|
|
|
|
|
|
0 - 1 year
|
216 906
|
-
|
|
|
1 - 5 years
|
1 081 212
|
-
|
|
|
5 years and beyond
|
448 130
|
-
|
|
|
Total
|
1 746 248
|
-
|
|
|
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28
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Exchange rates
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The exchange rates used in converting the financial information of subsidiaries from the functional currency of ZAR to the presentation currency are as follows
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year/period end rate
|
9.6266
|
8.1216
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year/period average rate
|
8.8684
|
7.1455
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29
|
Dividends paid and proposed
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During the year the following dividends were paid and proposed:
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This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UNAORKARBRAR