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African Oxygen Limited - Condensed Consolidated Interim Financial Statements For The Six Months Ended 30 June 2014

Release Date: 21/08/2014 15:00:00      Code(s): AFX     
African Oxygen Limited      
(Incorporated in the Republic of South Africa) 
Registration number: 1927/000089/06   
ISIN: ZAE000067120 JSE code: AFX    
NSX code: AOX          

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the six months ended 30 June 2014

- Revenue: R2.9 billion
- EBITDA: R442 million (-2%)
- Headline earnings per share: 49.5 cents (-10.2%)

Performance highlights
Results for the first half of 2014 were influenced by a challenging trading environment which reflects the continued decline in the manufacturing, mining,
and steel sectors in South Africa exacerbated by the five-month strike in the platinum sector and spill-over effects of Afrox's own strike in the first quarter.

Despite achieving price increases broadly in line with increased input costs, revenue for the six months to 30 June 2014 was flat at R2.87 billion (2013: R2.86 billion). 
Earnings before interest, tax, depreciation and amortisation (EBITDA) was down 2% at R442 million (2013: R449 million).

The EBITDA margin achieved was 15.4% (2013: 15.7%), reflecting the consequence of adverse sales conditions and inflationary pressure on costs; profit for the half-year 
was down 4.5% at R169 million (2013: R176 million) with headline earnings of 49.5 cents (2013: 55.1 cents).

The Group's capital revitalisation and growth plan continued to be implemented with capital expenditure of R209 million incurred during the first six months of 2014 
(2013: R261 million).
 
Business review
Uncertainty in the economy and low GDP growth in South Africa, continue to impact negatively on demand for our products in key sectors. At 30 June 2014, year-on-year mining 
production had fallen approximately 5.7%, with manufacturing output down 1.6% in the first quarter and 0.4% in the second. However, our long-term success, and the realisation 
of our strategic goals, depends on our ability to adjust and respond to current and future market dynamics. We believe the next few months will see our key South African 
markets continuing to move at the current lower levels of activity and accordingly we are pursuing an active cost management programme to mitigate against these difficult 
economic conditions.

In the first half of 2014, volume erosion continued in almost every market served in South Africa. Local shortages of Liquefied Petroleum Gas (LPG) - due to unexpected 
shutdowns at refineries - coupled with a planned maintenance shutdown of our import storage facility, constrained our ability to meet demand for LPG in the first quarter.

There was only a modest recovery in quarter two hampered by industrial action and a relatively mild start to winter in South Africa. Afrox continues to import LPG to supplement 
the market shortfall, in the process effectively subsidising an element of these additional costs as price recovery and distribution costs of imported product remain a challenge. 
We plan to increase the LPG cylinder pool by a further 5% in 2014, and therefore introduced a non-refundable rental charge to justify this additional capital investment in LPG 
cylinders. We continue to actively manage the illegal filling threat, not only to ensure that our assets are not abused, but more importantly, to protect the public from 
significant safety risks.

Hard Goods sales were down 14.4%, reflecting lower levels of activity in all key markets, especially the platinum mining sector. To improve performance, the Group is rationalising 
the current product range and focusing on driving sales of its high-yield products. 

Output reduction at key large customers led to a reduction in demand for Atmospheric Gases in this reporting period. As a result, gaseous pipeline sales reduced and sales for 
bulk and compressed gases remained flat reflecting the continued reduction in activity in the manufacturing sector and the effects of strike actions in the first and second quarters.

The R350 million Air Separation Unit in the Eastern Cape is expected to commence production by the second quarter of 2015, which will mark a significant improvement in 
security of supply to customers in this important region. Afrox also commissioned a new R14 million hydrogen facility in Pelindaba which will reduce  Afrox's dependence on 
imported hydrogen and enhance customer service levels.

Plant reliability of 99.1% (2013: 98.7%) has been achieved in this reporting period. Independently monitored customer satisfaction levels, with Afrox and our National Customer 
Service Centre (NCSC), stand at 95.1% (2013: 95.0%). The NCSC has also launched an eShop channel to take advantage of the growing trend across Africa for online ordering and 
account solutions.

Operations in the rest of Africa contributed 20% (2013: 19%) to the Group's half-year gross profit after distribution expenses (GPADE). Afrox businesses outside South Africa 
are receiving increased investment in plant and management resources as we commence with the roll-out of our African expansion strategy. The outlook for sub-Saharan Africa 
remains positive and the region continues to be central to future growth.
 
A management focus on workplace and distribution safety within the company continues to deliver results. Major incidents are down 67% compared to the same period last year 
(2013: down 73%). Afrox achieved multisite regional ISO 90001:2008 quality management certification, effectively streamlining certification in line with the Afrox business structure 
and thereby cutting costs.

Our Broad-Based Black Economic Empowerment (B-BBEE) status remains a Level 3 value adding rating. 

Although overall trading conditions have been challenging in South Africa, the Group's underlying business remains strong.

Board of directors
Nomfundo Vuyiswa Lila Qangule CA(SA) has been appointed as an independent non-executive director of the company with effect from 22 July 2014. She will serve as a member of the 
Afrox Board's Audit Committee. 

Dividend
It is the Group's policy to consider dividends twice annually. The Board of directors have declared a gross interim cash dividend of 24.0 cents per share for the six months ended
30 June 2014 (2013: 27.0 cents). The dividend is covered two times by headline earnings per share.

Outlook
Economic conditions are likely to remain challenging for the foreseeable future, particularly in the key manufacturing, mining and steel production sectors of the 
South African economy. This will require increased focus on cost containment by our company due to lack of volume growth expected in the second half of 2014. 

Mike Huggon          Brett Kimber                21 August 2014
Chairman             Managing Director           Johannesburg

NOTICE OF INTERIM DIVIDEND DECLARATION NUMBER 176 AND SALIENT FEATURES
Notice is hereby given that a gross interim cash dividend of 24.0 cents per ordinary share, being the interim dividend for the six-month period ended 30 June 2014, has been 
declared payable to all shareholders of African Oxygen Limited recorded in the register on Friday, 10 October 2014.

The salient dates for the declaration and payment of the interim dividend are as follows:
Last day to trade ordinary shares "cum" dividend          Friday, 3 October 2014
Ordinary shares trade "ex" the dividend                   Monday, 6 October 2014
Record date                                               Friday, 10 October 2014
Payment date                                              Monday, 13 October 2014

Share certificates may not be dematerialised or rematerialised between Monday, 6 October 2014 and Friday, 10 October 2014, both days inclusive.

The local net dividend amount is 20.4 cents per share for shareholders liable to pay the new Dividends Tax and 24.0 cents per share for shareholders exempt from the new Dividends 
Tax (2013: 27.0 cents).

In terms of the new Dividends Tax, the following additional information is disclosed:
- the dividend has been declared out of income reserves;
- the local Dividends Tax rate is 15%, subject to double tax agreement;
- no Secondary Tax on Companies (STC) credits were utilised;
- Afrox currently has 308 567 602 ordinary shares in issue; and
- Afrox's income tax reference number is 9350042710.

Results presentation 
Afrox will host a presentation on the financial results in Johannesburg on Friday, 22 August 2014. Anyone wishing to attend should contact Lebohang Mfeka at 011 490 0948. 
The slides, which will form part of the presentation will be available on the company's website from Monday, 25 August 2014.

By order of the Board

Cheryl Singh               21 August 2014
Company Secretary          Johannesburg

Forward-looking statements disclaimer: This interim results review contains statements related to our future business and financial performance and future events or 
developments involving Afrox that may constitute forward-looking statements. Such statements are based on current expectations and certain assumptions of Afrox's 
management are therefore subject to certain risks and uncertainties. A variety of factors, many of which are beyond Afrox's control, affect our operations, performance,
business strategy and results and could cause the actual results, performance or achievements of Afrox to be materially different from any future results, performance or 
achievements that may be expressed or implied by such forward-looking statements or anticipated on the basis of historical trends.

Condensed consolidated interim income statement

                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         6 months         6 months         12 months
                                                                         Reviewed         Reviewed           Audited
R'million
Revenue                                                                     2 866            2 859             5 825 
Operating expenses                                                         (2 424)          (2 410)           (4 945)
Earnings before interest, taxation, depreciation, amortisation and 
impairments (EBITDA)                                                          442              449               880 
Depreciation and amortisation                                                (195)            (178)             (366)
Earnings before interest and taxation (EBIT)                                  247              271               514 
Net finance expense                                                            (5)             (20)              (47)
Income from associate                                                           1                -                 1 
Profit before taxation                                                        243              251               468 
Taxation                                                                      (74)             (75)             (144)
Profit for the period                                                         169              176               324 
Attributable to:  
Equity holders of the parent company                                          163              169               309 
Non-controlling interests                                                       6                7                15 
Profit for the period                                                         169              176               324 
Earnings per share - cents  
Basic and diluted earnings per ordinary share - cents                        52.8             54.8             100.1 
Headline earnings per ordinary share - cents                                 49.5             55.1              95.3 
  
Condensed consolidated interim statement of comprehensive income 
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         6 months         6 months         12 months
                                                                         Reviewed         Reviewed           Audited
R'million
Profit for the period                                                         169              176               324 
Other comprehensive income after taxation                                     (88)              61               228 
Items that can subsequently be reclassified to the income statement           (26)              28                35 
Translation differences on foreign operations                                 (20)              24                29 
Translation differences relating to non-controlling interests                  (4)               4                 5 
Changes in fair value of cash flow hedges (net of taxation)                    (2)               -                 1 
Items that cannot subsequently be reclassified to the income statement        (62)              33               193 
Actuarial (losses)/gains on defined-benefit funds                             (86)              46               276 
Deferred taxation relating to actuarial losses/ (gains)                        24              (13)              (83) 
Total comprehensive income for the period                                      81              237               552 
Total comprehensive income attributable to:   
Equity holders of the parent company                                           79              226               532 
Non-controlling interests                                                       2               11                20 
                                                                               81              237               552 

Condensed consolidated statement of financial position

                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                           Note          Reviewed         Reviewed           Audited
R'million
ASSETS   
Property, plant and equipment                                 4             3 058            2 963             3 034 
Retirement benefits assets                                                    483              390               552
Deferred taxation assets                                                       18               12                 9
Lease receivables                                                             110              103               100
Other non-current assets                                                       83              115                99 
Non-current assets                                                          3 752            3 583             3 794 
Inventories                                                                   834              873               850 
Trade and other receivables                                                   983            1 061               906 
Lease receivables                                                              17                7                 7 
Derivative financial instruments                                                -                8                 6 
Other current assets                                                           14               25                31 
Taxation receivable                                                            41               38                33 
Cash and cash equivalents                                                     331              430               380 
Current assets                                                              2 220            2 442             2 213 
Total assets                                                                5 972            6 025             6 007 
EQUITY AND LIABILITIES  
Equity holders of the parent company                                        3 231            2 981             3 202 
Non-controlling interests                                                      38               37                37 
Total equity                                                                3 269            3 018             3 239 
Long-term borrowings                                                        1 000            1 000             1 000 
Deferred taxation liability                                                   546              548               570 
Non-current liabilities                                                     1 546            1 548             1 570 
Trade, other payables and financial liabilities                             1 123            1 143             1 141 
Taxation payable                                                               26               38                28 
Short-term portion of long-term borrowings                                      -              269                 3 
Bank overdrafts                                                                 8                9                26 
Current liabilities                                                         1 157            1 459             1 198 
Total equity and liabilities                                                5 972            6 025             6 007

Condensed consolidated interim statement of changes in equity

                                    Attributable to equity holders of the parent company 

                                            Incentive 
                                               scheme 
                                  Share     share and 
                                capital        share-          FCTR
                                    and         based           and    Actuarial                       Non-
                                  share       payment       hedging       gains/     Retained   controlling      Total
                                premium      reserves      reserves     (losses)     earnings     interests     equity

R'million                                                                      
Balance at 1 January 2013           552             8           (67)         174        2 137            27      2 831 
Profit for the period                 -             -             -            -          169             7        176 
Other comprehensive income            -             -            24           33            -             4         61 
Share-based payments                  -             7             -            -            -             -          7 
Dividends paid                        -             -             -            -          (56)           (1)       (57)
Balance at 30 June 2013             552            15           (43)         207        2 250            37      3 018 
Balance at 1 January 2013           552             8           (67)         174        2 137            27      2 831 
Profit for the period                 -             -             -            -          309            15        324 
Other comprehensive income            -             -            30          193            -             5        228  
Shares purchased on behalf of 
employees                             -           (16)            -            -            -             -        (16)
Share-based payments                  -            21             -            -            -             -         21 
Dividends paid                        -             -             -            -         (139)          (10)      (149)
Balance at 
31 December 2013                    552            13           (37)         367        2 307            37      3 239 
Balance at 1 January 2014           552            13           (37)         367        2 307            37      3 239 
Profit for the period                 -             -             -            -          163             6        169 
Other comprehensive income            -             -           (22)         (62)           -            (4)       (88)
Net share scheme transactions         -             1             -            -            -             -          1 
Share-based payments                  -            11             -            -            -             -         11 
Dividends paid                        -             -             -            -          (62)           (1)       (63)
Balance at 30 June 2014             552            25           (59)         305        2 408            38      3 269 
    
Condensed consolidated interim statement of cash flows
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         6 months         6 months         12 months
                                                                         Reviewed         Reviewed           Audited
R'million
Earnings before interest and taxation (EBIT)                                  247              271               514 
Adjustments for:   
Depreciation, amortisation and impairments                                    195              178               366 
Other                                                                          18               31               153 
Operating cash flows before working 
capital adjustments                                                           460              480             1 033 
Working capital adjustments                                                   (84)            (302)             (200)
Cash generated from operations                                                376              178               833 
Vested shares purchased on behalf of employees                                 (2)              (3)               (3)
Net finance expenses                                                          (49)             (43)              (76)
Taxation paid                                                                 (90)             (81)             (202)
Cash available from operating activities                                      235               51               552 
Dividends paid to owners of the parent                                        (62)             (56)             (139)
Dividends to non-controlling interests                                         (1)              (1)              (10)
Net cash inflow/(outflow) from operating activities                           172               (6)              403 
Additions to property, plant and equipment and intangibles                   (209)            (261)             (505)
Proceeds from disposal of the RECO business                                     -               21                36 
Other investing activities                                                      8               14                48 
Net cash outflow from investing activities                                   (201)            (226)             (421)
Borrowings raised                                                               -            1 000             1 216 
Borrowings repaid                                                              (3)            (602)           (1 083)
Forfeited shares sold                                                           1                -                 - 
Incentive share scheme shares purchased on behalf 
of employees                                                                    -                -               (16)
Net cash (outflow)/inflow from financing activities                            (2)             398               117 
Net (decrease)/increase in cash and cash equivalents                          (31)             166                99 
Cash and cash equivalents at the beginning of the period                      354              255               255 
Cash and cash equivalents at the end 
of the period                                                                 323              421               354 
  
Operating segments  
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         6 months         6 months         12 months
                                                                         Reviewed         Reviewed           Audited
R'million
Revenue                                                                     2 866            2 859             5 825 
Atmospheric Gases                                                             899              861             1 745 
LPG                                                                         1 045            1 025             2 132 
Hard Goods                                                                    457              523               993 
Rest of Africa                                                                465              450               955 
Gross profit after distribution expenses (GPADE)                              777              818             1 580 
Atmospheric Gases                                                             327              303               610 
LPG                                                                           153              159               311 
Hard Goods                                                                    140              201               337 
Rest of Africa                                                                157              155               322 
Reconciliation of GPADE to EBIT  
GPADE for business segments                                                   777              818             1 580 
Other operating expenses                                                     (530)            (547)           (1 066)
Earnings before interest and taxation (EBIT)                                  247              271               514 
  
Statistics and ratios  
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         6 months         6 months         12 months
                                                                         Reviewed         Reviewed           Audited
Average number of shares in issue during the period (000)                 308 568          308 568           308 568 
Shares in issue (000)                                                     308 568          308 568           308 568 
Dividends per share (cents)                                                  24.0             27.0              47.0
Final                                                                                                           20.0
Interim                                                                      24.0             27.0              27.0
Ratios  
EBITDA margin (%)                                                            15.4             15.7              15.1
Interest cover on EBITDA (times)                                             80.7             22.5              10.9
Effective taxation rate (%)                                                  30.3             30.1              30.8
Gearing (%)                                                                  15.0             19.2              14.6
Dividend cover on headline earnings (times)                                     2                2                 2
  

Notes to the interim condensed consolidated financial statements
African Oxygen Limited ("Afrox" or the "company") is a South African registered company. The interim condensed consolidated financial statements of the company comprise the
company and its subsidiaries (together referred to as the "Group") and the Group's interest in an associate.

1. Statement of compliance
The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards(IFRS), (IAS) 34 Interim Financial Reporting, the 
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and the 
requirements of the Companies Act of South Africa. The accounting policies applied in the preparation of these interim financial statements are in terms of IFRS and are consistent 
with those applied in the previous annual financial statements. 

2. Basis of preparation
The condensed consolidated interim financial statements do not include all the information and disclosures required for the audited consolidated financial statements. The 
condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements. The audited consolidated financial 
statements for the Group as at and for the year ended 31 December 2013 were prepared on the going-concern basis and are available for inspection at the company's registered 
office and on the Afrox website at www.afrox.com.
 
The accounting policies applied in the presentation of the condensed consolidated interim financial statements are consistent with those applied for the year ended 31 December 2013, 
except for new standards that became effective 1 January 2014, refer note 3. 
 
The condensed consolidated interim financial statements are prepared on the historical cost basis except for the following items which are measured using an alternative basis at 
each reporting date: 
 - Derivative financial instruments measured at fair value through profit or loss
 - Retirement benefit assets measured at the fair value of the plan assets less the present value of the defined benefit obligation

This report was compiled under the supervision of Nick Thomson CA(SA), Group Financial Director.

3. Changes in accounting policies
The Group has adopted the following new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 
1 January 2014:
 - Amendments to IFRS 10, IFRS 12 and IAS 27;
 - IAS 32 Financial Instruments: Presentation;
 - Novation of derivatives and continuation of hedge accounting (Amendments to IAS 39);
 - IAS 36 Impairment of Assets;
 - IFRIC 21 Levies.
 
The adaptation of the new standards listed above did not have a significant impact on the Group's reviewed condensed consolidated interim financial statements.

4. Property, plant and equipment
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         Reviewed         Reviewed           Audited
R'million
Opening carrying value                                                      3 034            2 854             2 854 
Additions, net of transfers from assets under construction                    209              261               505 
Interest capitalised                                                            7                -                 2 
Disposals                                                                      (5)              (1)               (7)
Depreciation                                                                 (178)            (161)             (332)
Translation differences                                                        (9)              10                12 
Closing carrying value                                                      3 058            2 963             3 034

5. Fair value classification and measurement 
Accounting classification and fair value
The classification of each class of financial assets and liabilities, and their fair values are:
                                                    At fair 
                                                      value                 Liabilities 
                                                    through          Loans           at                   Total   
                                                     profit            and    amortised       Other    carrying      Fair
R'million                                           or loss    receivables         cost      assets      amount     value
30 June 2013   
Financial assets measured 
at fair value   
Derivative financial instruments                          8              -            -           -           8         8 
Financial assets not measured at fair value   
Trade and other receivables                               -          1 004            -           -       1 004     1 004 
Cash and cash equivalents                                 -            430            -           -         430       430 
Finance lease receivables                                 -              -            -         110         110       110 
Total financial assets                                    8          1 434            -         110       1 552     1 552 
Financial liabilities not measured 
at fair value   
Borrowings                                                -              -        1 000           -       1 000     1 000 
Trade, other payables and financial assets                -              -          960           -         960       960 
Bank overdrafts                                           -              -            9           -           9         9 
Total financial liabilities                               -              -        1 969           -       1 969     1 969 
31 December 2013   
Financial assets measured at 
fair value   
Derivative financial instruments                          6              -            -           -           6         6 
Financial assets not measured 
at fair value   
Trade and other receivables                               -            885            -           -         885       885 
Cash and cash equivalents                                 -            380            -           -         380       380 
Finance lease receivables                                 -              -            -         107         107       107 
Total financial assets                                    6          1 265            -         107       1 378     1 378 
Financial liabilities not measured 
at fair value   
Borrowings                                                -              -        1 003           -       1 003       971 
Trade, other payables and financial assets                -              -          947           -         947       947 
Bank overdrafts                                           -              -           26           -          26        26 
Total financial liabilities                               -              -        1 976           -       1 976     1 944  
30 June 2014   
Financial assets measured 
at fair value   
Derivative financial instruments                          -              -             -          -           -         - 
Financial assets not measured 
at fair value   
Trade and other receivables                               -            974             -          -         974       974 
Cash and cash equivalents                                 -            331             -          -         331       331 
Finance lease receivables                                 -              -             -        127         127       127 
Total financial assets                                    -          1 305             -        127       1 432     1 432 
Financial liabilities not measured 
at fair value   
Borrowings                                                -              -         1 000          -       1 000       914 
Trade, other payables and financial assets                -              -           957          -         957       957 
Bank overdrafts                                           -              -             8          -           8         8 
Total financial liabilities                               -              -         1 965          -       1 965     1 879 
 
Reconciliation to the condensed interim consolidated statement of financial position:
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         Reviewed         Reviewed           Audited
R'million
Trade and other receivables                                                   983            1 061               906 
Prepayments                                                                    (8)             (12)              (20)
Deposits                                                                       (1)             (45)               (1)
Financial instruments                                                         974            1 004               885 
Trade, other payables and other financial liabilities                       1 123            1 143             1 141 
Employee benefits including leave pay, bonuses and other costs                (98)             (98)             (107)
Deferred rentals                                                              (28)             (39)              (52)
Value added taxation                                                          (40)             (46)              (35)
Financial instruments                                                         957              960               947 

Fair value hierarchy  
The table below analyses fair value measurements for financial instruments categorised into the fair value hierarchy based on the inputs used. The different levels are 
defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.  

R'million                                                       Level 1        Level 2       Level 3           Total
30 June 2013  
Financial assets measured at fair value  
Derivative financial instruments                                      -              8             -               8 
31 December 2013  
Financial assets measured at fair value  
Derivative financial instruments                                      -              6             -               6
30 June 2014  
Financial assets measured at fair value  
Derivative financial instruments                                      -              -             -               - 

Transfers  
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the transfer has occurred. There were no transfers 
between level 1, 2 or 3 of the fair value hierarchy during the six months ended 30 June 2014. 

6. Earnings and headline earnings per share
Headline earnings per share are calculated on headline earnings of R153 million (2013: R170 million) and a weighted average number of ordinary shares of 308 567 602 
(2013: 308 567 602) in issue during the period.

Reconciliation between earnings and headline earnings
                                                                          30 June          30 June       31 December
                                                                             2014             2013              2013 
                                                                         6 months         6 months         12 months
                                                                         Reviewed         Reviewed           Audited
R'million
Profit for the period                                                         163              169               309 
Adjusted for the after-taxation effects of:  
(Profit)/loss on disposal of property, plant and equipment                    (10)               1               (15)
Headline earnings                                                             153              170               294 
Basic and diluted earnings per share - cents                                 52.8             54.8             100.1
Headline earnings per share - cents                                          49.5             55.1              95.3

7. Related-party transactions
The Group entered into various sale and purchase transactions with related parties, in the ordinary course of business, on an arm's length basis. The nature of related-party 
transactions is consistent with those reported previously. 

8. Update on key litigation matters
As at the date of this report there is no outstanding litigation of a material nature against the Group. The company continues to pursue its rights in terms of a disputed supply 
contract with a major steel producer. This matter is expected to proceed to arbitration in the last quarter of 2014.

9. Subsequent events
Other than the continuing impact of the adverse trading conditions, the directors are not aware of any material matter or circumstance arising between 30 June 2014 and the date
of this report on which comment is required.

10. Independent review by the auditors
These interim condensed consolidated financial statements for the six months ended 30 June 2014 have been reviewed by the company's auditor, KPMG Inc. In their review report dated 
21 August 2014, which is available for inspection at the company's registered office, KPMG Inc state that their review was conducted in accordance with the International Standard 
on Review Engagements 2410, Review of interim information performed by the independent auditor of the entity, and have expressed an unmodified conclusion on the interim condensed 
consolidated financial statements.
 
The condensed consolidated interim financial results comprise the condensed consolidated statement of financial position at 30 June 2014, condensed consolidated income statement,
condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six 
months then ended and selected explanatory notes.

Corporate information
African Oxygen Limited                                              Registered office
(Incorporated in the Republic of South Africa)                      Afrox House, 23 Webber Street, Selby
Registration number: 1927/000089/06                                 Johannesburg 2001
ISIN: ZAE000067120 JSE code: AFX                                    PO Box 5404, Johannesburg 2000
NSX code: AOX                                                       Telephone +27 11 490 0400

Transfer secretaries: Computershare Investor Services (Pty) Ltd

Sponsor in South Africa: One Capital

Sponsor in Namibia: Namibia Equity Brokers (Pty) Ltd

Directors: B Kimber (Managing Director), NA Thomson** (Financial Director), MS Huggon** (Chairman), M von Plotho*, DM Lawrence, Dr KDK Mokhele, SN Maseko, CF Wells**, RJN Gearing**, 
NVL Qangule
* German ** British

Company Secretary: Cheryl Singh

Auditors: KPMG Inc.

www.afrox.com
www.afrox.co.za

Date: 21/08/2014 03:00:00 Supplied by www.sharenet.co.za                     
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Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.