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Keaton Energy Holdings Limited - Reviewed Condensed Interim Consolidated Results For The Six Months Ended 30 September 2014

Release Date: 19/11/2014 08:00:00      Code(s): KEH     
Keaton Energy Holdings Limited 
(incorporated in the Republic of South Africa) 
Registration number: 2006/011090/06
JSE share code: KEH ISIN ZAE000117420
(?Keaton Energy or ?the company? or ?the group?)

Reviewed condensed interim consolidated results for the six months ended 30 September 2014

Salient features
Improved safety performance at both Vanggatfontein and Vaalkrantz
Gross profit up 6% to R124.5 million
Cash and cash equivalents up 63% to R113.2 million
Total coal sales up 7% to 1.45Mt
Revenue up 10% to R783 million 
Cash generated from operations up 54% to R315.6 million
HEPS of 13.7 cents per share down from 19.4 cents due to increased number of shares in issue and increased finance
costs

Commentary

Dear Shareholder
Keaton Energy is pleased to report another record period of safe production, growth and cash generation for the six
months ended 30 September 2014 (?the period? or ?1H FY2015?), in line with expectations. We continued executing our growth
strategy while maintaining our long-life cash generating Vanggatfontein Colliery at optimal production levels and
enhancing the performance at Vaalkrantz Colliery. 
Safety
The safety performance at both group collieries remained excellent for the period: Vanggatfontein reported a lost time
injury frequency rate (LTIFR) of 0.04 (1H FY2014: 0.10) and Vaalkrantz a LTIFR of 0.12 (1H FY2014: 0.17). Keaton Energy
commends all involved for this performance.
Operational review
Vanggatfontein delivered 1.20Mt of washed 2- and 4-Seam thermal coal to Eskom during the period (1H  FY2014: 1.14Mt),
a pleasing 5% improvement on the previous corresponding production record. In addition, 5-Seam metallurgical coal sales
increased 18% over the comparable period to 65 006t (1H  FY2014: 55 154t).  No toll washing took place during the period
(1H FY2014:145 785t) as all capacity was utilised for own production. Discard  and slurry sales reduced to 131 985t (1H
 FY2014: 555 963t) as discards were used in on-site construction activities.
Production of domestic and export anthracite at Vaalkrantz increased significantly to 191 898t compared to 154 145t in
1H FY2014. This 24% growth highlights the success of the company?s drive to not only maintain, but grow production at
this important source of high quality anthracite. Given that the geological conditions nonetheless remain challenging, we
are pleased to report the improved safety performance that accompanied the increased production. 
Group operating and financial performance
Group revenue increased by 10% to R783 million (1H FY2014: R709.8 million) due to steady state operational performance
at Vanggatfontein and higher domestic and export anthracite sales at Vaalkrantz.
The group achieved a planned gross profit of R124.5 million or 16% of revenue (1H FY2014: R117.2 million or 17% of
revenue). Cost of sales increased by R65.9 million or 11% on the back of increased production volumes at both
Vanggatfontein and Vaalkrantz. Production costs were managed closely and cost containment remains an on-going focus at both
operations.
The increase in other income relates mainly to the settlement of the DRA matter. 
Profit from operations was not only consistent with the comparable period but also against plan. Net profit before tax
decreased from R63.7 million to R57.6 million on the back of increased finance costs following the drawdown of the
Investec finance facility in FY2014, the benefit of which will flow once Moabsvelden commences production. 
Headline earnings per share decreased from 19.4 cents at 30 September 2013 to 13.7 cents at period end. Given the
consistent operational performance this difference is explained by the issue of 32 647 838 new shares in February 2014 and
the increased finance costs referred to above. 
Capital investment for the group totalled R242.8 million for the period, compared to R139.7 million at September 2013.
The majority, R228.2 million, was spent at Vanggatfontein, primarily on on-going mine development relating to stripping
costs and the opening of Pit 4.
Cash and cash equivalents increased by R43.7 million primarily due to cash flows generated from operating activities
of R315.6 million (1HFY2014: R205.3 million), which were offset by cash flows from investing activities of R282.9 million
(1HFY2014:  R134 million).
Projects
Moabsvelden
The greenfields Moabsvelden Project was acquired in February 2014 when Keaton Energy acquired the entire issued share
capital of Xceed Resources Limited. The rationale for the acquisition was the integration of the Moabsvelden Project
into the Vanggatfontein Colliery complex, taking advantage of our existing local operational footprint.  Discussions on the
Eskom Coal Supply Agreement have progressed positively, while further submissions have been made to support the
application for an Integrated Water Use Licence.  Negotiations regarding the acquisition of the surface rights for the complete
Mining Right area are on-going. Boxcut excavation is planned to commence during the first quarter of FY2016, subject to
the timeous receipt of all necessary regulatory approvals.
Braakfontein
A detailed percussion drilling phase to provide structural information regarding the dip of the coal seams on
Braakfontein was completed during September 2014.  The results of this exercise have been positive and have  provided the
confidence for us to proceed with a Feasibility Study for a combined opencast and underground mine at Braakfontein.
Mooiklip
After the execution of the Mooiklip Prospecting Right during August 2014 a first phase of drilling was concluded
during October 2014. A six borehole second phase is currently being considered on the basis of the encouraging first 
phase quality and structural findings.
Coal resource and coal reserve statement
Other than normal coal depletion as a result of mining activities during the six months to 30 September 2014, there
were no significant changes to the previously reported group Coal Resource and Coal Reserve estimates as reported in the
31 March 2014 Integrated Annual Report. 
Litigation
As previously announced, subsidiary Keaton Mining Proprietary Limited successfully concluded a final settlement
agreement with DRA Mineral Projects Proprietary Limited (?DRA?).
Directorate
With effect from 1 July 2014 Dirk Jonker resigned from the board. The board thanks Mr Jonker for his contribution over
the past three years. Meindert Witteveen, head of Coal and Iron Ore at Gunvor SA, was appointed as a non-executive
director with effect from 5 September 2014.
Looking ahead
Our medium-term focus remains becoming a 5Mtpa producer.
Emphasis in the short to mid term will remain on optimal operation of our existing collieries whilst continually
improving our safety performance.  Additional revenue streams will flow from initiatives such as the belt filter plant at
Vanggatfontein which will not only introduce a new saleable product but at the same time reduce our environmental
footprint. 
Planning for our new colliery at Moabsvelden is proceeding largely to schedule albeit with some potential delays in
receipt of certain regulatory approvals. 
Looking to year end we anticipate, as was communicated at our year-end results in June 2014, ending the year with
similar results to last year.  
On behalf of the board

David Salter                         Mandi Glad
(Non-Executive Chairman)            (Chief Executive Officer)

18 November 2014

Preparation of condensed interim consolidated financial statements
The condensed interim consolidated financial statements for the six months ended 30 September 2014 have been reviewed
in terms of the Companies Act 71, 2008, as amended. Their preparation was supervised by the group Chief Financial
Officer, Jacques Rossouw, a Chartered Accountant (SA). The condensed interim consolidated financial statements were 
published on 19 November 2014 and can be found on the company?s website.


Condensed interim consolidated statement of profit or loss and other comprehensive income    
                                                                     Six months ended                   Year ended   
  R?000                                               Note    30 September        30 September            31 March   
                                                                      2014                2013                2014   
                                                                 (Reviewed)          (Reviewed)           (Audited)  
  Revenue                                                2         783 044             709 768           1 372 605   
  Cost of sales                                                  (658 499)           (592 609)         (1 153 869)   
  Gross profit                                           2         124 545             117 159             218 736   
  Other income                                           3          18 597               9 184              12 983   
  Mining and related expenses                                     (24 473)            (10 615)            (11 476)   
  Administrative expenses                                         (36 165)            (31 089)            (70 112)   
  Operating profit before net finance cost                          82 504              84 639             150 131   
  Net finance cost                                                (24 876)            (20 907)            (47 734)   
  Finance income                                                     3 240                 822               2 834   
  Finance cost                                                    (28 116)            (21 729)            (50 568)   
                                                                                                                     
  Net profit before taxation                                        57 628              63 732             102 397   
  Income taxation expense                                4        (22 373)            (21 402)            (37 975)   
  Net profit after taxation                                         35 255              42 330              64 422   
  Other comprehensive income                                                                                         
  Items that may be reclassified to profit or loss                                                                   
  Foreign currency translation reserve                                  25                   -                 356   
  Total comprehensive income                                        35 280              42 330              64 778   
  Net profit attributable to:                                                                                        
  Owners of the company                                             28 735              37 236              59 529   
  Non-controlling interest                                           6 520               5 094               4 893   
                                                                    35 255              42 330              64 422   
  Total comprehensive income attributable to:                                                                        
  Owners of the company                                             28 760              37 236              59 885   
  Non-controlling interest                                           6 520               5 094               4 893   
                                                                    35 280              42 330              64 778   
  Basic earnings per share (cents)                       5            12.8                19.4                30.3   
  Diluted earnings per share (cents)                     5            12.6                19.4                30.0   
  The accompanying notes are an integral part of these condensed interim consolidated financial statements.                                                                   
                                                                                                                    

Condensed interim consolidated statement of financial position

  R?000                                                      Note              At                 At                  At   
                                                                     30 September           31 March        30 September   
                                                                             2014               2014                2013   
                                                                        (Reviewed)          (Audited)          (Reviewed)  
  Assets                                                                                                                   
  Property, plant and equipment                                 6         799 006            797 155             764 206   
  Intangible assets                                                       702 071            700 688             414 289   
  Investments and loans                                                     5 216              5 152                   -   
  Deferred tax                                                             23 640             17 144              31 164   
  Restricted cash                                                           7 423              7 423               7 423   
  Restricted investments                                                   56 320             47 269              30 009   
  Trade and other receivables                                   7               -             37 610                   -   
  Total non-current assets                                              1 593 676          1 612 441           1 247 091   
  Restricted investments                                                    3 512              3 453                   -   
  Inventory                                                                43 837             35 081              41 428   
  Taxation                                                                    868                  -                   -   
  Trade and other receivables                                   8         227 612            151 336             163 085   
  Cash and cash equivalents                                               113 241             69 556              62 870   
  Total current assets                                                    389 070            259 426             267 383   
  Total assets                                                          1 982 746          1 871 867           1 514 474   
  Equity                                                                                                                   
  Stated capital                                                          692 929            692 929             640 903   
  Share-based payment reserve                                              22 576             18 788              16 828   
  Other reserves                                                           19 240             19 215            (18 751)   
  Retained earnings                                                       162 837            134 102             111 809   
  Total equity attributable to owners of the company                      897 582            865 034             750 789   
  Non-controlling interest                                                 47 609             51 183            (18 091)   
  Total equity                                                            945 191            916 217             732 698   
  Liabilities                                                                                                              
  Borrowings                                                    9         312 020            341 838             203 689   
  Long-term financial liabilities                                             729                604                 275   
  Mine closure and environmental rehabilitation provision      10         234 185            215 181             170 888   
  Provisions                                                               32 106             30 575                   -   
  Deferred income                                               7           5 418                  -                   -   
  Deferred tax                                                  4         115 926             87 357              88 068   
  Total non-current liabilities                                           700 384            675 555             462 920   
  Borrowings                                                    9          72 018             51 713              63 315   
  Mine closure and environmental rehabilitation provision      10               -                  -                 549   
  Trade and other payables                                     11         265 153            227 101             254 608   
  Taxation                                                                      -              1 281                 384   
  Total current liabilities                                               337 171            280 095             318 856   
  Total equity and liabilities                                          1 982 746          1 871 867           1 514 474   
  The accompanying notes are an integral part of these condensed interim consolidated financial statements.                                                                  

  
Condensed interim consolidated statement of changes in equity
for the six months ended 30 September 2014

  R?000                                                                       Stated     Share         Share       Share-       Other     
                                                                             capital    capital       premium       based     reserves    
                                                                                                                  payment                 
                                                                                                                  reserve                 
                                                                                                                                          
  Balance at 31 March 2013                                                         -        192       640 711      12 497     (18 751)    
  Total comprehen-sive income for the period                                       -          -             -           -            -    
  Transfer of share capital and share premium to stated capital(1)           640 903      (192)     (640 711)           -            -    
  Transactions with owners of the company recognised directly in equity                                                                   
  Share-based payments                                                             -          -             -       4 331            -    
  Balance at 30 September 2013                                               640 903          -             -      16 828     (18 751)    
                                                                                                                                          
  Balance at 31 March 2014                                                   692 929          -             -      18 788       19 215    
  Net profit for the period                                                        -          -             -           -            -    
  Other comprehensive income for the period                                        -          -             -           -           25    
  Dividends(2)                                                                     -          -             -           -            -    
  Transactions with owners of the company recognised directly in equity                                                                   
  Share-based payments                                                             -          -             -       3 788            -    
  Balance at 30 September 2014                                               692 929          -             -      22 576       19 240    
  
Condensed interim consolidated statement of changes in equity (continued)
for the six months ended 30 September 2014

  R?000                                                                     Retained        Total         Non-       Total    
                                                                            earnings       equity         con-       equity   
                                                                                         attribu-     trolling                
                                                                                         table to     interest                
                                                                                           owners       (?NCI?)               
                                                                                           of the                             
                                                                                          company                             
  Balance at 31 March 2013                                                    74 573      709 222     (23 185)      686 037   
  Total comprehen-sive income for the period                                  37 236       37 236        5 094       42 330   
  Transfer of share capital and share premium to stated capital(1)                 -            -            -            -   
  Transactions with owners of the company recognised directly in equity                                                       
  Share-based payments                                                             -        4 331            -        4 331   
  Balance at 30 September 2013                                               111 809      750 789     (18 091)      732 698   
                                                                                                                              
  Balance at 31 March 2014                                                   134 102      865 034       51 183      916 217   
  Net profit for the period                                                   28 735       28 735        6 520       35 255   
  Other comprehensive income for the period                                        -           25            -           25   
  Dividends(2)                                                                     -            -     (10 094)     (10 094)   
  Transactions with owners of the company recognised directly in equity                                                       
  Share-based payments                                                             -        3 788            -        3 788   
  Balance at 30 September 2014                                               162 837      897 582       47 609      945 191   
  (1) A special resolution in terms of regulation 31 of the Companies Act Regulations 2011 was adopted at the general meeting 
      held on 28 May 2013, whereby all ordinary shares were converted into ordinary shares with no par value. It was resolved that 
      all 250 million authorised shares and 191.7 million issued ordinary shares with a par value of 0.1 cents be converted into 
      ordinary shares with no par value and that the share capital account and the share premium account of the company be 
      transferred to the stated capital account.                                                                                                                      
  (2) On subsidiary level, Keaton Mining Proprietary Limited declared dividends of R38.8 million (of which R29.1 million has 
      been paid as at 30 September 2014) to its shareholders during the six months.  


  Condensed interim consolidated statement of cash flows
                                                                    Six months ended                Year ended   
  R?000                                                     30 September        30 September          31 March   
                                                                    2014                2013              2014   
                                                               (Reviewed)          (Reviewed)         (Audited)  
  Cash flows from operating activities                           315 644             205 313           416 913   
  Cash flows from investing activities                          (282 899)          (134 016)         (500 123)   
  Cash flows from financing activities                            10 940            (28 041)           133 152   
  Net increase in cash and cash equivalents                       43 685              43 256            49 942   
  Cash and cash equivalents at the beginning of the period        69 556              19 614            19 614   
  Cash and cash equivalents at the end of the period             113 241              62 870            69 556   
  
  
Segmental Report
for the six months ended 30 September 2014
                                                           Revenue                            Operating profit/(loss)                          
                                                                                        before depreciation/amortisation                                      
  R?000                                        Six         Year to         Six            Six       Year to         Six   
                                             months       31 March       months         months     31 March       months  
                                              ended           2014        ended          ended         2014        ended  
                                            30 Sept                     30 Sept        30 Sept                   30 Sept  
                                               2014                        2013           2014                      2013  
  Vanggatfontein Colliery (1) (5)           638 369      1 127 215      584 835        346 431      545 060      268 575  
  Vaalkrantz Colliery (1) (6)               144 675        245 390      124 933         11 060        2 119        8 910  
  Sterkfontein Project                            -              -            -              -            -            -  
  Keaton Energy Holdings Limited (2)         81 571        108 178       58 031         54 935       59 273       42 659  
  Keaton Administrative and Technical                                                
  Services Proprietary Limited (2)           17 290         26 469       12 796          (351)        (537)        1 021  
  Leeuw Braakfontein Project                      -              -            -        (4 050)      (9 420)      (6 416)  
  Koudelager Project                              -              -            -              -            -            -  
  Moabsvelden Project (2)                        88            175            -          (944)        (278)               
  Other segments (2) (3)                        225            450            -       (11 853)      (1 746)          752  
  Total segments                            882 218      1 507 877      780 595        395 228      594 471      315 501  
  Reconciliation to statements of profit                                             
  or loss and other comprehensive income                                             
  and financial position                                                                                                  
  Intersegment, deferred tax and other                                              
  consolidation adjustments (7)             (99 174)      (135 272)     (70 827)       (78 458)     (95 707)     (58 071) 
                                            783 044      1 372 605      709 768        316 770      498 764      257 430  
  Net finance cost (4)                                                                                                  
  Net profit before taxation                                                                                            
  Total assets and liabilities                                                                                          

(1) Revenue represents sales to external customers only.
(2) Revenue represents intersegment sales only.
(3) Includes the subsidiaries Amalahle Exploration Proprietary Limited, Labohlano Trading 46 Proprietary Limited,
    Ausco Finance Proprietary Limited, Ausco Services Proprietary Limited, Focus Coal Investments Proprietary Limited and 
    Xceed Resourced Limited.
(4) Net finance cost is not reported as forming part of each segment profit or loss as these are not measured or
    reported to the chief operating decision maker (?CODM?) in connection with the segment but rather on a collective
    company/group basis.
(5) Coal sales to major customers as a percentage of revenue equals 91% (92% at 31 March 2014 and 92% at 30 September
    2013).
(6) Coal sales to three major customers amounted to 47%, 20% and 14% (31 March 2014: three major customers 36%, 41%
    and 17%. 30 September 2013: coal sales to three major customers 40%, 38% and 13%). 
(7) During the previous financial reporting period the Group changed the information that it presents to the CODM.
    The Group no longer presents deferred tax assets and liabilities per segment, but instead only considers deferred tax
    assets and liabilities on a group wide basis. Accordingly, deferred tax  assets and liabilities are now shown as a
    reconciling item between reportable segments and IFRS reported figures. For the period ending 30 September 2013, the segment
    report has not been restated to reflect this change, as management is of the view that the change in reportable amounts are
    not material.

Segmental Report (continued)
for the six months ended 30 September 2014
                                                                                                 Operating profit/(loss) after           
                                                        Depreciation/amortisation                  depreciation/amortisation                              
  R?000                                              Six       Year to           Six              Six      Year to          Six   
                                                  months      31 March        months           months     31 March       months   
                                                   ended          2014         ended            ended         2014        ended   
                                                 30 Sept                     30 Sept          30 Sept                   30 Sept   
                                                    2014                        2013             2014                      2013   
  Vanggatfontein Colliery (1) (5)               (223 973)     (308 632)     (152 676)         122 458      236 428      115 899   
  Vaalkrantz Colliery (1) (6)                     (9 861)      (39 417)      (19 896)           1 199      (37 298)     (10 986)   
  Sterkfontein Project                                 -             -             -                -            -            -   
  Keaton Energy Holdings Limited (2)                   -             -             -           54 935       59 273       42 659   
  Keaton Administrative and Technical 
  Services Proprietary Limited (2)                  (417)        (584)         (219)             (768)      (1 121)         802   
  Leeuw Braakfontein Project                           -             -             -           (4 050)      (9 420)      (6 416)   
  Koudelager Project                                   -             -             -                -            -            -   
  Moabsvelden Project (2)                              -             -             -             (944)        (278)           -   
  Other segments (2) (3)                             (15)            -             -          (11 868)      (1 746)         752   
  Total segments                                (234 266)     (348 633)     (172 791)         160 962      245 838      142 710   
  Reconciliation to statements of profit 
  or loss and other comprehensive income 
  and financial position                                                                                                          
  Intersegment, deferred tax and other 
  consolidation adjustments (7)                         -             -             -          (78 458)     (95 707)    (58 071)  
                                                 (234 266)     (348 633)     (172 791)          82 504      150 131      84 639   
  Net finance cost (4)                                                                         (24 876)     (47 734)    (20 907)   
  Net profit before taxation                                                                    57 628      102 397      63 732   
  Total assets and liabilities                                                                                                    

Segmental Report (continued)
for the six months ended 30 September 2014
                                                             Segment assets                            Segment liabilities                                 
                                                                                                                                                
  R?000                                             Six         Year to            Six            Six        Year to            Six   
                                                 months        31 March         months         months       31 March         months   
                                                  ended            2014          ended          ended           2014          ended   
                                                30 Sept                        30 Sept        30 Sept                       30 Sept   
                                                   2014                           2013           2014                          2013   
  Vanggatfontein Colliery (1) (5)               969 367         910 519        885 427      1 205 592      1 177 759      1 199 233   
  Vaalkrantz Colliery (1) (6)                   181 535         176 429        232 194        319 156        294 685        270 405   
  Sterkfontein Project                           66 053          65 924         73 752         63 296         60 947         59 159   
  Keaton Energy Holdings Limited (2)          1 020 779         962 794        855 491          4 893          4 450          5 676   
  Keaton Administrative and Technical       
  Services Proprietary Limited (2)               15 542          10 753         11 572         26 926         20 888         19 640   
  Leeuw Braakfontein Project                    334 284         331 212        316 265         89 380         81 156        157 692   
  Koudelager Project                             26 112          25 990         25 548              -              -          6 595   
  Moabsvelden Project (2)                       337 487         294 141              -         71 684         26 812              -   
  Other segments (2) (3)                        330 913         330 819          7 703        111 729        109 421         27 644   
  Total segments                              3 282 072       3 108 581      2 407 952      1 892 656      1 776 118      1 746 044   
  Reconciliation to statements of profit    
  or loss and other comprehensive income    
  and financial position                                
  Intersegment, deferred tax and other     
  consolidation adjustments (7)              (1 299 326)     (1 236 714)      (893 478)      (855 101)      (820 468)      (964 268)   
                                              1 982 746       1 871 867      1 514 474      1 037 555        955 650        781 776   
  Net finance cost (4)                                                                                                                
  Net profit before taxation                                                                                                          
  Total assets and liabilities                1 982 746       1 871 867      1 514 474      1 037 555        955 650        781 776   

Notes to the condensed interim consolidated financial statements

1. Accounting policies
1.1 Basis of accounting
The condensed interim consolidated financial statements for the six months ended 30 September 2014 are prepared in
accordance with International Financial Reporting Standard, (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. They should be read in conjunction with
the audited financial statements for the year ended 31 March 2014, which have been prepared in accordance with
International Financial Reporting Standards (?IFRS?) as issued by the International Accounting Standards Board. The accounting
policies are consistent with those described and applied in the consolidated audited financial statements.
2. Revenue and gross profit
Vanggatfontein delivered 1 196 133t of washed 2- and 4-Seam thermal coal to Eskom during the six months, a pleasing 5%
improvement over the previous corresponding production record (30 September 2013: 1 142 702t and for the year ended 31
March 2014: 2 192 519t). In addition, 5-Seam metallurgical coal sales increased 18% over the comparable period to 65
006t (30 September 2013: 55 154t and for the year ended 31 March 2014: 97 635t). No toll washing took place during the
period (30 September 2013:145 785t and for the year ended 31 March 2014: 145 785t) as all capacity was utilised for own
production. B-grade product sold increased to 22 029t (30 September 2013: nil and for the year ended 31 March 2014: 10
328t).
During the six months Vanggatfontein generated revenue of R465.2 million from coal sales (30  September 2013: R400.1
million and for the year ended 31 March 2014: R779.3 million) and transport revenue of R173.2 million (30 September 2013:
R171.8 million and for the year ended 31 March 2014: R336.8 million).
Production of domestic and export anthracite at Vaalkrantz increased significantly to 191 898t versus 154 145t for the
comparable period (and for the year ended 31 March 2014: 303 837t). This 24% growth highlights the success of the
company?s drive to not only maintain but grow production at this important source of high quality anthracite. During the six
months Vaalkrantz generated revenue of R144.7 million (30 September 2013: R124.9 million and for the year ended 31 March
2014: R245.4 million).
The group recorded a gross profit of R124.5 million or 16% of sales for the six months ended 30 September 2014 (30
September 2013: gross profit of R117.2 million or 17% of sales and for the year ended 31 March 2014: gross profit of R218.7
million or 16% of sales). 
3. Other income
The increase for the period mainly relates to a R9.2 million credit on the settlement of the DRA Mineral Projects
Proprietary Limited (?DRA?) liability previously included under Trade and other payables. Refer to note 11 for additional
information.
4. Income taxation expense
The income taxation expense of R22.4 million for the six months ended 30 September 2014 is mainly attributable to the
utilisation of unredeemed capital expenditure by Keaton Mining Proprietary Limited, as a result of the continued
improved operational performance at Vanggatfontein.  The deferred tax liability in the statement of financial position
accordingly increased when compared to the liability at 31 March 2014.
5. Earnings and net asset value per share
The calculation of basic and diluted earnings per share is based on a profit for the period ended 30 September 2014
(attributable to owners of the company) of R28.7 million (30 September 2013: profit of R37.2 million and the 
year ended 31 March 2014: profit of R59.5 million). The weighted average number of shares used in calculating basic
earnings per share for the period was 224.3 million (30 September 2013: 191.7 million and the year ended 31 March 2014:
196.4 million). The weighted average number of shares used in calculating diluted earnings per share for the period was
228.4 million (30 September 2013: 191.7 million and the year ended 31 March 2014: 198.5 million).

                                                                              Six months ended               Year ended   
                                                                     30 September        30 September          31 March   
                                                                             2014                2013              2014   
                                                                        (Reviewed)          (Reviewed)         (Audited)  
  Total earnings per ordinary share (cents)                                                                               
  Basic earnings                                                             12.8                19.4              30.3   
  Diluted earnings                                                           12.6                19.4              30.0   
  Headline earnings                                                          13.7                19.4              30.3   
  Diluted headline earnings                                                  13.4                19.4              30.0   
  Reconciliation of headline earnings (net of tax and NCI):                                                               
  R?000                                                                                                                   
  Net profit for the period attributable to owners of the company          28 735              37 236            59 529   
  Loss on disposal of property, plant and equipment                         1 918                   -                24   
  Loss on disposal of intangible asset                                          -                   -                27   
  Total headline earnings                                                  30 653              37 236            59 580   
  Net asset value per share                                                                                               
  Number of shares in issue (millions)                                      224.3               191.7             224.3   
  Net asset value per share (cents)                                           421                 382               408   

6. Property, plant and equipment
The net increase of R1.9 million from 31 March 2014 is mainly attributable to the following:
-  Capital investments at Vanggatfontein of R230.2 million (attributable mainly to mine development of R228.2
   million). The rehabilitation assets at Vanggatfontein also increased by R14 million, relating to the increase in the
   rehabilitation liability. Refer to note 10.
-  Capital investments at Vaalkrantz of R9 million.
-  Other capital investments of R3.6 million.
These were offset by depreciation charges of R251.3 million and disposals of R3.6 million.
7. Trade and other receivables and deferred income
As reported in our 31 March 2014 Integrated Annual Report the non-current trade and other receivable of R37.6 million
represented the discount to the fair value of the shares issued to Plusbay Limited, a wholly owned subsidiary of Gunvor
Group Limited, (as part of the acquisition of Xceed Resources Limited) which was  accounted for as a share-based
payment. The discount was recognised as an asset as it then related to future financing to be obtained in the form of a USD4
million prepayment for coal. 
During the current period, the prepayment of USD4 million (R43 million) was received, with the difference of R5.4
million recognised as deferred income, relating to the coal to be delivered to Gunvor, once production at the Moabsvelden
project commences.
8. Trade and other receivables 
As disclosed in note 40 of the 31 March 2014 Integrated Annual Report, the company entered into a share purchase
agreement with JPI Leeuw and Associates Proprietary Limited (JPI) to acquire 18% of the equity interest held by JPI in Leeuw
Mining and Exploration Proprietary Limited for a purchase consideration of R26 million.
As at 30 September 2014 the acquisition of this equity interest has not yet become effective and as such the purchase
consideration paid to date of R14.8 million is accounted for as a prepayment.
9. Borrowings 
Total borrowings decreased by R9.5 million, mainly as a result of debt repayments to the value of R32.2 million (R24.6
million relates to the Investec Bank Limited loan). The decrease was offset by finance costs of R18.7 million and a
foreign exchange loss of R4 million included in administrative expenses in profit or loss.
10. Mine closure and environmental rehabilitation provision
The rehabilitation liability at Vanggatfontein increased by R17.9 million during the period. The increase is mainly
attributable to the additional ground disturbances at Pit 3 and Pit 4 as well as the unwinding of interest on previously
recognised rehabilitation liabilities of R7.7 million. These increases were offset by rehabilitation work completed at
Pit 1 of R3.8 million. The rehabilitation liability at Vaalkrantz increased by R1.1 million during the period, due to the
unwinding of interest on previously recognised rehabilitation liabilities.
11. Trade and other payables
Settlement between Keaton Mining Proprietary Limited (?Keaton?) and DRA Mineral Projects Proprietary Limited (?DRA?):
As reported in our 31 March 2014 Integrated Annual Report, trade and other payables included an amount of R33 million
owing to DRA. On 9 September 2014, Keaton reached an agreement (the ?Settlement Agreement?) with DRA for the settlement
of all claims and disputes, being both historic and future liabilities arising out of the construction and commissioning
of the Vanggatfontein Coal Processing Plant - Phase Two. As per the Settlement Agreement an amount of R23 million was
paid to DRA.
Keaton Mining Proprietary Limited (?Keaton?) vs Megacube Mining Proprietary Limited (?Megacube?):
Included in trade and other payables is an amounts of R42.5 million owing to Megacube as reported in the 31 March 2014
Integrated Annual Report. This amount is still under legal dispute and there have been no significant changes to the
status as reported in our 31 March 2014 Integrated Annual Report.
12. Commitments and contingencies
The group?s capital commitments are:
                                                                                          At           At              At   
                                                                                30 September     31 March    30 September   
                                                                                        2014         2014            2013   
  R?000                                                                            (Reviewed)    (Audited)      (Reviewed)  
  Exploration and mine development expenditure authorised and contracted              34 902        1 548           4 392   
  Exploration and mine development expenditure authorised but not contracted          28 512       61 361          60 005   
                                                                                      63 414       62 909          64 397   
All contracted amounts will be funded both through existing funding mechanisms within the group and cash generated 
from operations.                                                
For a detailed disclosure on all contingent liabilities refer to Keaton Energy?s Integrated Annual Report for the year
ended 31 March 2014, available on the group?s website at www.keatonenergy.co.za
13. Financial risk management activities
Fair value determination
The following table presents the group?s assets and (liabilities) that are measured at fair value by level within the
fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets;
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset, either directly or
indirectly (that is, as prices) or indirectly (that is derived from prices); and
Level 3: Inputs for the asset that are not based on observable market data, (that is unobservable inputs).

 R?000                                           At           At              At   
                                       30 September     31 March    30 September   
                                               2014         2014            2013   
                                          (Reviewed)    (Audited)      (Reviewed)  
 Fair value through profit or loss                                                 
 Level 1(1)                                  56 320       47 269          30 009         
 Level 2(2)                                   (729)         (604)           (275)          
 Level 3                                         -             -               -               

(1) Level 1 financial assets relate to restricted investments which serve as collateral mainly for environmental
    guarantees provided to the DMR. Contributions are mainly invested in Momentum, Stanlib, Sanlam and the Nedbank Bettabeta
    Green Exchange Traded Fund (?Green ETF?). These underlying funds invest in equity instruments and money market investments,
    both local and foreign. The BGreen ETF index consists of a selection of stocks from the top 100 largest South African
    companies listed on the JSE. These investments are fair value through profit or loss financial assets and recognised at
    fair value.
(2) Level 2 financial liabilities relate to an IDC equity linked call option. The option under consideration was
    valued by independent professional valuers, using a finite difference scheme for valuation. Assumptions used to value the
    option includes a probability linked to the likely IDC preference share redemption period, the spot share price of the
    company on date of valuation, a term structure with the Johannesburg Interbank Agree Rate (JIBAR), Forward Rate Agreement
    (FRA) and swap data as inputs and volatility.
14. Significant events after 30 September 2014 up to the date of this report
As reported in notes 31 and 40 of the 31 March 2014 Integrated Annual Report, the external shareholder in one of the
company?s subsidiaries exercised its put option. In addition to this on 2 May 2014 the company exercised its call option
in terms of the shareholders agreement relating to two of the company?s exploration subsidiaries. At the date of these
interim results the company is still in process to determine the fair value of these shares and evaluating the necessary
statutory and regulatory permissions required to give effect to the put option.
15. Dividends
No dividends have been declared nor are any proposed for the period ended 30 September 2014 (30 September 2013: Rnil
and the year ended 31 March 2014: Rnil).
16. Review report
These condensed consolidated financial statements for the period ended 30 September 2014 have been reviewed by KPMG,
who expressed an unmodified review conclusion. A copy of the auditor?s review report is available for inspection at the
company?s registered office together with the financial statements identified in the auditor?s report.

Registered Office
Ground Floor, Eland House, The Braes, 3 Eaton Avenue, Bryanston, South Africa 
Postnet Suite 464, Private Bag X51, Bryanston, 2021
Tel:     +27 11 317 1700
Telefax: +27 11 463 4759
E-mail:  info@keatonenergy.co.za

Directors
Non-executive
Dr JD Salter (Chairman)* 
LX Mtumtum (Lead independent director)
P Pouroulis** 
OP Sadler (Independent)
APE Sedibe
MT Witteveen***
GH Kemp (Independent)
JHM Schurink***
Executive
AB Glad (Chief Executive Officer)
J Rossouw (Chief Financial Officer)
*British **South African/Cypriot ***Dutch

Company Secretary
Anelia Schutte-Bouwer

Sponsor
Investec Bank Limited
100 Grayston Drive, Sandown, Sandton, 2196, South Africa
PO Box 785700, Sandton, 2146, South Africa

Transfer Secretaries
Computershare Investor Services South Africa Proprietary Limited 
Ground Floor, 70 Marshall Street, Johannesburg, South Africa 
PO Box 61051, Marshalltown, 2107

Auditors
KPMG Inc. 1226 Francis Baard Street, Hatfield, Pretoria

www.keatonenergy.co.za

Date: 19/11/2014 08:00:00 Supplied by www.sharenet.co.za                     
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