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African Oxygen Limited - Condensed Consolidated Interim Financial Statements For The Six Months Ended 30 June 2015

Release Date: 27/08/2015 13:35:00      Code(s): AFX     
for the Six Months Ended 30 June 2015

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 2015

- Revenue: R2.67 billion (6.5%)
- EBITDA: R486 million  (10%)
- Headline earnings per share: 37.4 cents (24.4%)

Performance highlights
Positive effects of the turnaround are already evident with Afrox growing EBITDA by 10% or R46 million to R486 million in the first 6 months of
2015. This growth was achieved against a background of significant headwinds from the South African economy which has impacted volumes. The
EBITDA margin before restructuring costs increased to 18.1% (2014: 15.4%). An additional restructuring charge of R126 million was provided in the
current year. Even though the underlying business performance improved, the R126 million provision resulted in headline earnings per share
reducing by 24.4% to 37.4 cents (2014: 49.5 cents) and earnings per share reducing by 33.7% to 35.0 cents (2014: 52.8 cents).

Revenue declined by 6.5% to R2.679 billion (2014: R2.866 billion) mainly due to the effect of lower LPG prices. Revenue, excluding the effects of
reduced LPG pricing in South Africa was marginally below the prior year. Capital expenditure of R149 million (2014: R209 million) has reduced,
thus aligning capital requirements with the prevailing economic environment. The decision to invest in a production campus in Durban was re-
evaluated resulting in a decision to secure suitable rented premises and dispose of the property instead. This will result in a release of R205
million of capital.

Lower levels of capital expenditure, focussed trade working capital management, optimisation of fixed assets and under- lying EBITDA growth
resulted in Afrox remaining strongly cash generative. Net debt reduced by R323 million to R354 million  (2014: R677 million).
Return On Capital Employed (ROCE) improved to 16.6% (2014: 12.8%) reflecting the focus that the restructure has on both costs and asset
utilisation.

Business review

The LPG business performed well with volumes up by 0.7%. This was in the main due to the divergence of LPG selling prices and the cost of
electricity combined with the unreliability of electricity supply leading to increased LPG usage for energy requirements. Lower LPG cost prices
resulted in a lower contribution to the total Group revenue at 32.5% (2014: 36.5%).

Revenue from the Atmospheric Gases business increased by 5.2% to R946 million (2014: R899 million) mainly as a result of the performance in
Afrox's market leading CO2 business and Healthcare products. However underlying demand for gaseous pipeline sales, bulk and compressed gases was
below the prior year and was impacted by the continued slowdown in the South African economy.

Hard goods revenue reduced by 7.1% to R425 million (2014: R457 million) driven by lower volumes from the adverse business environment. GPADE
declined by 14.7% to R119 million (2014: R140 million). The supply chain is being reviewed as part of the turnaround to reduce costs and increase
flexibility.

The Emerging Africa business revenue decreased 6.0% to R437 million (2014: R465 million) due to a combination of the slowdown in the commodity
markets, a shortage of LPG, and the closure of a business. This important business segment receives increasing support from the Afrox Executive
team to: strengthen governance, improve customer service, and deliver value.

Management is intensifying its focus on workplace and distribution safety across the Group with particular emphasis on passenger car avoidable
accidents.

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

Turnaround

For long-term success and the realisation of strategic goals Afrox can no longer only rely on customer expansion and further growth in current
markets. With the turnaround launched in 2014, Afrox will; reduce its personnel costs by more than 15%, streamline the supply chain, review
channels to market, leverage channels such as e-commerce to increase ease of doing business for our customers and reduce the cost to serve.

Board of directors

The following changes have taken place since the 2014 year-end report: following the resignation of Afrox Chairman Michael Huggon, as announced
on SENS on 21 May 2015, Bernd Eulitz was elected to the Board at the May 2015 AGM  and assumed the role of Chairman from 1 June 2015; Dorian
Devers was appointed Chief Financial Officer and executive director with effect from 28 May 2015. Schalk Venter was appointed executive director
and Managing Director effective from 18 May 2015.

David Lawrence and Sipho Maseko resigned as independent non-executive directors, with effect from 28 May 2015.

Dividend

It is Afrox's policy to consider dividends twice annually. The Board of directors have declared a gross interim cash dividend of  18.0 cents per
share for the six months ended 30 June 2015 (2014: 24.0 cents). The dividend is covered two times by headline earnings per share.

Outlook

Challenging economic conditions for the foreseeable future, particularly in the key manufacturing, mining and steel production sectors of the
South African economy will require increased focus on cost containment, which forms an integral part of the turnaround process. Although overall
trading conditions remain tough, Afrox's underlying business remains strong and cash generative.

Notice of interim dividend declaration number 177 and salient features

Notice is hereby given that a gross interim cash dividend of 18 cents per ordinary share, being the interim dividend for the six month period
ended 30 June 2015, has been declared payable to all shareholders of African Oxygen Limited recorded in the register on Friday, 9 October 2015.

The salient dates for the declaration and payment of the interim dividend are as follows:

Last day to trade ordinary shares 'cum' dividend  Friday, 2 October 2015
Ordinary shares trade 'ex' the dividend           Monday, 5 October 2015
Record date                                       Friday, 9 October 2015
Payment date                                      Monday, 12 October 2015

Share certificates may not be dematerialised or rematerialised between Monday, 5 October 2015 and Friday, 9 October 2015,  both days inclusive.
The local net dividend amount is 15.3 cents (2014: 20.4 cents) per share for shareholders liable to pay the new Dividend Tax and 18.0 cents
(2014: 24 cents) per share for shareholders exempt from the new Dividends Tax

In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17(c) of the JSE Listings Requirements 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;
-        Afrox currently has 308 567 602 ordinary shares in issue; and
-        Afrox's income tax reference number is 9350042710.

By order of the Board

Cheryl Singh              27 August 2015
Company Secretary         Johannesburg

Condensed consolidated interim income statement
                                                                                            30 June 2015  30 June 2014   31 Dec 2014
                                                                                                6 months      6 months     12 months
R'million                                                                                       Reviewed      Reviewed       Audited
Revenue                                                                                            2 679         2 866         5 834
Operating expenses excluding restructuring costs                                                  (2 193)       (2 424)       (5 016)
Earnings before interest, taxation, depreciation and amortisation (EBITDA)
excluding restructuring costs                                                                        486           442           818
Depreciation and amortisation                                                                       (190)         (195)         (381)
Impairment of tangible assets                                                                        (11)            -           (35)
Impairment of intangible assets                                                                        -             -           (17)
Earnings before interest and taxation (EBIT)
excluding restructuring costs                                                                        285           247           385
Restructuring costs                                                                                 (126)            -          (185)
Earnings before interest and taxation (EBIT)                                                         159           247           200
Net finance expense                                                                                    -            (5)          (12)
Income from associate net of taxation expense                                                          -             1             1
Profit before taxation                                                                               159           243           189
Taxation                                                                                             (44)          (74)          (93)
Profit for the period                                                                                115           169            96
Attributable to:
Owners of the company                                                                                108           163            83
Non-controlling interests                                                                              7             6            13
Profit for the period                                                                                115           169            96
Earnings per share -cents
Basic and diluted earnings per ordinary share - cents                                               35.0          52.8          26.8

Condensed consolidated interim statement of comprehensive income
                                                                                            30 June 2015  30 June 2014   31 Dec 2014
                                                                                                6 months      6 months     12 months
R'million                                                                                       Reviewed      Reviewed       Audited
Profit for the period                                                                                115           169            96
Other comprehensive income after taxation                                                             31           (88)         (119)
Items that are or maybe reclassified                                                                  12           (26)          (41)
Translation differences on foreign operations                                                          9           (20)          (27)
Translation differences relating to non-controlling interests                                          4            (4)          (10)
Changes in fair value of cash flow hedges                                                             (1)           (2)           (4)
Items that will never be reclassified to profit or loss                                               19           (62)          (78)
Actuarial gains/(losses) on defined-benefit funds                                                     26           (86)         (109)
Deferred taxation relating to actuarial (gains)/losses                                                (7)           24            31


Total comprehensive income for the period                                                            146            81           (23)
Total comprehensive income attributable to:
Owners of the Company                                                                                135            79           (26)
Non-controlling interests                                                                             11             2             3
                                                                                                     146            81           (23)

Segmental report
                                                                                            30 June 2015  30 June 2014   31 Dec 2014
                                                                                                6 months      6 months     12 months
R'million                                                                                       Reviewed      Reviewed       Audited
Revenue                                                                                            2 679         2 866         5 834
Atmospheric Gases                                                                                    946           899         1 776
LPG                                                                                                  871         1 045         2 135
Hard Goods                                                                                           425           457           935
Rest of Africa                                                                                       437           465           988
Gross profit after distribution (GPADE),
before restructuring                                                                                 816           777         1 559
Atmospheric Gases                                                                                    376           327           663
LPG                                                                                                  171           153           313
Hard Goods                                                                                           119           140           229
Rest of Africa                                                                                       150           157           354
Reconciliation of GPADE to EBIT
GPADE for business segments before restructuring costs                                               816           777         1 559
Other operating expenses                                                                            (520)         (530)       (1 122)
Impairments                                                                                          (11)            -           (52)
Restructuring costs                                                                                 (126)            -          (185)
Earnings before interest and taxation (EBIT)                                                         159           247           200

Condensed consolidated interim statement of financial position
                                                                                      Note  30 June 2015  30 June 2014   31 Dec 2014
                                                                                                6 months      6 months     12 months
R'million                                                                                       Reviewed      Reviewed       Audited
ASSETS
Property, plant and equipment                                                            4         3 007         3 058         3 166
Retirement benefits assets                                                                           513           483           475
Deferred taxation assets                                                                              17            18            15
Lease receivables                                                                                     93           110           104
Other non-current assets                                                                              53            83            59
Non-current assets                                                                                 3 683         3 752         3 819
Inventories                                                                                          584           834           634
Trade and other receivables                                                                        1 017           997           879
Lease receivables                                                                                     22            17            19
Taxation receivable                                                                                   35            41            32
Cash and cash equivalents                                                                            666           331           526
Assets held-for-sale                                                                     7           112             -             -
Current assets                                                                                     2 436         2 220         2 090
Total assets                                                                                       6 119         5 972         5 909
EQUITY AND LIABILITIES
Equity holders of the parent company                                                               3 149         3 231         3 019
Non-controlling interests                                                                             35            38            28
Total equity                                                                                       3 184         3 269         3 047
Long-term borrowings                                                                               1 000         1 000         1 000
Deferred taxation liability                                                                          517           546           512
Non-current liabilities                                                                            1 517         1 546         1 512
Provisions                                                                                           247             -           197
Trade, other payables and financial liabilities                                                    1 125         1 123         1 080
Taxation payable                                                                                      26            26            43
Derivative financial instruments                                                                       -             -             1
Bank overdrafts                                                                                       20             8            29
Current liabilities                                                                                1 418         1 157         1 350
Total equity and liabilities                                                                       6 119         5 972         5 909

Condensed consolidated interim statement of cash flows
                                                                                      Note  30 June 2015  30 June 2014   31 Dec 2014
                                                                                                6 months      6 months     12 months
R'million                                                                                       Reviewed      Reviewed       Audited
Earnings before interest and taxation (EBIT)                                                         159           247           200
Adjustments for:
Depreciation, amortisation and impairments                                                           201           195           433
Increase in costs relating to the restructuring                                                      126             -           185
Other non-cash movements                                                                              31            18            32
Operating cash flows before working capital adjustments                                              517           460           850
Working capital adjustments                                                                         (121)          (84)          136
Cash generated from operations                                                                       396           376           986
Vested shares purchased on behalf of employees                                                         -            (2)           (2)
Net finance expenses                                                                                 (41)          (49)         (101)
Taxation paid                                                                                        (66)          (90)         (113)
Dividends received                                                                                     -             -             1
Cash available from operating activities                                                             289           235           771
Dividends paid to owners of the parent                                                                 -           (62)         (136)
Dividends to non-controlling interests                                                                (4)           (1)          (12)
Net cash inflow from operating activities                                                            285           172           623
Additions to property, plant and equipment                                                          (135)         (209)         (514)
Intangible assets acquired                                                                            (8)            -           (13)
Other investing activities                                                                            18             8            66
Net cash outflow from investing activities                                                          (125)         (201)         (461)
Borrowings repaid                                                                                      -            (3)           (3)
Forfeited shares sold                                                                                  -             1             1
Incentive share scheme shares purchased
on behalf of employees                                                                               (11)            -           (17)
Net cash outflow from financing activities                                                           (11)           (2)          (19)
Net increase/(decrease) in cash and cash equivalents                                                 149           (31)          143
Cash and cash equivalents at the beginning of the period                                             497           354           354
Cash and cash equivalents at the end of the period                                                   646           323           497

Condensed consolidated interim statement of changes in equity
                                                               Attributable to the owners of the Company
                                                               Share     Incentive      FCTR and    Actuarial  Retained         Non-   Total
                                                         capital and        scheme       hedging       gains/  earnings  controlling  equity
                                                               Share     share and      reserves     (losses)              interests
                                                             premium   share-based
                                                                           payment
R'million                                                                 reserves
Balance at 1 January 2014                                        552            13           (37)         367     2 307           37   3 239
Total comprehensive income                                         -             -           (22)         (62)      163            2      81
Profit for the period                                              -             -             -            -       163            6     169
Other comprehensive income,
net of taxation                                                    -             -           (22)         (62)        -           (4)    (88)
Net share scheme transaction                                       -             1             -            -         -            -       1
Share-based payments, net of tax                                   -            11             -            -         -            -      11
Dividends                                                          -             -             -            -       (62)          (1)    (63)
Balance at 30 June 2014                                          552            25           (59)         305     2 408           38   3 269
Balance at 1 January 2014                                        552            13           (37)         367     2 307           37   3 239
Total comprehensive income                                         -             -           (31)         (78)       83            3     (23)
Profit for the period                                              -             -             -            -        83           13      96
Other comprehensive income,  net of taxation                       -             -           (31)         (78)        -          (10)   (119)
Shares purchased on behalf of employees                            -           (17)            -            -         -            -     (17)
Share-based payments, net of tax                                   -            (4)            -            -         -            -      (4)
Dividends paid                                                     -             -             -            -      (136)         (12)   (148)
Balance at 31 December 2014                                      552            (8)          (68)         289     2 254           28   3 047
Balance at 1 January 2015                                        552            (8)          (68)         289     2 254           28   3 047
Total comprehensive income                                         -             -             8           19       108           11     146
Profit for the period                                              -             -             -            -       108            7     115
Other comprehensive income,  net of taxation                       -             -             8           19         -            4      31
Shares purchased on behalf of employees                            -           (11)            -            -         -            -     (11)
Net share scheme transaction                                       -             6             -            -         -            -       6
Dividends paid                                                     -             -             -            -         -           (4)     (4)
Balance at 30 June 2015                                          552           (13)          (60)         308     2 362           35   3 184

Statistics and ratios
                                                        30 June 2015  30 June 2014   31 Dec 2014
                                                            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)                                     18.0          24.0          24.0
Final                                                              -             -             -
Interim                                                         18.0          24.0          24.0
Ratios
EBITDA margin (%)                                               18.1          15.4          14.0
Interest cover on EBITDA (times)                                   -          80.7          33.6
Effective taxation rate (%)                                     27.7          30.3          49.1
Gearing (%)                                                      8.6          15.0          12.3
Dividend cover on headline earnings (times)                      2.1           2.0           1.5

Notes to the condensed consolidated interim financial statements
African Oxygen Limited ('Afrox' or the 'Company') is a South African registered company. The condensed consolidated interim 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 and
trading trust.

1. Statement of compliance
The condensed consolidated interim financial statements 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. The  accounting policies applied in
the preparation of these condensed consolidated interim financial statements are in terms of International Financial Reporting Standards 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 2014 were prepared on
the going-concern basis and are available for inspection 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 2014, except for new standards that became effective 1 January 2015, 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 are measured at fair value through profit or loss
- Retirement benefit assets and liabilities are measured at the fair value of the plan assets less the present value of the defined benefit
  obligation
- Share-based payment awards are measured at fair value. The fair value of the equity instruments granted is estimated using and industry
  accepted technique
- Non-current Assets held for sale are measured at the lower of carrying value and fair value less costs of disposal

This report was compiled under the supervision of Matthias Vogt, Head of Finance.

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 2015:
-  Defined benefit plans: Employee Contributions (Amendments to IAS 19);
-  Annual Improvements to IFRSs 2010-2012 Cycle - various standards;
-  Annual Improvements to IFRSs 2011-2013 Cycle - various standards.

The adoption 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 2015  30 June 2014  31 Dec 2014
                                                                     6 months      6 months    12 months
R'million                                                            Reviewed      Reviewed      Audited
Opening carrying value                                                  3 166         3 034        3 034
Additions, net of transfers from assets under construction                149           216          533
Transfer to assets held-for-sale                                         (112)            -            -
Impairments                                                               (11)            -          (35)
Disposals                                                                  (1)           (5)         (12)
Depreciation                                                             (176)         (178)        (349)
Translation differences                                                    (8)           (9)          (5)
Closing carrying value                                                  3 007         3 058        3 166

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         Loans  Liabilities   Other     Total   Fair
                                                                        value           and           at  assets  carrying  value
                                                                      through   receivables    amortised            amount
                                                                       profit                       cost
R'million                                                             or loss
30 June 2015
Financial assets not measured  at fair value
Trade and other receivables                                                 -         1 013            -       -     1 013  1 013
Cash and cash equivalents                                                   -           666            -       -       666    666
Finance lease receivables                                                   -             -            -     115       115    115
Total financial assets                                                      -         1 679            -     115     1 794  1 794
Financial liabilities not measured  at fair value
Borrowings                                                                  -             -        1 000       -     1 000    913
Trade, other payables and financial liabilities                             -             -          965       -       965    965
Bank overdrafts                                                             -             -           20       -        20     20
Total financial liabilities                                                 -             -        1 985       -     1 985  1 898
31 December 2014
Financial assets not measured  at fair value
Trade and other receivables                                                 -           878            -       -       878    878
Cash and cash equivalents                                                   -           526            -       -       526    526
Finance lease receivables                                                   -             -            -     123       123    123
Total financial assets                                                      -         1 404            -     123     1 527  1 527
Financial liabilities measured at fair value
Derivative financial instruments                                            1             -            -       -         1      1
Financial liabilities not measured  at fair value
Borrowings                                                                  -             -        1 000       -     1 000    959
Trade, other payables and financial liabilities                             -             -          925       -       925    925
Bank overdrafts                                                             -             -           29       -        29     29
Total financial liabilities                                                 1             -        1 954       -     1 955  1 914
30 June 2014
Financial assets not measured at fair value
Trade and other receivables                                                 -           988            -       -       988    988
Cash and cash equivalents                                                   -           331            -       -       331    331
Finance lease receivables                                                   -             -            -     127       127    127
Total financial assets                                                      -         1 319            -     127     1 446  1 446
Financial liabilities not measured  at fair value
Borrowings                                                                  -             -        1 000       -     1 000    914
Trade, other payables and financial liabilities                             -             -          957       -       957    957
Bank overdrafts                                                             -             -            8       -         8      8
Total financial liabilities                                                 -             -        1 965       -     1 965  1 879

Reconciliation to the condensed consolidated interim statement of financial position:

                                                                 30 June 2015  30 June 2014  31 Dec 2014
                                                                     6 months      6 months    12 months
R'million                                                            Reviewed      Reviewed      Audited
Trade and other receivables                                             1 017           997          879
Prepayments                                                                (3)           (8)           -
Deposits                                                                   (1)           (1)          (1)
Financial Instruments                                                   1 013           988          878
Trade, other payables and other financial liabilities                   1 125         1 123        1 080
Employee benefits including leave pay, bonuses and  other costs           (95)          (98)        (108)
Deferred rentals                                                          (16)          (28)         (18)
Value added taxation                                                      (49)          (40)         (29)
Financial Instruments                                                     965           957          925

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 2015
Financial assets measured at fair value
Derivative financial instruments               -        -        -      -
31 December 2014
Financial assets measured at fair value
Derivative financial instruments               -        1        -      1
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 June 2015.

6. Earnings and headline earnings per share
Headline earnings per share are calculated on headline earnings of R115 million (2014: R153 million) and a weighted average number of ordinary
shares of 308 567 602 (2014: 308 567 602) in issue during the period.

Reconciliation between earnings and headline earnings

R'million                                            30 June 2015  30 June 2014  31 Dec 2014
                                                         6 months      6 months    12 months
                                                         Reviewed      Reviewed      Audited
Profit for the period                                         108           163           83
Adjusted for the effects of:
Profit on disposal of property, plant and equipment            (1)          (13)         (19)
Impairment of goodwill in subsidiaries                          -             -           17
Impairment of property, plant and equipment                    11             -           35
                                                              118           150          116
Taxation                                                       (3)            3           (5)
Headline earnings                                             115           153          111
Basic and diluted earnings per share - cents                 35.0          52.8         26.8
Headline earnings per share - cents                          37.4          49.5         36.2

7. Assets held-for-sale
A decision was taken to dispose of the Group's recently acquired land, situated in Cornubia, Durban. This is in line with the current
restructuring initiatives. A suitable alternative rented premises was procured that will enable the Group to accommodate the Durban operations on
one site. The process to dispose of the land will be piecemeal and is expected to be completed within 18 months.

R'million                                            30 June 2015  30 June 2014  31 Dec 2014
                                                         6 months      6 months    12 months
                                                         Reviewed      Reviewed      Audited
Property, plant and equipment                                 123             -            -
Impairment of property, plant and equipment                   (11)            -            -
Total net assets held for sale                                112             -            -

8. 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.

9. 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.

No revenue has been accounted for in terms of the contract since June 2012. The disputed revenue not recorded amounts to approximately R113
million. The steel company concerned has tabled that it has overpaid in terms of the contract by R184 million. No provision has been made against
this counter claim.

10. Subsequent events
Other than for the continuing impact of the adverse trading conditions, the directors are not aware of any material matter or circumstance
arising between 30 June 2015 and the date of this report on which comment is required.

11. Independent review by the auditors
These condensed consolidated interim financial statements for the six months ended 30 June 2015 have been reviewed by the Company's auditor, KPMG
Inc. In their review report dated 27 August 2015, 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 condensed consolidated interim financial statements.

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: S Venter (Managing Director), DKT Devers** (Financial Director), BH Eulitz* (Chairman), M von Plotho*, Dr KDK Mokhele, CF Wells** RJN
Gearing**, NVL Qangule, GJ Strauss * German ** British

Company Secretary: Cheryl Singh

Auditors: KPMG Inc.

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

27 August 2015

Date: 27/08/2015 01:35:00 Supplied by www.sharenet.co.za                     
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