28 February 2014
REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2013
Continental Coal Limited ("Continental" or "the Group") is pleased to provide
its operations and financial report for the half-year ended 31 December 2013.
Post 31 December 2013, of major significance to Continental and its
shareholders is the recapitalisation of the Company with an initial $5 million
bridge funding being received and larger recapitalisation plans well advanced,
as previously announced.
Continental has made key payments to current creditors and negotiated a 3 month
standstill period to recapitalize the Group and restructure its financial
arrangements.
Importantly the Group will focus on, and ensure, stability at an operational
level with the Group's current mining operations whilst saving significant
costs at the corporate level. As part of the restructure process, Continental
will look to strengthen its BEE credentials in South Africa and generate
additional synergies with key strategic partners including Eskom, Transnet and
RBCT to ensure a significant growth profile moving forward.
The reconstituted Board of Directors have complete faith in the assets and
operational management of the Company, and are optimistic that a range of
strategic and financing opportunities will be advanced so as to stabilise the
Group's balance sheet and focus on significant growth following completion of a
proposed rights issue.
The reconstituted Board of Directors has received interest from a number of
globally recognised energy investors/traders to participate in the Company
going forward, and terms are currently being negotiated.
As at the date of this report Continental's securities on both the ASX and AIM
markets continue to be suspended. The reconstituted Board of Directors will
consider a decision on seeking to lift the suspension of the shares pending the
provision of further clarification of its financial position to the market.
Please find attached extracts from the Company's Half Year Report as follows:
* Consolidated Statement of Profit or Loss and Other Comprehensive Income;
* Consolidated Statement of Financial Position; and
* Consolidated Statement of Cash Flows.
A copy of the full Half Year Report is available on the Company's website.
For and behalf of the Board
Dr Paul D'Sylva
Interim Executive Chairman
Results for Announcement to Market
SUMMARY RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2013
The following is a summary of the financial results for the period ended 31
December 2013 (previous corresponding period 31 December 2012). Unless
otherwise stated all figures are provided in AUD.
Increase/ Six months ended Six months ended
(Decrease) 31 December 2013 31 December 2012
% $'000 $'000
Revenue and other income 28% 39,900 31,210
from ordinary activities
Profit/(Loss) before 225% (3,688) (1,134)
Interest and Tax (EBIT)
from ordinary activities
Income tax benefit/ (130%) 194 (638)
(expense)
Profit /(Loss) for the 146% (15,788) (6,412)
period attributable to
members (NPAT)
Brief Explanation of above figures
Refer to the Review of Operations on page 4 of the attached Half Yearly Report
for the period ended 31 December 2013.
Dividends
There were no dividends declared or paid during the period and the directors do
not recommend that any dividend be paid.
Earnings Result
The net loss of Continental Coal Limited for the half-year ended 31 December
2013 after providing for income tax was $16,698,000 (31 December 2012: loss of
$7,291,000).
31 December 2013 31 December 2012
Cents Cents
Earnings Per Share (EPS)
Basic loss per share (cents per share) (2.29) (1.37)
Weighted average number of ordinary shares 688,466,982 467,682,357
used in the calculation of basic earnings
per share
The amount used as the numerator in calculating basic EPS is the same as the
net profit/(loss) reported in the Consolidated Statement of Profit or Loss and
Other Comprehensive Income.
31 December 31 December
2013 2012
Cents Cents
Net Tangible Asset (NTA) Backing
Per Share
Net tangible asset backing per (12.74) (17.76)
share (cents per share)
Peter Landau
Interim Executive Director
Dated this 28th day of February 2014
DIRECTOR'S REPORT
Your directors present their report on the consolidated entity (referred to
hereafter as the "Group") consisting of Continental Coal Limited and the
entities it controlled at the end of, or during, the half-year ended 31
December 2013.
DIRECTORS
The names of the Directors who held office during or since the end of the half
year:
Dr Paul D'Sylva Interim Executive Chairman (appointed 13 February 2014)
Mr Peter Landau Interim Executive Director (appointed 13 February 2014)
Mr Connie Molousi Non-executive Director
Dr Lars Schernikau Non-executive Director (appointed 13 February 2014)
Mr Mike Kilbride Independent Non-executive Chairman (resigned 13 February 2014)
Mr Don Turvey Chief Executive Officer and Executive Director (resigned 13 February 2014)
Mr Johan Bloemsma Non-executive Director (resigned 13 February 2014)
Mr Bernard Swanepoel Non-executive Director (resigned 13 February 2014)
Mr Ron Chamberlain Non-executive Director (appointed 14 October 2013, resigned 13 February 2014)
Mr Jason Brewer Non-executive Director (resigned 15 November 2013)
Mr James Leahy Non-executive Director (resigned 31 July 2013)
REVIEW OF OPERATIONS
Principal Activities
The principal activity of the Group during the period was the acquisition,
exploration, development and operation of thermal coal mines and properties in
Southern Africa. There were no significant changes in the nature of the
activities of the Group during this period.
Overview
In the 6 months to 31 December 2013 the Group continued its program of
establishing itself as a successful thermal coal mining, production,
exploration and development Group in Southern Africa focusing on the ramp up of
its flagship Penumbra Coal Mine and advancing the De Wittekrans coal project
with the granting of its mining right.
Coal Mine and Processing Operations
Health and Safety
During the period, seven Dressing Station Case ("DSC") accidents were reported
at the Company's mining and processing operations - six DSC accidents were
reported at the Penumbra Underground Mine and one at the Vlakvarkfontein Mine.
One reportable methane related incident and two reportable dam overflowing
related incidents also occurred at the Penumbra Underground Mine and processing
facility during the period due to excessive rain. The incidents had no material
impacts on operations and their causes have been addressed.
Operational performance
Operational performance (tonnes)
6 months ended 6 months ended
31 December 2013 31 December 2012
Run of Mine (ROM) production
Vlakvarkfontein 728,983 735,748
Ferreira 247,129 258,037
Penumbra 223,327 2,694
Total ROM production 1,199,439 996,479
Feed to plant
Ferreira 269,670 323,253
Penumbra 216,401 2,694
Total feed to plant 486,071 325,947
Export yields
Ferreira 72.0% 68.0%
Penumbra 55.4% 26.2%
Export coal buy-in 20,953 -
Domestic sales 712,624 647,659
Export sales 320,696 209,750
Total sales 1,033,320 857,409
Total ROM coal production increased by 20% for the 6 months ended 31 December
2013 compared to the previous reporting period.
Feed to the Delta Processing Operations increased by 49% increase for the 6
months ended 31 December 2013 compared to the previous reporting period.
Total sales increased by 21% increased for the 6 months ended 31 December 2013
compared to the previous reporting period.
Export yields at Penumbra have shown a steady increase during the past 6 months
with the average yield of 55.4% recorded for the 6 months ended 31 December
2013.
Vlakvarkfontein Coal Mine
Vlakvarkfontein Coal Mine produced 728,983t ROM for the half year, which was
very similar to the production achieved for the 6 months ended 31 December
2012.
Total thermal coal sales for the 6 months ended 31 December 2013 from the
Vlakvarkfontein Coal Mine were 712,624 and comprised 579,432t to Eskom and
133,192t of non-select coal.
Vlakvarkfontein remains on target to achieve its planned production of 1.3 Mt
ROM at a cost of ZAR152/t (US$13.82) for FY2014.
Ferreira Coal Mine
ROM coal production at the Ferreira Coal Mine for the 6 months ended 31
December 2013, which was its last producing period, totalled 247,129t.
Export yields for Ferreira averaged 72.0% for the 6 months ended 31 December
2013.
Mining at Ferreira has now been terminated with only inventory clean-up to be
completed. The Group is finalising the closure plan with all stakeholders and
will commence the final rehabilitation of the mine site on approval of the
closure plan by all stakeholders.
Penumbra Coal Mine
The commissioning of the permanent ventilation shaft in August 2013 was the
last remaining infrastructure item required to reach the design capacity of
67,000 tonnes per month. With adequate ventilation in place since early
September 2013, both continuous miner sections were fully operational and able
to be deployed in the planned mining outlay of 9 road production sections.
Production rates increased to an average of 37,221t ROM per month during the
half year. A drill-and-blast section was added to the two continuous miner
sections during the half year which will add additional flexibility to achieve
and maintain the planned production rate. Each continuous miner section
currently has two shuttle cars each with the third shuttle cars expected in
February 2014.
ROM coal production at the Penumbra Coal Mine for the 6 months ended 31
December 2013 was 223,327t. Production build-up at Penumbra is now forecast to
achieve its design capacity of 67,000t ROM per month by April 2014.
Export yields at Penumbra have shown a steady increase during the reporting
period with the average yield of 55.4% recorded for the six months ended 31
December 2013. The yield is expected to improve to the planned 62% with the
increase in production.
Penumbra is forecasting the delivery of 359 621t ROM during the 2014 financial
year at a FOB cost of R580 (US$53) per sales tonne.
Development Project
De Wittekrans Coal Project
The Mining Right for De Wittekrans was granted in September 2013 and the
Company expects the Integrated Water Use License (IWUL) to be granted in Q2
2014.
Exploration Projects
Botswana Coal Projects
Negotiations on the previously announced earn-in agreement on Prospecting
Licences 339/2008 and 341/2008 were terminated during the half year. The Group
is in early stage discussions with 2 unrelated parties to reach a commercial
agreement on 2 of the Prospecting licences that have been awarded to the Group.
The third license is in the process of being relinquished.
Corporate
Bridge finance and recapitalisation
Subsequent to half year end the Group executed a binding term sheet with UK
corporate advisory firm Empire Equity Limited ("Empire Equity") to provide $5
million bridge funding and undertake a broader recapitalisation and restructure
of the Group and its financial arrangements.
The Group received the $5 million bridge funding from Empire Equity and made
key payments to current creditors and negotiated a 3 month standstill period to
recapitalize the Group.
Empire Equity and/or its nominees (the "Investors") have invested in 7.5
million unsecured convertible promissory notes ("Notes") with a face value of
A$1.00 at a discounted issue price of A$0.6667 per Note and with a maturity
date of 4 months redeemable upon successful completion of the Groups
recapitalization. The Investors will receive a 6% fee on the Investment Amount
as well as 70 million options, subject to shareholder approval, for providing
the $5 million.
The Investors have also undertaken to assist the Group in undertaking a rights
issue currently proposed to raise up to A$28 million with terms to be
determined by the Group and the underwriter engaged. The proceeds will be used
to settle amounts owed by the Group to various existing convertible note
holders and other major creditors.
A condition to providing the funding was the resignation or termination of the
CEO Mr Don Turvey, CFO Mr Lou van Vuuren and Non-Executive Directors Mr Mike
Kilbride and Mr Johan Bloemsma. This occurred on 13 February 2014. Mr Ron
Chamberlain and Mr Bernard Swanepoel also tendered their resignations as
Non-Executive Directors to the Board. Village Main Reef Ltd will nominate a new
representative to the Board pursuant to the terms of their 2013 subscription
agreement.
Following the new appointments, the Board of the Company comprises:
Dr Paul D'Sylva (Interim Executive Chairman)
Mr Peter Landau (Interim Executive Director)
Mr Connie Molusi (Non-Executive Director)
Dr Lars Schernikau (Non-Executive Director)
Creditors' representative (Non-Executive Director) - to be appointed
Village Main Reef representative (Non-Executive Director) - to be appointed
The management structure of the Company moving forward is still being
considered by the reconstituted Board, but will initially be overseen by Mr
Landau and Dr D'Sylva in temporary executive roles as well as current COO Mr
Johan Heystek at an operational level.
In addition Ms Jane Flegg was appointed as Company Secretary following the
resignations of Mr Dennis Wilkins and Mr John Ribbons as Joint Company
Secretary.
Proposed listing on the Johannesburg Stock Exchange
The proposed listing has been postponed until such time as the recapitalisation
of the Company has been completed.
ASX and Aim share trading suspension
As at the date of this report Continental's securities on both the ASX and AIM
markets continue to be suspended. The reconstituted Board of Directors will
consider a decision on seeking to lift the suspension of the shares pending the
provision of further clarification of its financial position to the market.
ROUNDING
The Group is of a kind referred to in Class Order 98/100, issued by the
Australian Securities and Investments Commission, relating to the `rounding
off' of amounts in the directors' report and financial report. Amounts in the
directors' report and financial report have been rounded off to the nearest
thousand dollars in accordance with that Class Order.
EVENTS SUBSEQUENT TO REPORTING DATE
Other than as set out above, there were no matters or circumstances have arisen
since the end of the reporting date and the date of this report which
significantly affects or may significantly affect the results of the operations
of the Group.
AUDITORS INDEPENDENCE DECLARATION
The lead auditor's independence declaration under section 307C of the
Corporations Act 2001 for the half-year ended 31 December 2013 can be found on
the following page.
This report is made in accordance with a resolution of the Board of Directors.
Peter Landau
Interim Executive Director
Dated this 28th day of February 2014
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 DECEMBER 2013
31 December 2013
Note Consolidated
31 December 31 December
2013 2012
$'000 $'000
Operating sales revenue 2 38,597 29,737
Operating expenses (32,458) (25,349)
Depreciation & amortisation (3,531) (1,704)
Cost of sales 3 (35,989) (27,053)
Gross profit 2,608 2,684
Other income 2 1,303 1,473
Administration expenses 3 (4,050) (4,461)
Finance expenses 3 (13,656) (5,772)
Impairment expenses 3 (2,265) -
Marketing expenses (97) (144)
Other expenses 3 (735) (433)
Loss before income tax (16,892) (6,653)
Income tax benefit/(expense) 194 (638)
Loss for the half year from (16,698) (7,291)
continuing operations
Other Comprehensive Income/(Loss)
Items that may be reclassified to
profit or loss
Exchange differences on translation 85 (3,373)
of foreign operations
Changes in the fair values of (580) 1,266
cashflow hedges, net of tax
Other comprehensive loss for the (495) (2,107)
half year, net of tax
Total comprehensive loss for the (17,193) (9,398)
half year
Net loss is attributable to:
Owners of Continental Coal Limited (15,788) (6,412)
Non-controlling interests (910) (879)
(16,698) (7,291)
Total comprehensive loss is
attributable to:
Owners of Continental Coal Limited (16,430) (7,577)
Non-controlling interests (763) (1,821)
(17,193) (9,398)
Loss per share for loss from
continuing operations attributable
to the ordinary equity holders of
the Group:
Basic loss per share (2.29) (1.37)
(cents per share)
Diluted loss per share (2.29) (1.37)
(cents per share)
The above Consolidated Statement of Profit or Loss and Other Comprehensive
Income should be read in conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
Note Consolidated
31 December 2013 30 June 2013
$'000 $'000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 4 3,948 4,496
Trade and other receivables 6,239 7,744
Inventories 3,190 4,862
TOTAL CURRENT ASSETS 13,377 17,102
NON-CURRENT ASSETS
Trade and other receivables 2,931 2,981
Other assets 2,217 1,658
Derivative financial instruments 1,820 2,400
Exploration expenditure 5 50,751 54,363
Development expenditure 6 72,579 76,344
Property, plant and equipment 7 12,511 11,933
Deferred tax assets 3,328 3,022
TOTAL NON-CURRENT ASSETS 146,137 152,701
TOTAL ASSETS 159,514 169,803
CURRENT LIABILITIES
Trade and other payables 8 11,016 12,459
Deferred revenue 9 - 5,859
Income tax payable 796 1,115
Provisions 4,273 296
Borrowings 10 87,876 18,531
Derivative financial instruments 80 228
Other financial liabilities 4,419 3,633
Provision for rehabilitation 3,416 3,759
TOTAL CURRENT LIABILITIES 111,876 45,880
NON-CURRENT LIABILITIES
Deferred revenue 9 - 5,467
Borrowings 10 212 52,141
Other financial liabilities 6,633 6,984
Deferred tax liability 21,699 23,009
Provision for rehabilitation 9,318 9,594
TOTAL NON-CURRENT LIABILITIES 37,862 97,195
TOTAL LIABILITIES 149,738 143,075
NET ASSETS 9,776 26,728
EQUITY
Issued capital 11 236,533 236,032
Reserves (3,480) (2,838)
Accumulated losses (214,775) (198,987)
Capital and reserves attributable to 18,278 34,207
owners of Continental Coal Ltd
Amounts attributable to non-controlling (8,502) (7,479)
interests
TOTAL EQUITY 9,776 26,728
The above Consolidated Statement of Financial Position should be read in
conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED
31 DECEMBER 2013
Share Accumulated Foreign Other Hedging Share Total Non- Total
Capital losses Currency Reserve Reserve Based Controlling
Ordinary Translation Payment Interest
Reserve Reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 July 2012 220,015 (164,739) (19,189) (9,944) (508) 30,798 56,433 8,089 64,522
Loss for the half year - (6,412) - - - - (6,412) (879) (7,291)
Exchange differences on - - (2,102) - - - (2,102) (1,271) (3,373)
translation of foreign
operations
Cashflow hedges, net of - - - - 937 - 937 329 1,266
tax
Total comprehensive - (6,412) (2,102) - 937 - (7,577) (1,821) (9,398)
income/(loss) for the
half year
Transactions with owners
in their capacity as
owners:
Shares issued during the 3,654 - - - - - 3,654 - 3,654
half year
Transaction cost 241 - - - - - 241 - 241
recoveries
Options issued as share - - - - - 219 219 - 219
based payments
Transactions with - - - 333 - - 333 - 333
non-controlling
interests
Balance at 31 December 223,910 (171,151) (21,291) (9,611) 429 31,017 53,303 6,268 59,571
2012
Balance at 1 July 236,032 (198,987) (23,931) (12,182) 1,776 31,499 34,207 (7,479) 26,728
2013
Loss for the half - (15,788) - - - - (15,788) (910) (16,698)
year
Exchange differences - - (195) - - - (195) 280 85
on translation of
foreign operations
Cashflow hedges, net - - - - (447) - (447) (133) (580)
of tax
Total comprehensive - (15,788) (195) - (447) - (16,430) (763) (17,193)
income/(loss) for
the half year
Transactions with
owners in their
capacity as owners:
Shares issued during 501 - - - - - 501 - 501
the half year
Dividends paid - - - - - - - (260) (260)
Balance at 31 236,533 (214,775) (24,126) (12,182) 1,329 31,499 18,278 (8,502) 9,776
December 2013
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the notes to the Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED
31 DECEMBER 2013
Note Consolidated
31 December 31 December
2013 2012
$'000 $'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 40,832 30,020
Interest received 249 202
Other income 31 -
Proceeds from commodity hedge 561 346
Payments to suppliers and employees (36,667) (32,791)
Income tax paid (1,126) -
Net cash provided by/(used in) operating 3,880 (2,223)
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investment in Vanmag - 879
Proceeds from sale of property, plant and 420 -
equipment
Exploration expenditure 5 (244) (587)
Development costs 6 (1,783) (15,605)
Purchase of property, plant and equipment (1,593) (7,402)
Payments in relation to SIOC transaction - (125)
Net cash (used in) investing activities (3,200) (22,840)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares, net of - (11)
transaction costs
Interest and borrowing costs (1,145) (3,751)
Proceeds from borrowings 908 17,735
Repayment of borrowings (491) (1,231)
Royalty payments (325) (414)
Net cash (used in)/provided by financing (1,053) 12,328
activities
Net (decrease) in cash held (373) (12,735)
Effect of the exchange rate changes on the (74) (631)
balance of cash held in foreign currencies
at the beginning of the half year
Cash at beginning of half year 3,513 14,595
Cash at half year end 4 3,066 1,229
The above Consolidated Statement of Cash Flows should be read in conjunction
with the Notes to the Financial Statements.
For further information please contact:
Media (Australia)
David Tasker
Professional Public Relations
T: +61 8 9388 0944
Nominated Advisor
Stuart Laing
RFC Ambrian Limited
T: +61 8 9480 2500
Brokers
Jonathan Williams
RFC Ambrian Ltd
T : +44 203 440 6817
About Continental Coal Limited
Continental Coal Limited (ASX:CCC/AIM: COOL) is a South African thermal coal
producer with a portfolio of projects located in South Africa's major coal
fields including two operating mines, the Vlakvarkfontein and Penumbra Coal
Mines, producing approx. 2Mtpa of thermal coal for the export and domestic
markets. A Feasibility Study was also completed on a proposed third mine, the
De Wittekrans Coal Project with a mining right granted in September 2013.
Competent Persons Statement
The information in this release that relates to Coal Resources on
Vlakvarkfontein, Vlakplaats and Wolvenfontein is based on resource estimates
completed by Dr. Philip John Hancox. Dr. Hancox is a member in good standing of
the South African Council for Natural Scientific Professions (SACNASP No.
400224/04) as well as a Member and Fellow of the Geological Society of South
Africa. He is also a member of the Fossil Fuel Foundation, the Geostatistical
Association of South Africa, the Society of Economic Geologists, and a Core
Member of the Prospectors and Developer Association of Canada. Dr. Hancox has
more than 12 years' experience in the South African Coal and Minerals
industries and holds a Ph.D from the University of the Witwatersrand (South
Africa).
The information in this release that relates to Coal Resources on Penumbra, De
Wittekrans, Knapdaar, Leiden and Wesselton II is based on coal resource
estimates completed by Mr. Nico Denner, a full time employee of Gemecs (Pty)
Ltd. Mr. Denner is a member in good standing of the South African Council for
Natural Scientific Professions (SACNASP No. 400060/98) as well as a Member and
Fellow of the Geological Society of South Africa. He has more than 15 years'
experience in the South African Coal and Minerals industries.
The information in this release that relates to Coal Resources on Project X and
Vaalbank is based on coal resource estimates completed by Mr. Coenraad van
Niekerk, a full time employee of Gemecs (Pty) Ltd. Mr. van Niekerk is a member
in good standing of the South African Council for Natural Scientific
Professions (SACNASP No. 400066/98) as well as a Member and Fellow of the
Geological Society of South Africa. He has more than 38 years' experience in
the South African Coal and Minerals industries.
The information in this release that relates to Coal Resources on Mooifontein
is based on coal resource estimates completed by Mr. Dawie van Wyk, a full time
employee of Geocoal services (Pty) Ltd. Mr. van Wyk is a member in good
standing of the South African Council for Natural Scientific Professions
(SACNASP No. 401964/83) as well as a Member and Fellow of the Geological
Society of South Africa. He has more than 30 years' experience in the South
African Coal and Minerals industries.
The Coal Reserves on Vlakvarkfontein, and is based on reserve estimates
completed by Eugène de Villiers. Mr. de Villiers is a graduated mining engineer
(B.Eng) Mining from the University of Pretoria and is professionally registered
with the Engineering Council of South Africa (Pr.eng no - 20080066). He is also
a member of the South African Institute of Mining and Metallurgy (SAIMM
Membership no. 700348) and the South African Coal Managers Association (SACMA
Membership no. 1742). Mr. de Villiers has been working in the coal industry
since 1993 and has a vast amount of production and mine management as well as
project related experience.
Forward Looking Statement
This communication includes certain statements that may be deemed
"forward-looking statements" and information. All statements in this
communication, other than statements of historical facts, that address future
production, reserve potential, exploration drilling, exploitation activities
and events or developments that the Company expects to take place in the future
are forward-looking statements and information. Although the Company believes
the expectations expressed in such forward-looking statements and information
are based on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ materially
from those in the forward-looking statements and information. Factors that
could cause actual results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration successes,
drilling and development results, production rates and operating costs,
continued availability of capital and financing and general economic, market or
business conditions. Investors are cautioned that any such statements are not
guarantees of future performance and actual results or developments may differ
materially from those stated.