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Murray & Roberts Holdings Limited - Preliminary Report For The Year Ended 30
June 2005
Murray & Roberts Holdings Limited
(Registration number: 1948/029826/06)
(`Murray & Roberts` or `Group`)
Share Code: MUR ISIN code: ZAE00008983
Preliminary Report
for the year ended 30 June 2005
SALIENT POINTS
Operating Cash up 131% to R668 million
Order Book up 70% to R8,5 billion
Revenues up 27% to R10,7 billion
Operating profit up 29% to R543 million
Taxation up 456 % to R150 million
Headline Earnings down 10% to 140 cents per share
Dividend maintained at 45 cents per share for full year
This final year of Rebuilding Murray & Roberts has seen a fundamental reshaping
of our Group in line with a strategic engagement of the global construction
economy. The acquisition of Cementation and a strategic partnership with Clough
has established a global engineering and contracting platform serving key
natural resource markets in Southern Africa, Middle East, Southeast Asia and
North America.
Our domestic market leadership is enhanced through the acquisition of new
business capacity in the construction economy and our preferred bidder status on
both the Gautrain Rapid Rail Link project and the PBMR Nuclear Power Programme.
Commercial fixed investment has improved in Middle East and new project awards
such as Dubai International Airport offer Murray & Roberts a platform for
sustainable expansion following two years of market realignment.
Finally, a major benefit of Rebuilding Murray & Roberts has materialised in the
form of an empowerment strategy that will see broad-based community and staff
participation in the equity of the Group into the future combined with value-
based empowerment partnerships in the Group`s various operating markets.
Brian C Bruce, Group Chief Executive
EXECUTIVE SUMMARY
This final year of Rebuilding Murray & Roberts was characterised by intense
transformation and change as all the preparation through the previous five years
crystallised into a new performance platform for the Group. Operating profits
increased by 29% to R543 million (2004: R421 million) off a 27% increase in
revenues to R10,7 billion (2004: R8,4 billion).
This underpinned a performance consistent with the prospects statement included
in the 2004 annual report and ahead of the half-year interim report. Unitrans
Limited contributed only to the first half-year and with a return to normal
levels of taxation, fully diluted headline earnings per share ended 10% down at
140 cents (2004: 155 cents).
Disposal of the Group`s 44% shareholding in non-core investment Unitrans freed
the Group for the acquisition of 100% of Cementation and a control shareholding
over time in Clough Limited. Both companies operate within the strategic focus
of the Group and are expected to deliver attributable earnings from the 2007
financial year in line with what could have been expected had the Group remained
invested in Unitrans.
The operating margin is steady at 5,1% (2004: 5,0%). This incorporates a
disappointing result in Middle East and a fair value increase in concession
investments. The Group has remained within its sustainable operating margin
range of 5,0% to 7,5% which reflects both the opportunity and risk profile of
the Group`s target market.
The year-end net cash position improved to R1,7 billion (2004: R1,0 billion)
following capital expenditure of R303 million (2004: R353 million) and a net
acquisition inflow of R350 million (2004: R35 million outflow). Working capital
peaked during the year, fuelled by delayed funding of previous-year losses and
intra-year stock build-up primarily in the steel sector. Interest-bearing long
term liabilities increased to R339 million (2004: R139 million). This primarily
relates to a loan facility arranged to fund a portion of the acquisition of the
Group`s shares in Clough Limited.
The Group returned 16,1% on average shareholders` funds (2004: 19,0%). This is
below the historic Group target of 20%, and is expected to improve in the future
once surplus cash has been invested into productive capacity.
Three areas of concern are noted that have impacted on performance in the year.
* A loss of R40 million (12 cents per share) has been recorded on the Khalifa
Sports Hall project in Qatar which has been recognised in full. Whereas some
financial recovery is possible, it is the Group`s experience over recent years
that this will require significant corporate resolve and may take more than the
current reporting period to finalise.
* A total of 12 fatalities (2004: 7 fatalities) were recorded in the year on
work sites under control of the Group, highlighting the need for greater
awareness amongst all employees and subcontractors of the inherent dangers
associated with construction activity. The Group has committed the necessary
resources to ensure that operations will become safer and that all people
entering and working in the Group`s many operations are appropriately prepared
and protected against possible danger.
* The liquidation of Consani Engineering (Pty) Limited in January 2005 after it
became evident that the company was not sustainable under current and projected
economic and market conditions. This has been a major setback after the effort
that went into transforming the company over the preceding years. An exceptional
write-down of R144 million has been recognised in the accounts, paving the way
for settlement of the majority of employee and creditor claims against Consani.
International Financial Reporting Standards (IFRS)
The Group is required in terms of revised JSE Listings Requirements, to prepare
its annual financial statements in accordance with IFRS with effect from 1 July
2005. SA GAAP differs in some areas from IFRS and the Group will restate its
comparative financial statements appropriately and adjustments on transition to
IFRS will be made retrospectively against the opening accumulated profit as at 1
July 2004.
Where choice of accounting policies is available, including elective exceptions
under IFRS 1: First-time Adoption of IFRS, these have been determined as
appropriate for the Group.
Market
All markets targeted by the Group are showing signs of sustainable growth
potential, although sustained levels of increased value will depend in the short
term on how clients, contractors and suppliers adjust to changed dynamics and
temporary shortages of capacity.
In South Africa, gross fixed capital formation (GFCF) looks set for an extended
period of sustainable growth, in contrast to significant investment decline over
the previous 30 years. Middle East countries in general are diversifying their
regional economy, supported by a strong oil price and for them, challenging
global alternatives. China in particular and Asia in general are placing
increased demand into the global natural resources sector. Globalisation has
brought greater awareness of human development needs, highlighting a global
deficit in the supply of power, energy and water as well as education and
employment opportunity.
Globalising Murray & Roberts recognises the influence of these trends on the
fortunes of the Group. More specifically, the competitive landscape is
increasingly influenced by those companies who have benchmarked global best
practice for sustainable earnings growth and value creation. The board and
executive leadership of Murray & Roberts has committed the Group to this level
of achievement.
Order book
The Group`s project order book stood at R8,5 billion at 30 June 2005 (2004: R5,0
billion including Cementation), an increase of 70% in the year. More than 67% of
the order book is repeat business with known clients. The most significant award
in the year was Dubai International Airport where the Group`s 40% share amounts
to R2,4 billion within three years.
The Bombela Consortium was selected preferred bidder for the Gautrain Rapid Rail
Link subsequent to year-end. The Murray & Roberts share of this project will be
disclosed on contract finalisation and is significant. The Group is also
preferred bidder for the Pebble Bed Modular Reactor nuclear power programme
together with long-term partner SNC Lavalin. This project is planned for
construction starting in 2007 and over a three year period will offer
significant new opportunity to a number of companies in the Group. Thereafter
and subject to licensing, the multi-unit rollout programme is expected to extend
for up to 20 years.
New projects have been secured since year-end in the domestic mining and
construction markets and in Middle East. The Directors are further encouraged by
major prospects being pursued by the Group across all its principle domestic and
international markets.
The long-term order book for foundry work is stable, although there is some
volatility in off-take demand by customers. As preferred bidder, the Group still
awaits commencement of the Spoornet locomotive replacement programme in South
Africa.
Operations
The Group`s South African regional construction activities recorded revenues of
R2,21 billion (2004: R2,13 billion) and operating profits of R127 million (2004:
R93 million) at a margin of 5,7% (2004: 4,4%). This result includes R37 million
in contribution from concession investments (2004: R35 million) and accommodates
a poor performance in the overtraded Western Cape market.
Integration between Cementation and Murray & Roberts in Southern Africa is well
advanced with empowerment partner AKA Capital introduced from January 2005. The
combined business recorded revenues of R1,85 billion (2004: R400 million for RUC
only) and an operating profit of R69 million (2004: R4 million for RUC only) at
a margin of 3,7%. Revenues from mining contracting in Canada and Australia are
R655 million with operating profits of R42 million at a margin of 6,4%.
Middle East construction activities posted revenues of R914 million (2004: R889
million) at an operating loss of R38 million (2004: R10 million loss including
San Stefano). The major contributor to the loss is Khalifa Sports Hall, with a
further R10 million provided against the ADNOC office project and San Stefano in
Egypt. There has been good progress in bringing these and other problem
contracts to commercial finality.
The engineering contracting and services operations experienced a difficult year
with a low order book leading to under-recovery of overheads. Combined operating
profits were down to R26 million (2004: R81 million) on revenues of R603million
(2004: R651 million) at a margin of 4,3% (2004: 12,4%).
The general level of construction investment has remained buoyant in Southern
Africa and Middle East, offering stable market conditions for the supply of
construction materials and services. Steel products and services activities saw
revenues increase to R1,64 billion (2004: R1,53 billion) at an operating profit
of R95 million (2004: R84 million). Steel fabrication operations are more
dependent on major project activity, but recorded growth in revenues to R626
million (2004: R428 million) at an operating profit of R61 million (2004: R29
million).
The infrastructure materials and services businesses continue to underpin this
sector with revenues of R833 million (2004: R737 million) delivering operating
profits of R144 million (2004: R134 million).
The Group`s industrial interests comprising Murray & Roberts Foundries Group,
UCW and Consani (for the half year prior to liquidation) generated lower
revenues of R1,02 billion (2004: R1,26 billion) but improved operating profits
to R92 million (2004: R70 million) at a margin of 9,0% (2004: 5,6%).
Corporate overheads for the year are R115 million (2004: R100 million) and
reflect the increased cost of higher levels of domestic and international
leadership to ensure the capacity for growth and risk management across the
Group`s diverse activities.
Associates
The Group`s 44% shareholding in Unitrans was sold effective 31 December 2004 and
its final contribution to associate headline earnings in the Group is R64
million for the year.
The Murray & Roberts share of post-acquisition earnings in Clough Limited is R16
million for the year, which derives largely from its 83% listed subsidiary PT
Petrosea in Indonesia, various oil & gas services projects and property
development activity in Australia.
Clough itself has recorded an attributable loss of AUD60 million for the year to
30 June 2005, the majority of which relate to pre-acquisition matters identified
by the Group in due diligence. This relates largely to an engineering,
procurement, install and commission (EPIC) oil & gas project off Melbourne in
the Bass Straights where the client has drawn down two on-demand performance
bonds to the value of AUD39,8 million against alleged damages. Clough has taken
its disputes to arbitration in terms of the contract, but in the meantime
suffers a cash flow deficit. The share acquisition proceeds from Murray &
Roberts has been useful in stabilising the company, allowing other operations to
continue and an appropriate legal response to be mounted.
Further details on Clough are available on www.clough.com.au
Exceptional items
The disposal of Unitrans produced an exceptional profit of R214 million. This
has been partially offset in the period against a provisional loss on
liquidation of Consani amounting to R144 million and an exceptional loss on sale
of Booker Tate of R47 million.
Exceptional charges have been raised against the Group`s remaining interest in
Borbet South Africa (R15 million) and in the write down of outstanding goodwill
relating to the purchase of JCI Projects in 2000 (R5 million). Straight-lining
of lease commitments in the property head lease portfolio resulted in a credit
of R12 million in the year.
Acquisition and disposal
The Cementation Company Africa Limited was acquired with effect from 1 July
2004, delisted from the JSE Limited and all but 3,8% of minorities bought-out. A
series of transactions thereafter resulted in the merger of its main subsidiary
with Murray & Roberts RUC. With effect from January 2005 and in terms of broad-
based black economic empowerment criteria and the Mining Charter, AKA Capital
acquired 26% of Murray & Roberts Cementation.
Cementation Canada was acquired at the same time and has been fully incorporated
into the Group`s international structure.
On 10 November 2004 minority shareholders in Clough Limited based in Perth
Australia approved a transaction that allowed Murray & Roberts to increase its
ownership in the company to 29,3% and in terms of a shareholder agreement with
McRae Investments (representing the Clough Family), move to control over time as
allowed by the rules of the Australian Stock Exchange (ASX). The Group has since
acquired further shares in Clough through ASX and its interest in the company
now stands at 30,2%.
The Group has reached agreement with McRae Investments and the Board of Clough
Limited, subject to regulatory approvals, to increase its shareholding in Clough
through an issue and subscription for new shares and an equivalent sell-down by
McRae. Murray & Roberts will thereafter hold the right to 49% of Clough and
McRae will reduce to below 20%. This arrangement will free Clough of much of its
debt and with its increased shareholding Murray & Roberts will engage a more
intense partnership with Clough across a broader market spectrum.
The sale of Criterion Equipment to J&J Group from 1 September 2005 is an
empowerment transaction valued at R75 million, including an element of vendor
financing. Managing director Graham Callanan and his team have served the Group
with distinction over the past five years and the directors wish them well into
the future.
The Group has acquired an initial 80% shareholding in Oconbrick (Pty) Limited
with effect from 1 July 2005 for a consideration of R96 million. It is planned
that this company together with Harvey Roofing will form the core of the Group`s
strategy to serve the developing affordable housing market in South Africa.
Murray & Roberts has sought to acquire the entire shareholding of Concor Limited
in terms of Section 311 (alternatively Section 440 k) of the Companies Act.
Negotiations are continuing and shareholders will be kept informed of progress.
Black Economic Empowerment
Further to the cautionary published through SENS on 28 July 2005, the directors
have approved a proposal for submission to shareholders in general meeting, to
repurchase 10% of the Group`s shares using its own resources, with the specific
intent to create the basis for broad-based black economic empowerment ownership
in the equity of the Group. Details of this proposal are included in a separate
announcement to shareholders of today`s date.
Prospects
The Group`s primary leadership focus over the past year has been to stabilise
and resource existing operations in preparation for a period of sustainable
market growth; to build a quality major project order book across all business
sectors; and to convert surplus balance sheet cash and gearing capacity into new
areas of business potential within the core strategic focus of the group.
The Group continues to seek involvement in numerous major project opportunities
available in Middle East, Southeast Asia and Southern Africa. These include
mining and construction projects, power generation facilities, transport systems
and minerals processing investments.
The demand for construction materials in South Africa is expected to remain
steady through the year ahead, with some growth expected as new major projects
get started. It is encouraging that cement producers are well advanced with
increased production plans.
Further expansion is planned for power generation capacity in South Africa and
the regional transport infrastructure remains in need of significant upgrade to
meet economic development targets. These offer increased public private
partnership opportunity.
With a lower interest rate regime seemingly well established and inflation under
control, in spite of higher energy prices, the Group is positive that domestic
market conditions will continue to improve during the year ahead. Growth will
primarily be driven by government investment into infrastructure and by direct
investment into industry, commercial and residential accommodation.
International and natural resources markets of interest to the Group are
expected to grow in line with continued economic activity in South and Southeast
Asia and demand from China. Investment in Middle East is driven primarily by
energy, with increasing attention to the benefits of economic diversification as
the region seeks to eradicate its high levels of unemployment through the
creation of an estimated 80 million jobs over the next 20 years.
The Directors are of the view that the next few years will be positive to the
Group and that there will be real growth in headline earnings in the year to 30
June 2006.
Dividend
The directors have declared a final dividend of 30,0 cents per share in respect
of the year ended 30 June 2005 (2004: 30,0 cents per share) making the total
dividend 45,0 cents per share for the year (2004: 45,0 cents per share).
Attention is drawn to the formal dividend announcement contained herein.
On behalf of the directors
Roy Andersen Chairman of the Board
Brian Bruce Group Chief Executive
Roger Rees Group Financial Director
Bedfordview
31 August 2005
Notice to shareholders
Declaration of final ordinary dividend (No. 107)
Notice is hereby given that the final dividend, dividend No. 107 of 30 cents per
share in respect of the financial year ended 30 June 2005 has been declared
payable to shareholders recorded in the register at the close of business on
Friday 14 October 2005.
The salient dates for the final ordinary dividend are as follows:
Last day to trade cum the dividend Friday 7 October 2005
Shares commence trading ex dividend Monday 10 October 2005
Record date Friday 14 October 2005
Payment date Monday 17 October 2005
Share certificates may not be dematerialised or re-materialised between Monday
10 October 2005 and Friday 14 October 2005, both days inclusive.
On Monday 17 October 2005, the dividend will be electronically transferred to
the bank accounts of all certificated shareholders where this facility is
available. Where electronic fund transfer is not available or desired, cheques
dated 17 October 2005 will be posted on that date.
Dematerialised shareholder accounts will be credited at their CSDP or broker on
Monday 17 October 2005.
By order of the Board
SF Linford
Group Secretary
Bedfordview
31 August 2005
Directors:
RC Andersen* (Chairman) BC Bruce (Managing & Group Chief Executive) SJ Flanagan
SE Funde* N Jorek3 SJ Macozoma* NM Magau* JM McMahon* IN Mkhize* RW Rees1 AA
Routledge* MJ Shaw* KE Smith2 JJM Van Zyl* RT Vice*
Secretary:
SF Linford
1 British 2 Irish 3 German *Non executive
Summarised consolidated income statement
Restated
Audited Audited
R millions 30.6.05 30.6.04
Revenue 10,694 8,424
Earnings before interest,
exceptional items,
depreciation and amortisation (EBITDA) 793 615
Amortisation of goodwill (note 2) - (5)
Depreciation (250) (189)
Earnings before interest and exceptional 543 421
items
Exceptional items 13 (16)
Headlease and other discontinued property 11 (7)
activities
Other 2 (9)
Earnings before interest and taxation 556 405
(EBIT)
Net interest (expense) income (5) 10
Earnings before taxation 551 415
Taxation (150) (27)
Earnings after taxation 401 388
Income from associates 77 114
Minority shareholders` interest (30) (25)
Earnings attributable to ordinary 448 477
shareholders
Reconciliation of headline earnings
Attributable earnings 448 477
Exceptional items as above (13) 16
Taxation on exceptional items 16 -
Amortisation of goodwill - 5
Non-headline portion of income from 2 5
associate
Headline earnings 453 503
Reconciliation of weighted average number
of shares in issue (000)
Weighted average number of ordinary shares 331,893 331,893
in issue
Less: weighted average number of shares (13,664) (13,788)
held by The Murray & Roberts Trust
Weighted average number of shares in issue 318,229 318,105
used in the determination of basic per
share figures
Add: adjustment for share options 4,611 6,173
Weighted average number of shares in issue 322,840 324,278
used in the determination of diluted per
share figures
Earnings per share (cents)
- Diluted 139 147
- Basic 141 150
Headline earnings per share (cents)
- Diluted 140 155
- Basic 142 158
Total dividend per ordinary share (cents)* 45.0 45.0
Operating cash flow per share (cents) 201 87
* Based on the year to which the dividend relate.
Summarised consolidated balance sheet
Restated
Audited Audited
R millions 30.6.05 30.6.04
ASSETS
Non-current assets 2,318 2,319
Property, plant and equipment 1,194 1,090
Investment property 259 271
Associate company - Unitrans Limited - 653
Associate company - Clough Limited 505 -
Other investments 360 305
Current assets 4,796 3,775
Accounts receivable and other 2,863 2,671
Bank balances and cash 1,933 1,104
Total tangible assets 7,114 6,094
Goodwill 48 5
Deferred taxation assets 38 33
TOTAL ASSETS 7,200 6,132
EQUITY AND LIABILITIES
Permanent capital 3,059 2,657
Ordinary shareholders` funds 2,967 2,603
Minority shareholders` interest 92 54
Non-current liabilities 820 632
Long-term provision 5 29
Obligations under finance headleases* 274 346
Other long-term liabilities* 339 139
Deferred taxation liabilities 202 118
Current liabilities 3,321 2,843
Accounts payable and other 2,940 2,560
Bank overdrafts and short-term loans* 381 283
TOTAL EQUITY AND LIABILITIES 7,200 6,132
Net asset value per share (cents) 932 818
* Interest-bearing borrowings
SUPPLEMENTARY INFORMATION (R millions)
Commitments
Capital expenditure
- spent 303 353
- authorised but unspent 396 397
Operating lease commitments 236 262
Contingent liabilities 157 56
Summarised consolidated cash flow statement
Restated
Audited Audited
R millions 30.6.05 30.6.04
Cash generated by operations before 714 534
working capital changes
Cash outflow from discontinued headlease (68) (114)
property activities
Decrease (increase) in working capital 33 (88)
Cash generated by operations 679 332
Interest and taxation (11) (43)
Operating cash flow 668 289
Dividends paid (143) (167)
Dividends paid to minority shareholders (20) (1)
Cash retained in operations 505 121
Net investment activities 107 (253)
Net funds flow 612 (132)
Summarised statement of changes in equity
Restated
Audited Audited
R millions 30.6.05 30.6.04
Opening balance 2,603 2,484
Restatement (note 2) - 3
Earnings attributable to ordinary 448 477
shareholders
Movement in revaluation reserve (1) (2)
Movement in non-trading financial asset 16 12
reserve
Movement in hedging reserve 3 2
Foreign currency translation 61 (163)
movement on investments
Movement in treasury shares (20) (43)
Dividend declared and paid (143) (167)
2,967 2,603
Segmental analysis
Restated
Audited Audited
R millions 30.6.05 30.6.04
REVENUE
Construction & engineering 6,237 4,153
Construction materials & services 3,381 2,886
Fabrication & manufacture 870 763
Corporate 1 1
Ongoing operations 10,489 7,803
Discontinued operations 205 621
Revenue as reported 10,694 8,424
EBIT
Construction & engineering 226 177
Construction materials & services 337 274
Fabrication & manufacture 98 75
Corporate (115) (100)
Ongoing operations 546 426
Discontinued operations (3) (5)
EBIT as reported 543 421
Notes:
1. These consolidated summarised preliminary financial statements are prepared
in accordance with AC127: Interim Financial Reporting. The accounting policies
and methods of computation for the financial statements for the year ended 30
June 2005 are consistent with those applied in the prior year except as
described in note 2 below and are in accordance with South African Statements of
Generally Accepted Accounting Practice and the Companies Act in South Africa.
2. Restatements, changes in accounting policy and comparatives.
2.1 AC140: Business Combinations
The Group adopted AC140: Business Combinations during the current year. The
adoption of this statement resulted in a change in the accounting policy for
goodwill. For all business combinations on or after 31 March 2004 goodwill is
measured as the excess of the `cost of the acquisition` over the `interest in
the fair value of the assets, liabilities and contingent liabilities acquired
and recognised`.
Until 30 June 2004, goodwill was:
- amortised on a straight line basis over its useful life with a maximum of ten
years.
In accordance with the provisions of AC140:
- the Group ceased amortisation of goodwill from 1 July 2004;
- accumulated amortisation as at 30 June 2004 has been eliminated with a
corresponding decrease in the cost of goodwill; and
- from 1 July 2004 onwards, goodwill is tested annually for impairment, as well
as when there are indications of impairment.
Adoption of this accounting policy resulted in goodwill amortisation amounting
to R5 million being ceased, and in a goodwill impairment charge of R5 million.
The impact of the restatement on earnings and headline earnings per share is set
out below.
The acquisition accounting for Clough Limited is still on a provisional basis.
2.2 AC105: Leases
In prior years, operating lease payments were recognised in the income statement
in the year incurred. Interpretative guidance by the South African Institute of
Chartered Accountants, Circular 7/2005 issued in August 2005, require minimum
lease payments that are subject to fixed escalations to be spread over the life
of the lease instead of as incurred.
R millions
The adjustments resulting from the restatement can
be summarised as follows:
Increase of 2003 accumulated profit opening balance -
Recognition of deferred operating lease income 108
accrual
Recognition of deferred operating lease cost accrual (119)
Decrease of 2004 net profit (11)
Increase of 2005 net profit 13
The impact of the restatement on earnings and headline earnings per share is set
out below.
2.3 Depreciation of headlease investment property
In prior years, the land element of the capitalised headlease investment
property was incorrectly depreciated together with the building element. During
the current year, this has been corrected by a reversal of R6 million in
accumulated depreciation.
R millions
The adjustments resulting from the restatement can
be summarised as follows:
Increase in 2003 accumulated profit opening balance 3
Increase in 2004 net profit 3
Increase in 2005 net profit 3
The impact of the restatement on earnings and headline earnings per share is set
out below.
2.4 Impact on earnings and headline earnings per share
Increase
(decrease) in
basic and diluted
earnings per share
(EPS)
2005 2004
Cents Cents
Non-amortisation of goodwill 2 -
Impairment of goodwill (2) -
Recognition of operating lease payments
and income on a straight-line basis* 4 (3)
Adjustments to the depreciation of headlease
investment property* 1 1
Total impact 5 (2)
These adjustments had no impact on basic and diluted headline earnings per share
(HEPS).
* Relates to the headlease and other discontinued property activities
2.5 Comparatives
The comparative information presented has been restated for the following:
- reclassification of investment property from property, plant and equipment to
investment property;
- reclassification of an impairment provision from other accruals to other
investments;
- restatement of operating lease costs and income on a straight-line basis; and
- restatement of the depreciation on headlease investment property.
3. Total financial institution guarantees given to third parties on behalf of
group companies amounted to R1 788 million (2004: R1 352 million). The directors
do not believe any exposure to loss is likely.
4. These summarised financial statements and the annual financial statements
from which they have been extracted have been audited by the company`s auditors,
Deloitte & Touche. Their unqualified audit opinions are available for inspection
at the company`s registered office.
