| REPORT OF THE DIRECTORS |
| for the year ended 30 June 2007 |
| |
| This report represented by the directors is a constituent
document of the group financial statements at 30 June 2007.
Except where otherwise stated, all amounts set out in tabular
form are expressed in millions of rand. |
| |
| NATURE OF BUSINESS |
| Murray & Roberts Holdings Limited is an investment holding
company with interests in the construction & engineering,
construction materials & services and fabrication sectors. The
company does not trade and all of its activities are undertaken
through a number of subsidiaries, joint ventures and associates.
Information regarding the Group's major subsidiary and
associate companies appears in annexure 1 to the consolidated
annual financial statements. A full list of subsidiary and associate
companies is available to shareholders on request. |
| |
| GROUP FINANCIAL RESULTS |
Group earnings for the year ended 30 June 2007 were
R796 million (2006: R561 million), representing diluted earnings
per share of 235 cents (2006: 165 cents). Diluted headline
earnings per share (excluding BBBEE expense) were 325 cents
(2006: 184 cents).
Full details of the financial position and results of the Group are
set out in these financial statements.
The annual financial statements have been prepared in
accordance with International Financial Reporting Standards,
based on consistently applied accounting policies, except for the
change in accounting policy pertaining to investment properties. |
| |
| Exceptional items |
A loss of R103,4 million arose from the final disposal of the
Group's automotive interests and a balance sheet impairment of
R115 million was taken against the Group's investment in
Clough. This was partially offset by net gains of R10,9 million
on various transactions, including an operating profit of
R13,3 million in the property portfolio.
Potential liabilities associated with the Group's property
headlease structures have been resolved. The cost of the
settlement was offset by a fair value adjustment on property
assets (refer to note 25 of the consolidated financial statements
for details).
|
| |
| SHARE CAPITAL |
Full details of the authorised and issued capital of the company
at 30 June 2007 are contained in note 11 of the financial
statements. There were no changes to the authorised and
issued share capital during the year under review.
Particulars relating The Murray & Roberts Trust (the Trust) are set
out in note 11 of the financial statements. During the year, the
Trust granted an aggregate total of 7 165 000 options over
ordinary shares (2006: 2 135 000 options) to senior executives,
including executive directors.
At 30 June 2007, the Trust held 5 880 661 ordinary shares
(2006: 9 965 386 ordinary shares) against the commitment of
13 734 775 ordinary shares (2006: 11 074 000 ordinary shares).
The total number of ordinary shares that may be utilised for
purposes of the Share Scheme is limited to 10% of the total
issued share capital of the company from time to time, currently
33 189 262 ordinary shares (2006: 33 189 262 ordinary shares). |
| |
| Purchase of own shares |
| In terms of the general authority obtained at the last annual
general meeting, the company or its subsidiaries may
repurchase ordinary shares to a maximum of 20% of the issued
ordinary shares. No ordinary shares were repurchased during
the year in terms of this general authority. Approval will be sought
at the forthcoming annual general meeting on 30 October 2007
to renew this general authority. |
| |
| DIVIDEND |
| The following dividends were declared in respect of the year
ended 30 June 2007: |
Interim dividend number 110 of 45 cents per ordinary share
(2006: 20 cents)
Final dividend number 111 of 71 cents per ordinary share
(2006: 40 cents) |
| |
| SUBSIDIARIES AND ASSOCIATES |
| Acquisitions |
| Acquisition of a further interest in Clough Limited (Clough) |
| The Group increased it shareholding in Clough from 46,1% to
49,1% in December 2006 representing 15 300 000 shares at a
cost of A$6,3 million. The Group also subscribed for an issue of
convertible notes in Clough at a cost of A$23,2 million which
have a coupon of 10% payable quarterly in arrears and which
may be redeemed between one and three years after issue, or
converted into 63 021 791 shares. In November 2005 the Group
secured the rights to 30 million Clough shares to be issued by
Clough within two years in return for a convertible loan credit
facility of A$15 million with a 10% coupon. |
| |
| Acquisition of Wade Walker (Proprietary) Limited (Wade Walker) |
| The Group acquired 80% of the issued share capital of Wade
Walker on 10 January 2007 for R68 million. |
| |
| Disposals |
| Disposal of Murray & Roberts Foundries Group (Proprietary) |
| Limited and Borbet Africa Limited |
| With effect from 1 April 2007 as part of the continued program
to rationalise non-core activities, the Group disposed of its entire
interest in Murray & Roberts Foundries Group (Proprietary)
Limited for the sum of R333 million and its remaining 50%
interest in associate company Borbet Africa Limited for the sum
of R35 million. |
| |
| SPECIAL RESOLUTIONS ADOPTED BY SUBSIDIARY COMPANIES |
| Special resolutions relating to name changes and share buy
backs in some subsidiary companies were passed during the
year under review. |
| |
| POST BALANCE SHEET EVENT |
| The Group has reached agreement with Clough and the Clough
Family (McRae) on a comprehensive capitalisation package for
Clough that is subject to shareholder and regulatory approvals and
entails a further cash investment of about A$40 million by the Group
into a combination of share and convertible note acquisition, share
placement and rights issue subscription. The Group will consolidate
Clough from 1 July 2007. Key facts of the transaction are disclosed
in note 47 to the annual financial statements. |
| |
| DIRECTORATE AND SECRETARY |
| At the date of this report, the directors of the company were: |
| |
| Independent non-executive |
| RC Andersen (chairman); SE Funde; NM Magau; JM McMahon;
IN Mkhize; AA Routledge; MJ Shaw; JJM van Zyl; RT Vice. |
| |
| Executive |
BC Bruce (group chief executive); SJ Flanagan (group executive
director); RW Rees (group financial director); KE Smith (group
executive director).
N Jorek resigned as an executive director on 29 August 2007.
The Secretary's business and postal addresses are: |
| |
Douglas Roberts Centre
22 Skeen Boulevard
Bedfordview
2007 |
PO Box 100
Bedfordview
2008 |
| |
| Interests of directors: |
| At 30 June 2007, the present directors of the company
held direct and indirect beneficial and non-beneficial interest
in 2 933 993 of the company's issued ordinary shares
(2006: 1 159 909 ordinary shares). Details of ordinary shares held per individual directors are listed below. A total of 4 547 500
(2006: 6 108 750) share options are allocated to directors in
terms of the company's Share Scheme, further details are set
out in note 45. |
| |
| Beneficial |
Direct |
Indirect |
| BC Bruce |
1 665 805 |
– |
| JJM van Zyl |
– |
687 535 |
| Non-beneficial |
|
|
| RW Rees |
– |
590 653 |
|
| |
| At the date of this report, these interests remain unchanged. |
| |
| Auditors |
Deloitte & Touche will continue in office in accordance with
section 270 (2) of the Companies Act.
29 August 2007 |
