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AVENG LIMITED - Audited Group results for the 12 months ended 30 June 2013

Release Date: 10/09/2013 07:05
Code(s): AEG     PDF:  
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Audited Group results for the 12 months ended 30 June 2013

AVENG LIMITED 
(Aveng, the Company, the Group or Aveng Group)
(Incorporated in the Republic of South Africa)
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
Share code: AEG
Audited Group results for the 12 months ended 30 June 2013

Vision
The Aveng Group aims to be a leading infrastructure development company providing a diverse range of construction,
infrastructure and engineering products, services and solutions for customers, sustainable profitability for shareholders
and a great place to work for employees.

Mission 
Building a positive and lasting legacy of which our stakeholders, their families and future generations will be proud.

Achieved through 
- Our ongoing involvement in building iconic structures, landmark buildings, bridges, dams, airports, roads and power
  stations which form the backbone of many economies in developing countries
- Our dedication to a values-based culture of safety, honesty and accountability across all levels of the group
- Our commitment to prioritising people, equality and fairness in all relationships and partnerships we forge with
  stakeholders
- Our active contribution to social development and sustainability

Within its broad exposure across the infrastructure value chain, the Aveng Group has the capability to deliver complex
multi-disciplinary projects in key industry sectors

- Public Infrustructure
- Water
- Power
- Commercial and Industrial
- Mining
- Concessions
- Rail

Highlights
- Revenue
  R52 billion
  increase of 27% from June 2012
- Operating earnings
  R627 million
  increase of 24% from June 2012
- Headline earnings
  R466 million
  decrease of 6% from June 2012
- Earnings per share
  124,6 cents
  decrease of 8% from June 2012
- Headline earnings per share
  124,6 cents
  decrease of 3% from June 2012
- Dividends per share
  No dividend was declared for the full year
- Net asset value per share
  R34,12
  increase of 5% from June 2012
- Two year order book
  R37,4 billion
  decrease of 20% from June 2012

Condensed consolidated statement of financial position as
at 30 June 2013

                                                                            																		  
                                                                      2013        2012*      
                                                                   Audited      Audited   
                                                         Note           Rm           Rm                                                                                       
  ASSETS                                                                                  
  Non-current assets                                                                      
  Investment property                                       6           71            -  
  Property, plant and equipment                             6        6 789        6 666   
  Goodwill arising on consolidation                                  1 425        1 384   
  Intangible assets                                                    184          165   
  Equity-accounted investments                              6          144          105   
  Available-for-sale investments                                        70          146   
  Deferred tax assets                                                1 347          998   
                                                                    10 030        9 464   
  Current assets                                                                          
  Inventories                                                        2 780        2 467   
  Trade and other receivables                                        2 655        2 683   
  Amounts due from contract customers                               10 397        7 242   
  Cash and bank balances                                    7        4 551        5 203   
                                                                    20 383       17 595   
  TOTAL ASSETS                                                      30 413       27 059   
  EQUITY AND LIABILITIES                                                                  
  Equity                                                                                  
  Share capital and share premium                                    1 388        1 435   
  Other reserves                                                       802          602   
  Retained earnings                                                 11 103       10 864   
  Equity attributable to equity-holders of the parent               13 293       12 901   
  Non-controlling interests                                             12           10   
                                                                    13 305       12 911   
  Liabilities                                                                             
  Non-current liabilities                                                                 
  Borrowings and other liabilities                                   1 312          748   
  Deferred tax liabilities                                             319          299   
  Provisions                                                         1 105          918   
                                                                     2 736        1 965   
  Current liabilities                                                                     
  Borrowings and other liabilities                                     219          180   
  Taxation payable                                                     210          242   
  Trade and other payables                                           9 052        7 894   
  Provisions                                                         1 924        1 253   
  Amounts due to contract customers                                  2 367        2 271   
  Bank overdrafts                                           7          600          343   
                                                                    14 372       12 183   
  TOTAL LIABILITIES                                                 17 108       14 148   
  TOTAL EQUITY AND LIABILITIES                                      30 413       27 059   
  *Comparatives have been amended, as detailed in the Change in disclosure note, refer 
   to note 3.                                 

   
Condensed consolidated statement of comprehensive earnings 
for the year ended 30 June 2013

   
                                                                      2013        2012*       
                                                                   Audited      Audited     
                                                         Note           Rm           Rm                                                                                                    
  Revenue                                                           51 704       40 886   
  Cost of sales1                                                   (48 233)     (37 396)  
  Gross earnings                                                     3 471        3 490   
  Operating expenses2                                               (2 844)      (2 986)  
  Operating earnings before other gains and losses                     627          504   
  Other gains and losses                                                 -           31   
  Operating earnings after other gains and losses                      627          535   
  Earnings from available-for-sale investments                          41           37   
  Share of (loss) / earnings from equity-accounted                           
  investments                                                          (12)          41   
  Net operating earnings                                               656          613   
  Finance earnings                                                     132          189   
  Finance and transaction expenses                                    (162)         (76)  
  Earnings before taxation                                             626          726   
  Taxation                                                  5         (167)        (203)  
  Earnings for the period                                              459          523   
  Other comprehensive earnings for the period:                                            
  Items that may be subsequently recycled to earnings                                     
  Exchange differences on translating foreign operations               196          485   
  Movement in insurance and other reserves                              (2)         (12)  
                                                                       194          473   
  Total comprehensive earnings for the period                          653          996   
 1 Cost of sales includes depreciation of R1 090 million (2012: R1 343 million).                                    
 2 Operating expenses includes depreciation of R89 million (2012: R136 million), 
   amortisation of R50 million (2012: R37 million) and an impairment of R2 million 
   (2012: R nil).                                    
 The total depreciation and impairment expense included in the Statement of 
 comprehensive earnings amounts to R1 181 million (2012: R1 479 million). 
                                                                                      
  Total comprehensive earnings for the period attributable to:                            
  Equity-holders of the parent                                         659          993   
  Non-controlling interests                                             (6)           3   
                                                                       653          996   
  Earnings for the period attributable to:                                                
  Equity-holders of the parent                                         466          521   
  Non-controlling interests                                             (7)           2   
                                                                       459          523   
  Other comprehensive earnings for the period attributable                      
  to:                                                                           
  Equity-holders of the parent                                         193          472   
  Non-controlling interests                                              1            1   
                                                                       194          473   
  Determination of headline earnings for the period:                                      
  Earnings for the period attributable to equity-holders of the                 
  parent                                                               466          521   
  Adjusted for (net of tax):                                                              
  Profit on sale -change in holding in subsidiary                        -          (26)  
  Profit on sale of property, plant and equipment                       (1)           -  
  Impairment of property, plant and equipment                            1            -  
  Headline earnings                                                    466          495   
  Results per share (cents)                                                               
  Earnings                                                           124,6        134,9   
  Headline earnings                                                  124,6        128,1   
  Diluted earnings                                                   115,9        126,1   
  Diluted headline earnings                                          115,9        119,8   
  Dividend                                                               -        60,0   
  Number of shares (millions)                                                             
  In issue                                                           389,8        389,8   
  Weighted average                                                   373,9        386,0   
  Diluted weighted average                                           402,1        412,9   
  *Comparatives have been amended, as detailed in the Change in disclosure note, refer to note 3.                                   


Condensed consolidated statement of cash flows 
for the year ended 30 June 2013                                                                                          
                                                                      2013         2012   
                                                                   Audited      Audited   
                                                                        Rm           Rm                                                                                          
  Cash retained from operating activities                                                 
  Cash retained from operations                                        627          535   
  Depreciation and impairment                                        1 181        1 479   
  Amortisation                                                          50           37   
  Non-cash items and other movements                                   540          173   
  Cash generated by operations                                       2 398        2 224   
  Changes in working capital                                                              
  Increase in inventories                                             (313)        (398)   
  (Increase) / decrease in trade and other receivables
  and amounts due from contract customers                           (3 127)       1 769   
  Increase / (decrease) in trade and other payables and 
  amounts due to contract customers                                  1 256       (2 170)   
  Cash generated by operating activities                               214        1 425   
  Finance earnings                                                     126          189   
  Finance and transaction expenses paid                               (164)         (76)   
  Taxation paid                                                       (464)        (567)   
  Cash (outflow) / inflow from operating activities                   (288)         971   
  Investing activities                                                                    
  Property, plant and equipment purchased -expansion                  (459)      (1 220)   
   -replacement                                                       (925)        (867)   
  Acquisition of investment property                                   (71)           -  
  Acquisition of intangible assets                                     (29)           -  
  Changes in equity-accounted and available-for-sale 
  investments                                                          (38)          30   
  Proceeds from sale of property, plant and equipment                  165          149   
  Proceeds from sale of intangible assets                                2            -  
  Cash outflow on acquisition of subsidiary                             (9)           -  
  Proceeds from sale of available-for-sale investment                   80            -  
  Dividend earnings                                                     41           37   
  Cash outflow from investing activities                            (1 243)      (1 871)   
  Operating free cash outflow                                       (1 531)        (900)   
  Financing activities with equity-holders                                                
  Shares repurchased                                                   (47)        (448)   
  Increase in shares by non-controlling interests of 
  subsidiary company                                                     -           10   
  Dividends paid                                                      (242)        (561)   
  Financing activities with debt holders                                                  
  Proceeds from borrowings                                             603          845   
  Net decrease in cash and cash equivalents before 
  foreign exchange movements on cash                                (1 217)      (1 054)   
  Foreign exchange movements on cash                                   308          514   
  Cash and cash equivalents at beginning of year                     4 860        5 400   
  Cash and cash equivalents at end of year                           3 951        4 860   
  Borrowings, excluding bank overdrafts                              1 531          928   
  Net cash position                                                  2 420        3 932   

  
Notes to the condensed consolidated annual financial statements

1. Corporate information
The condensed consolidated annual financial statements of the Group for the twelve months ended 30 June 2013
(results) were authorised for issue in accordance with a resolution of the directors on 6 September 2013.

Aveng Limited is a limited liability company incorporated and domiciled in the Republic of South Africa whose shares
are publicly traded. The Group operates in the construction, engineering and mining environment and as a result the
revenue is not seasonal in nature but is influenced by the nature of the contracts currently in progress. Refer to the
commentary for a more detailed report on the performance of the different operating segments within the Group.

2. Basis of preparation and accounting policy
The results have been prepared on the historical cost basis, except for certain financial assets which are measured at
fair value.

The accounting policies used in the preparation of these results are consistent in all material respects with those
used in the Groups audited annual financial statements as at 30 June 2012.

The condensed annual financial statements for the year ended have been prepared in accordance with International
Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB), the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council, IAS 34: Interim Financial Reporting, requirements of the South African Companies Act 
71 of 2008 as amended, and the Listings Requirements of the JSE Limited.

The full year financial results have been prepared under the supervision of the Group Financial Director, Mr HJ
Verster.

The results have been audited by Ernst & Young Incorporated and the unqualified audit opinion is available on request
from the Company Secretary at the Companys registered office.

The Groups integrated report will be available by the end of September 2013.

The Group has adopted the following new and revised Standards and Interpretations (issued by the International
Financial Reporting Interpretation Committee) of the IASB that became effective before or on 1 July 2012:

  Standard    Subject                                                                             
  IAS 1       Presentation of Financial Statements -Other Comprehensive Earnings (Amendment) and Classification of 
              the Requirements for Comparative Information (Improvement)                     
  IAS 12      Income Taxes -Deferred Tax, Recovery of Underlying Assets (Amendment)                     
  The adoption of these improvements and amendments did not have a material effect on the Groups full year results.                                                                                        
  In addition the following Standards and Interpretations have been issued but are not yet effective. The effective 
  date refers to periods beginning on or after, unless otherwise indicated.                                                                                        
  Standard    Subject                                                            Effective date   
  IFRS 1      First Time Adoption of IFRS -Borrowing Costs (Improvement)          1 July 2013      
  IFRS 7      Financial Instruments: Disclosure (Amendment)                      1 January 2013   
  IFRS 9      Financial Instruments: Recognition and Measurement                 1 January 2015   
  IFRS 10     Consolidated Financial Statements                                  1 January 2013   
  IFRS 11     Joint Arrangements                                                 1 January 2013   
  IFRS 12     Disclosure of Interest in Other Entities                           1 January 2013   
  IFRS 13     Fair Value Measurement                                             1 January 2013   
  IAS 16      Property, Plant and Equipment (Improvement)                        1 January 2013   
  IAS 19      Employee Benefits (Amendment)                                      1 January 2013   
  IAS 27      Separate Financial Statements (as revised in 2011)                 1 January 2013   
  IAS 28      Investment in Associate and Joint Ventures (as revised in 2011)    1 January 2013   
  IAS 32      Financial Instruments: Presentation (Amendment)                    1 January 2014   
  IAS 34      Interim Financial Reporting (Improvement)                          1 January 2013   
  IAS 36      Impairment of Assets (Amendment)                                   1 January 2014   
  IAS 39      Financial Instruments: Recognition and Measurement (Amendment)    1 January 2014   
  The Group does not intend to early adopt any of the above Standards and Interpretations.                                                                                        
                                                                                                  
Contracting revenue
The Group uses the percentage-of-completion method in accounting for its construction contracts. Use of the
percentage-of-completion method requires the Group to estimate the construction services and activities performed to date as a
proportion of the total services and activities to be performed. In addition, judgments are required when recognising and
measuring any variations or claims on each contract. 

3. Change in disclosure
As part of the Groups financial reporting improvement initiatives, the structure, format and presentation of
disclosures in the financial statements were reviewed. This resulted in the reallocation of certain comparative amounts as well
as the introduction of certain terminology changes.

4. Segment information
The Group has determined four reportable segments that are largely organised and managed separately according to the
nature of products and services provided. 
These operating segments are components of the Group: 
a) that engage in business activities from which they earn revenues and incur expenses; and
b) whose operating results are regularly reviewed by the Groups chief operating decision makers to make decisions
   about resources to be allocated to the segments and assess their performance.
Segment assets exclude Goodwill arising on consolidation, Intangible assets, Equity-accounted investments,
Available-for-sale investments, Deferred tax assets and Cash and bank balances.
Segment liabilities exclude Borrowings and other liabilities, Deferred tax liabilities, Taxation payable and Bank
overdrafts.

The Groups operating segments for the year are categoried as follows:
1.  Construction and Engineering
    1.1 Construction and Engineering: South Africa and rest of Africa
    This operating segment comprises Aveng Grinaker-LTA, Aveng Engineering and Projects Company (Aveng E+PC) and Aveng
    Water.
    1.2 Construction and Engineering: Australasia and Asia*
    This operating segment comprises McConnell Dowell.
2.  Mining
    This operating segment comprises Aveng Moolmans and Aveng Mining Shafts & Underground.
3.  Manufacturing
    This operating segment comprises Aveng Manufacturing and Aveng Trident Steel.
4.  Administration and Eliminations
    This operating segment comprises Corporate Services, corporate-held investments including properties, and
    consolidation eliminations.
* The Construction and Engineering: Australasia and Pacific operating segment has been renamed to Construction and
  Engineering: Australasia and Asia.

                                                                                                                                                                    
                                                          Construction and                                                                     
                                                          Engineering:                                 Manu-      Adminis-            
                                                      South Africa                                 facturing       tration             
  2013                                                and the rest    Australasia                        and    and Elimi-            
  Rm                                                   of Africa**       and Asia    Mining***    Processing     nations**     Total                                                                                                                                                                       
  External revenue                                           8 059         26 749        7 435         9 326           135    51 704   
  Internal revenue                                             235              -            -           409          (644)        -  
  Gross revenue                                              8 294         26 749        7 435         9 735          (509)   51 704   
  Operating earnings before other gains and losses            (916)           644          708           269           (78)      627   
  Other gains and losses                                         -             -             -             -             -         -  
  Operating earnings after other gains and losses             (916)           644          708           269           (78)      627   
  Earnings from available-for-sale investments                   -             -             -             -            41        41   
  Share of earnings / (loss) from equity-accounted
  investments                                                    2             (5)           2             -           (11)      (12)  
  Net operating earnings                                      (914)           639          710           269           (48)      656   
  Net finance earnings (finance earnings less 
  finance and transaction expenses)                             32            (23)         (31)            1            (9)      (30)  
  Earnings before taxation                                    (882)           616          679           270           (57)      626   
  Taxation                                                     354           (157)        (276)          (82)           (6)     (167)  
  Earnings for the period                                     (528)           459          403           188           (63)      459   
  Investments*                                                   6            107            3             -            98       214   
  Segment assets (note 1)                                    4 082          8 149        4 285         5 739           437    22 692   
  Segment liabilities (note 2)                               3 043          7 087        1 580         1 788           950    14 448   
  Capital expenditure                                           46            384          615           305           105     1 455   
  Depreciation and impairment                                  107            402          581            83             8     1 181   
  Amortisation                                                  11              -                         10            29        50   
                                                                                                                                                                    
                                                           Construction and                                                                     
                                                           Engineering:                                Manu-      Adminis-            
                                                      South Africa                                 facturing       tration             
  2012                                                and the rest    Australasia                        and    and Elimi-            
  Rm                                                   of Africa**       and Asia    Mining***    Processing     nations**     Total                                                                                                                                                                   
  External revenue                                           7 931         17 122        6 680         9 148             5    40 886   
  Internal revenue                                             267              -            -           178          (445)        -  
  Gross revenue                                              8 198         17 122        6 680         9 326          (440)   40 886   
  Operating earnings before other gains and losses            (894)           360          579           588          (129)      504   
  Other gains and losses                                        38              -            -            (3)           (4)       31   
  Operating earnings after other gains and losses             (856)           360          579           585          (133)      535   
  Earnings from available-for-sale investments                   -              -            -             -            37        37   
  Share of earnings / (loss) from equity-accounted
  investments                                                   (5)            46            -            -              -        41   
  Net operating earnings                                      (861)           406          579           585           (96)      613   
  Net finance earnings (finance earnings less 
  finance and transaction expenses)                             34             42            2             1            34       113   
  Earnings before taxation                                    (827)           448          581           586           (62)      726   
  Taxation                                                     270           (104)        (184)         (204)           19      (203)  
  Earnings for the period                                     (557)           344          397           382           (43)      523   
  Investments*                                                   4            133            1             -           113       251   
  Segmental assets (note 1)                                  3 383          5 610        4 491         5 280           294    19 058   
  Segmental liabilities (note 2)                             2 391          5 961        2 086         1 407           491    12 336   
  Capital expenditure                                          176            611        1 087           198            15     2 087   
  Depreciation and impairment                                  119            618          586           127            29     1 479   
  Amortisation                                                   7              -            -            13            17        37   
  * **Consists of equity-accounted investments and available-for-sale investments.                                                                                     
  *** Concessions are reported under the Administration and Eliminations segment in the 2013 financial year, compared to the 
      Construction and Engineering: South Africa and rest of Africa segment in the 2012 financial year. The Comparatives have been adjusted.                                                                                    
  *** Aveng Mining Shafts & Underground is reported under the Mining segment in the 2013 financial year, compared to the Construction 
      and Engineering: South Africa and rest of Africa segment in the 2012 financial year. The Comparatives have been adjusted.                                                                                     
                                                                                                                                                                    
                                                                                                                   
                                                             2013           2012   
                                                               Rm             Rm                                                                                                                    
  Note 1 -Reconciliation of segment assets                                             
  Total assets of the Group                                30 413         27 059   
  Goodwill arising on consolidation                        (1 425)        (1 384)  
  Intangible assets                                          (184)          (165)  
  Equity-accounted investments                               (144)          (105)  
  Available-for-sale investments                              (70)          (146)  
  Deferred tax assets                                      (1 347)          (998)  
  Cash and bank balances                                   (4 551)        (5 203)  
  Segment assets                                           22 692         19 058   
  Note 2 -Reconciliation of segment liabilities                                             
  Total liabilities of the Group                           17 108         14 148   
  Borrowings and other liabilities                         (1 531)          (928)  
  Deferred tax liabilities                                   (319)          (299)  
  Taxation payable                                           (210)          (242)  
  Bank overdrafts                                            (600)          (343)  
  Segment liabilities                                      14 448         12 336   
                                                                                                                   
 
 The Group operates in five principal geographical areas:                                                                             
                                                                                                                   
                                                                   2013       2012           2013           2012   
                                             2013       2012    Segment    Segment        Capital        Capital   
                                          Revenue    Revenue     assets     assets    expenditure    expenditure   
                                               Rm         Rm         Rm         Rm             Rm             Rm                                                                                                                      
 South Africa                              19 164     18 485     11 870     11 114            747            976   
  Rest of Africa including Mauritius        4 984      4 971      2 320      2 267            257            499   
  Australasia and the Pacific Islands*     24 661     14 738      7 274      4 748            327            565   
  Southeast Asia*                           2 544      2 581        989        891             57             46   
  Middle East and other regions               351        111        239         38             67              1   
                                           51 704     40 886     22 692     19 058          1 455          2 087 									   
  *Included in the Australasia and the Pacific Islands and Southeast Asia  georaphical segments is revenue 
    derived by various operating segments.                            

5. Income tax                                                                                                          
                                                                                          2013     2012   
                                                                                            Rm       Rm                                                                                                          
  TAXATION                                                                                                
  Major components of the tax expense                                                                     
  Current                                                                                                 
  Local income tax -current period                                                         131      213   
  Local income tax -recognised in current tax for prior periods                             (5)       -  
  Dividend Witholding Tax                                                                    1       57   
  Capital Gains Tax                                                                          -        4   
  Foreign income tax or withholding tax -current period                                    348      386   
  Foreign income tax or withholding tax -recognised in current tax for prior periods       (43)     (15)  
  Current tax expense                                                                      432      645   
  Deferred                                                                                                
  Deferred tax -current period                                                            (176)    (382)  
  Deferred tax -foreign rate exchange                                                        1        9   
  Deferred tax -arising from prior period adjustment                                       (90)     (69)  
  Deferred tax movement in statement of comprehensive earnings                            (265)    (442)  
  Total tax expense                                                                        167      203   
  Effective tax rate                                                                     26,7%    28,0%   

6. Property, plant and equipment, Investment property and Intangible assets 
During the twelve months ended 30 June 2013, the Group acquired assets at a cost of R1 484 million (2012: R2 087
million). Assets with a net carrying amount of R135 million (2012: R78 million) have been disposed of in the current year.
There was a decrease of R50 million to the consolidated depreciation expense of property, plant and equipment in the
current financial year due to the estimated change in useful lives. Depreciation, amortisation and impairment amounted to
R1 179 million (2012: R1 479 million), R50 million (2012: R37 million) and R2 million (2012: R Nil) respectively

7. Cash and cash equivalents                                                                                                                                                        
                                                                                  2013     2012   
                                                                                    Rm       Rm                                                                                                                                                         
  Cash and bank balances                                                         4 551    5 203   
  Bank overdrafts                                                                 (600)    (343)  
                                                                                 3 951    4 860   
  Cash and bank balances at the end of the year include                       
  the following bank balances ad cash that are restricted from immediate use: 
  Group share of cash held by joint ventures                                       935    1 156   
  Guardrisk Life Fund                                                               40       29   
                                                                                   975    1 185   
                                                                                                  
8. Competition commission
Aveng has proactively engaged and co-operated with the Competition Commission in its investigation into historic
anti-competitive practices in the South African construction industry. In June this year, Aveng entered into a settlement
agreement with the Competition Commission with respect to the above mentioned investigations, levying an administrative
penalty against the Group of R307 million. This represents a full and final settlement of all alleged collusive conduct as
defined in the Consent Agreement, confirmed by the Competition Tribunal. This penalty has been provided for in full at 
year-end.

9. Related party transactions
During the year the Company and its subsidiaries, in the ordinary course of business, entered into various sale and
purchase transactions with equity-accounted investments. There have been no significant changes to the nature of related
party transactions since 30 June 2012.

There were no related party transactions with directors or entities in which the directors have a material interest.

10. Dividends
The Board has reviewed the current periods financial performance, and given the adverse cash flow which was mainly as
a result of working capital outflow on the Queensland Curtis Liquid Natural Gas Pipeline project (QCLNG) and the
losses at Aveng Grinaker-LTA and has resolved not to declare a dividend.

11. Events after the reporting date
Mr Roger Jardine resigned as Group Chief Executive Officer (CEO) and director of the company effective 31 August
2013. Mr Kobus Verster, the Group Financial Director, will be acting CEO from 1 September 2013 until a replacement for Mr
Jardine is appointed. 

The directors are not aware of any matter or circumstance arising since the end of the reporting period not otherwise
dealt with in the Groups condensed consolidated annual financial statements which significantly affects the financial
position of the Group and the Company as at 30 June 2013 or the results of its operations or cash flows for the year then
ended. 

12. Major acquisitions and disposals
Acquisition of investment property
The Group acquired a 15% undivided share in the Goldfields Mall Shopping Centre for R71 million in June 2013. This
property is being held to earn rentals and as such has been classified as an investment property. 

Acquisition of subsidiary
The Group acquired 51% of the equity (and voting rights) of EESTech Africa (Proprietary) Limited for AUD1 million (R9
million) in February 2013. 

Disposal of available-for-sale investment
The Group disposed of their 15% shareholding in Goldfields Mall (Proprietary) Limited, which was held as an
available-for-sale investment, and was sold for its carrying amount of R80 million in June 2013.


Statement of changes in equity for the year ended 30 June 2013

                                                                                                                                                
                                                                                          Foreign  Equity-settled                               
                                                                             Total       currency     share-based                               
                                                       Share      Share     issued    translation         payment    Insurance    Total other   
                                                     capital    premium    capital        reserve         reserve     reserves       reserves   
                                                          Rm         Rm         Rm             Rm              Rm           Rm             Rm                                                                                                                                                                                                                   
  Balance at 1 July 2011                                  19      1 864      1 883             62               -           72            134   
  Earnings for the period                                  -         -         -                -               -            -             -    
  Other comprehensive earnings for the period              -         -         -              484               -          (12)           472   
  Total comprehensive earnings for the period              -         -         -              484               -          (12)           472   
  Shares issued                                            -       327        327               -               -            -              -   
  Share repurchase programme                               -      (448)      (448)              -               -            -              -   
  Movement in treasury shares                              -      (327)      (327)              -               -            -              -   
  Transfer between reserves                                -         -         -                -               -           (4)            (4)  
  Dividends                                                -         -         -                -               -            -              -   
  Total contributions and distributions recognised                                                                        
  directly in equity                                       -      (448)      (448)              -               -           (4)            (4)  
  Balance at 1 July 2012                                  19      1 416      1 435            546               -           56            602   
  Earnings for the period                                  -         -         -                -               -            -              -   
  Other comprehensive earnings for the period              -         -         -              195               -           (2)           193   
  Total comprehensive earnings for the period              -         -         -              195               -           (2)           193   
  Movement in treasury shares                              -       (47)       (47)              -               -            -              -   
  Equity settled share-based payment expense               -         -         -                -              21            -             21   
  Transfer between reserves                                -         -         -              (14)              -            -            (14)  
  Business combination -acquisition of subsidiary          -         -         -                -               -            -              -   
  Dividends                                                -         -         -                -               -            -              -   
  Total contributions and distributions                    -       (47)       (47)            (14)             21            -              7   
  recognised directly in equity                                                                                                                 
  Balance at 30 June 2013                                 19      1 369      1 388            727              21           54            802   
                                                                                                                                                                                                                               

                                                                           Total                            
                                                                    attributable                            
                                                                      to equity-           Non-            
                                                        Retained      holders of    controlling     Total   
                                                        earnings      the parent      interests    equity   
                                                              Rm              Rm             Rm        Rm                                                                                                                                                                                                                               
  Balance at 1 July 2011                                  10 900          12 917             (3)   12 914   
  Earnings for the period                                    521             521              2       523   
  Other comprehensive earnings for the period                  -             472              1       473   
  Total comprehensive earnings for the period                521             993              3       996   
  Shares issued                                                -             327             10       337   
  Share repurchase programme                                   -            (448)             -      (448)  
  Movement in treasury shares                                  -            (327)             -      (327)  
  Transfer between reserves                                    4               -              -         -  
  Dividends                                                 (561)           (561)             -      (561)  
  Total contributions and distributions recognised   
  directly in equity                                        (557)         (1 009)            10      (999)  
  Balance at 1 July 2012                                  10 864          12 901             10    12 911   
  Earnings for the period                                    466             466             (7)      459   
  Other comprehensive earnings for the period                  -             193              1       194   
  Total comprehensive earnings for the period                466             659             (6)      653   
  Movement in treasury shares                                  -             (47)             -       (47)  
  Equity settled share-based payment expense                   -              21              -        21   
  Transfer between reserves                                   14               -              -         -  
  Business combination -acquisition of subsidiary              -               -              9         9   
  Dividends                                                 (241)           (241)            (1)     (242)  
  Total contributions and distributions                     (227)           (267)             8      (259)  
  recognised directly in equity                                                                            
  Balance at 30 June 2013                                 11 103          13 293             12    13 305   

  
Other Group information 
for the year ended 30 June 2013                                                                                          
                                                   2013       2012   
                                                Audited    Audited   
                                                     Rm         Rm   
                                                                     
  Capital expenditure                                                
  Expansion                                         459      1 220   
  Replacement                                       925        867   
  Acquisition of investment property                 71          -  
  Acquisition of intangible assets                   29          -  
                                                  1 484      2 087   
  Commitment for future capital expenditure:                         
  Contracted                                        176        269   
  Authorised, but not contracted for                 50        474   
                                                    226        743   
  Results per share (cents)                                          
  Earnings                                        124,6      134,9   
  Diluted earnings                                115,9      126,1   
  Headline                                        124,6      128,1   
  Diluted headline earnings                       115,9      119,8   
  Number of shares (millions)                                        
  In issue                                        389,8      389,8   
  Weighted average                                373,9      386,0   
  Diluted weighted average                        402,1      412,9   
  Dividend per share (cents)                          -       60,0   

Commentary
Overview
Salient features
-  Revenue improved by 27% to R51,7 billion (2012: R40,9 billion).
-  Net operating earnings up by 7% to R656 million (2012: R613 million).
-  Headline earnings per share decreased by 3% to 124,6 cents (2012: 128,1 cents).
-  Order book decreased by 6% to R37,4 billion compared to 31 December 2012.
-  Net cash position of R2,4 billion (2012: R3,9 billion).
-  Solid contribution by Construction and Engineering: Australasia and Asia1 and Mining operating segments.
-  Losses in the Construction and Engineering: South Africa and rest of Africa operating segment.

Safety
The Groups safety vision, Home without harm, Everyone Everyday remains integral to the manner in which the Group
conducts business. There has been continuous improvement in the All Injury Frequency Rate to 4,52 in comparison with 4,65
in the prior year.

However, the Group regrettably suffered six fatalities during the period, two of whom involved service provider
employees. The Aveng Board and Management extend their sincere condolences to the families of our deceased colleagues.

The Group is focused on improving the management and control of high consequence activities, in particular those
involving service providers, subcontractors and transport.

Operating environment
The Group experienced a difficult year with a very disappointing performance from Aveng Grinaker-LTA offsetting a much
improved result from McConnell Dowell as well as sustained performance from Aveng Mining. The impact of labour
disruptions on the South African operations was material, both in terms of direct cost and loss of productivity. In addition,
loss provisions were required on some major projects which adversely impacted the results. The finalisation of the
Competition Commission Fast-Track settlement process is welcomed and hopefully provides a base for the industry to restore its
reputation in the future.

The construction and engineering operating environment in Australasia and Asia is slowing, with large mining and gas
projects unlikely to continue at the same pace and scale as experienced over the past few years. Despite a softer trading
environment and contract loss provisions impacting on the overall financial performance, McConnell Dowell produced a
solid set of results. Good progress has been made with the resolution of commercial issues on previously reported
problematic contracts, however, the QCLNG project remains a material financial risk.

The South African construction and engineering market remained subdued, with slower than anticipated infrastructure
spend taking place. Operating results were adversely affected by labour disruptions experienced in the construction and
mining sectors and material projected contract losses, including the Mokolo Crocodile Pipeline project (Mokolo). These
factors, as well as some contract management issues on some contracts, resulted in further operating losses compared to
the prior year.

Within the Mining operating segment, Aveng Moolmans delivered a strong performance from an improved operational
performance favourably impacting on margins, especially in South Africa and West Africa, partly offset by underperformance
from Aveng Mining Shafts & Underground due to project delays and the impairment of a significant receivable relating to
Great Basin Gold Limiteds Burnstone Mine project. 

The Group order book of R37,4 billion has decreased by 6% from R39,7 billion at 31 December 2012, mainly as a result
of the reduction in the Mining order book as well as the softening infrastructure market experienced by the Construction
and Engineering: Australasia and Asia operating segment. The Group order book nevertheless remains strong. 

Financial performance
Revenue increased by 27% to R51,7 billion over the comparable period as a result of significant activity on a number
of large projects aided by currency weakness within the Construction and Engineering: Australasia and Asia operating
segment, and significant growth in revenue achieved by the Mining operating segment.

The direct cost of labour disruptions on the Groups net operating earnings amounted to R350 million. Of this amount,
R270 million was in respect of Aveng Grinaker-LTA, with the remaining R80 million affecting the Mining and Manufacturing
and Processing operating segments. Of the above, the direct costs of strike action on the Groups Lephalale projects
amounted to R250 million.

Despite the aforementioned impact, the Groups net operating earnings increased by 7% to R656 million in relation to
the prior year. This was primarily due to a substantial improvement in the operating performance of McConnell Dowell and
Mining, offset by a weaker performance by the Manufacturing and Processing operating segment and a substantial loss at
Aveng Grinaker-LTA.

The Manufacturing and Processing operating segment delivered acceptable results in a challenging operating
environment, except for losses at Steeledale which were due to lower selling prices, inventory write-downs and labour disruptions.
Net financing expenses were R30 million compared to net finance earnings of R113 million in 2012 as a result of the
lower net cash position. Earnings from equity-accounted investments declined by R53 million to a loss of R12 million due
to losses emanating from McConnell Dowells Middle East investments. The effective tax rate reduced to 26,7% from 28,0%
due to a more advantageous mixture of lower-rate tax jurisdictions compared to 2012. Consequently, the 7% increase in net
operating earnings translated into a 6% decline in headline earnings, to R466 million. 

Undiluted and diluted headline earnings reduced by 3% to 124,6 cents per share (2012: 128,1 cents per share) and 115,9
cents per share (2012: 119,8 cents per share) respectively.

Operating free cash flow culminated in an outflow of R1,5 billion which is mainly attributable to the following:
- capital expenditure of R1,5 billion, for Aveng Mining as a result of the Sishen Mine expansion and three new shaft
  sinking contracts; Aveng Manufacturing as a result of the construction of Infrasets Tete factory in Mozambique; and
  McConnell Dowells replacement investment to support its revenue growth; 
- increase in receivables, mainly being a reflection of higher revenues at McConnell Dowell; and
- increased inventory levels, primarily steel in support of automotive customers.
The Groups net cash position of R2,4 billion declined by 38% in relation to the R3,9 billion reported in the prior
year. The Group is pursuing outstanding claims, especially at McConnell Dowell, to recover the negative working capital
movement whilst optimising the planned capital expenditure programme to improve overall cash flow.
Operating review 
Construction and Engineering: Australasia and Asia
This operating segment comprises McConnell Dowell Construction, Tunnelling, Electrix and Pipeline business units.

Revenue increased by 56% to R26,7 billion (38% increase to AUD 2,9 billion) against the comparative period, reflective
of the strong work-on-hand position at the beginning of the financial year and high project activity on a number of
large projects such as the QCLNG, Hay Point Berth (Hay Point), Australia Pacific Liquid Natural Gas Pipeline (APLNG),
Gladstone Liquid Natural Gas Pipeline (GLNG) and Gold Coast Rapid Transport (GCRT). The solid earnings increase was
enhanced by good contributions from the Electrix business unit and marine projects in Australia.

There has been a marginal slow-down in the Southeast Asia business resulting from the tough competitive environment in
those markets.

Performance in Rand terms was supported by a strong Australian Dollar, which averaged R9,08 compared to R8,01 in the
comparative period (13% increase).

Underlying net operating earnings has been strong and has increased by 57% from R406 million in the comparative period
to R639 million in the current period, despite continued uncertainty on the QCLNG project impacting profit recognition
within the Australian operations. The QCLNG project will remain a material financial risk to both profit and cash flow
through to completion at the end of the 2013 calendar year.

The Australian Construction business unit maintained strong growth, reporting revenue growth of 49% over the
comparative period from R7,7 billion to R11,5 billion.

The Adelaide Desalination Plant, one of the most advanced and energy efficient plants in the world, which was
initially delayed by geotechnical and weather challenges, achieved full capacity of 100 gigaliters of desalinated water per
annum in December 2012. The commercial issues have been finalised with the client. The desalination plant has won a number
of industry awards including the Desalination Plant of the year award at the Global Water Awards held in Spain.

The Hay Point project in Queensland has been affected by significant changes to scope, difficult ground conditions and
inclement weather. The commercial issues on the project have been resolved. The client and McConnell Dowell will work
on a collaborative basis with the EPCM (engineer, procure, construct and manage) contractor to complete the project. 

The Komo Airfield project, which entailed the construction of approximately 3km of runway and apron areas in a very
remote and challenging environment, has been completed and the commercial issues have been resolved.

Work has progressed well on Fortescue Metals Group (FMG) Berth 4 and FMG Rail Construction project in a joint
venture arrangement with the Lennings Rail Services (LRS) business unit within Aveng Manufacturing. The Seaford Rail
Overpass was completed on time, while operational challenges have been encountered on the GCRT project, but remedial action has
been implemented. 

Built Environs successfully completed the LEAP 2 Defense Housing Public Private Partnership (PPP) project and
Walkerville Marketplace project.

Overseas Construction reported a 1% decrease in revenue, from R3,7 billion to R3,6 billion as revenue from Southeast
Asia has slowed, which is reflective of the competitive markets. New Zealand, the Pacific Islands and the Middle East
reached revenue levels consistent with the prior year. Growth opportunities are expected in the transport, power and water
sectors. Work has progressed well on projects in Singapore, Indonesia and the Vale Jetty in Malaysia. The mechanical
projects in Saudi Arabia are close to completion and have progressed well. Winning work remains a challenge, however, there
are positive signs in growth markets going forward including Southeast Asia, Qatar and Saudi Arabia.

The Pipelines business unit reported a considerable increase in revenue to R8,0 billion compared to R2,9 billion in
the comparative period. Work on a number of significant coal seam methane projects secured in Queensland in the previous
financial year are still in progress. Work on the APLNG (approximately 70% complete) and GLNG (approximately 60%
complete) projects have progressed according to schedule and are performing well overall.

However, profitability continues to be impacted by the QCLNG project, which is now 88% complete, primarily due to
adverse weather conditions and commercial issues with the client. 

As a result, further loss provisions have been recognised on the project. The project is being undertaken with a joint
venture partner, and involves the detailed design and construction work for a 540km, 42-inch underground gas pipeline network. 
The extreme weather events experienced in Queensland in the current year have extended the project beyond the 31 August 2013 
schedule which has added costs and commercial risk for which provisions have been recognised. Although this project is 
expected to be substantially completed in November 2013, it is adversely impacting working capital as well as profitability 
which is expected to be resolved during the second half of the new financial year.

The Electrix business unit achieved significant growth across all of its key business sectors in Australia and New
Zealand, increasing revenue by 37% to R2,6 billion for the year. In New Zealand, business remains strong, underpinned by
long-term maintenance contracts in transmission lines and substations, as well as high work levels in the gas sector. In
Australia, significant growth has been experienced through winning significant contracts with Powerco, SP Ausnet and
Western Power as well as extensions of existing term contracts. The Electrix business unit goes into the new financial year
with a record level of work-on-hand and excellent prospects to expand into the distribution, gas, transport and water
sectors.

The Tunnelling business unit is currently performing below revenue expectations, which is a reflection of a shortage
of work while securing new contracts has been a challenge. Revenue decreased marginally in relation to the prior period.
The Waterview Project is a significant transport infrastructure project in New Zealand, which is approximately 30%
complete and is on schedule. The Abu Dhabi cable project is on track and the Beauty World Mass Rapid Transport Station in
Singapore is moving towards substantial completion ahead of time. There are a number of significant project opportunities
being pursued in the mining, infrastructure and transport sectors that the business unit is well positioned to capitalise
on.

Construction and Engineering: South Africa and rest of Africa
This operating segment comprises the Aveng Grinaker-LTA, Aveng Water and Aveng E+PC business units. 

The Aveng Mining Shafts & Underground activities of the Group, previously reported under this operating segment, are
now reported under the Mining operating segment. Comparatives have been restated.

Revenue for the operating segment increased by 1% to R8,3 billion, compared to R8,2 billion in the comparative period.
The operating segment reported a net operating loss of R914 million against a loss of R861 million in the prior year,
after absorbing the impact of loss provisions on poor performing contracts, labour disruptions which have affected the
completion dates and profitability of some projects and losses in the Specialised business unit.

Aveng Grinaker-LTA
Revenue increased by 3% to R7,7 billion from R7,5 billion in the prior year. 
Following the change in management in the second half of the year, a decision was made to utilise a team of external
experts to reassess completion programmes and cost-to-completion levels on major contracts. This has resulted in an
increase in provisions on some of these contracts, including the Mokolo project.

The net operating loss emanated from the following: 
- the impact of labour disruptions, including those on Lephalale-related projects which resulted in a R270 million
  direct cost impact on net operating earnings;  
- losses on major contracts, which include the Mokolo project, to the amount of R500 million; and 
- losses of R150 million at the Specialised business units of Rand Roads and Aveng Steel Fabrication (ASF,
  previously known as DSE);
  
The Construction business unit, which includes the Building, Civils and Earthworks, and Mechanical and Electrical
business, reported a decrease in revenue of 2% to R6,1 billion. An operating loss was reported in the current financial
period, mainly as a result of problems experienced on contracts, as well as labour disruptions. The Coastal division
performed well, benefitting from the integration of the Building and Civils operations. A number of higher margin large
contracts were awarded during the year which have had a positive impact on results, however, the major impact is expected to be
felt in the ensuing financial year. 
            
The Specialised business unit, which comprises of Rand Roads, Ground Engineering (GEL), Karenna, Automation and
Control Systems (A&CS), Facades and ASF, continued to underperform relative to expectations. Revenue for the Specialised
business unit has increased by 26% to R1,6 billion in relation to the comparative period, notably due to the good
performances of GEL and A&CS.

Rand Roads reported a net operating loss which was primarily due to inventory write-down on imported bitumen, cost
overruns on some major projects as well as bad debt provisions recognised.

ASFs productivity and utilisation levels remained below capacity whilst the labour disruptions at Medupi delayed the
delivery of ASFs contract work to the site, and as a result an operating loss was recognised. The contractual claims
against Genrec, relating to the ASF steel fabrication contract for the Medupi Power Station, continue to be pursued
through legal and contractual channels.

Aveng E+PC and Aveng Water
The revenue of Aveng E+PC declined by 15% to R332 million against the comparative year, mainly as a result of the
tapering-off of work on large contracts in the current year and delays experienced in the start of new ones. 

Aveng Waters revenue declined in relation to the comparative year due to delays experienced on the civil construction
at the eMalahleni Phase 2 Expansion Project.

Mining
This operating segment comprises Aveng Moolmans and Aveng Mining Shafts & Underground.

Segmental revenue increased by 11% to R7,4 billion, which was driven by strong growth from Aveng Moolmans.
 
The net operating earnings grew by 23% to R710 million as a result of improved efficiencies and new business
offsetting the impact of labour disruptions in the mining industry. This increase was after a loss provision as a result of a
customer, namely Great Basin Gold Limited (owner of the Burnstone Mine project), being placed in business rescue, and the
costs of termination, by mutual consent, of a contract in Zambia which was incurring losses.

Aveng Moolmans revenue growth is attributable to growth in South Africa and West Africa. The west Africa region
achieved record levels of plant fleet utilisation and tonnages produced. A heightened focus on operating efficiencies and the
completion of some lower margin projects have driven the improvement in results within Aveng Moolmans. 

The performance of Aveng Mining Shafts & Underground was hampered by project commencement delays on three new projects
as well as the aforementioned receivable impairment relating to the Burnstone Mine project.

The Mining operating segment benefitted from a diversified client, commodity and country portfolio combined with a
continued focus on improved efficiencies.

Manufacturing and Processing
This operating segment comprises Aveng Manufacturing and Aveng Trident Steel.

Segmental revenue increased by 4% to R9,7 billion in relation to the comparative period, with a decline of 54% in net
operating earnings of R269 million when compared to R585 million achieved in the prior period, mainly due to the slower
than anticipated domestic infrastructure send, labour and steel supply disruptions and price volatility.

The Aveng Manufacturing business unit consists of Steeledale, Duraset, Dynamic Fluid Control (DFC), Infraset and the
LRS divisions and achieved a revenue growth of 4% over the comparative period. The Steeledale division experienced
lower revenue due to lower selling prices in the rebar market and slower trading activity for mesh products. The Steeledale
divisions financial performance was further hampered by higher steel and manufacturing costs, as well as inventory
write downs and labour disruptions. The Duraset and DFC divisions were impacted by lower volumes from the local mining
sector due to labour disruptions, with the impact at DFC partially mitigated by improved revenue from its foreign operations.
The Infraset division performed well as a result of improvements across its entire range, while the LRS division
experienced revenue growth mainly as a result of the FMG Rail Construction project in Australia.

The Aveng Trident Steel business experienced a growth in revenue of 5% over the prior year. Notably, conditions
improved in the second half of the year with stronger performances contributing to a marginal improvement in sales volumes,
and steel prices strengthening. An increase in steel imports normalised low inventory levels towards the end of the
financial year. Profitability has, however, been hampered by a continued slow-down in the market demand for merchanting
products and strong price competition as well as the disruptions in steel supply from local mills and price volatility. A
major initiative, which involved substantial management time, was the installation of an integrated computer system which
was successfully commissioned on 12 August 2013. 

Administration
Administration, which comprises Corporate Services, corporate-held investments including properties and consolidation
eliminations, reduced the net operating earnings by R48 million to R48 million in the current year. This is reflective
of savings of Corporate office overhead expenditure compared to the prior year, success fees earned by the concessions
business in reaching financial close on the Sishen renewable wind energy project and increased recovery of centralised
Corporate office cost to better reflect the cost structure of each operating segment.

Order Book
The Groups two-year order book decreased by 6% to R37,4 billion at 30 June 2013 from R39,7 billion at 31 December
2012. This was primarily due to a 28% reduction in the Mining operating segment order book following the termination of a
mining contract in Zambia and the run-off of still-to-be extended mining contracts which are scheduled for renewal in
2014. The successful renewal of these long-term contracts will result in the normalisation of the Mining operating segment's 
order book.

The Construction and Engineering: Australasia and Asia operating segments order book decreased by 3% to R24,0 billion
at 30 June 2013 from R24,7 billion at 31 December 2012 as a result of large projects coming to an end. In Australian
Dollar terms the order book decreased by 7% to AUD2,7 billion.

The Construction and Engineering: South Africa and rest of Africa operating segment order book increased by 13% to
R7,5 billion reflecting the award of some significant projects during the past six months, including the Nacala Rail
Project in Tete, Mozambique and the Majuba Rail Line for Eskom. The segment is also working on the financial close of the
Mauritius Road Decongestion project.

Competition commission 
Following the widespread investigation by the Competition Commission into historic anti-competitive practices, a Group
subsidiary, Aveng (Africa) Limited entered into a R307 million settlement agreement with the Commission in June 2013.
The Competition Tribunal confirmed the settlement in July and this represents the full and final settlement of all
alleged collusive conduct as defined in the consent agreement with the Commission. Aveng co-operated to the fullest extent
possible with the Commissions Fast-Track settlement process and acknowledged historic anti-competitive practices. We
believed that the most appropriate way to mitigate our risk was to settle all outstanding matters defined in the consent
agreement and therefore we chose not to expose the Group to additional penalties or legal expenses by raising any challenges
in the tribunal. This included issues in respect of which we had little information. The settlement has provided
certainty and finality to our stakeholders and we trust that this draws a line under this regrettable period in our history
and enables us to move forward. We do so in the hope that the South African government will support the construction
industry as it seeks to restore trust and develop a sustainable future. We support the introduction of an industry-wide code
of conduct that formalises the commitment by industry participants to compete ethically. In support of the industrys
commitment to eradicate unethical behaviour, we have since 2007 implemented a comprehensive group-wide programme to
identify and remove anti-competitive conduct and we continue to educate all staff to ensure compliance with the relevant
legislation.

Dividend declaration 
The Board has reviewed the current periods financial performance and given the adverse cash flow, which was mainly as
a result of working capital outflow on QCLNG and the losses at Aveng Grinaker-LTA, and has resolved not to declare a
dividend.

Changes to the board 
Roger Jardine, the Chief Executive Officer (CEO), resigned with effect from 31 August 2013 after five years at the
helm. Roger informed the Board that with the completion of the Competition Commissions investigation into the
construction industry, he had decided that this was an appropriate time for him to step down.

Roger played a primary role in managing the very complex regulatory process with the Competition Commission as well as
dealing with the consequent issues that arose as a result of the investigation. The Board thanks Roger for his
commitment in steering the Group through one of the most difficult periods that it has faced and wishes him well in his future
endeavours.

Kobus Verster, the Group Financial Director, has assumed the role of acting CEO and the nomination committee of the
Board has commenced a process to appoint a permanent CEO. 
Stephen Pell resigned as an executive director on 8 February 2013.

Outlook and prospects 
The Group anticipates that public sector infrastructure spend in South Africa will remain slower than anticipated.
Opportunities in certain selected key African markets remain an important focus area. 

The Australian economy is expected to weaken in the transition from the peak of the resources boom to growth in
non-mining sectors, which will negatively impact infrastructure spend. However, McConnell Dowell is tendering on a number of
large PPP and transport opportunities which should place McConnell Dowell in good position going forward. The QCLNG
project will remain a material financial risk to both profit and cash flow through to completion at the end of the 2013
calendar year, and will thus continue to receive intense focus. 

Aveng Grinaker-LTA will continue its stabilisation process by reducing overheads, focusing on current project
execution, implementing improved business processes and systems and targeting working capital and cash management. The business
unit will place intense focus on its project awards in Mozambique while leveraging further opportunities in the region,
including its preferred bidder status in the Mauritius Road Decongestion project.

Aveng Steel was established with effect from 1 July 2013 to combine the Aveng Groups steel businesses into one
operating segment, leverage synergies to restore stability in the Aveng Steeledale business and leverage the combined capacity
of its operations to pursue growth in new market segments, a wider product mix and geographic expansion. There will be
an on-going focus on operational improvements to mitigate the challenging dynamics in the steel industry.

Aveng Engineering will focus its attention on managing and participating in the construction of the Groups two
renewable solar and wind energy projects in the Northern Cape.

The Aveng Manufacturing business units, rail and infrastructure divisions are well positioned for growth outside
South Africa. In Mozambique, Aveng Manufacturing is constructing a plant for the manufacture of concrete pipes and sleepers
to be completed by January 2014.
The Mining operating segment expects its order book to normalise during the year as contracts are renewed. Mining
continues to be well placed to participate in the African mining industry as well as seeking opportunities in shaft sinking
projects in other regions. 

Although the Board anticipates that the steps taken to resolve the under-performing operations will have a positive
impact in the 2014 financial year, the impact of current and imminent labour disruptions is a material risk to performance
of the South African operations. In particular, the automotive and civil construction industrys strike in August 2013
will have a negative impact on volumes and productivity at Aveng Steel and Aveng Grinaker-LTA, with potential mining
labour disruptions impacting on the Aveng Manufacturing and Mining business units which service these industries.

In summary, the current order book and the structural improvements implemented in 2013 as well as the provisions and
remedial action taken on problematic contracts, should result in a solid improvement in the operational performance of
the Group in the 2014 financial year.

By order of the Board
AWB Band                HJ Verster
(Chairman)              (acting Chief Executive Officer, and Group Financial Director)
6 September 2013

Directors 
AWB Band*# (Chairman), HJ Verster (acting Chief Executive Officer, and Group Financial Director), JJA Mashaba (Group
Human Resources Director), DG Robinson (Australian), P Erasmus*#, MA Hermanus*#, MJ Kilbride*#, RL Hogben*#, TM
Mokgosi-Mwantembe*#, MJD Ruck*#, MI Seedat*#, NL Sowazi*,  PK Ward*#  (*non-executive)     (#independent) 
COMPANY SECRETARY 
M Nana 
  
Registered office 
204 Rivonia Road, Morningside, Sandton, 2057
PO Box 6062, Rivonia, 2128, South Africa
Telephone +27 11 779 2800
Telefax +27 11 784 5030

Registrars  
Computershare Investor Services (Proprietary) Limited
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107, South Africa
Telephone +27 11 370 5000
Telefax +27 11 370 5560
PO Box 61051, Marshalltown, 2107

Sponsor 
J.P. Morgan Equities South Africa (Proprietary) Limited
Registration number: 1995/011815/08/06
1 Fricker Road, cnr Hurlingham Road,Illovo, 2196, South Africa
Telephone +27 11 537 5333
Telefax +27 11 507 0770

Disclaimer 
Certain Statements in this release that are neither reported financial results nor other historical information, are
forward looking statements, including but not limited to, statements that are predictions of or indicate future earnings,
savings, synergies, events, trends, plans or objectives about the Companys operations and financial conditions. They
are based on Aveng Limiteds best estimates and information at the time of writing. They are nonetheless subject to
significant uncertainties and contingencies many of which are beyond the control of the Company. Unanticipated events will
occur and actual future events may differ materially from current expectations due to new business opportunities, changes
in priorities by the Company or its joint ventures as well as other factors. Any of these factors may materially affect
the Companys future business activities and its ongoing results. Undue reliance should not be placed on such statements
because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other
factors that could cause actual results and company plans and objectives to differ materially from those expressed or
implied in the forward looking statements (or past results).


www.aveng.co.za
    



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