Wrap Text
Unaudited interim condensed consolidated financial statements for the six months ended 31 December 2014
Aveng Group
1944/018119/06
Share codes
JSE: AEG
ISIN: ZAE 000111829
Unaudited interim condensed consolidated financial statements
for the six months ended 31 December 2014
Salient features
Financial performance
During the six months period ended 31 December 2014:
Revenue R23,9 billion
Decrease of 14% from R27,7 billion at December 2013
Net operating earnings R413 million
Decrease of 19% from R510 million at December 2013
Profit on sale of subsidiary R777 million
Earnings for the period R362 million profit
December 2013: R313 million profit
Headline earnings R138 million
Decrease of 55% from R307 million at December 2013
Operating free cash flow R220 million inflow
December 2013: R178 million outflow
Earnings per share 89,3 cents
Increase of 6% from 83,9 cents at December 2013
Headline earnings per share 34,5 cents
Decrease of 58% from 82,1 cents at December 2013
Net operating earnings - segmental analysis
H1 H1 H2 % Change
2015 2014 Change 2014 H1 2015/
Rm Rm % Rm H2 2014
South Africa and rest of Africa* (229) (202) (13) (232) 1
Australasia and Asia 183 191 (4) 80 >100
Total Construction and Engineering (46) (11) (318) (152) 70
Mining 241 295 (18) 234 3
Manufacturing and Processing 79 162 (51) 202 (61)
Other and Eliminations* 139 64 117 5 >100
Total 413 510 (19) 289 43
* Effective 1 July 2014, the results of Aveng Capital Partners have been reallocated from Other and Eliminations
segment to the Construction and Engineering: South Africa and rest of Africa segment to more accurately reflect the synergies
with Aveng Grinaker-LTA and Aveng Engineering. Comparatives have been adjusted accordingly.
Interim condensed consolidated statement of financial position
as at 31 December 2014
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Note Rm Rm Rm
ASSETS
Non-current assets
Investment property* - 78 86
Goodwill arising on consolidation 7 351 1 443 663
Intangible assets 7 298 222 321
Property, plant and equipment 7 5 825 6 864 6 346
Equity-accounted investments 8 263 219 306
Infrastructure investments 9 633 - -
Available-for-sale investments - 72 190
Deferred taxation 1 383 1 379 1 403
Derivative instruments* 8 - **
Amounts due from contract customers* 10 3 192 3 431 2 946
11 953 13 708 12 261
Current assets
Inventories 3 056 2 903 2 793
Derivative instruments* 46 28 1
Amounts due from contract customers* 10 6 906 5 822 8 405
Trade and other receivables* 2 433 2 999 2 785
Cash and bank balances* 4 256 5 246 4 136
16 697 16 998 18 120
Non-current assets held-for-sale 11 607 - 607
TOTAL ASSETS 29 257 30 706 30 988
EQUITY AND LIABILITIES
EQUITY
Share capital and share premium 2 001 1 388 2 008
Other reserves* 1 279 941 1 220
Retained earnings* 10 515 11 473 10 157
Equity attributable to equity-holders of parent 13 795 13 802 13 385
Non-controlling interest 14 10 11
TOTAL EQUITY 13 809 13 812 13 396
LIABILITIES
Non-current liabilities
Deferred taxation* 234 386 257
Borrowings and other liabilities 12 2 158 1 738 2 303
Payables other than contract-related* - 87 102
Employee-related payables* 126 743 682
Derivative instruments* - - 3
Trade and other payables 297 - -
2 815 2 954 3 347
Current liabilities
Amounts due to contract customers 10 2 353 2 352 2 677
Borrowings and other liabilities 12 416 830 564
Payables other than contract-related* 98 102 95
Employee-related payables* 1 081 703 893
Derivative instruments* 3 - 60
Trade and other payables* 8 416 9 402 9 743
Taxation payable 266 181 213
Bank overdrafts* - 370 -
12 633 13 940 14 245
TOTAL LIABILITIES 15 448 16 894 17 592
TOTAL EQUITY AND LIABILITIES 29 257 30 706 30 988
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations
adopted, changes in accounting policies and other reclassifications.
** Amount less than R1 million.
Interim condensed consolidated statement of comprehensive earnings
for the six months ended 31 December 2014
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) % (Audited)
Note Rm Rm change Rm
Revenue 23 864 27 654 (14) 52 959
Cost of sales* (22 304) (25 781) 13 (49 324)
Gross earnings* 1 560 1 873 (17) 3 635
Other earnings* 319 202 58 302
Operating expenses* (1 496) (1 609) 7 (3 171)
Earnings from equity-accounted investments 8 30 44 (32) 33
Net operating earnings* 413 510 (19) 799
Impairment of property, plant and equipment
and intangible assets* 7 (246) - (>100) (15)
Impairment of goodwill arising on consolidation* 7 (291) - (>100) (816)
Profit on sale of subsidiary 5 777 - >100 -
Earnings/(loss) before financing transactions* 653 510 28 (32)
Finance earnings 72 57 26 136
Accrual of coupon interest for convertible bonds 12 (64) - (>100) -
Accretion of convertible bond liability due to
transaction costs 12 (3) - (>100) -
Accretion of convertible bond liability due to
separation of option component 12 (28) - (>100) -
Fair value adjustment on convertible bonds
conversion option 12 36 - (>100) -
Other finance expenses (179) (140) (28) (319)
Earnings/(loss) before taxation* 487 427 14 (215)
Taxation* 13 (125) (114) (10) (161)
EARNINGS/(LOSS) FOR THE PERIOD* 362 313 16 (376)
Earnings/(loss) for the period attributable to:
Equity-holders of the parent* 358 314 14 (381)
Non-controlling interest 4 (1) >100 5
362 313 16 (376)
Earnings/(loss) for the period 362 313 16 (376)
brought forward*
Other comprehensive earnings
Exchange differences on translating
foreign operations (255) 192 (>100) 402
Recycling of exchange differences on sale (111) - (>100) -
of subsidiary
Available-for-sale fair value reserve - - - 93
Other comprehensive loss released/(raised)
from equity-accounted investments 8 28 - >100 (28)
Other comprehensive (loss)/earnings (338) 192 >100 467
for the period, net of taxation*
Total comprehensive earnings 24 505 (95) 91
for the period*
Total comprehensive earnings
for the period attributable to:
Equity-holders of the parent* 20 506 (96) 86
Non-controlling interests 4 (1) >100 5
24 505 (95) 91
Other comprehensive earnings
for the period attributable to:
Equity-holders of the parent* (338) 192 (>100) 467
Results per share (cents)*
Earnings/(loss) - basic 15 89,3 83,9 6 (101,9)
Earnings/(loss) - diluted 15 89,0 78,0 14 (94,8)
Number of shares (millions)
In issue 416,7 389,8 - 416,7
Weighted average 15 400,6 373,9 - 374,0
Diluted weighted average 15 402,1 402,1 - 402,1
EBITDA for the Group being net operating earnings before depreciation and amortisation is R928 million
(December 2013: R1 094 million; June 2014: R1 708 million).
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes
in accounting policies and other reclassifications.
Interim condensed consolidated statement of cash flows
for the six months ended 31 December 2014
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Note Rm Rm Rm
Operating activities
Cash retained / (utilised) from operations 589 425 (98)
Depreciation 501 564 881
Amortisation 14 20 28
Non-cash and other movements 16 (418) (141) 549
Cash generated by operations* 686 868 1 360
Changes in working capital:*
Increase in inventories (279) (123) (13)
Decrease/(increase) in amounts due from contract customers 743 4 (2 094)
Decrease/(increase) in trade and other receivables 362 (226) (12)
(Decrease)/increase in amounts due to contract customers (252) (15) 310
(Decrease)/increase in trade and other payables (1 204) 352 693
(Decrease)/increase in derivative instruments (103) (28) 62
Decrease in payables other than contract-related (102) (94) (102)
Decrease in employee-related payables (187) (224) (106)
Total changes in working capital (1 022) (354) (1 262)
Cash (utilised)/generated by operating activities (336) 514 98
Finance expenses paid (176) (140) (283)
Finance earnings received 72 57 127
Taxation paid (134) (107) (252)
Cash (outflow)/inflow from operating activities (574) 324 (310)
Investing activities
Property, plant and equipment purchased
- expansion (101) (271) (384)
- replacement (456) (320) (677)
Proceeds on sale of property, plant and equipment 242 144 256
Proceeds on disposal of investment property 97 - -
Acquisition of intangible assets (26) (58) (176)
Capital expenditure net of proceeds on disposal (244) (505) (981)
Loans advanced to equity-accounted investments
net of dividends received 8 (88) (31) (140)
Loans advanced to infrastructure investment companies 9 (165) - -
Acquisition of subsidiary 4 (23) - -
Net proceeds on disposal of subsidiary 5 1 314 - -
Dividend earnings - 34 33
Cash inflow/(outflow) from investing activities 794 (502) (1 088)
Operating free cash inflow/outflow 220 (178) (1 398)
Operating free cash inflow/(outflow) brought forward 220 (178) (1 398)
Financing activities with equity-holders
Shares repurchased (7) - (7)
Dividends paid (2) - (6)
Financing activities with debt-holders
Proceeds from convertible bonds 12 1 947 - -
(Repayment)/proceeds from borrowings raised (1 900) 1 037 1 336
Net increase/(decrease) in cash and bank balances
before foreign exchange movements 258 859 (75)
Foreign exchange movements on cash and bank balances (138) 124 314
Cash and bank balances at beginning of the period* 4 136 3 893 3 897
Total cash and bank balances at end of the period 4 256 4 876 4 136
Borrowings excluding bank overdrafts* 2 574 2 568 2 867
Net cash position* 1 682 2 308 1 269
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes
in accounting policies and other reclassifications.
Interim condensed consolidated statement of changes in equity
for the six months ended 31 December 2014
Available-
Total Foreign for-sale
share currency fair
Share Share capital and translation value
capital premium premium reserve reserve
Rm Rm Rm Rm Rm
Six months ended 31 December 2013 (Unaudited)
Opening balance as previously reported 19 1 369 1 388 727 -
Adoption of new IFRS 10 accounting standard
(refer to note 3) - - - - -
Balance at 1 July 2013 as restated 19 1 369 1 388 727 -
Earnings for the period - - - - -
Other comprehensive earnings for the period
(net of taxation) - - - 192 -
Total comprehensive earnings for the period - - - 192 -
Equity-settled share-based payment charge - - - - -
Acquisition of non-controlling interests - - - - -
Total contributions and distributions recognised - - - - -
Balance at 31 December 2013 19 1 369 1 388 919 -
Year ended 30 June 2014 (Audited)
Balance at 1 July 2013 19 1 369 1 388 727 -
Loss for the period - - - - -
Other comprehensive earnings/(loss) for the period
(net of taxation) - - - 402 93
Total comprehensive earnings/(loss) for the period - - - 402 93
Movement in treasury shares - (1) (1) - -
Equity-settled share-based payment charge - - - - -
Issue of shares to BEE consortium 1 620 621 - -
Dividends paid - - - - -
Total contributions and distributions recognised 1 619 620 - -
Balance at 30 June 2014 20 1 988 2 008 1 129 93
Six months ended 31 December 2014 (Unaudited)
Balance at 1 July 2014 20 1 988 2 008 1 129 93
Earnings for the period - - - - -
Other comprehensive earnings/(loss) for
the period (net of taxation) - - - (366) -
Total comprehensive earnings/(loss)
for the period - - - (366) -
Movement in treasury shares - (7) (7) - -
Equity-settled share-based payment charge - - - - -
Transfer of convertible bond option to convertible
bond equity reserve - - - - -
Deferred transaction costs allocated to convertible
bond equity reserve - - - - -
Foreign currency translation movement - - - - -
Dividends paid - - - - -
Total contributions and distributions recognised - (7) (7) - -
Balance at 31 December 2014 20 1 981 2 001 763 93
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes
in accounting policies and other reclassifications.
Interim condensed consolidated statement of changes in equity
for the six months ended 31 December 2014 (continued)
Equity-
settled
Equity- share- Convertible
accounted based bond Total
investments payment Insurance equity other
reserve reserve reserve* reserve reserves*
Rm Rm Rm Rm Rm
Six months ended 31 December 2013 (Unaudited)
Opening balance as previously reported - 21 54 - 802
Adoption of new IFRS 10 accounting standard
(refer to note 3) - - (54) - (54)
Balance at 1 July 2013 as restated - 21 - - 748
Earnings for the period - - - - -
Other comprehensive earnings for the period
(net of taxation) - - - - 192
Total comprehensive earnings for the period - - - - 192
Equity-settled share-based payment charge - 1 - - 1
Acquisition of non-controlling interests - - - - -
Total contributions and distributions recognised - 1 - - 1
Balance at 31 December 2013 - 22 - - 941
Year ended 30 June 2014 (Audited)
Balance at 1 July 2013 - 21 - - 748
Loss for the period - - - - -
Other comprehensive earnings/(loss) for the period
(net of taxation) (28) - - - 467
Total comprehensive earnings/(loss) for the period (28) - - - 467
Movement in treasury shares - - - - -
Equity-settled share-based payment charge - 5 - - 5
Issue of shares to BEE consortium - - - - -
Dividends paid - - - - -
Total contributions and distributions recognised - 5 - - 5
Balance at 30 June 2014 (28) 26 - - 1 220
Six months ended 31 December 2014 (Unaudited)
Balance at 1 July 2014 (28) 26 - - 1 220
Earnings for the period - - - - -
Other comprehensive earnings/(loss) for
the period (net of taxation) 28 - - - (338)
Total comprehensive earnings/(loss)
for the period 28 - - - (338)
Movement in treasury shares - - - - -
Equity-settled share-based payment charge - 7 - - 7
Transfer of convertible bond option to convertible
bond equity reserve - - - 402 402
Deferred transaction costs allocated to convertible
bond equity reserve - - - (12) (12)
Foreign currency translation movement - - - - -
Dividends paid - - - - -
Total contributions and distributions recognised - 7 - 390 397
Balance at 31 December 2014 - 33 - 390 1 279
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes
in accounting policies and other reclassifications.
Interim condensed consolidated statement of changes in equity
for the six months ended 31 December 2014 (continued)
Total
attributable
to equity
holders Non-
Retained of the controlling Total
earnings* parent* interest equity*
Rm Rm Rm Rm
Six months ended 31 December 2013 (Unaudited)
Opening balance as previously reported 11 103 13 293 12 13 305
Adoption of new IFRS 10 accounting standard
(refer to note 3) 56 2 - 2
Balance at 1 July 2013 as restated 11 159 13 295 12 13 307
Earnings for the period 314 314 (1) 313
Other comprehensive earnings for the period
(net of taxation) - 192 - 192
Total comprehensive earnings for the period 314 506 (1) 505
Equity-settled share-based payment charge - 1 - 1
Acquisition of non-controlling interests - - (1) (1)
Total contributions and distributions recognised - 1 (1) -
Balance at 31 December 2013 11 473 13 802 10 13 812
Year ended 30 June 2014 (Audited)
Balance at 1 July 2013 11 159 13 295 12 13 307
Loss for the period (381) (381) 5 (376)
Other comprehensive earnings/(loss) for the period
(net of taxation) - 467 - 467
Total comprehensive earnings/(loss) for the period (381) 86 5 91
Movement in treasury shares - (1) - (1)
Equity-settled share-based payment charge - 5 - 5
Issue of shares to BEE consortium (621) - - -
Dividends paid - - (6) (6)
Total contributions and distributions recognised (621) 4 (6) (2)
Balance at 30 June 2014 10 157 13 385 11 13 396
Six months ended 31 December 2014 (Unaudited)
Balance at 1 July 2014 10 157 13 385 11 13 396
Earnings for the period 358 358 4 362
Other comprehensive earnings/(loss) for
the period (net of taxation) - (338) - (338)
Total comprehensive earnings/(loss)
for the period 358 20 4 24
Movement in treasury shares - (7) - (7)
Equity-settled share-based payment charge - 7 - 7
Transfer of convertible bond option to convertible
bond equity reserve - 402 - 402
Deferred transaction costs allocated to convertible
bond equity reserve - (12) - (12)
Foreign currency translation movement - - 1 1
Dividends paid - - (2) (2)
Total contributions and distributions recognised - 390 (1) 389
Balance at 31 December 2014 10 515 13 795 14 13 809
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes
in accounting policies and other reclassifications.
Interim condensed consolidated statement of adjusted earnings
for the six months ended 31 December 2014
Six months ended 31 December 2014 (unaudited)
Adjusted Special
earnings items Total
Note Rm Rm Rm
Revenue 1.1 22 503 (1 361) 23 864
Cost of sales 1.1 (21 036) 1 268 (22 304)
Gross earnings 1 467 (93) 1 560
Other earnings 319 - 319
Operating expenses 1.1 (1 467) 29 (1 496)
Earnings from equity-accounted investments 30 - 30
Net operating earnings 349 (64) 413
Impairment of property, plant and equipment
and intangible assets 1.2 - 246 (246)
Impairment of goodwill arising on consolidation 1.3 - 291 (291)
Profit on the sale of subsidiary 1.4 - (777) 777
Earnings before financing transactions 349 (304) 653
Finance earnings 72 - 72
Accrual of coupon interest for convertible bonds (64) - (64)
Accretion of convertible bond liability due to
transaction costs 1.5 - 3 (3)
Accretion of convertible bond liability due to
separation of option component 1.5 - 28 (28)
Fair value adjustment on convertible bond
conversion option 1.5 36 - 36
Other finance expenses 1.1 (175) 4 (179)
Earnings/(loss) before taxation 218 (269) 487
Taxation 1.6 - 125 (125)
Earnings/(loss) for the period 218 (144) 362
Earnings/(loss) attributable to:
Equity-holders of the parent 214 (144) 358
Non-controlling interest 4 - 4
218 (144) 362
Earnings per share - basic (cents) 53,3 89,3
Earnings per share - diluted (cents) 53,1 89,0
Interim condensed consolidated statement of adjusted earnings
for the six months ended 31 December 2014 (continued)
Six months ended 31 December 2013 (unaudited)
Adjusted Special
earnings items Total
Rm Rm Rm
Revenue 25 822 (1 832) 27 654
Cost of sales (24 072) 1 709 (25 781)
Gross earnings 1 750 (123) 1 873
Other earnings 202 - 202
Operating expenses (1 564) 45 (1 609)
Earnings from equity-accounted investments 44 - 44
Net operating earnings 432 (78) 510
Impairment of property, plant and equipment
and intangible assets - - -
Impairment of goodwill arising on consolidation - - -
Profit on the sale of subsidiary - - -
Earnings before financing transactions 432 (78) 510
Finance earnings 56 (1) 57
Accrual of coupon interest for convertible bonds - - -
Accretion of convertible bond liability due to
transaction costs - - -
Accretion of convertible bond liability due to
separation of option component - - -
Fair value adjustment on convertible bond
conversion option - - -
Other finance expenses (140) - (140)
Earnings/(loss) before taxation 348 (79) 427
Taxation (91) 23 (114)
Earnings/(loss) for the period 257 (56) 313
Earnings/(loss) attributable to:
Equity-holders of the parent 258 (56) 314
Non-controlling interest (1) - (1)
257 (56) 313
Earnings per share - basic (cents) 69,0 83,9
Earnings per share - diluted (cents) 64,2 78,0
Interim condensed consolidated statement of adjusted earnings
for the six months ended 31 December 2014 (continued)
Year ended 30 June 2014 (unaudited)
Adjusted Special (Audited)
earnings items Total
Rm Rm Rm
Revenue 49 197 (3 762) 52 959
Cost of sales (45 814) 3 510 (49 324)
Gross earnings 3 383 (252) 3 635
Other earnings 302 - 302
Operating expenses (3 079) 92 (3 171)
Earnings from equity-accounted investments 33 - 33
Net operating earnings 639 (160) 799
Impairment of property, plant and equipment
and intangible assets - 15 (15)
Impairment of goodwill arising on consolidation - 816 (816)
Profit on the sale of subsidiary - - -
Earnings before financing transactions 639 671 (32)
Finance earnings 134 (2) 136
Accrual of coupon interest for convertible bonds - - -
Accretion of convertible bond liability due to
transaction costs - - -
Accretion of convertible bond liability due to
separation of option component - - -
Fair value adjustment on convertible bond
conversion option - - -
Other finance expenses (319) - (319)
Earnings/(loss) before taxation 454 669 (215)
Taxation (114) 47 (161)
Earnings/(loss) for the period 340 716 (376)
Earnings/(loss) attributable to:
Equity-holders of the parent 335 716 (381)
Non-controlling interest 5 - 5
340 716 (376)
Earnings per share - basic (cents) 89,7 (101,9)
Earnings per share - diluted (cents) 83,4 (94,8)
1.1 Results of Electrix disposed of effective 31 October 2014 have been excluded from adjusted
earnings in all periods. Electrix was not considered to be an operating segment nor a separate
major line of business or geographical area, therefore the sale of this entity does not give
rise to a discontinued operation but rather a disposal group.
1.2 For the six months ended 31 December 2014, a R246 million impairment of property, plant and
equipment and intangible assets was recognised. A R15 million impairment of intangible assets
was recognised for the financial year ended 30 June 2014.
1.3 Goodwill in respect of Built Environs to the value of R291 million was impaired for the
six-month period ended 31 December 2014. A R816 million impairment of goodwill was recognised
for the financial year ended 30 June 2014.
1.4 A profit of R777 million before taxation arose on the sale of the Group’s 100% investment in
Electrix.
1.5 On 23 July 2014 the Group issued convertible bonds that were recognised as containing separate
liability and equity components in accordance with IAS 32 Financial Instruments: Presentation.
In so far as the annual interest charge relates to the accretion of the liability from
R1 562 million (that is, the issue of R2 000 million less the initial value of the option
component being R438 million) to R2 000 million, this accretion has been excluded from adjusted
earnings as it pertains to an IFRS requirement that does not appropriately represent the cash flow
effects of the bonds being the coupon interest and transaction costs.
1.6 The taxation of special items include the taxation effects of the above items as well as some
specific taxation-only items, as follows:
Taxation impact Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) (Unaudited)
1.2 Impairment of property, plant and equipment
and intangible assets (49) - -
1.4 Profit on disposal of subsidiary 64 - -
1.5 Accretion of convertible bond liability (9) - -
1.6 Taxation on results of subsidiary disposed of
during the period 19 23 47
Other taxation:
Non-recognition of deferred taxation asset* 100 - -
125 23 47
* From 1 July 2014, an additional deferred taxation asset was not recognised to the extent that assessed
losses (arising since 1 July 2014) exceed the reversal of other temporary differences.
Notes to the interim condensed consolidated financial statements
for the six months ended 31 December 2014
1. Corporate information
The unaudited interim condensed consolidated financial statements of Aveng Limited (the “Company”)
and its subsidiaries (the “Group”) for the six months ended 31 December 2014 (the “interim results”) were
authorised for issue in accordance with a resolution of the directors on 16 February 2015.
Nature of business
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 and execution of the contracts
currently in progress.
Business restructuring
Effective from 1 July 2014, management responsibility for Aveng Engineering moved to Aveng Grinaker-LTA. The
change in reporting structure enhanced the Group’s competitive advantage in the renewable power and water
markets, which is expected to grow over the next few years. There was no change in the segment reports as both
operating groups fall within the same reporting segment.
Changes in directorate
Mr AH Macartney was appointed as Group Finance director effective from 8 September 2014.
2. BASIS OF PREPARATION AND ACCOUNTING POLICY
The interim results have been prepared on a historical cost basis, except for certain financial instruments
and non-financial assets which are measured at fair value.
These interim results are presented in South African rand (“ZAR”) and all values are rounded to the nearest million
(“Rm”) except where otherwise indicated. The interim results are prepared in accordance with IAS 34 Interim Financial
Statements and the Listings Requirements of the Johannesburg Stock Exchange. The accounting policies adopted are
consistent with those of the previous year as well as the Group’s audited annual financial statements as at
30 June 2014, except as disclosed in note 3 and the following new accounting policy:
South African infrastructure investments
With effect from 1 July 2014, the concessions and property-related activities of the Group were reorganised to fall
within Aveng Capital Partners (“ACP”). All future infrastructure and real estate investments will be managed by ACP.
This business unit has been determined to be operating as a venture capital organisation, such that the investments
managed by ACP have been reclassified as financial assets at fair value through profit or loss. This includes investments
in associates and joint ventures that would otherwise have been equity-accounted. The 10,9% investment in the N3 Toll
Concession Company, has been retained as an available-for-sale investment as initially designated in terms of IAS 39
Financial Instruments. In future such investments will be designated as at fair value through profit or loss upon
initial recognition. For the six months ended 31 December 2014, fair value remeasurements of R83 million have been
recognised in earnings. These remeasurements have been included in headline earnings.
ACP is included in the Construction and Engineering: South Africa and rest of Africa segment.
The interim results do not include all the information and disclosures required by the annual financial statements and
should therefore be read in conjunction with the Group’s audited annual financial statements as at 30 June 2014.
The interim results have been prepared under the supervision of Mr AH Macartney, Group Finance director.
The interim results comply with IAS 34 - Interim Financial Statements.
3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS
3.3.2
Balance Employee-
as previously 3.1.1 3.2 related
reported IFRS 10 Revaluation payables
Note Rm Rm Rm Rm
Statement of financial position as at
31 December 2013
Assets
Non-current assets
Investment property 71 - 7 -
Amounts due from contract customers 10 - - - -
Current assets
Derivative instruments - - - -
Amounts due from contract customers 10 10 387 - - -
Trade and other receivables 2 920 56 - -
Cash and bank balances 5 619 (58) - -
Equity and liabilities
Equity
Other reserves 996 (55) - -
Retained earnings 11 411 56 6 -
Liabilities
Non-current liabilities
Payables other than contract-related 1 166 - - (743)
Deferred taxation 385 - 1 -
Employee-related payables - - - 743
Current liabilities
Payables other than contract-related 1 552 - - (703)
Employee-related payables - - - 703
Trade and other payables 9 405 (3) - -
Bank overdrafts 685 - - -
Statement of financial position as at
30 June 2014
Assets
Current assets
Derivative instruments - - - -
Liabilities
Non-current liabilities
Derivative instruments - - - -
Current liabilities
Derivative instruments - - - -
Trade and other payables 9 805 - - -
3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
3.3.3 3.3.4 3.3.7
Contract Contract 3.3.5 Derivative
provision balance Provision 3.3.6 instruments Restated
split split reallocation Offsetting split balance
Rm Rm Rm Rm Rm Rm
Statement of financial position as at
31 December 2013
Assets
Non-current assets
Investment property - - - - - 78
Amounts due from contract customers (747) 4 178 - - - 3 431
Current assets
Derivative instruments - - - - 28 28
Amounts due from contract customers (336) (4 178) (51) - - 5 822
Trade and other receivables - - 51 - (28) 2 999
Cash and bank balances - - - (315) - 5 246
Equity and liabilities
Equity
Other reserves - - - - - 941
Retained earnings - - - - - 11 473
Liabilities
Non-current liabilities
Payables other than contract-related (336) - - - - 87
Deferred taxation - - - - - 386
Employee-related payables - - - - - 743
Current liabilities
Payables other than contract-related (747) - - - - 102
Employee-related payables - - - - - 703
Trade and other payables - - - - - 9 402
Bank overdrafts - - - (315) - 370
Statement of financial position as at
30 June 2014
Assets
Current assets
Derivative instruments - - - - 1 1
Liabilities
Non-current liabilities
Derivative instruments - - - - 3 3
Current liabilities
Derivative instruments - - - - 60 60
Trade and other payables - - - - (62) 9 743
3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
Balance 3.3.1 3.3.8
as previously 3.2 Reallocation Reallocation
reported Revaluation of other earnings of fair value
Rm Rm Rm Rm
Statement of comprehensive earnings for the six months ended
31 December 2013
Cost of sales (25 681) - - -
Gross earnings 1 973 - - -
Other earnings 3 7 158 -
Operating expenses (1 551) - (158) -
Net operating earnings 469 7 - -
Share of dividend earnings from available-for-sale investments 34 - - -
Taxation (113) (1) - -
Statement of comprehensive earnings for the twelve months ended
30 June 2014
Cost of sales (49 122) - - -
Gross earnings 3 837 - - -
Other earnings 254 - - 15
Operating expenses (3 373) - - -
Share of dividend earnings from available-for-sale investments 33 - - -
Net operating earnings 784 - - 15
Impairment of non-financial assets (831) - - -
Impairment of property, plant and equipment and intangible assets - - - -
Impairment of goodwill arising on consolidation - - - -
Fair value adjustments 15 - - (15)
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
3.3.11
3.3.9 3.3.10 Reallocation
Reallocation Split of of operating Restated
of dividends impairment expenses balance
Rm Rm Rm Rm
Statement of comprehensive earnings for the six months ended
31 December 2013
Cost of sales - - (100) (25 781)
Gross earnings - - (100) 1 873
Other earnings 34 - - 202
Operating expenses - - 100 (1 609)
Net operating earnings 34 - - 510
Share of dividend earnings from available-for-sale investments (34) - - -
Taxation - - - (114)
Statement of comprehensive earnings for the twelve months ended
30 June 2014
Cost of sales - - (202) (49 324)
Gross earnings - - (202) 3 635
Other earnings 33 - - 302
Operating expenses - - 202 (3 171)
Share of dividend earnings from available-for-sale investments (33) - - -
Net operating earnings - - - 799
Impairment of non-financial assets - 831 - -
Impairment of property, plant and equipment and intangible assets - (15) - (15)
Impairment of goodwill arising on consolidation - (816) - (816)
Fair value adjustments - - - -
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
Balance
as previously Change in 3.1.1 3.2
reported definition* Prior to IFRS 10 Revaluation
Rm Rm restatement Rm Rm
Segmental report as at 31 December 2013
Total assets
Construction and Engineering: South Africa and rest of Africa 3 157 2 755 5 912 - -
Construction and Engineering: Australasia and Asia 8 348 4 498 12 846 - -
Mining 4 230 819 5 049 - -
Manufacturing and processing 5 906 827 6 733 - -
Other and Eliminations 1 504 55 1 559 (2) 7
23 145 8 954 32 099 (2) 7
Total liabilities
Construction and Engineering: South Africa and rest of Africa 2 470 1 181 3 651 - -
Construction and Engineering: Australasia and Asia 7 489 800 8 289 - -
Mining 1 801 697 2 498 - -
Manufacturing and Processing 1 905 320 2 225 - -
Other and Eliminations 810 821 1 631 (2) -
14 475 3 819 18 294 (2) -
* As described in the audited consolidated annual financial statements as at 30 June 2014, the definition for segment assets and segment liabilities
changed to now incorporate all assets and liabilities within each segment.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
3.3.4
Contract 3.3.12
balance 3.3.6 Segment Restated
split Offsetting reallocation balance
Rm Rm Rm Rm
Segmental report as at 31 December 2013
Total assets
Construction and Engineering: South Africa and rest of Africa (1 032) (252) 601 5 229
Construction and Engineering: Australasia and Asia (39) - - 12 807
Mining (12) - - 5 037
Manufacturing and processing - (22) - 6 711
Other and Eliminations - (41) (601) 922
(1 083) (315) - 30 706
Total liabilities
Construction and Engineering: South Africa and rest of Africa (1 032) (252) 99 2 466
Construction and Engineering: Australasia and Asia (39) - - 8 250
Mining (12) - - 2 486
Manufacturing and Processing - (22) - 2 203
Other and Eliminations - (41) (99) 1 489
(1 083) (315) - 16 894
* As described in the audited consolidated annual financial statements as at 30 June 2014, the definition for segment assets
and segment liabilities changed to now incorporate all assets and liabilities within each segment.
3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
Balance 3.3.12
as previously 3.2 Segment Restated
reported Revaluation reallocation balance
Rm Rm Rm Rm
Segmental report for the six months ended 31 December 2013
Net operating earnings
Construction and Engineering: South Africa and rest of Africa (334) - 132 (202)
Construction and Engineering: Australasia and Asia 191 - - 191
Mining 295 - - 295
Manufacturing and Processing 162 - - 162
Other and Eliminations 189 7 (132) 64
503 7 - 510
3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
3.3.7
Balance Derivative 3.3.8 3.3.12
as previously instruments Reallocation Segment Restated
reported split of fair value reallocation balance
Rm Rm Rm Rm Rm
Segmental report as at 30 June 2014
Total assets
Construction and Engineering: South Africa and rest of Africa 4 546 - - 522 5 068
Construction and Engineering: Australasia and Asia 13 340 - - - 13 340
Mining 4 848 - - - 4 848
Manufacturing and Processing 7 029 - - - 7 029
Other and Eliminations 1 224 1 - (522) 703
30 987 1 - - 30 988
Total liabilities
Construction and Engineering: South Africa and rest of Africa 2 450 - - 114 2 564
Construction and Engineering: Australasia and Asia 8 623 - - - 8 623
Mining 2 244 - - - 2 244
Manufacturing and Processing 2 589 - - - 2 589
Other and Eliminations 1 685 1 - (114) 1 572
17 591 1 - - 17 592
Segmental report for the twelve months ended 30 June 2014
Net operating earnings
Construction and Engineering: South Africa and rest of Africa (566) - - 132 (434)
Construction and Engineering: Australasia and Asia 271 - - - 271
Mining 529 - - - 529
Manufacturing and Processing 364 - - - 364
Other and Eliminations 186 - 15 (132) 69
3. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS (continued)
3.1 Standards and interpretations effective and adopted in the current year
In the current period, the Group has adopted the following standards and interpretations that are
effective for the current financial year and that are relevant to its operations. They, however, did not
have an impact on the interim results.
- IFRS 10, IFRS 12 and IAS 27 (amendment) Investment Entities
- IAS 19 (amendment) Defined Benefit Plans: Employee Contributions
- IAS 36 (amendment) Recoverable Amount Disclosures for Non-financial Assets
- IAS 39 (amendment) Novation of derivatives and Continuation of Hedge Accounting
- IFRIC 21 Levies
3.1.1 Deconsolidation of Guardrisk Life Fund (“captive”)
As a result of IFRS 10 Consolidated Financial Statements, which became effective from 1 July 2013,
the Group has changed its accounting policy for determining whether it has control over and consequently
whether it consolidates its investees. IFRS 10 introduced a new control model that focuses on whether the
Group has power over an investee, exposure or rights to variable returns from its involvement with the
investee and ability to use its power to affect those returns.
The Group has deconsolidated the captive, and in terms of the transitional provisions, restated the
comparative information.
3.2 Change in accounting policy - Investment property
During the year ended 30 June 2014, the Group changed its accounting policy on investment property from
the cost model to the fair value model. The results at 31 December 2013 have accordingly been restated to
reflect this change. A fair value adjustment of R7 million was recognised in respect of the Goldfields Mall
property, which was carried as investment property. This investment property was disposed of on 12 December 2014.
Deferred capital gains tax amounting to R1 million was also restated.
3.3 Other reclassifications affecting comparative figures
As part of the Group’s financial reporting improvement initiatives, the structure, format and presentation of
disclosures in the interim results were reviewed. This resulted in the reallocation of certain comparative amounts.
This initiative is an ongoing programme targeting the most appropriate disclosure and presentation practices to
best serve the interests of the Group’s stakeholders based on interaction with them during the period.
The resulting reallocations had no impact on the earnings of the Group and as such the reallocations are regarded
as not having had a qualitatively significant effect on the information presented.
3.3.1 Other earnings of R158 million in the prior year was reclassified from operating expenses to a separate line item
in the statement of comprehensive earnings.
3.3.2 Employee-related payables of R1 446 million were reclassified from provisions to a separately disclosed line item.
The amount reclassified was also classified according to the maturity profile of its associated risk, R743 million
non-current and R703 million as current.
3.3.3 Provisions for amounts due from customers of R1 083 million were reclassified from provisions to amounts due from
contract customers to reflect the net risk exposure implicit in uncertified claims and variations in 2013. The
amount reclassified was also classified accordingly to the maturity profile of its associated risk, R336 million
non-current and R747 million as current.
3.3.4 Uncertified claims and variations of R4 178 million were classified as non-current amounts due from contract
customers in 2013 to reflect a more accurate maturity profile.
3.3.5 Provision for contract receivables of R51 million included in trade and other receivables in 2013 were reclassified
to amounts due from contract customers.
3.3.6 Notional bank overdrafts of R315 million were offset against cash and bank balances in terms of the amended
IAS 32 Financial Instrument: Presentation relating to the offsetting of financial instruments as these balances
will be settled against the current accounts.
3.3.7 Derivative instruments of R28 million (June 2014: R62 million) were reclassified from trade and other receivables
(June 2014: trade and other payables) to a separately disclosed line item.
3.3.8 Fair value adjustments on investment property of R15 million were combined with other earnings.
3.3.9 Share of dividend earnings from available-for-sale investments of R34 million (June 2014: R33 million) was combined with other earnings.
3.3.10 Impairment of non-financial assets in June 2014 of R831 million was reclassified to separately disclosable
line items. The amount reclassified was presented according to the nature, namely impairment of property, plant
and equipment and intangible assets of R15 million and goodwill arising on consolidation amounting to R816 million.
3.3.11 Operating expenses of R100 million (June 2014: R202 million) were reallocated to cost of sales to more
accurately allocate overheads to cost of sales.
3.3.12 Aveng Capital Partners was reallocated from the Other and Eliminations segment to Construction and Engineering:
South Africa and rest of Africa. The adjustment accurately reflects the value chain inherent in the Construction
and Engineering: South Africa and rest of Africa business model.
4. Business combinations
Dynamic Fluid Control Proprietary Limited, a wholly owned subsidiary of Aveng (Africa) Proprietary Limited, acquired
100% of the equity and voting rights of Atval Proprietary Limited (“Atval”) effective from 1 July 2014.
Atval was established in 1985 and is a leading South African manufacturer of high pressure knife-gate valves with
25 years of proven experience in the South African market. The company primarily focuses on high-pressure pinch
valves that are extensively used on mineral processing, particularly abrasive tailings pipe lines, with annuity
income generated from maintenance of valve sleeve linings.
The purchase price allocation exercise will be completed within 12 months, which will reduce the goodwill and
recognise tangible and intangible assets at fair value.
December
2014
(Unaudited)
Rm
Cash outflow on acquisition:
Consideration paid 25
Less: Cash and bank balances acquired (2)
23
Goodwill arising on acquisition
Consideration paid 25
Less: Provisional fair value of identifiable net assets acquired (6)
19
5. SALE OF SUBSIDIARY
On 31 October 2014, 100% of the investment in Electrix Proprietary Limited and Electrix Limited
(collectively “Electrix”) was sold. Electrix was a wholly owned business and formed part of the Construction
and Engineering: Australasia and Asia segment.
The profit on disposal of the subsidiary was R777 million (R713 million after taxation) including the recycled
foreign currency translation reserve (“FCTR”) of R111 million. The profit is separately disclosed in the
statement of comprehensive earnings.
Electrix has always formed part of the Construction and Engineering: Australasia and Asia segment. Electrix was
not considered an operating segment nor a separate major line of business or geographical area. The sale of this
business does not give rise to a discontinued operation but rather a disposal group.
December
2014
(Unaudited)
Rm
Net cash impact of sale
Total assets (excluding cash and bank balances) 756
Cash and bank balances 129
Total liabilities (536)
Net assets sold 349
Profit on disposal before tax 777
Add back: Associated obligations and transaction costs 464
Less: FCTR recycled to earnings (111)
Total proceeds received in cash 1 479
Less: Cash and bank balances sold (129)
Less: Transaction costs paid (36)
Net cash received 1 314
6. SEGMENTAL REPORT
Construction and Engineering:
South
Africa and Manufacturing Other
Six months ended December 2014 (Unaudited) rest Australasia and and
Rm of Africa and Asia Mining Processing Eliminations Total
External revenue 4 122 11 804 2 974 4 959 5 23 864
Internal revenue 172 - - 294 (466) -
Gross revenue 4 294 11 804 2 974 5 253 (461) 23 864
Cost of sales (4 350) (11 041) (2 592) (4 891) 570 (22 304)
Gross (loss) / earnings (56) 763 382 362 109 1 560
Other earnings 126 47 1 91 54 319
Operating expenses (326) (618) (142) (374) (36) (1 496)
Earnings / (loss) from equity-accounted investments 27 (9) - - 12 30
Net operating (loss) / earnings (229) 183 241 79 139 413
Impairment of property, plant and equipment and
intangible assets (152) (33) (29) (32) - (246)
Impairment of goodwill arising on consolidation - (291) - - - (291)
Profit on sale of subsidiary - 777 - - - 777
(Loss) / earnings before financing transactions (381) 636 212 47 139 653
Finance earnings 41 17 1 7 6 72
Other finance expenses (23) (48) (24) (23) (120) (238)
(Loss) / earnings before taxation (363) 605 189 31 25 487
Taxation (7) (92) (12) 12 (26) (125)
(Loss) / earnings for the period (370) 513 177 43 (1) 362
Capital expenditure 51 194 191 119 28 583
Depreciation (63) (148) (202) (82) (6) (501)
Amortisation (4) - - (5) (5) (14)
Construction and Engineering:
South
Africa and Manufacturing Other
Six months ended December 2013* (Unaudited) rest Australasia and and
Rm of Africa and Asia Mining Processing Eliminations Total
External revenue 4 231 14 933 3 459 5 026 5 27 654
Internal revenue 53 - 2 239 (294) -
Gross revenue 4 284 14 933 3 461 5 265 (289) 27 654
Cost of sales (4 194) (14 156) (3 009) (4 754) 332 (25 781)
Gross earnings 90 777 452 511 43 1 873
Other earnings 63 6 8 105 20 202
Operating expenses (356) (618) (165) (454) (16) (1 609)
Earnings from equity-accounted investments 1 26 - - 17 44
Net operating (loss) / earnings (202) 191 295 162 64 510
Finance earnings 28 17 6 6 - 57
Other finance expenses (32) (51) (21) (4) (32) (140)
(Loss) / earnings before taxation (206) 157 280 164 32 427
Taxation 102 (45) (95) (52) (24) (114)
(Loss) / earnings for the period (104) 112 185 112 8 313
Capital expenditure 57 151 197 124 120 649
Depreciation (46) (203) (231) (73) (11) (564)
Amortisation (7) - - (6) (7) (20)
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes in accounting
policies and other reclassifications.
Construction and Engineering:
South
Africa and Manufacturing Other
Year ended June 2014* (Audited) rest Australasia and and
Rm of Africa and Asia Mining Processing Eliminations Total
External revenue 8 239 28 169 6 581 9 958 12 52 959
Internal revenue 438 - 1 654 (1 093) -
Gross revenue 8 677 28 169 6 582 10 612 (1 081) 52 959
Cost of sales (8 549) (26 594) (5 708) (9 661) 1 188 (49 324)
Gross earnings 128 1 575 874 951 107 3 635
Other earnings / (loss) 88 (10) (14) 248 (10) 302
Operating expenses (678) (1 296) (332) (834) (31) (3 171)
Earnings / (loss) from equity-accounted investments 28 2 1 (1) 3 33
Net operating (loss) / earnings (434) 271 529 364 69 799
Impairment of property, plant and equipment and
intangible assets - - - - (15) (15)
Impairment of goodwill arising on consolidation - - - - (816) (816)
(Loss) / earnings before financing transactions (434) 271 529 364 (762) (32)
Finance earnings 70 39 17 11 (1) 136
Other finance expenses (64) (101) (59) (7) (88) (319)
(Loss) / earnings before taxation (428) 209 487 368 (851) (215)
Taxation 119 (14) (163) (110) 7 (161)
(Loss) / earnings for the period (309) 195 324 258 (844) (376)
Capital expenditure 152 243 298 406 138 1 237
Depreciation (85) (258) (407) (112) (19) (881)
Amortisation (13) - - (5) (10) (28)
*Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes in accounting
policies and other reclassifications.
Construction and Engineering:
South
Segment report Africa and Manufacturing Other
December 2014 (Unaudited) rest Australasia and and
Rm of Africa and Asia Mining Processing Eliminations Total
Assets
Goodwill arising on consolidation - 100 - 251 - 351
Intangible assets 3 - - 149 146 298
Property, plant and equipment 600 891 2 663 1 356 315 5 825
Equity-accounted investments 208 51 4 - - 263
Infrastructure investments 572 61 - - - 633
Deferred taxation 776 348 370 86 (197) 1 383
Derivative instruments - 25 - 13 16 54
Amounts due from contract customers 2 048 6 957 1 058 419 (384) 10 098
Inventories 73 7 326 2 650 - 3 056
Trade and other receivables 606 232 116 1 363 116 2 433
Cash and bank balances 270 2 983 399 922 (318) 4 256
Non-current assets held-for-sale - - - - 607 607
Total assets 5 156 11 655 4 936 7 209 301 29 257
Liabilities
Deferred taxation 14 - 189 5 26 234
Borrowings and other liabilities - 279 661 6 1 628 2 574
Employee-related payables 175 585 198 50 199 1 207
Amounts due to contract customers 631 1 367 260 94 1 2 353
Derivative instruments - - - - 3 3
Trade and other payables 1 149 4 384 714 2 465 1 8 713
Taxation payable 49 85 28 33 71 266
Payables other than contract-related 98 - - - - 98
Total liabilities 2 116 6 700 2 050 2 653 1 929 15 448
Construction and Engineering:
South
Segment report Africa and Manufacturing Other
December 2013* (Unaudited) rest Australasia and and
Rm of Africa and Asia Mining Processing Eliminations Total
Assets
Investment property - - - - 78 78
Goodwill arising on consolidation 816 395 - 232 - 1 443
Intangible assets 10 33 - 81 98 222
Property, plant and equipment 649 1 114 2 884 1 399 818 6 864
Equity-accounted investments 98 75 4 1 41 219
Available-for-sale investments 12 60 - - - 72
Deferred taxation 906 447 158 - (132) 1 379
Derivative instruments - - - 17 11 28
Amounts due from contract customers 1 549 6 609 1 132 472 (509) 9 253
Inventories 111 17 300 2 475 - 2 903
Trade and other receivables 502 569 (102) 1 571 459 2 999
Cash and bank balances 576 3 488 661 463 58 5 246
Total assets 5 229 12 807 5 037 6 711 922 30 706
Liabilities
Deferred taxation 1 - 176 173 36 386
Borrowings and other liabilities - 859 631 - 1 078 2 568
Employee-related payables 223 792 272 117 42 1 446
Amounts due to contract customers 707 1 010 543 92 - 2 352
Trade and other payables 1 146 5 496 807 1 689 264 9 402
Taxation payable - 93 55 33 - 181
Payables other than contract-related 189 - - - - 189
Bank overdrafts 200 - 2 99 69 370
Total liabilities 2 466 8 250 2 486 2 203 1 489 16 894
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes
in accounting policies and other reclassifications.
Construction and Engineering:
South
Africa and Manufacturing Other
June 2014* (Audited) rest Australasia and and
Rm of Africa and Asia Mining Processing Eliminations Total
Assets
Investment property - - - - 86 86
Goodwill arising on consolidation - 431 - - 232 663
Intangible assets 6 35 - 155 125 321
Property, plant and equipment 702 1 170 2 746 1 374 354 6 346
Equity-accounted investments 196 56 4 - 50 306
Available-for-sale investments 126 64 - - - 190
Deferred taxation 970 472 238 (102) (175) 1 403
Derivative instruments 1 1
Amounts due from contract customers 2 185 8 085 997 534 (450) 11 351
Inventories 98 23 304 2 368 - 2 793
Trade and other receivables 434 174 93 1 980 104 2 785
Cash and bank balances 351 2 830 466 720 (231) 4 136
Non-current assets held-for-sale - - - - 607 607
Total assets 5 068 13 340 4 848 7 029 703 30 988
Liabilities
Deferred taxation 17 - 211 18 11 257
Borrowings and other liabilities - 862 653 7 1 345 2 867
Employee-related payables 200 886 230 151 108 1 575
Amounts due to contract customers 728 1 612 231 106 - 2 677
Derivative instruments 29 34 - - - 63
Trade and other payables 1 333 5 168 824 2 307 111 9 743
Taxation payable 60 61 95 - (3) 213
Payables other than contract-related 197 - - - - 197
Total liabilities 2 564 8 623 2 244 2 589 1 572 17 592
* Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted,
changes in accounting policies and other reclassifications.
The Group operates in five principal geographical areas:
Six Six Six Six
months months months months
ended ended ended ended
December December June December December June
2014 2013 2014 2014 2013 2014
Revenue Revenue Revenue Revenue Revenue Revenue
Rm Rm Rm % % %
South Africa 10 036 10 249 19 489 42,0 37,1 36,8
Rest of Africa 1 733 2 084 4 609 7,2 7,5 8,7
Australasia and Asia 10 060 13 467 25 001 42,2 48,7 47,2
South East Asia 1 778 1 577 3 300 7,5 5,7 6,2
Middle East and other regions 257 277 560 1,1 1,0 1,1
23 864 27 654 52 959 100,00 100,0 100,0
The Group operates in five principal geographical areas:
December December June December December June
2014 2013 2014 2014 2013 2014
Segment Segment Segment Segment Segment Segment
assets assets assets assets assets assets
Rm Rm Rm % % %
South Africa 14 651 14 099 14 206 50,1 45,9 45,8
Rest of Africa 2 158 3 347 2 706 7,4 10,9 8,7
Australasia and Asia 10 559 11 821 12 377 36,1 38,5 39,9
South East Asia 1 399 1 033 1 244 4,8 3,4 4,0
Middle East and other regions 490 406 455 1,6 1,3 1,6
29 257 30 706 30 988 100,0 100,0 100,0
7. IMPAIRMENTS
7.1 Impairment of property, plant and equipment and intangible assets
Following the goodwill impairment of R75 million pertaining to Aveng Water in the immediate preceding six month
period ended 30 June 2014, it was necessary to impair assets due to the subdued economic conditions and the
resultant pressure on the order book. An impairment charge totalling R213 million was recognised against ancillary
operations. This comprising plant and equipment in the Construction and Engineering: South Africa and rest of
Africa (R152 million charge), Manufacturing and Processing (R32 million charge) and Mining (R29 million charge).
An intangible asset associated with Built Environs of R33 million was also impaired during the period. Refer to
note 7.2.
During the period ended 30 June 2014, indefinite life intangibles within Aveng Grinaker-LTA were fully impaired
by R15 million.
7.2 Impairment of goodwill arising on consolidation
Goodwill of R291 million associated with the Built Environs business (refer to note 7.1) in the Construction and
Engineering: Australia and Asia segment has been fully impaired. While management has implemented a robust
turnaround plan for this business, there is uncertainty around the business’s ability to generate the required
returns within a reasonable timeframe based on the current order book. The timing of this impairment is aligned with
the Group’s renewed focus on the return on assets within the direct control of management.
During the period ended 30 June 2014, the goodwill associated with the Aveng Water business (R75 million) was impaired
as a result of its repositioning within the Group to a more ancillary and supportive role within the Construction and
Engineering operating group.
During the period ended 30 June 2014, the goodwill associated with Aveng Grinaker-LTA was also fully impaired amounting
to R741 million. This impairment was linked to the difficulty in quantifying the fact pattern of the current operating
group turnaround plan.
8. EQUITY-ACCOUNTED INVESTMENTS
December December June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
Opening balance 306 144 144
Transfer to infrastructure investments held at fair value (3) - -
Transfer of shareholder loans to infrastructure investments (168)
Loans advanced 92 44 154
Share of other comprehensive earnings - - (28)
Share of earnings before taxation and dividends 44 37 44
Amount recorded in the statement of comprehensive earnings 30 44 33
Excluding: Fair value adjustments on foreign exchange contracts
disclosed as derivative instruments 14 (7) 11
Dividends received (4) (6) (13)
Foreign currency translation movement 4 - 6
Other (8) - (1)
263 219 306
The Group’s share of bank guarantees issued by Dutco McConnell Dowell Middle East LLC is R95 million (December 2013: R93 million,
June 2014: R93 million) for which no liabilities are expected to arise. Other than as stated above, the Group did not incur any
other contingent liabilities with regards to associates and joint ventures.
9. INFRASTRUCTURE INVESTMENTS
December December June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
South African infrastructure investments
At fair value through profit or loss 447 - -
Available-for-sale investment 126 - -
Other infrastructure investments 573 - -
Available-for-sale investment 60 - -
Total infrastructure investments 633 - -
With effect from 1 July 2014, the Group’s South African Infrastructure investments managed by Aveng Capital
Partners (“ACP”) were measured at fair value. These include all South African infrastructure investments in
which the Group holds less than 50%. These investments are managed, reported and evaluated on a fair value
basis in terms of ACP’s investment methodology. To the extent that these investments were previously
equity-accounted, they have been reclassified to infrastructure investments at their equity-accounted values
as at 30 June 2014. This is not considered to be a change in accounting policy as the ACP business model was
only approved from 1 July 2014.
December December June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
South African infrastructure investments
Opening balance - - -
Reclassification of equity investment from equity-accounted investments 3 - -
Reclassification of shareholder loans from equity-accounted investments 168 - -
Recycling of equity-accounted earnings from other comprehensive income
upon reclassification 28
Reclassification from available-for-sale investments 126
Fair value remeasurement through comprehensive earnings 83
Loans advanced 165 - -
573 - -
Determination of fair values
The fair values of the project investments in the ACP portfolio are determined by discounting the cash flows
from the relevant forecast models. The discount rates applied in the valuations are based on an internal Aveng
funding rate plus a risk premium specific to each project investment, taking into consideration specific industry
benchmarks and the project stage in the project life cycle.
10. AMOUNTS DUE FROM / (TO) CONTRACT CUSTOMERS
December December June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
Uncertified claims and variations (underclaims)1 6 495 5 535 6 763
Provision for amounts due from contract customers1 (964) (1 083) (1 102)
Progress billings received (overclaims)2 (1 728) (1 852) (1 766)
Uncertified claims and variations less progress billings received 3 803 2 600 3 895
Contract receivables3 4 420 4 653 5 527
Provision for contract receivables (46) (51) (46)
Retention receivables4 193 199 209
8 370 7 401 9 585
Amounts received in advance5 (625) (500) (911)
Net amounts due from contract customers 7 745 6 901 8 674
Disclosed on the statement of financial
position as follows:
Uncertified claims and variations 6 495 5 535 6 763
Provision for amounts due from contract customers (964) (1 083) (1 102)
Contract and retention receivables 4 613 4 852 5 736
Provision for contract receivables (46) (51) (46)
Amounts due from contract customers 10 098 9 253 11 351
Progress billings received (1 728) (1 852) (1 766)
Amounts received in advance (625) (500) (911)
Amounts due to contract customers (2 353) (2 352) (2 677)
Net amounts due from contract customers 7 745 6 901 8 674
1 Includes revenue not yet certified - recognised based on percentage of completion / measurement and
agreed variations, less provisions and deferred contract costs.
2 Progress billings are amounts billed for work performed above revenue recognised.
3 Amounts invoiced still due from customers.
4 Retentions are amounts invoiced but not paid until the conditions specified in the contract are fulfilled
or until defects have been rectified.
5 Advances are amounts received from the customer before related work is performed.
Included in amounts due from contract customers are non-current assets of R3 192 million (December 2013: R3 431 million,
June 2014: R2 946 million).
Included in contract receivables are amounts that are past due but not impaired; these have been adequately assessed for
impairment.
11. NON-CURRENT ASSETS HELD-FOR-SALE
During the previous financial year, the Group made a decision to dispose of non-core properties. These properties were
classified as non-current assets held-for-sale and will be sold as a single portfolio of land and buildings. The transaction
is expected to be finalised in the second half of the financial year.
12. BORROWINGS AND OTHER LIABILITIES
Convertible bonds During July 2014, the Company issued convertible bonds denominated in South African rand with a nominal value of R2 billion
During July 204, the Company issued convertible bonds denominated in South African rand with a nominal value of R2 billion
and a coupon of 7,25%. Interest is payable bi-annually for a period of five years with the bond repayment date being five
years from the issue date at par plus interest.
The bonds are convertible into 69,6 million Aveng Limited shares at the holder’s option based on a conversion price of R28,76
subject to shareholders’ approval, which was received on 19 September 2014.
The Company has the option to call the bonds at par plus accrued interest at any time on or after 7 August 2017 up to 20
consecutive dealing days before the redemption date, if the aggregate value of the underlying shares per bond for a
specified period of time is 130% of the conversion price. However, the bondholders may convert the bonds into shares before
the actual settlement.
The Company also has the option to settle the outstanding bonds at par plus accrued interest at any time if less than 15%
of the bonds remain outstanding. The convertible bonds comprise a liability component as well as an embedded conversion option, being the option for the
bondholders to convert the bond to a fixed number of Aveng Limited shares.
The liability component is recognised and initially measured at fair value, adjusted for transaction costs and subsequently
measured at amortised cost in accordance with the Group’s accounting policy on borrowings and other liabilities. The
conversion option was initially measured at fair value with changes in the fair value recognised in comprehensive earnings
in accordance with the Group’s accounting policy on derivative instruments. On the date that shareholder approval was
obtained to settle the instruments in shares, the derivative was reclassified to equity, at the then fair value.
The effective interest rate associated with the convertible bond liability is 13,6% per annum.
Convertible Convertible
bond Derivative bond equity
liability liability reserve Total
Rm Rm Rm Rm
Issued July 2014 1 562 438 - 2 000
Transaction costs (41) - - (41)
Fair value adjustment to comprehensive earnings - (36) - (36)
Transfer to equity - (402) 402 -
Transaction costs allocated to equity component (12) (12)
Interest determined with the effective interest rate 95 - - 95
Accrual of coupon interest for convertible bonds 64 - - 64
Accretion of liability due to:
Transaction costs capitalised 3 - - 3
Effect of fair value adjustment of derivative liability 2 - - 2
Effect of fair value of conversion option reclassification to equity 26 - - 26
1 616 - 390 2 006
The Group had the following undrawn facilities:
December December June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Total borrowing facilities 6 774 3 807 5 567
Current utilisation (2 574) (2 938) (2 867)
4 200 869 2 700
13. TAXATION
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
Taxation expense
Current taxation expense 138 79 255
Deferred taxation charge (13) 35 (94)
125 114 161
% % %
Effective tax rate reconciliation
Effective taxation rate 25,7 26,7 (74,9)
Deferred taxation asset capped (20,4) - -
Other special items* (5,3) (0,6) 100,0
Effective taxation rate on earnings excluding special items - 26,1 25,1
Exempt income 41,3 0,9 15,3
Deferred taxation asset not recognised - - (14,4)
Disallowable charges (8,4) (1,6) (4,8)
Change in taxation rate - - (0,4)
Prior year adjustment (4,0) - 5,3
Effects of other jurisdictions and other (0,9) 2,6 1,9
28,0 28,0 28,0
* Refer to the statement of adjusted earnings for information relating to special items.
South African income taxation is calculated at 28% (Dec 2013: 28%, June 2014: 28%) of the taxable income for the
period. Taxation in other jurisdictions is calculated at rates prevailing in the relevant jurisdictions.
Deferred taxation asset
The recognition of deferred taxation assets are supported by probable forecasted taxable profits for the reporting periods
up to and including 30 June 2019. These forecasts take into account viable taxation planning opportunities and other expected
cost savings.
The Group has not increased the deferred taxation asset, since 1 July 2014, for Aveng Africa due to the Board taking a
conservative view on the ability to utilise further assets in the foreseeable future. From 1 July 2014, an additional
deferred taxation asset was not recognised to the extent that assessed losses (arising since 1 July 2014) exceed the
reversal of other temporary differences.
14. RELATED PARTIES
During the period Aveng Limited 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 2014.
There were no related party transactions with directors or entities in which the directors have a material interest other
than director’s emoluments.
15. EARNINGS, ADJUSGTED EARNINGS AND HEADLINE EARNINGS PER SHARE
Weighted Weighted Number of Weighted
average average shares average
Number number of Number number of June number of
of shares shares of shares shares 2014 shares
December December December December June June
2014 2014 2013 2013 2014 2014
Number of shares (excluding treasury shares) 400 274 095 400 556 037 373 890 810 373 890 810 400 647 313 374 007 675
Diluted number of 402 065 952 402 065 952 402 066 221 402 066 221 402 065 952 402 065 952
shares*
* The convertible bonds were anti-dilutive for the period ended 31 December 2014 and have therefore been excluded from
the calculation of the diluted number of shares.
Six months Six months Six months Six months
ended ended ended ended
December December December December Year ended Year ended
2014 2014 2013 2013 June 2014 June 2014
Gross of Net of Gross of Net of Gross of Net of
taxation taxation taxation taxation taxation taxation
Rm Rm Rm Rm Rm Rm
Determination of headline earnings
Earnings for the period attributable to equity-holders of the parent* 358 314 (381)
Impairment of goodwill 291 291 - - 816 816
Impairment of property, plant and equipment 213 182 - - - -
Impairment of intangible assets 33 33 - - 15 15
Profit on sale of property, plant and equipment (5) (4) (1) (1) (25) (18)
Profit on sale of subsidiary (777) (713) - - - -
Fair value adjustment on investment property (11) (9) (7) (6) (15) (11)
Headline earnings* 138 307 421
Adjusted earnings* / ** 214 258 335
** Earnings and adjusted earnings are calculated in accordance with IAS 33 Earnings per share. Headline earnings are calculated
in accordance with Circular 2 / 2013.
** Refer to the statement of adjusted earnings for further information.
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) % (Audited)
Rm Rm change Rm
Determination of diluted earnings*
Earnings for the period attributable to equity-holders of the parent 358 314 14 (381)
Diluted earnings attributable to equity-holders of the parent 358 314 14 (381)
Diluted headline earnings 138 307 (55) 421
Diluted adjusted earnings 214 258 (17) 335
Earnings / (loss) per share 89,3 83,9 6 (101,9)
- basic (cents)
Earnings / (loss) per share 89,0 78,0 14 (94,8)
- diluted (cents)
Headline earnings per share 34,5 82,1 (58) 112,5
- basic (cents)
Headline earnings per share 34,4 76,3 (55) 104,7
- diluted (cents)
Adjusted earnings per share 53,3 69,0 (23) 89,7
- basic (cents)
Adjusted earnings per share 53,1 64,2 (17) 83,4
- diluted (cents)
* The convertible bonds were anti-dilutive for the period ended 31 December 2014 and have therefore not been included in
the calculation of diluted earnings.
16. NON-CASH AND OTHER MOVEMENTS
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2014 2013 2014
(Unaudited) (Unaudited) (Audited)
Rm Rm Rm
Earnings from disposal of property, plant and equipment (18) (55) (66)
Impairment of goodwill, property, plant and equipment and intangible assets 537 - 831
Profit on disposal of subsidiary (777) - -
Movement in employee-related payables - - -
Fair value adjustment (104) (7) (15)
Movement in foreign currency translation (63) (79) (206)
Movement in equity-settled share-based payment reserve 7 1 5
Non-controlling interest acquired - (1) -
(418) (141) 549
17. CONTINGENT LIABILITIES
December December 30 June
2014 2013 2014
(Unaudited) (Unaudited)* (Audited)*
Rm Rm Rm
Contingent liabilities at the reporting date, not otherwise
provided for in the interim results, arose from performance
bonds and guarantees issued in:
South Africa and rest of Africa
Guarantees and bonds (ZARm) 3 735 3 211 4 061
Parent company guarantees (ZARm) 2 851 3 002 2 987
6 586 6 213 7 048
Australasia and Asia
Guarantees and bonds (AUDm) 623 644 651
Parent company guarantees (AUDm) 4 764 3 894 4 149
5 387 4 538 4 800
* Adjusted to remove advance payment guarantees where the advance payment is already recognised as a liability to
the Group.
Taxation dispute with Zambia Revenue Authority (“ZRA”)
A subsidiary of the Group, Moolmans Mining Zambia is currently in a taxation dispute with the ZRA relating to additional
taxation assessments issued to the company by the ZRA. During the six month period, an advance payment was made to the ZRA
in order to release all equipment from Zambia. This dispute is currently ongoing and the Group has raised sufficient
provision in this regard.
Claims and legal disputes in the ordinary course of business
The Group is, from time to time, involved in various claims and legal proceedings arising in the ordinary course of business.
The Board does not believe that adverse decisions in any pending proceedings or claims against the Group will have a material
adverse effect on the financial condition or future operations of the Group. Provision is made for all liabilities which are
expected to materialise and contingent liabilities are disclosed when outflows are possible.
Commentary
Overview
Salient features
- All Injury Frequency Rate improved to 3,5 compared with 3,8 at 30 June 2014
- Revenue decreased by 14% to R23,9 billion (2013: R27,7 billion)
- Net operating earnings decreased by 19% to R413 million (2013: R510 million)
- Headline earnings per share decreased by 58%
- Sale of the Electrix business successfully completed
- Two-year order book (excluding Electrix) flat at R32,5 billion against December 2013
- Net cash improved to R1,7 billion from R1,3 billion in June 2014
Safety
Aveng remains fully committed to improving its safety culture by driving the safety vision “Home without harm,
Everyone, Everyday”.
Regrettably, the Group suffered two fatalities in the Mining operating segment during the six-month period ended 31
December 2014. This remains unacceptable as the Group strives towards fatality-free operations. The Aveng Board and management
extend their sincere condolences to the families of the deceased employees.
Along with the improvement in the All Injury Frequency Rate, other notable achievements included:
- numerous recognition awards from international mining client, Codelco, the most notable of which was for safety,
health and environmental management excellence at Aveng Mining Shafts & Underground’s Chuquicamata Copper Mine contract in
Chile;
- Aveng Engineering’s Pembani Coal Carolina washing plant contract, for achieving seven years without a Lost Time
Injury; and
- Aveng Grinaker-LTA’s Mechanical and Engineering contract at Medupi power station achieved 2,3 million Lost Time
Injury-free hours.
Operating environment
Overview
In line with the economic slowdown experienced in the Group’s key markets, Aveng continued to experience difficult
trading conditions.
Continuing the preceding financial year’s trends, the South African market remained challenging due to low levels of
major infrastructure-related spend, the impact of reduced mining activities and labour disruptions.
Trading conditions in Australia were complicated by the fact that social and transport-related infrastructure projects
are not yet compensating for the reduced mining infrastructure spend and recent decline in liquid natural gas projects.
Despite these macro-economic challenges, the recovery and stabilisation plan implemented in the previous financial
year, which focused on strengthening liquidity and reducing fixed costs, continued to progress as anticipated.
Construction and Engineering: Australasia and Asia: The general Australian business environment remained tough with
increased competition and lower major mining opportunities resulting in decreased revenue. Notwithstanding, opportunities
exist in social and transport-related infrastructure projects and in the oil and gas sectors. McConnell Dowell continues
to focus on non-mining-related work. Growth in Southeast Asia partially offset the previously anticipated reduction in
revenue, following the completion of multi-year major mining and infrastructure contracts.
Construction and Engineering: South Africa and rest of Africa: The segment remained constrained due to the lack of
large infrastructure investments, as evidenced by the weak forecast South African GDP growth rate of 1,4% for 2014. The
marginally improved segmental revenue, compared with 31 December 2013, was mainly due to construction activity on two large
private sector building-related contracts and engineering work on two renewable energy contracts, of which the Sishen
solar energy facility was successfully completed on schedule in December 2014.
Mining: With no improvement in the downturn of the commodities market, the segment’s revenue was unable to compensate
for the non-renewal of three gold-mining contracts in Africa during the previous financial year, despite the
commencement of the Nkomati Nickel Mine contract and increased activity on existing contracts.
Aveng Manufacturing: Recent investments by Infraset in Mozambique and Zambia enabled it to benefit from the strong
demand for concrete rail products, while Lennings Rail Services’ revenue was assisted by growth in rail construction and
maintenance services in sub-Saharan Africa. Labour disruptions and constrained infrastructure investment adversely
affected the mining, water and specialist construction products business units.
Aveng Steel: The extremely demanding market conditions that characterised the second half of the previous financial
year continued into the current year, with the South African steel sector experiencing numerous business failures in the
downstream market segment. Aveng Steel was adversely affected by the longer-than-anticipated steel sector labour
disruptions, high competition and lower international prices, - which had a notably negative impact on sales volumes and inventory
levels.
Financial performance
Statement of comprehensive earnings
Revenue decreased by 14% to R23,9 billion against the comparative period’s R27,7 billion primarily as a result of:
- completion of multi-year major mining and infrastructure-related contracts within the Construction and Engineering:
Australasia and Asia segment; and
- non-renewal of three gold-mining contracts at Aveng Moolmans.
The decrease in revenue was marginally offset by the weaker rand to Australian dollar exchange rate, which contributed
R602 million (2013: R1,6 billion) to rand revenue from the Construction and Engineering: Australasia and Asia operating
segment.
Net operating earnings decreased by 19% to R413 million (2013: R510 million), while the earnings margin decreased
slightly to 1,7% (2013: 1,8%). This result was characterised by:
- further losses on the Mokolo Crocodile Pipeline contract (“Mokolo”) as a result of difficulties in returning to higher
productivities following severe flood damage, causing an extended close-out of the contract; as well as increased costs
and penalties associated with remedial action to address operational difficulties relating to a water purification
contract;
- unforseen losses on the Grootegeluk Cyclic Pond contract due to weather delays and scope changes;
- an 18% decline in the Mining segment’s earnings due to the non-renewal of three gold-mining contracts in the open-cut
business and lower-than-anticipated productivity levels in the shaft-sinking unit;
- a tough steel sector culminating in a weak result from Aveng Steel, being largely responsible for the 51% reduction in
the Manufacturing and Processing segment’s earnings. This was driven by labour disruptions, reduced margins due to weak
demand and increased price competition, and restructuring costs to re-align the fixed cost base; and
- in mitigation of the above:
- solid results from Aveng Manufacturing due to strong demand for rail and related services in sub-Saharan Africa; and
- fair value gains of R94 million included in other earnings - representing gains on infrastructure investments
reaching a marketable maturity level allowing for their reclassification as financial assets held at fair value, and
gains on investment properties.
Earnings from equity-accounted investments of R30 million was down by R14 million against the comparative period due
to losses incurred on McConnell Dowell’s Middle East investments, as well as certain investments being reclassified as
infrastructure investments (held at fair value), effective from 1 July 2014.
McConnell Dowell disposed of its shares in Electrix on 31 October 2014 for R1,3 billion. The profit on the sale of
this subsidiary (treated as a disposal group and not a discontinued operation) amounted to R777 million before taxation.
The Group recognised the impairment charges described below following a review of current business performance, a
consideration of the prevailing market conditions, the resultant pressure on the relevant order books, and the Group's
view of the subdued economic conditions in the nearer term.
Goodwill of R291 million and intangible assets of R33 million associated with the Built Environs business in the
Construction and Engineering: Australasia and Asia segment was fully impaired. While management have implemented a robust
turnaround plan for this business, there is uncertainty around the business’ ability to generate the required returns
within a reasonable timeframe based on the current order book. The timing of this impairment is aligned to the Group’s
renewed focus on the return on assets within the direct control of management, as opposed to legacy intangible assets.
An impairment charge totalling R213 million was recognised against ancillary operations, comprising plant and equipment
in the Construction and Engineering: South Africa and rest of Africa (R152 million charge), Manufacturing and Processing
(R32 million charge) and Mining (R29 million charge) segments.
Net bank and related finance charges of R50 million were in line with the comparative period. Transaction costs of R57
million were above that of the comparative period (R30 million) in order to maintain access to previously arranged loan
facilities in South Africa and Australia in support of the Group’s liquidity position. The net convertible bonds
interest expense - including the accretion of interest at the effective interest rate for the share redemption amount -
equalled to R59 million. This charge was reduced by a R36 million fair value gain on the carrying amount of the equity option
embedded in the convertible bonds. Following shareholder approval (on 19 September 2014) to equity settle the bonds, the
option was reclassified to equity and will no longer be fair valued.
The taxation expense increased to R125 million, with an effective tax rate of 25,7% from R114 million (26,7%) in the
comparative period.
Headline earnings decreased by 55%. Items excluded from the calculation of headline earnings include the profit on
sale of Electrix, impairment charges and fair value gains on investment property.
Earnings per share (“EPS”) of 89,3 cents (2013: 83,9 cents) increased by 6% and headline earnings per share (“HEPS”)
of 34,5 cents (2013: 82,1 cents) decreased by 58%. The per share amounts were reduced as a result of the impact of
dilution caused by the issuing of shares to conclude the Group’s BEE transaction on 30 June 2014.
Statement of financial position
The Group reduced its capital expenditure to R583 million (2013: R649 million). Of this, R101 million (2013: R271
million) went into expansions; R456 million (2013: R320 million) to replacements of property, plant and equipment;
and R26 million (2013: R58 million) for intangible assets. The majority of the amount was spent as follows:
- R192 million at McConnell Dowell to replace equipment in the Overseas Construction (notably Southeast Asia) business
unit.
- R155 million at Aveng Moolmans which included an excavator replaced due to fire damage.
- R79 million at Aveng Manufacturing primarily relating to replacements in the Lennings Rail Services business unit as
well as a plant upgrade and other new equipment for Infraset.
During December 2014, the Group, by following its minority rights through a co-ownership agreement, disposed of its
10,9% interest in the Goldfields Mall investment property for R97 million.
Capital expenditure net of proceeds from disposals (including the aforementioned sale of investment property and
insurance proceeds on the replaced Aveng Moolmans excavator) reduced by R261 million to R244 million (2013: R505 million),
primarily reflecting the disposal of construction camps and ancillary equipment utilised by McConnell Dowell’s multi-year
major mining and infrastructure contracts.
Equity-accounted investments increased by 20% to R263 million against the comparative period and decreased by 14%
compared with 30 June 2014, predominantly due to an increase in equity funding and temporary bridging loans, and the
subsequent reclassification of three concession investments as infrastructure investments. This reclassification resulted from
Aveng Capital Partners’ (“ACP”, formally Aveng Concessions) investments reaching a marketable maturity level allowing
for their reclassification as financial assets held at fair value.
Infrastructure investments of R633 million represent the aforementioned reclassification from equity-accounted
investments, and the Group’s investment in the N3 Toll Concession, which retains its classification as an available-for-sale
investment, along with the Australian available-for-sale investment in GoldlinQ, the concession investment in the Gold
Coast Rapid Transit (“GCRT”) project.
Inventories increased by 5% to R3 billion against the comparative period and increased by 9% compared with 30 June
2014. This was due to increased inventory holdings by Aveng Steel, as a result of the rebalancing of the inventory mix
(including the impact of increased imports) and slower-than-anticipated sales due to depressed market conditions.
Amounts due from contract customers (being non-current and current) increased by R845 million (9%) to R10,1 billion
against 31 December 2013 (R9,3 billion). However, there was a significant decrease of R1,3 billion (11%) against the
position at 30 June 2014 of R11,4 billion. The main contributors were:
- against 31 December 2013, an increase in uncertified claims and variations on major infrastructure and building
contracts at McConnell Dowell, and Aveng Mining Shafts & Underground’s Chuquicamata Copper Mine contract in Chile;
- against 30 June 2014, a reduction of R1 billion on contract receivables at McConnell Dowell due to settlement payments
received on major mining, transport infrastructure and oil and gas contracts.
Amounts due to contract customers remained flat against 31 December 2013, while decreasing by 12% compared with 30
June 2014, due to the utilisation of advance payments at McConnell Dowell.
Trade and other receivables of R2,4 billion decreased by R566 million (19%) against R3,0 billion at 31 December 2013
due to improved collections at Aveng Manufacturing and Aveng Steel. The 13% or R352 million decrease compared with 30
June 2014 was attributable to higher sales volumes in June 2014 in anticipation of the steel industry labour disruptions
that followed in July, combined with improved collections and a short trading month in December 2014.
Trade and other payables decreased by R689 million (7%) to R8,7 billion against 31 December 2013 due to lower accruals
at McConnell Dowell as a result of lower contract-related expenditure and payment of trade payables on completion of
major contracts during the reporting period. AUD30 million of the AUD142,5 million advance payment was repaid on the
Queensland Curtis Liquid Natural Gas (“QCLNG”) contract in July 2014. As previously reported, it was anticipated that the
remainder would be settled by December 2014. However, based on the status of current negotiations, the settlement of the
remainder of the advanced payment is now expected during the second half of the financial year.
Operating free cash flow for the period amounted to a R220 million inflow which included R1,3 billion of proceeds on
the disposal of Electrix, consistent with the Group’s ongoing initiative to improve liquidity. Furthermore, the cash
flow performance was characterised by:
- significant cash outflows for McConnell Dowell associated with the remedial work on the GCRT contract, repayment of
the AUD30 million of advances on the QCLNG contract and the aforementioned working capital requirements;
- operating losses, utilisation of onerous contract provisions, notably related to the Mokolo contract, and working
capital requirements within Aveng Grinaker-LTA;
- temporary bridging funding of the renewable energy investments; and
- this was in part mitigated by a sound operating performance from Aveng Manufacturing and a positive working capital
contribution by Aveng Steel.
Cash and bank balances increased to R4,3 billion (June 2014: R4,1 billion), while the net cash position increased to
R1,7 billion from R1,3 billion at 30 June 2014. Borrowings decreased to R2,6 billion from R2,9 billion at 30 June 2014
due to the repayment of borrowings at McConnell Dowell. Proceeds from the issue of the convertible bond were utilised to
repay revolving credit facilities and fund working capital requirements.
The Group successfully placed R2 billion senior unsecured convertible bonds on 16 July 2014, which in turn was listed
on the Johannesburg Stock Exchange (“JSE”) on 4 September 2014. At date of issue, the convertible option (a derivative
instrument) was measured at a fair value of R438 million and the convertible bond liability was recognised at R1,6
billion. Authority for physical settlement in shares, on conversion, was granted at the general meeting convened on 19
September 2014. The fair value gain up to this date on re-measurement of the derivative liability amounted to R36 million,
thereafter the re-measured carrying amount of the option of R402 million was reclassified to equity together with
transaction costs allocable to the option.
Deferred taxation assets decreased marginally against a comparative position of R1,4 billion. Aveng has not increased
the deferred taxation asset of its main South African operating subsidiary since June 2014 due to the Group taking a
conservative view on the ability to utilise further assets in the foreseeable future.
Operating review
Construction and Engineering: Australasia and Asia
This operating segment comprises McConnell Dowell Construction, Tunnelling, Built Environs and the Pipeline business
units.
Revenue decreased by 25% to AUD1,2 billion or 21% to R11,8 billion against the comparative period, resulting in a 49%
(2013: 54%) contribution to the revenue of the Group. The reduction in revenue is reflective of the completion of
multi-year pipeline and building contracts, and the sale of Electrix. In Australian dollar terms net operating earnings were
flat at AUD19 million. However, net operating earnings in rand terms decreased by 4% to R183 million (2013: R191
million). The net operating margin percentage improved from 1,3% to 1,6%, due to the roll-off of non-contributing contracts.
Net operating earnings improved substantially against the immediately preceding six months performance of AUD8 million.
Revenue for Australia Construction was up by 39% or R1,7 billion to R6 billion (2013: R4,3 billion) due to notable
revenue generation emanating from the Hay Point, Roy Hill and Webb Dock contracts.
As previously reported, McConnell Dowell continues to close out remedial work and undertake demobilisation associated
with the GCRT contract. The process is taking longer than initially anticipated. Given the technical and legal
complexities, it is expected that the commercial negotiations will be protracted, and thus the final outcome remains an
uncertain and material risk to the Group. The process of lodging, finalising and resolving claims with the affected
counterparties has been intensified.
Overseas Construction performed well in challenging market conditions, despite remaining flat at R1,8 billion compared
with 31 December 2013 due to the shortage of new work secured. Revenue was sourced from the power, marine and transport
sectors in New Zealand, and the transport and oil and gas sectors in South East Asia, particularly in Singapore,
Indonesia and Malaysia.
The Pipelines business unit reported a major decrease in revenue to R1,1 billion (2013: R4,9 billion) as the large
liquefied natural gas pipeline contracts in Queensland reached completion. Construction work on the Australia Pacific
Liquid Natural Gas contract (“APLNG”) was completed in June 2014 and work on the Gladstone Liquefied Natural Gas (“GLNG”)
contract was effectively completed in November 2014. As previously reported, the arbitration process, using the
International Chamber of Commerce rules, for the QCLNG contract is progressing in line with the agreed timelines with no material
change in the status thereof. As noted earlier, the settlement of the remaining portion of the advance payment has been
postponed to the second half of the financial year. It continues to be expected that the commercial negotiations will be
protracted, and thus the final outcome remains an uncertain and material risk to the Group.
The revenue of the Building operation decreased by 40% or R554 million to R841 million (2013: R1,4 billion),
reflecting the tough building market, evident from the lack of new work secured during the reporting period. The Ocean Keys
Shopping Centre was completed in November 2014, leaving the Perth Airport Terminal 1 expansion contract as the largest
contract within the business unit.
The Tunnelling and Underground operation reported an increase in revenue of 8% or R69 million to R894 million (2013:
R825 million), due to good progress on two significant Metro Down Town Line contracts in Singapore and the Waterview
contract in New Zealand.
The four months of revenue reported by Electrix of R1,4 billion prior to its sale on 31 October 2014 was 26% or R471
million lower than the comparative period, which included a full six months of sales of R1,8 billion.
Overall, management continued to focus on strengthening contract execution performance.
Construction and Engineering: South Africa and rest of Africa
This operating segment comprises Aveng Grinaker-LTA, Aveng Engineering and Aveng Capital Partners. The results of
Aveng Capital Partners have been reallocated from the Other and Eliminations segment to the Construction and Engineering:
South Africa and rest of Africa segment to more accurately reflect the synergies with Aveng Grinaker-LTA and Aveng
Engineering. Comparatives have been adjusted accordingly.
Revenue remained flat at R4,3 billion due to ongoing activity on the Sishen and Gouda renewable energy projects, the
Nacala and Majuba rail contracts, work on Eskom-related projects and two major private sector building contracts, namely
Mall of the South in Alberton and Sasol Corporate Head Office in Sandton.
Net operating losses for the segment increased by 13% to R229 million against the comparative (2013: R202 million). As
communicated in the trading statement of 11 December 2014, the result was adversely affected by two legacy contracts,
namely the Mokolo contract within Aveng Grinaker-LTA and a water purification contract housed in Aveng Engineering.
Civil Engineering achieved a 21% or R284 million increase in revenue, as a result of the rail-related work on the
Nacala and Majuba Rail Link contracts.
Other significant operational issues were:
- weather delays and scope changes in the Grootegeluk Cyclic Ponds contract, which delayed completion of the contract
until the second half of the financial year;
- the aforementioned Mokolo contract, which is estimated to be completed by the fourth quarter of the financial year,
with maintenance and inspection works continuing for six months thereafter; and
- labour disruptions experienced on the Majuba Rail Link contract.
Mechanical and Electrical: Revenue decreased by 5% or R49 million to R954 million (2013: R1 003 million). There has
been a significant reduction in the losses within Mechanical and Electrical compared to the comparative period, given the
insufficient margins on the legacy contracts experienced at that time. This was partially offset by additional work on
Eskom’s two new coal-fired power plant contracts. Good progress has been made on the commercial challenges surrounding
the Eskom contracts.
Buildings and Coastal: Revenue decreased by 13% due to the completion of the Cradlestone Mall contract, not
compensated for by the ramp-up of the Mall of the South and Sasol Corporate Office contracts which continue to track well
operationally. The Coastal division has increased revenues compared with the prior period due to the construction of the Audi
Centre in Durban, the Aspen Unit 4 High Containment Suite Facility contract, and the refurbishment of the Pavilion Mall.
Aveng Engineering
Aveng Engineering is responsible for generic engineering services and contract management activities in the water,
power and energy, and minerals sectors. It houses the design and construction of Aveng’s renewable energy interests. The
operating group reports to Aveng Grinaker-LTA effective from 1 July 2014.
Revenue increased by 19% or R75 million to R477 million (2013: R402 million) due to higher activities on the Group’s
renewable energy projects in the Power business. The Sishen solar energy facility in the Northern Cape was successfully
completed on schedule in December 2014. The Gouda wind energy facility in the Western Cape is on schedule for completion
in June 2015.
The lack of production at the Kromdraai modular water treatment facility operated for Anglo American had an adverse
impact on the net operating earnings of the Water business. After changing the process chemistry and the physical
configuration of the plant, it was able to treat the input water at a considerably lower volume and higher cost. This plant was
impaired by R44 million.
Cost optimisation measures implemented during the comparative period continue to be maintained, while the future
positioning of the business continues to receive attention.
Aveng Capital Partners
Aveng Capital Partners is responsible for managing the Group’s investments in South African toll road, real estate and
renewable energy concessions.
Revenue decreased significantly against the December 2013 comparative due to the net success fee earned in the prior
year (R111 million) upon reaching financial close on the Gouda renewable energy project.
Net operating earnings included fair value gains of R83 million on certain renewable and real estate investments
reaching a marketable maturity level.
Mining
This operating segment comprises Aveng Moolmans and Aveng Mining Shafts & Underground.
The segment reported a 14% or R487 million decrease in revenue to R3,0 billion (2013: R3,5 billion). Net operating
earnings decreased by 18% or R54 million to R241 million (2013: R295 million) due to the continued downturn in the mining
and commodity market.
The revenue of Aveng Moolmans decreased by 10% or R260 million to R2,2 billion (2013: R2,5 billion) due to the
non-renewal of three gold-mining contracts in Africa, partially offset by increased activity on existing contracts. The Nkomati
Nickel Mine contract commenced operations in July 2014. Aveng Moolmans continued to record good results.
During the reporting period, the Zambia Revenue Authority issued an additional tax assessment against Aveng Moolmans
following the completion of a mining contract in April 2013. The assessment has been paid to secure the release of the
mining fleet which was impounded by the authorities. Sufficient provision was made for these charges in the previous
financial year. Aveng Moolmans continues to pursue legal and other avenues to resolve this ongoing dispute.
Aveng Moolmans’ portfolio currently spans five commodities mined for seven customers in four countries, with 33% of
work sourced outside South Africa compared with 42% in the comparative period.
The revenue of Aveng Mining Shafts & Underground decreased by 24% or R229 million to R729 million (2013: R956 million)
due to the general downturn in the mining industry and a more selective approach to new work in order to strengthen the
quality of the business unit’s earnings, and mitigate risk by securing longer-term contracts. Net operating earnings
were impacted by margin slippage at some South African contracts.
The business unit continues to experience operational and commercial challenges on the Chuquicamata Copper Mine
contract in Chile. While agreement has been reached in principle and part-payment received for settlement of two outstanding
claims, Aveng Mining Shaft & Underground continues to engage with the client, Codelco, on resolving these and other
matters.
The Kalagadi Manganese Mine contract has made good operational progress and will be completed in the second half of
the financial year.
Sasol’s Thubelisha contract was completed successfully in July 2014, while the Shondoni coal contract progressed
according to expectations. However, Wesizwe’s Bakubung Platinum Mine was negatively affected by production delays as a result
of safety and labour stoppages.
The delay in securing the environmental management plan for Ivanhoe’s Platreef Platinum Mine negatively impacted
revenue and earnings for the period. However, work is scheduled to commence in the second half of the financial year, with
site establishment nearing completion.
Manufacturing and Processing
This operating segment comprises Aveng Manufacturing and Aveng Steel.
Revenue remained flat at R5,3 billion; however, net operating earnings fell significantly by 51% or R83 million to R79
million (2013: R162 million) due to steel sector labour disruptions affecting both operating groups. In the case of
Aveng Steel, this was further compounded by weak demand, low international steel prices, increased price competition, and
restructuring costs to re-align the fixed cost base.
Aveng Manufacturing
The operating group consists of Infraset, Lennings Rail Services, Aveng A&CS, Facades, Aveng DFC and Duraset.
Aveng Manufacturing’s total revenue remained flat at R1,8 billion against the comparative period. In spite of tough
market conditions and the impact of the aforementioned labour disruptions on Aveng DFC and Duraset, Aveng A&CS, Infraset
and Lennings Rail Services produced good results.
Aveng Manufacturing Infraset’s revenue increased by 20% as a result of strong demand for precast concrete products in
the southern Africa region, especially in Mozambique and Zambia. South African operations performed well due to the
supply of concrete sleepers and pipes.
Aveng Manufacturing Lennings Rail Services’ revenue increased by 18% against the comparative period as a result of
rail construction contracts for Kalagadi Manganese Mine and the Nacala Section 2 contract, and the ongoing maintenance
contracts for Transnet.
Aveng Manufacturing A&CS revenue decreased by 7% against the comparative period due to a slowdown in capital projects
in the oil and gas markets.
Aveng Manufacturing Facades’ revenue decreased materially by 71% against the comparative period due to the completion
of existing contracts and the lack of new work at the required return levels. Actions relating to its future
repositioning are in process; however, the business unit remained loss-making as a result of cost over-runs.
Aveng Manufacturing DFC’s revenue decreased marginally by 1% against the comparative period. Foreign operations
continue to perform well, while the South African operations focused on clawing back lost productivity as a result of the
platinum sector labour disruption (a spill-over from the previous financial year). Aveng Manufacturing DFC acquired Atval
Proprietary Limited on 1 July 2014, thereby expanding the Aveng product range into the high-pressure knife-gate valve
market.
Aveng Manufacturing Duraset was particularly affected by the short-supply of inventory as a result of the
aforementioned labour disruptions, resulting in revenue decreasing by 25% against the comparative period. Emerging from a
difficult 2014, turnaround initiatives were implemented focusing on efficiency improvements and the realignment of the fixed
cost base of the business.
Aveng Steel
The operating group consists of Aveng Trident Steel, Aveng Steel Fabrication and Aveng Steeledale.
As anticipated, aforementioned labour disruptions had a notable impact on the performance of Aveng Steel. Revenue
remained flat at R3,4 billion against the comparative period, with profitability impacted by labour disruptions, lower
international steel prices, change in product mix, increased competition and restructuring costs. The benefits of integrating
the three businesses continued to materialise.
Although Aveng Trident Steel’s revenue marginally improved by 2% against the comparative period, its performance was
materially impacted by the steel sector labour disruptions, the inability to effect price increases amid increased
competition, and lower volumes coupled to weak demand. Operating earnings were negatively impacted by once-off restructuring
costs in order to re-align the fixed cost base.
Encouragingly, Aveng Steeledale’s revenue grew by 15% in an extremely challenging market. With fundamental business
controls and practices having been restored, a reduction in fixed costs implemented, and through the leveraging of Aveng
Steeledale’s competitive advantages of geographic spread and experience in managing construction sites, a turnaround in
profitability was achieved against the operating loss in the comparative period.
Aveng Steel Fabrication’s ongoing contracts to supply fabricated steel to the Medupi and Kusile power stations
proceeded to plan, albeit at lower productivity levels. The contracts are scheduled to be completed early in the next financial
year. Despite the preservation of the lower cost structure following restructuring initiatives, the low levels of
demand for infrastructure development are anticipated to continue to have a negative impact on the business’ financial
performance.
Other and Eliminations
The results of Aveng Capital Partners have been reallocated from the Other and Eliminations segment to the
Construction and Engineering: South Africa and rest of Africa segment. Comparatives have been adjusted accordingly.
This segment, which comprises corporate services, corporate-held investments including the property portfolio, and
consolidation eliminations, reflected a net operating earnings increase of R75 million to R139 million (2013: R64 million).
The improved performance is attributable to:
- cost-saving initiatives to reduce the fixed cost base; and
- a change in philosophy regarding the recovery of centralised administration and property rental expenses to better
reflect the usage of support services by the operating groups.
Two-year order book
The Group’s two-year order book (excluding Electrix) remained flat at R32,5 billion against the comparative December
2013 position of R32,4 billion, though cyclically down by 12% against June 2014 (R37,1 billion).
The Construction and Engineering: Australasia and Asia operating segment’s order book decreased by 16% or R2,5 billion
to R13,5 billion against the comparative December 2013 position, or 34% down against June 2014, reflective of a weaker
market as a large number of the major contracts are now close to completion without having been replaced. However, the
extent of unsecured work is more significant than anticipated. The order book for Australia Construction decreased
against the comparative period, partially offset by an increase for Overseas Construction, with notable growth experienced in
Southeast Asia. New major contracts awarded include: Bonriki Runway Expansion in Kiribati and Brunei Liquefied Natural
Gas Co-generation plant. The evolution of the order book reflects the objective of diversifying beyond Australia and
commodity-dependent sectors. Prospects include road, rail and ports infrastructure, maintenance contracts and commercial
building projects.
The Construction and Engineering: South Africa and rest of Africa operating segment’s order book of R8,0 billion
remained flat against the comparative December 2013 position, though 8% up against June 2014, due to the awarding of
infrastructure contracts, and rehabilitation contracts for SANRAL and the construction of two major hospitals, being Dr Pixley
Ka Isaka Seme Memorial hospital and Pinehaven hospital. The public sector work contribution in the order book increased
from 20% to 37%. A strong focus exists to diversify into the cross-border markets and to grow further into Africa.
Notable prospects include rail depots and power-related engineering and construction projects in southern Africa.
The combined order book for Aveng Mining increased by 45% or R3,2 billion to R10,3 billion against the comparative
December 2013 position, and 20% up against 30 June 2014, with the South African order book gaining relative to the
non-South African position. The increase is attributable to additional work secured on existing operations, and the award of the
BlackRock horizontal tunnelling development contract within Aveng Mining Shafts & Underground. The non-renewal of
gold-mining contracts has reduced the previous dependency on gold contracts outside South Africa, with platinum, iron ore and
manganese mining gaining at the expense of gold and coal. Aveng Moolmans contributes 64% of the order book, compared to
50% at December 2013 and 68% at June 2014, with 22% currently outside South Africa (December 2013: 47%, and June 2014:
33%). Prospects include shaft-sinking, horizontal tunnelling development and open-cast mining in the South African
platinum sector, and zinc, coal, iron ore and gold in sub-Saharan Africa, though delayed and downscaled as a result of low
commodity prices.
Outlook and prospects
It is expected that the outlook for the Group will be influenced by:
- order book replenishment by McConnell Dowell;
- the anticipation of an improved performance from Aveng Grinaker-LTA;
- generally positive prospects for the Mining and Manufacturing and Processing segments; and
- the realisation of benefits from the cost-saving initiatives already undertaken.
QCLNG and GCRT commercial negotiations remain protracted processes, thus their final outcome continues to be a
material risk to the Group.
The process of disposing of the majority of the Group’s property portfolio in South Africa is well advanced. The
transaction is expected to be finalised in the second half of the financial year.
By order of the Board
AWB Band HJ Verster
Chairman Chief Executive Officer
16 February 2015
Jet Park
Corporate information
Directors
AWB Band*# (Chairman), HJ Verster (Chief Executive Officer), EK Diack*#, PJ Erasmus*#, MA Hermanus*#, MJ Kilbride*#,
AH Macartney (Group Financial Director), JJA Mashaba (Group Executive Director), TM Mokgosi-Mwantembe*#, KW Mzondeki*#,
DG Robinson^ (Executive Director), MI Seedat*#, PK Ward*#.
(*non-executive) (#independent) (^Australian)
Company Secretary
Michelle Nana
Business address and registered office
Aveng Park, 1 Jurgens Street, Jetpark, Gauteng, 1620
PO Box 6062, Rivonia, Johannesburg, Gauteng, 2128, South Africa
Telephone: +27 (0) 11 779 2800
Telefax: +27 (0) 11 784 5030
Auditors
Ernst & Young Incorporated
Registration number: 2005/002308/21
102 Rivonia Road, Sandton, Johannesburg, 2194
Private Bag X14, Northlands, 2116, South Africa
Telephone +27 (0) 11 772 3000
Telefax +27 (0) 11 772 4000
Principal bankers
Absa Bank Limited
Australia and New Zealand Banking Group Limited
Barclays Bank Public Limited Company
Commonwealth Bank of Australia Limited
FirstRand Bank Limited
Investec Bank Limited
Nedbank Limited
Standard Chartered Bank Public Limited Company
The Hong Kong and Shanghai Banking Corporation Limited
The Standard Bank of South Africa Limited
Corporate legal advisers
Webber Wentzel
10 Fricker Road, Illovo Boulevard, Illovo, 2196, South Africa
PO Box 6177, Marshalltown, 2107, South Africa
Telephone +27 (0) 11 530 5000
Telefax +27 (0) 11 530 1111
Sponsor
J.P. Morgan Equities South Africa (Proprietary) Limited
Registration number: 1995/011815/07
1 Fricker Road, cnr Hurlingham Road, Illovo, 2196, South Africa
Telephone +27 (0) 11 537 0300
Telefax +27 (0) 11 507 0351/2/3
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 (0) 11 370 5000
Telefax +27 (0) 11 370 5560
Website
www.aveng.co.za
Date of release : 17 February 2015
Date: 17/02/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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