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AVENG LIMITED - Reviewed interim condensed consolidated financial statements for the six months ended 31 December 2015

Release Date: 23/02/2016 07:05
Code(s): AEG     PDF:  
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Reviewed interim condensed consolidated financial statements for the six months ended 31 December 2015

Aveng Group
Company registration number: 1944/018119/06
Share codes: JSE: AEG ISIN: ZAE 000111829

Reviewed interim condensed consolidated financial statements for the six months ended 31 December 2015

Salient features - financial performance

For the six months ended 31 December 2015:
- Revenue
  R18,0 billion 
  Decrease of 25% from R23,9�billion at December 2014
  
- Net operating earnings
  R52 million 
  Decrease of 87% from R413�million at December 2014
  
- Gain on property transaction
  R577 million
  
- Earnings for the period attributable to equity holders of the parent 
  R230 million 
  Decrease of 36% from R358 million at December 2014
  
- Headline loss
  R231 million 
  Decrease from R138�million earnings at December 2014
  
- Operating free cash flow
  R295 million outflow 
  December 2014: R220 million inflow
  
- Capital expenditure
  R171 million 
  December 2014: R583 million
  
- Earnings per share
  57,8 cents 
  Decrease of 35% from 89,3 cents at�December�2014
  
- Headline loss per share
  58,0 cents
  Decrease from 34,5 cents earnings at December�2014


Net operating earnings / (loss) - segmental analysis  
                                             H1       H1                June    
                                           2016     2015     Change     2015    
                                             Rm       Rm          %       Rm    
   South Africa and rest of Africa         (125)    (229)        45     (697)   
    Aveng Grinaker-LTA                      (48)    (297)        84     (587)   
    Aveng Engineering                       (83)     (28)     >(100)    (291)   
    Other                                     6       96        (94)     181    
   Australasia and Asia                       8      183        (96)     112    
   Total Construction and Engineering      (117)     (46)     >(100)    (585)   
   Mining                                   198      241        (18)     413    
   Manufacturing and Processing             (48)      79      >(100)      54
    Aveng Steel                            (146)     (65)     >(100)    (174)
    Aveng Manufacturing                      98      144        (32)     228
   Other and Eliminations                    19      139        (86)    (170)   
   Total                                     52      413        (87)    (288)   


Interim condensed statement of financial position
as at 31 December 2015
                                                                   31 December   31 December     30 June    
                                                                          2015          2014        2015    
                                                                     (Reviewed)    (Reviewed)   (Audited)   
                                                        Notes               Rm            Rm          Rm    
   ASSETS                                                                                                   
   Non-current assets                                                                                       
   Goodwill arising on consolidation                                       342           351         342    
   Intangible assets                                                       332           298         339    
   Property, plant and equipment                                         5 450         5 825       5 626    
   Equity-accounted investments                                            136           263         151    
   Infrastructure investments                               9              877           633         778    
   Deferred taxation                                                     1 829         1 383       1 580    
   Derivative instruments                                                   15             8           6    
   Amounts due from contract customers                     10            1 174         3 192         900    
                                                                        10 155        11 953       9 722    
   Current assets                                                                                           
   Inventories                                                           2 400         3 056       2 529    
   Derivative instruments                                                  106            46          35    
   Amounts due from contract customers                     10            9 068         6 906       9 394    
   Trade and other receivables                                           2 005         2 433       2 424    
   Cash and bank balances                                                3 452         4 256       2 856    
                                                                        17 031        16 697      17 238    
   Non-current assets held-for-sale                         8                7           607         559    
   TOTAL ASSETS                                                         27 193        29 257      27 519    
   EQUITY AND LIABILITIES                                                                                   
   Equity                                                                                                   
   Share capital and share premium                                       2 009         2 001       2 023    
   Other reserves*                                                       2 031         1 186       1 162    
   Retained earnings*                                                   10 020        10 608       9 790    
   Equity attributable to equity-holders of parent                      14 060        13 795      12 975    
   Non-controlling interest                                                 11            14          23    
   TOTAL EQUITY                                                         14 071        13 809      12 998                                                                    
   LIABILITIES                                                                                              
   Non-current liabilities                                                                                  
   Deferred taxation                                                       434           234         221    
   Borrowings and other liabilities                        13            1 901         2 158       2 037    
   Employee-related payables                                               474           126         468    
   Trade and other payables                                11                -           297           -    
                                                                         2 809         2 815       2 726    
   Current liabilities                                                                                      
   Amounts due to contract customers                       10            1 792         2 353       2 562    
   Borrowings and other liabilities                        13            1 220           416         426    
   Payables other than contract-related                                      -            98         102    
   Employee-related payables                                               548         1 081         648    
   Derivative instruments                                                    -             3           2    
   Trade and other payables                                11            6 566         8 416       7 961    
   Taxation payable                                                        187           266          94    
                                                                        10 313        12 633      11 795    
   TOTAL LIABILITIES                                                    13 122        15 448      14 521    
   TOTAL EQUITY AND LIABILITIES                                         27 193        29 257      27 519    
   *  Comparatives have been amended as detailed in note 3: New accounting standards and interpretations 
      adopted, changes in accounting policies and other reclassifications.                                                                                                               


Interim condensed statement of comprehensive earnings
for the six months ended 31 December 2015
                                                                         Six months     Six months                    Year    
                                                                              ended          ended                   ended    
                                                                        31 December    31 December                 30 June    
                                                                               2015           2014                    2015    
                                                                          (Reviewed)     (Reviewed)    Change     (Audited)   
                                                             Notes               Rm             Rm          %           Rm    
   Revenue                                                                   17 998         23 864        (25)      43 930    
   Cost of sales                                                            (16 711)       (22 304)        25      (41 566)   
   Gross earnings                                                             1 287          1 560        (18)       2 364    
   Other earnings                                                               214            319        (33)         471    
   Operating expenses                                           14           (1 392)        (1 496)         7       (3 063)   
   (Loss) / earnings from equity-accounted investments                          (57)            30      >(100)         (60)   
   Net operating earnings / (loss)                                               52            413        (87)        (288)   
   Impairment of property, plant, equipment and 
   intangible assets                                                            (23)          (246)        91         (330)   
   Impairment of goodwill arising on consolidation                                -           (291)       100         (291)   
   Profit on sale of subsidiary                                                   -            777       (100)         777    
   Gain on property transaction                                  6              577              -       >100            -    
   Earnings / (loss) before financing transactions                              606            653         (7)        (132)   
   Finance earnings                                                             105             72         46          177    
   Convertible bond interest and gains                                         (111)           (59)       (88)        (167)   
   Other finance expenses                                                      (150)          (179)        16         (316)   
   Earnings / (loss) before taxation                                            450            487         (8)        (438)   
   Taxation                                                     15             (218)          (125)       (74)         (80)   
   Earnings / (loss) for the period                                             232            362        (36)        (518)     
                                                                                                                              
   Other comprehensive earnings to be reclassified to earnings      
   in subsequent period (net of taxation):                              
   Exchange differences on translating foreign operations                       985           (366)      >100         (372)   
   Other comprehensive loss released from equity-accounted          
   investments                                                                    -             28      >(100)          28    
   Other comprehensive earnings / (loss) for the period (net        
   of taxation)                                                                 985           (338)      >100         (344)   
   Total comprehensive earnings / (loss) for the period                       1 217             24       >100         (862)   
   Total comprehensive earnings / (loss) for the period             
   attributable to:                                                            
   Equity-holders of the parent                                               1 223             20       >100         (804)   
   Non-controlling interest                                                      (6)             4      >(100)         (58)   
                                                                              1 217             24       >100         (862)   
   Earnings / (loss) for the period attributable to:                                                                          
   Equity-holders of the parent                                                 230            358        (36)        (460)   
   Non-controlling interest                                                       2              4        (50)         (58)   
                                                                                232            362        (36)        (518)   
   Other comprehensive earnings / (loss) for the period (net        
   of taxation)                                                           
   Equity-holders of the parent                                                 993           (338)      >100         (344)   
   Non-controlling interest                                                      (8)             -      >(100)           -    
                                                                                985           (338)      >100         (344)   
   Results per share (cents)                                                                                                  
   Earnings - basic                                                            57,8           89,3        (35)      (114,8)   
   Earnings - diluted                                                          57,2           89,0        (36)      (114,4)   
   Headline (loss) / earnings - basic                                         (58,0)          34,5      >(100)      (144,3)   
   Headline (loss) / earnings - diluted                                       (57,5)          34,4      >(100)      (143,8)   
   Number of shares (millions)                                                                                                
   In issue                                                                   416,7          416,7          -        416,7    
   Weighted average                                                           398,0          400,6       (0,6)       400,6    
   Diluted weighted average                                                   402,1          402,1          -        402,1    
   EBITDA for the Group, being net operating earnings before interest, tax, depreciation and amortisation is R496 million 
   (December 2014: R928 million; June 2015: R662 million).                                                                        


Interim condensed statement of changes in equity
for the six months ended 31 December 2015
                                                                                                   Total     Foreign                   Equity-    
                                                                                                   share    currency    Available-   accounted    
                                                                                                 capital      trans-      for-sale     invest-    
                                                                             Share      Share        and      lation    fair value       ments    
                                                                           capital    premium    premium     reserve       reserve*    reserve    
                                                                                Rm         Rm         Rm          Rm            Rm          Rm   
   Six months ended 31 December 2014 (Reviewed)                                                                                                   
   Opening balance as previously reported                                       20      1 988      2 008       1 129            93         (28)   
   Adoption of IFRS 9 accounting standard                                        -          -          -           -           (93)          -    
   Balance at 1 July 2014 as restated                                           20      1 988      2 008       1 129             -         (28)   
   Earnings for the period                                                       -          -          -           -             -           -    
   Other comprehensive loss for the period (net of taxation)                     -          -          -        (366)            -          28    
   Total comprehensive earnings for the period                                   -          -          -        (366)            -          28    
   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             -           -    
   Year ended 30 June 2015 (Audited)                                                                                                              
   Balance at 1 July 2014 as restated                                           20      1 988      2 008       1 129             -         (28)   
   Loss for the period                                                           -          -          -           -             -           -    
   Other comprehensive loss for the period (net of taxation)                     -          -          -        (372)            -          28    
   Total comprehensive loss for the period                                       -          -          -        (372)            -          28    
   Movement in treasury shares                                                   -         15         15           -             -           -    
   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       -          -          -           -             -           -    
   Increase in equity investment                                                 -          -          -           -             -           -    
   Foreign currency translation movement                                         -          -          -           -             -           -    
   Dividends paid                                                                -          -          -           -             -           -    
   Total contribution and distributions recognised                               -         15         15           -             -           -    
   Balance at 30 June 2015                                                      20      2 003      2 023         757             -           -    
  
                                                              Equity-                                      Total attri-  
                                                              settled     Conver-                               butable     
                                                               share-       tible                            to equity-         
                                                                based        bond       Total                   holders          Non-         
                                                              payment      equity       other    Retained        of the   controlling      Total    
                                                              reserve     reserve   reserves*    earnings*       parent      interest     equity      
                                                                   Rm          Rm          Rm          Rm            Rm            Rm         Rm  
   Six months ended 31 December 2014 (Reviewed)                                             
   Opening balance as previously reported                          26           -       1 220      10 157        13 385            11     13 396   
   Adoption of IFRS 9 accounting standard                           -           -         (93)         93             -             -          -   
   Balance at 1 July 2014 as restated                              26           -       1 127      10 250        13 385            11     13 396   
   Earnings for the period                                          -           -           -         358           358             4        362   
   Other comprehensive loss for the period (net of taxation)        -           -        (338)          -          (338)            -       (338)  
   Total comprehensive earnings for the period                      -           -        (338)        358            20             4         24   
   Movement in treasury shares                                      -           -           -           -            (7)            -         (7)  
   Equity-settled share-based payment charge                        7           -           7           -             7             -          7   
   Transfer of convertible bond option to convertible bond                                                                               
   equity reserve                                                   -         402         402           -           402             -        402   
   Deferred transaction costs allocated to convertible bond                                                                              
   equity reserve                                                   -         (12)        (12)          -           (12)            -        (12)  
   Foreign currency translation movement                            -           -           -           -             -             1          1   
   Dividends paid                                                   -           -           -           -             -            (2)        (2)  
   Total contributions and distributions recognised                 7         390         397           -           390            (1)       389   
   Balance at 31 December 2014                                     33         390       1 186      10 608        13 795            14     13 809   
   Year ended 30 June 2015 (Audited)                                                                                                               
   Balance at 1 July 2014 as restated                              26           -       1 127      10 250        13 385            11     13 396   
   Loss for the period                                              -           -           -        (460)         (460)          (58)      (518)  
   Other comprehensive loss for the period (net of taxation)        -           -        (344)          -          (344)            -       (344)  
   Total comprehensive loss for the period                          -           -        (344)       (460)         (804)          (58)      (862)  
   Movement in treasury shares                                      -           -           -           -            15             -         15   
   Equity-settled share-based payment charge                      (11)          -         (11)          -           (11)            -        (11)  
   Transfer of convertible bond option to convertible bond                                                                               
   equity reserve                                                   -         402         402           -           402             -        402   
   Deferred transaction costs allocated to convertible bond                                                                              
   equity reserve                                                   -         (12)        (12)          -           (12)            -        (12)  
   Increase in equity investment                                    -           -           -           -             -            76         76   
   Foreign currency translation movement                            -           -           -           -             -             1          1   
   Dividends paid                                                   -           -           -           -             -            (7)        (7)  
   Total contribution and distributions recognised                (11)        390         379           -           394            70        464   
   Balance at 30 June 2015                                         15         390       1 162       9 790        12 975            23     12 998   
          

Interim condensed statement of changes in equity continued
for the six months ended 31 December 2015   
                                                                                                                                        Equity-
                                                                                         Total     Foreign                   Equity-    settled         
                                                                                         share    currency    Available-   accounted     share-         
                                                                                       capital      trans-      for-sale     invest-      based         
                                                                   Share      Share        and      lation    fair value       ments    payment         
                                                                 capital    premium    premium     reserve       reserve*    reserve    reserve         
                                                                      Rm         Rm         Rm          Rm            Rm          Rm         Rm         
   Six months ended 31 December 2015 (Reviewed)                                                                                                      
   Balance at 1 July 2015                                             20      2 003      2 023         757             -           -         15      
   Earnings for the period                                             -          -          -           -             -           -          -      
   Other comprehensive earnings for the period (net of taxation)       -          -          -         993             -           -          -      
   Total comprehensive earnings for the period                         -          -          -         993             -           -          -      
   Purchase of treasury shares                                         -        (23)       (23)          -             -           -          -      
   Equity-settled share-based payment release                          -          9          9           -             -           -         (9)     
   Equity-settled share-based payment charge                           -          -          -           -             -           -          7      
   Recognition of deferred tax on convertible bond                     -          -          -           -             -           -          -      
   Decrease in equity investment                                       -          -          -           -             -           -          -      
   Total contribution and distributions recognised                     -        (14)       (14)          -             -           -         (2)     
   Balance at 31 December 2015                                        20      1 989      2 009       1 750             -           -         13      
   *  Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes in accounting 
      policies and other reclassifications.  

                                                                                                   Total attri-                           
                                                                  Conver-                               butable                           
                                                                    tible                            to equity-                           
                                                                     bond       Total                   holders          Non-             
                                                                   equity       other    Retained        of the   controlling      Total  
                                                                  reserve    reserves*   earnings*       parent      interest     equity  
                                                                       Rm          Rm          Rm            Rm            Rm         Rm  
   Six months ended 31 December 2015 (Reviewed)                                                                                           
   Balance at 1 July 2015                                             390       1 162       9 790        12 975            23     12 998  
   Earnings for the period                                              -           -         230           230             2        232  
   Other comprehensive earnings for the period (net of taxation)        -         993           -           993            (8)       985  
   Total comprehensive earnings for the period                          -         993         230         1 223            (6)     1 217  
   Purchase of treasury shares                                          -           -           -           (23)            -        (23) 
   Equity-settled share-based payment release                           -          (9)          -             -             -          -  
   Equity-settled share-based payment charge                            -           7           -             7             -          7  
   Recognition of deferred tax on convertible bond                   (122)       (122)          -          (122)            -       (122) 
   Decrease in equity investment                                        -           -           -             -            (6)        (6) 
   Total contribution and distributions recognised                   (122)       (124)          -          (138)           (6)      (144) 
   Balance at 31 December 2015                                        268       2 031      10 020        14 060            11     14 071  
   *  Comparatives have been amended as detailed in note 3: New accounting standards and interpretations adopted, changes in accounting 
      policies and other reclassifications.   
   

Interim condensed statement of cash flows
for the six months ended 31 December 2015
                                                                   Six months    Six months        Year    
                                                                        ended         ended       ended    
                                                                  31 December   31 December     30 June    
                                                                         2015          2014        2015    
                                                                    (Reviewed)    (Reviewed)   (Audited)   
                                                           Note            Rm            Rm          Rm    
   Operating activities                                                                                    
   Cash retained from operations                                          660           589         (92)   
   Depreciation                                                           429           501         929    
   Amortisation                                                            15            14          21    
   Non-cash and other movements                              16          (194)         (418)       (457)   
   Cash generated by operations                                           910           686         401    
   Changes in working capital                                                                              
   Decrease / (increase) in inventories                                   162          (279)        201    
   Decrease in amounts due from contract customers                         52           743         547    
   Decrease in trade and other receivables                                424           362         357    
   Increase in derivative instruments                                     (82)         (103)       (101)   
   Decrease in amounts due to contract customers                         (770)         (252)        (43)   
   Decrease in trade and other payables                                  (338)       (1 204)     (1 953)   
   QCLNG repayment                                                     (1 072)            -           -    
   Decrease in payables other than contract-related                      (102)         (102)       (102)   
   Decrease in employee-related payables                                  (96)         (187)       (258)   
   Total changes in working capital                                    (1 822)       (1 022)     (1 352)   
   Cash utilised by operating activities                                 (912)         (336)       (951)   
   Finance expenses paid                                                 (209)         (176)       (361)   
   Finance earnings received                                              102            72         174    
   Taxation paid                                                         (233)         (134)       (397)   
   Cash outflow from operating activities                              (1 252)         (574)     (1 535)   
   Investing activities                                                                                    
   - expansion                                                            (75)         (101)       (175)   
   - replacement                                                          (89)         (456)       (649)   
   Proceeds on disposal of property, plant and equipment                   45           242         245    
   Proceeds on disposal of investment property                              -            97          97    
   Acquisition of intangible assets                                        (7)          (26)        (52)   
   Proceeds from property transaction                                   1 127             -           -    
   Loans advanced to equity-accounted investments net 
   of dividends received                                                  (40)          (88)        (68)   
   Proceeds on disposal of equity-accounted investments                     -             -           5    
   Net loans advanced to infrastructure investment companies               (7)         (165)       (208)   
   Acquisition of subsidiary (net of cash acquired)                         -           (23)        (23)   
   Net proceeds on disposal of subsidiary                                   -         1 314       1 314    
   Dividend earnings                                                        3             -          22    
   Cash inflow from investing activities                                  957           794         508    
   Operating free cash (outflow) / inflow                                (295)          220      (1 027)   
   Shares repurchased                                                     (23)           (7)         (7)   
   Loans (repaid) / advanced by non-controlling interest                   (6)            -          76    
   Dividends paid                                                           -            (2)         (7)   
   Proceeds from convertible bonds issued                                   -         1 947       1 947    
   Net proceeds from / (repayment of) borrowings                          606        (1 900)     (2 066)   
   Net increase in cash and bank balances before foreign
   exchange movements                                                     282           258      (1 084)   
   Foreign exchange movements on cash and bank balances                   314          (138)       (196)   
   Cash and bank balances at the beginning of the�period                2 856         4 136       4 136    
   Total cash and bank balances at the end of the period                3 452         4 256       2 856    
   Borrowings excluding bank overdrafts                                 3 121         2 574       2 463    
   Net cash position                                                      331         1 682         393    


Notes to the interim condensed consolidated financial statements
for the six months ended 31 December 2015

1.  CORPORATE INFORMATION   
    The reviewed interim condensed consolidated financial statements (the �interim results�) of Aveng Limited 
    (the �Company�) and its subsidiaries (the �Group�) for the six months ended 31 December 2015 were 
    authorised for issue in accordance with a resolution of the directors on 19 February 2016. 

    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 
    environments 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.    

2.  BASIS OF PREPARATION AND ACCOUNTING POLICY  
    The interim results have been prepared on a historical basis except for certain financial instruments 
    that 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 when 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 Group�s audited consolidated financial statements as at 
    30 June 2015, except as disclosed in note 3: New accounting standards and interpretations adopted, changes 
    in accounting policies and other reclassifications.
    
    The interim results have been prepared by Clare Giletti under the supervision of Group Finance Director, 
    Adrian Macartney. 

    The reviewed interim condensed consolidated financial statements for the six month period ended 
    31�December 2015, set out on pages 2 to 36, have been reviewed by the Company�s external auditors Ernst &
    Young Inc., in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim 
    Financial Information Performed by the Independent Auditors of the Entity. The unmodified review opinion is 
    available on request from the Company Secretary at the Company�s registered office. 

    Assessment of significance or materiality of amounts disclosed in these interim results 
    The Group presents amounts in these interim results in accordance with International Financial Reporting 
    Standards (�IFRS�). Only amounts that have a relevant and material impact on the interim results have been 
    separately disclosed. The assessment of significant or material amounts is determined by taking into account 
    the qualitative and quantitative factors attached to each transaction or balance that is assessed.

3.  NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED, CHANGES IN ACCOUNTING POLICIES AND OTHER RECLASSIFICATIONS 
    The impact of early adopting IFRS 9 has been analysed by the Group as part of the 30 June 2015 year end 
    results, the significant movement for six months ended 31 December 2015 has been analysed below.
    
                                           Balance as        Early         
                                           previously     adoption    Restated    
                                             reported    of IFRS 9     balance    
                                                   Rm           Rm          Rm   
    Statement of financial position as at
    31 December 2014                        
    EQUITY AND LIABILITIES                                                        
    Equity                                                                        
    Other reserves                              1 279          (93)      1 186    
    Retained earnings                          10 515           93      10 608    
 
4.  SIGNIFICANT ACCOUNTING JUDGEMENT AND ESTIMATES 
    The preparation of the interim condensed consolidated financial statements requires management to make 
    judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not 
    readily apparent from other sources. The estimates and associated assumptions are based on historical 
    experience and other factors that are considered to be relevant. Actual results may differ from these 
    estimates.

    Impairment of cash generating units 
    Where indicators existed the Group assessed the recoverable amount (higher of its fair value less cost
    to dispose and its value-in-use) of the relevant cash generating units. The value-in-use was used as 
    the Group expects to recover the economic benefits through operational use. 

    The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model,
    the expected future cash inflows and the growth rates used for extrapolation and terminal value 
    purposes. The following assumptions were used in the calculation: 
    1. The Group weighted average cost of capital (�WACC�) was adjusted to take into account the risk 
       specific to each cash generating unit; and  
    2. Non-cash settled intercompany balances were excluded from the calculation of the Net Asset Value 
       (�NAV�).  
   
    The above resulted in the value-in-use (recoverable amount) being higher than the NAV and as a result no 
    impairment was recognised in the statement of comprehensive earnings. 

5.  CHANGE IN ESTIMATE  
    The Group reassessed the tax deductibility of the unwinding of the convertible bond equity option, through 
    the effective interest rate and as a result deferred tax remeasurement of R122�million has been raised 
    through equity as required for compound instruments.

6.  GAIN ON PROPERTY TRANSACTION 
    Loss of control of a subsidiary 
    Effective from 1 September 2015, Dimopoint Property Limited (�Dimopoint�) (a wholly owned subsidiary of Aveng), 
    issued additional shares to the Collins Property Group. Prior to the issue of�shares, Dimopoint held a portion 
    of the properties held-for-sale at 30 June 2015, (refer to note 8: Non-current assets held-for-sale). The 
    issue of the additional shares resulted in Aveng�s interest�being diluted thereby resulting in a loss of 
    control of Dimopoint, with Aveng retaining a 30% non-controlling interest. A profit of R150 million resulted 
    from the loss of control of Dimopoint. The remaining 30% investment in Dimopoint is treated as a joint venture 
    as Aveng retains joint control of Dimopoint and is measured at fair value in terms of IFRS 9 in accordance 
    with the IAS�28.18 (Investment in Associates and Joint Ventures) Venture Capital Organisation exemption. 

    Profit on sale of properties  
    Following the loss of control in Dimopoint, the remaining held-for-sale properties were sold to Dimopoint 
    for a profit of R427 million. 
                                                           December 
                                                               2015
                                                           Reviewed    
                                                                 Rm      
    Held-for-sale asset                                         612    
    Transaction costs                                             5    
    Gain on property transaction                                577    
     Profit on loss of control                                  150    
     Profit on sale of properties                               427    
    Total proceeds                                            1 194    
    Retention of a non-controlling interest in Dimopoint        (67)   
    Cash proceeds on sale of properties                       1 127    

7.  SEGMENTAL REPORT  
    The Group has determined four reportable segments that are largely organised and managed separately 
    according to the nature of products and services provided. 

    These segments are components of the Group:                                               
    - that engage in business activities from which they earn revenues and incur expenses; and  
    - have operating results that are regularly reviewed by the Group�s chief operating decision-makers to 
      make decisions about resources to be allocated to the segments and in assessment of their performance. 
    
    The Group�s reportable segments are categorised as follows:  
1.  Construction and Engineering   
1.1 Construction and Engineering: South Africa and rest of Africa  
    This reportable segment includes: Aveng Grinaker-LTA, Aveng Engineering and Aveng Capital Partners (�ACP�).
    Aveng Engineering is being discontinued, with the remaining portions of Water and Operate & Maintain 
    merging with the Mechanical and Electrical business unit within Aveng Grinaker-LTA.  

    Revenues from this segment include the supply of expertise in a number of market sectors: power, mining, 
    infrastructure, commercial, retail, industrial, Oil and Gas. 

1.2 Construction and Engineering: Australasia and Asia  
    This segment comprises McConnell Dowell.  
    This segment specialises in the construction and maintenance of tunnels and pipelines, railway 
    infrastructure maintenance and construction, marine and mechanical engineering, industrial building 
    projects, Oil and Gas construction and mining and mineral construction.
    
2.  Mining  
    This segment comprises Aveng Moolmans and Aveng Shafts & Underground in one operating group.
    Revenues from this segment are derived from mining related activities. 

3.  Manufacturing and Processing  
    This segment comprises Aveng Manufacturing and Aveng Steel.  
    The revenues from this segment comprise the supply of products, services and solutions to the mining, 
    construction, Oil and Gas, water, power and rail sectors across the Group�s value chain locally and 
    internationally. 

4.  Other and Eliminations  
    This segment comprises corporate services, corporate held investments, including properties and 
    consolidation eliminations. 

                                                  Construction and 
                                                     Engineering:   
     Segment report December 2015         South Africa                               Manufac-          Other            
     (Reviewed)                               and rest    Australasia              turing and            and            
     Rm                                      of Africa       and Asia    Mining    Processing   Eliminations     Total  
     Assets                                                                                                             
     Goodwill arising on consolidation               -            100         -            10            232       342  
     Intangible assets                               1              -        15           145            171       332  
     Property, plant and equipment                 466            865     2 326         1 324            469     5 450  
     Equity-accounted investments                  109             58         4             -            (35)      136  
     Infrastructure investments                    712             86         -             -             79       877  
     Deferred taxation                           1 801            735       294          (140)          (861)    1 829  
     Derivative instruments                         15             18         -            49             39       121  
     Amounts due from contract customers         1 450          7 649     1 208           537           (602)   10 242  
     Inventories                                    13              7       243         2 137              -     2 400  
     Trade and other receivables                   345            200       235         1 096            129     2 005  
     Cash and bank balances                        524          1 840       493           889           (294)    3 452  
     Assets held-for-sale                            -              -         -             -              7         7  
     Total assets                                5 436         11 558     4 818         6 047           (666)   27 193  
     Liabilities                                                                                                        
     Deferred taxation                             287            105       200           (86)           (72)      434  
     Borrowings and other liabilities                -            939       486             6          1 690     3 121  
     Employee-related payables                     163            497       233            84             45     1 022  
     Trade and other payables                      948          2 951       738         1 795            134     6 566  
     Amounts due to contract customers             496            980       194           122              -     1 792  
     Taxation payable                               24            (46)      107            25             77       187  
     Total liabilities                           1 918          5 426     1 958         1 946          1 874    13 122  
 
                                                 Construction and 
                                                    Engineering:   
     Segment report December 2014         South Africa                               Manufac-          Other           
     (Reviewed)                               and rest    Australasia              turing 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    
     Payables other than contract-related           98              -         -             -              -        98    
     Employee-related payables                     175            585       198            50            199     1 207    
     Derivative instruments                          -              -         -             -              3         3    
     Trade and other payables                    1 149          4 384       714         2 465              1     8 713    
     Amounts due to contract customers             631          1 367       260            94              1     2 353    
     Taxation payable                               49             85        28            33             71       266    
     Total liabilities                           2 116          6 700     2 050         2 653          1 929    15 448    
 
                                                   Construction and 
                                                      Engineering:   
     Segment report June 2015             South Africa                               Manufac-          Other           
     (Audited)                                and rest    Australasia              turing and            and           
     Rm                                      of Africa       and Asia    Mining    Processing   Eliminations     Total 
     Assets                                                                                                                    
     Goodwill arising on consolidation               -            100         -            10            232       342    
     Intangible assets                               2              -         8           152            177       339    
     Property, plant and equipment                 494            799     2 506         1 326            501     5 626    
     Equity-accounted investments                  131             56         4             -            (40)      151    
     Infrastructure investments                    706             72         -             -              -       778    
     Deferred taxation                           1 463            617       195          (154)          (541)    1 580    
     Derivative instruments                          -             15         -             9             17        41    
     Amounts due from contract customers         2 256          6 895     1 253           472           (582)   10 294    
     Inventories                                    31              7       225         2 266              -     2 529    
     Trade and other receivables                   469            186        91         1 463            215     2 424    
     Cash and bank balances                        215          2 350       266           271           (246)    2 856    
     Non-current assets held-for-sale                -              -         -             -            559       559    
     Total assets                                5 767         11 097     4 548         5 815            292    27 519    
     Liabilities                                                                                                          
     Deferred taxation                              99             72       182           (54)           (78)      221    
     Borrowings and other liabilities                -            250       557             5          1 651     2 463    
     Payables other than contract-related          102              -         -             -              -       102    
     Employee-related payables                     211            446       273           122             64     1 116    
     Derivative instruments                          -              -         -             2              -         2    
     Trade and other payables                    1 382          3 928       701         1 757            193     7 961    
     Amounts due to contract customers             614          1 588       272            88              -     2 562    
     Taxation payable                               31             11        42            16             (6)       94    
     Total liabilities                           2 439          6 295     2 027         1 936          1 824    14 521    
                                                                                                                                                                  
                                                      Construction and                                                                      
                                                         Engineering:                                                                      
                                              South Africa                               Manufac-           Other            
    Six months ended December 2015 (Reviewed)     and rest    Australasia              turing and             and                 
    Rm                                           of Africa       and Asia     Mining   Processing    Eliminations       Total  
    Gross revenue                                    3 857          7 048      2 968        4 396            (271)     17 998    
    Cost of sales                                   (3 656)        (6 543)    (2 658)      (4 182)            328     (16 711)   
    Gross earnings                                     201            505        310          214              57       1 287    
    Other earnings                                      27             36         17           96              38         214    
    Operating expenses                                (330)          (498)      (129)        (358)            (77)     (1 392)   
    (Loss) / earnings from equity-accounted 
    investments                                        (23)           (35)         -            -               1         (57)   
    Net operating (loss) / earnings                   (125)             8        198          (48)             19          52    
    Impairment of property, plant, equipment 
    and intangible assets                                -              -        (23)           -               -         (23)   
    Gain on property transaction                         -              -          -            7             570         577    
    (Loss) / earnings before financing 
    transactions                                      (125)             8        175          (41)            589         606    
    Net finance earnings�/ (expenses)                   21            (29)        (6)          (7)           (135)       (156)   
    (Loss) / earnings before taxation                 (104)           (21)       169          (48)            454         450    
    Taxation                                            96            (21)       (81)          30            (242)       (218)   
    (Loss) / earnings for the period                    (8)           (42)        88          (18)            212         232    
    Capital expenditure                                 19             41         26           69              16         171    
    Depreciation                                       (38)          (112)      (207)         (67)             (5)       (429)   
    Amortisation                                         -              -          -           (6)             (9)        (15)   
    Earnings before interest, taxation, 
    depreciation and amortisation (�EBITDA�)           (87)           120        405           25              33         496    
     
                                                         Construction and                                                                      
                                                            Engineering:                                                                     
                                              South Africa                                 Manufac-           Other           
    Six months ended December 2014 (Reviewed)     and rest    Australasia                turing and             and                
    Rm                                           of Africa       and Asia     Mining     Processing    Eliminations      Total 
    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, 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    
    Net finance earnings�/ (expenses)                   18            (31)       (23)           (16)           (114)      (166)   
    (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)   
    Earnings before interest, taxation, 
    depreciation and amortisation (�EBITDA�)          (162)           331        443            166             150        928    
                                                                                                 
                                                           Construction and                                                                      
                                                             Engineering:                                                                      
                                              South Africa                                 Manufac-           Other            
    Year ended June 2015 (Audited)                and rest    Australasia                turing and             and                 
    Rm                                           of Africa       and Asia     Mining     Processing    Eliminations       Total 
    Gross revenue                                    8 355         20 912      5 956          9 928          (1 221)     43 930    
    Cost of sales                                   (8 491)       (19 678)    (5 258)        (9 243)          1 104     (41 566)   
    Gross (loss) / earnings                           (136)         1 234        698            685            (117)      2 364    
    Other earnings                                     226             45          1            164              35         471    
    Operating expenses                                (736)        (1 152)      (286)          (795)            (94)     (3 063)   
    (Loss) / earnings from equity-accounted   
    investments                                        (51)           (15)         -              -               6         (60)   
    Net operating (loss) /earnings                    (697)           112        413             54            (170)       (288)   
    Impairment of property, plant, equipment  
    and intangible assets                             (209)           (44)       (32)           (32)            (13)       (330)   
    Impairment of goodwill arising on         
    consolidation                                        -           (291)         -              -               -        (291)   
    Profit on sale of subsidiary                         -            777          -              -               -         777    
    (Loss) / earnings before financing        
    transactions                                      (906)           554        381             22            (183)       (132)   
    Net finance earnings/(expenses)                     15            (36)       (42)           (25)           (218)       (306)   
    (Loss) / earnings before taxation                 (891)           518        339             (3)           (401)       (438)   
    Taxation                                           111            (14)      (194)            (7)             24         (80)   
    (Loss) / earnings for the period                  (780)           504        145            (10)           (377)       (518)   
    Capital expenditure                                 96            262        257            180              81         876    
    Depreciation                                       (91)          (286)      (418)          (119)            (15)       (929)   
    Amortisation                                        (5)             -          -            (12)             (4)        (21)   
    Earnings before interest, taxation,       
    depreciation and amortisation (�EBITDA�)          (601)           398        831            185            (151)        662    
                                                                                                                                                      
    The Group operates in five principal geographical areas:                                                                                              
                                           Six months     Six months           Year     Six months     Six months           Year
                                                ended          ended          ended          ended          ended          ended
                                             December       December           June       December       December           June    
                                                 2015           2014           2015           2015           2014           2015
                                            (Reviewed)     (Reviewed)      (Audited)     (Reviewed)     (Reviewed)      (Audited) 
    Revenue                                        Rm             Rm             Rm              %              %              %  
    South Africa                                9 609         10 036         19 628           53,4           42,0           44,7   
    Rest of Africa including Mauritius          1 046          1 733          2 908            5,8            7,3            6,6
    Australasia and Asia                        4 866         10 060         15 880           27,0           42,1           36,1   
    Southeast Asia                              2 191          1 778          5 115           12,2            7,5           11,7   
    Middle East and other regions                 286            257            399            1,6            1,1            0,9       
                                               17 998         23 864         43 930          100,0          100,0          100,0   
                                          
    Segment assets                           
    South Africa                               13 358         14 651         14 048           49,1           50,1           51,1                    
    Rest of Africa including Mauritius          2 210          2 158          1 625            8,1            7,4            5,9                         
    Australasia and Asia                        9 106         10 559          9 383           33,5           36,1           34,1                    
    Southeast Asia                              2 230          1 399          2 154            8,2            4,8            7,8                         
    Middle East and other regions                 289            490            309            1,1            1,6            1,1           
                                               27 193         29 257         27 519          100,0          100,0          100,0                  

8.  NON-CURRENT ASSETS HELD-FOR-SALE                                                                    
    The majority of non-current asset held-for-sale were sold on 1 September 2015 to Imbali Props�21 Proprietary Limited, a member 
    of the Collins Property Group for R1,1 billion cash. The Group retained a 30% interest in Dimopoint, a special purpose 
    vehicle created for the purpose of holding the non-core properties. There are two properties remaining in non-current assets 
    held-for-sale that were not part of the sale. These properties are anticipated to be sold to external�parties. 

                                                           December         December            June     
                                                               2015             2014            2015     
                                                          (Reviewed)       (Reviewed)       (Audited)     
                                                                 Rm               Rm              Rm    
    Non-current assets held-for-sale                                                                    
    Land and buildings                                            7              607             559    
    Movement during the period                                                                          
    Opening balance                                             559              607             607    
    Transferred from property, plant and equipment               45                -              75    
    Environmental provision relating to property                 15                -               -    
    Transferred to property, plant and equipment                  -                -            (123)   
    Sold                                                       (612)               -               -    
                                                                  7              607             559    

9.  INFRASTRUCTURE INVESTMENTS                                                                                                    
                                                                                December         December            June     
                                                                                    2015             2014            2015    
                                                                               (Reviewed)       (Reviewed)       (Audited)     
                                                                                      Rm               Rm              Rm    
    South African infrastructure investments                                                                                 
    Financial investments at fair value through profit or loss                       791              573             706    
    Other infrastructure investments                                                                                         
    Financial investments at fair value through profit or loss                        86               60              72    
    Total infrastructure investments                                                 877              633             778    
    South African infrastructure investments                                                                                 
    Opening balance                                                                  706                -               -    
    Reclassification of equity investments from equity-accounted investments          (5)               3               3    
    Reclassification of shareholder loans from equity-accounted investments            4              168             168    
    Recycling of equity-accounted earnings from other comprehensive earnings           -               28              28    
    Reclassification from financial investments                                        -              126             126    
    Fair value remeasurement through comprehensive earnings                           12               83             173    
    Non-controlling interest in Dimopoint                                             67                -               -    
    Loans advanced                                                                    49              169             208    
    Loan repayment                                                                   (42)              (4)              -    
                                                                                     791              573             706    
    Balance at the end of the year comprises:                                                                                
    Blue Falcon 140 Trading Proprietary Limited                                      251              160             217    
    Dimopoint Proprietary Limited                                                     79                -               -    
    Imvelo Company Proprietary Limited                                                48               45              40    
    N3 Toll Concessions Proprietary Limited                                          128              126             128    
    Windfall 59 Properties Proprietary Limited                                       286              242             321    
    JSG Proprietary Limited                                                           (1)               -               -    
                                                                                     791              573             706    
    Other infrastructure investments                                                                                         
    Opening balance                                                                   72                -               -    
    Reclassification from financial investments                                        -               64              64    
    Foreign currency translation movement                                             14               (4)             (4)   
    Fair value remeasurement through comprehensive earnings                            -                -              12    
                                                                                      86               60              72    
                                                                                                 
10. AMOUNTS DUE FROM / (TO) CONTRACT CUSTOMERS                                                                                 
                                                                                  December         December            June     
                                                                                      2015             2014            2015    
                                                                                 (Reviewed)       (Reviewed)       (Audited)     
                                                                                        Rm               Rm              Rm    
    Uncertified claims and variations (underclaims)**1                               6 547            5 788           5 157    
    Contract contingencies**                                                          (343)            (257)           (253)   
    Progress billings received (including overclaims)2                              (1 342)          (1 728)         (1 921)   
    Uncertified claims and variations less progress billings received                4 862            3 803           2 983    
    Contract receivables3                                                            3 807            4 420           5 147    
    Provision for contract receivables                                                   *              (46)              *    
    Retention receivables4                                                             231              193             243    
                                                                                     8 900            8 370           8 373    
    Amounts received in advance5                                                      (450)            (625)           (641)   
    Net amounts due from contract customers                                          8 450            7 745           7 732    
    Disclosed on the statement of financial position as follows:                                                               
    Uncertified claims and variations**                                              6 547            5 788           5 157    
    Contract contingencies                                                            (343)            (257)           (253)   
    Contract and retention receivables                                               4 038            4 613           5 390    
    Provision for contract receivables                                                   *              (46)              *    
    Amounts due from contract customers                                             10 242           10 098          10 294    
    Progress billings received                                                      (1 342)          (1 728)         (1 921)   
    Amounts received in advance                                                       (450)            (625)           (641)   
    Amounts due to contract customers                                               (1 792)          (2 353)         (2 562)   
    Net amounts due from contract customers                                          8 450            7 745           7 732    
    * Amounts less than R1 million.                                                                                               
    ** Provisions have been netted off against uncertified claims and variations.                                                      
    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 the related work is performed.                                                      

                                                                                        Provision
                                    Uncertified       Contract                                for                 
                                     claims and        contin-          Contract         contract      Retention     
                                     variations**      gencies**     receivables      receivables    receivables       Total
                                             Rm             Rm                Rm               Rm             Rm          Rm   
    December 2015 (Reviewed)                                                                                                              
    Non-current assets                    1 174              -                 -                -              -       1 174    
    Current assets                        5 373           (343)            3 807                *            231       9 068    
                                          6 547           (343)            3 807                *            231      10 242    
    December 2014 (Reviewed)                                                                                                     
    Non-current assets                    3 192              -                 -                -              -       3 192    
    Current assets                        2 596           (257)            4 420              (46)           193       6 906    
                                          5 788           (257)            4 420              (46)           193      10 098    
    June 2015 (Audited)                                                                                                          
    Non-current assets                      900              -                 -                -              -         900    
    Current assets                        4 257           (253)            5 147                *            243       9 394    
                                          5 157           (253)            5 147                *            243      10 294    
    * Amounts less than R1 million.                                                                             
    ** Provisions have been netted off against uncertified claims and variations.                         

                                     
                                               December         December            June     
                                                   2015             2014            2015    
                                              (Reviewed)       (Reviewed)       (Audited)     
                                                     Rm               Rm              Rm    
11. TRADE AND OTHER PAYABLES                                                                
    Trade payables                                2 686            2 878           2 859    
    Subcontractors                                  462              392             425    
    Accrued expenses                              2 734            3 220           3 180    
    Income received in advance                      111            1 096           1 072    
    Promissory notes                                573              830             425    
                                                  6 566            8 416           7 961    
    TRADE AND OTHER PAYABLES                              
    - non-current portion                             -              297               -   
    
    Trade and other payables comprise amounts owing to suppliers for goods and services supplied in the normal course of business.         
    Promissory notes issued by the Group bear interest between a range of 8,30% and 8,59% per annum. Terms vary in accordance with 
    contracts of supply and service but are generally settled on 30 to 90 day terms.                                     
    Included in income received in advance is an advance payment received relating to the Perth Airport contract of AUD10 million 
    (R111 million). The AUD112,5 million (R1,1 billion) QCLNG advance payment was repaid on 29�October�2015.                               

12. FOREIGN EXCHANGE MOVEMENTS                                                         
    Material foreign exchange movements have been disclosed in terms of IAS 1. With the deterioration of the Rand 
    against foreign currencies, the translated results of McConnell Dowell, the Australian operating group of Aveng, 
    had the biggest foreign currency impact. Only the accounts relating to McConnell Dowell that have been significantly 
    impacted have been disclosed below.                                      
                                                        Amounts due            
                                                         from / (to)      Trade and
                                                           contract           other
                                                          customers        payables   
                                                                 Rm              Rm                     
    Balance as at 30 June 2015 (Audited)                      7 732           7 961    
    Movement in ordinary course of business                    (336)         (1 885)   
    Foreign exchange movement at McConnell Dowell             1 054             490    
    Balance as at 31 December 2015 (Reviewed)                 8 450           6 566    

13. BORROWINGS AND OTHER LIABILITIES                                                           
                                                           December         December            June     
                                                               2015             2014            2015    
                                                          (Reviewed)       (Reviewed)       (Audited)     
                                                                 Rm               Rm              Rm                                         
13.1 Borrowings held at amortised cost                                                          
     Interest-bearing borrowings comprise:                                                      
     Payment profile                                                                            
     - within one year                                        1 220              416             426    
     - between two to five years                              1 901            2 158           2 037    
                                                              3 121            2 574           2 463    
     Interest rate structure                                                                    
     Fixed and variable (interest rates)                                                        
     Fixed - long term                                        1 730            1 866           1 814    
     Fixed - short term                                         923              156             162    
     Variable - long term                                       171              325             222    
     Variable - short term                                      297              227             265    
                                                              3 121            2 574           2 463    
                                                                                                                                                                   
                                                                                                    December     December         June     
                                                                                                        2015         2014         2015    
                                                                                                   (Reviewed)   (Reviewed)    (Audited)     
    Description                   Terms                           Rate of interest                        Rm           Rm           Rm    
    Convertible bond              Interest coupon is payable
    of R2 billion                 bi-annually until July 2019     Coupon of 7,25%                      1 690        1 616        1 651    
    Finance sale and leaseback    Monthly instalment ending       Fixed interest rate of 
    amounting to AUD9 million*    in June 2018                    5,15% to 6,08%                          97           80           91    
    Short-term facility           
    of AUD10 million              Repayable in May 2016           Bank bill swap rate plus 1,65%         111           95           94    
    Short-term facility       
    of AUD60�million***           Repayable in May 2016           Bank bill swap rate plus 2,20%         669            -            -    
    Hire purchase agreement       Monthly instalment ending 
    denominated in AUD million*   in September 2017               Fixed interest rate of 6,81%            60          103           65    
    Hire purchase agreement       Quarterly instalments  
    denominated in USD*           ending in June 2017             Fixed rate ranging 4,58% to 4,65%      233          316          253    
    Hire purchase agreement       Monthly instalment ending 
    denominated in�ZAR*           in November 2017                South African prime less 2,00%          60           80           74    
    Hire purchase agreement       Monthly instalment ending
    denominated in�ZAR*           in March 2017                   South African prime less 1,70%         126          185          148    
    Hire purchase agreement       Monthly instalment ending
    denominated in ZAR*           in May 2018                     Fixed interest rate of 9,70%            59           87           69    
    *  These borrowings and other liabilities are finance leases and are included in the analysis of the payable finance lease liability.                               
    *** Backed by a bank guarantee.                                                                                                                       

                                                                                               December         December            June 
                                                                                                   2015             2014            2015 
                                                                                              (Reviewed)       (Reviewed)       (Audited)
     Description                   Terms                           Rate of interest                  Rm               Rm              Rm 
     Finance lease
     facilities                    Monthly instalment ending
     denominated in ZAR*           in March 2017                   South African prime               13                8              13    
     Interest-bearing 
     borrowings                                                                                   3 118            2 570           2 458    
     Interest outstanding on 
     interest-bearing borrowings**                                                                    3                4               5    
     Total interest-bearing 
     borrowings                                                                                   3 121            2 574           2 463    
     *  These borrowings and other liabilities are finance leases and are included in the analysis of the payable finance lease liability.                                                                                                                                                         
     **  Interest outstanding in the current year relates to finance leases.                                                                                                                                                         

                                                       December         December            June     
                                                           2015             2014            2015    
                                                      (Reviewed)       (Reviewed)       (Audited)     
                                                             Rm               Rm              Rm    
                                                                                                        
     Finance lease liabilities are payable as follows:                                              
     Minimum lease payments due                                                                     
     - within one year                                      397              365             369    
     - within two to five years                             300              583             411    
     Less: future finance charges                           (46)             (85)            (62)   
     Present value of minimum lease payments                651              863             718    

    The Australasia and Asia operating segment entered into a finance sale and leaseback arrangement in the 2012 financial year
    and in the 2015 financial year entered into an asset-based finance arrangement. 

    The arrangement, amounting to AUD9 million (R97 million) (December 2014: (R80 million); June�2015: (R91 million)) has been 
    secured by plant and equipment with a net carrying amount of R70 million (December 2014: R80 million; June 2015:�R60�million). 
    The arrangement amounting to AUD5 million (R60 million) (December 2014: R103 million; June�2015: (R65 million)) has been 
    secured by assets with a net carrying amount of R58 million (December 2014: (R103 million); June 2015: (R49 million)). 
    The Mining operating segment entered into various asset-based finance lease arrangements to purchase operating equipment 
    denominated both in USD and ZAR. These arrangements are secured by the assets for which the funding was provided and are 
    repayable in monthly and quarterly instalments with the final repayment to be made in May 2018. Equipment with a net 
    carrying amount of R495 million (December 2014: R687 million; June 2015: R613 million) has been pledged as security for 
    the facility.
    
    The Mining and Manufacturing and Processing operating segments entered into various vehicle lease arrangements. 
    Equipment with the net carrying amount of R7 million (December 2014: R4 million; June 2015:�R10�million) has been 
    pledged as security.                   

14. OPERATING EXPENSES                                                                                                                          
                                                              December         December            June     
                                                                  2015             2014            2015     
                                                             (Reviewed)       (Reviewed)       (Audited)     
                                                                    Rm               Rm              Rm    
    Operating lease charges - premises                              56                49              88    
    Operating lease charges - plant and equipment                    5                5               9    
    Depreciation of property, plant and equipment                   14               20              47    
    Amortisation of intangible assets                               15               14              21    
    Share-based payment expense                                      5               (6)            (20)   
    Employee costs                                                 840              977           1 895    
    Employee benefits                                               12               26              65    
    Computer costs                                                  53               50             105    
    Consulting fees                                                 48               40             119    
    Other                                                          344              321             734    
                                                                 1 392            1 496           3 063    
                                                                                                           
15. TAXATION                                                                        
    Taxation expense                                                        
                                                               December         December            June     
                                                                   2015             2014            2015     
                                                              (Reviewed)       (Reviewed)       (Audited)     
                                                                     Rm               Rm              Rm    
                                                                                                            
    Current taxation expense                                        326              138             340    
    Deferred taxation charge                                       (108)             (13)           (260)   
                                                                    218              125              80    
    Reconciliation of the taxation expense                                                                  
    Reconciliation between applicable taxation rate and    
    effective taxation rate                                
    Effective taxation rate on earnings                           48,4%            25,7%         (18,3)%    
    Exempt income and capital items                               16,9%            25,5%         (10,4)%    
    Deferred taxation asset not recognised                      (46,9)%          (20,4)%           62,9%    
    Dividend withholding tax                                    (34,5)%                -               -    
    Movement in foreign exchange differences                      51,5%             7,4%         (34,9)%    
    Prior year adjustment                                        (4,9)%           (1,8)%         (11,7)%    
    Effects of other jurisdictions and other                     (2,5)%           (8,4)%            6,0%    
    Disallowable expenditure                                          -                -           34,4%    
                                                                  28,0%            28,0%           28,0%    
    South African income taxation is calculated at 28% (December 2014: 28%; June 2015: 28%) of the taxable income for the year. 
    Taxation in other jurisdictions is calculated at rates prevailing in the relevant jurisdictions. 

    Deferred taxation asset                                                                                                           
    The Group�s results include a number of legal statutory entities within a number of taxation jurisdictions. The recoverability 
    of deferred taxation assets was assessed in respect of each individual legal entity. Deferred tax assets have been recognised 
    on unused taxation losses where management has concluded that there will be sufficient future taxable income against which 
    deferred tax assets raised as at 31 December 2015 may be utilised. No deferred tax asset has been recognised for statutory 
    entities where recoverability of such assets within the next five years is uncertain. In assessing the recoverability of the 
    deferred tax asset, management has taken into account forecasts that were prepared for the financial years 2016 to 2020.     
                                       
16. NON-CASH AND OTHER MOVEMENTS                         
                                                                     December         December            June     
                                                                         2015             2014            2015     
                                                                    (Reviewed)       (Reviewed)       (Audited)     
                                                                           Rm               Rm              Rm    
    Earnings from disposal of property, plant and equipment               (13)             (18)            (61)   
    Impairment of goodwill, property, plant, equipment and        
    intangible assets                                                      23              537             628    
    Profit on disposal of subsidiary                                        -             (777)           (777)   
    Gain on property transaction before transaction costs                (582)               -               -    
    Fair value adjustment                                                 (12)            (104)           (196)   
    Movements in foreign currency translation                             383              (63)            (62)   
    Movement in equity-settled share-based payment reserve                  7                7              11    
                                                                         (194)            (418)           (457)   
17. CONTINGENT LIABILITIES                     
    Contingent liabilities at the reporting date, not otherwise provided for in the consolidated financial statements, 
    arise from performance bonds and guarantees issued in: 
    South Africa and rest of Africa                                                                               
    Guarantees and bonds (ZARm)                                         3 716            3 735           3 721    
    Parent company guarantees (ZARm)                                      964            2 851             898    
                                                                        4 680            6 586           4 619    
    Australasia                                                                                                   
    Guarantees and bonds (AUDm)                                           498              623             647    
    Parent company guarantees (AUDm)                                      409            4 764           1 215    
                                                                          907            5 387           1 862    
    Contract performance guarantees issued by the parent company on behalf of its group companies are calculated 
    based on the probability of draw down.                                                                            
                                                             
    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 the outflows are possible.                                                      

18. HEADLINE EARNINGS        
                                                           Six months ended              Six months ended                  Year ended                    
                                                           31 December 2015              31 December 2014                 30 June 2015                   
                                                               (Reviewed)                    (Reviewed)                     (Audited)                   
                                                        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�parent                                             230                           358                          (460)   
    Impairment of goodwill                                     -              -            291            291            291            291    
    Impairment of property, plant and equipment               23             17            213            182            273            252    
    Impairment of intangible assets                            -              -             33             33             57             57    
    Earnings on sale of property, plant and equipment       (585)          (478)            (5)            (4)             6              4    
    Profit on sale of subsidiary                               -              -           (777)          (713)          (777)          (713)   
    Fair value adjustment on investment property               -              -            (11)            (9)           (11)            (9)   
    Headline (loss) / earnings                                             (231)                          138                          (578)   

19. FAIR VALUE OF ASSETS AND LIABILITIES                                                                                                         
    The Group measures the following financial instruments at fair value:     
    - Infrastructure investments; and                                                                                                        
    - Forward exchange contracts                                                                                                             
    The Infrastructure investments comprises of the following:                                                     
    - N3 Toll Concession (RF) Proprietary Limited;                                                       
    - Windfall 59 Properties Proprietary Limited;
    - Blue Falcon 140 Trading Proprietary Limited;                                                         
    - Imvelo Concession Company Proprietary Limited;                      
    - GoldlinQ Holdings; and                                                                                                        
    - Dimopoint Proprietary Limited                                               
    Except for Dimopoint, which was a new addition, the methodology, valuation parameters and assumptions for all other Infrastructure 
    investments have remained unchanged since 30 June 2015. For more detail refer to the 30 June 2015 consolidated financial statements 
    available on the Group�s website.

    The Group has reassessed the fair value of these Infrastructure investments as at 31 December 2015 and except for Dimopoint, where 
    a R12 million fair value adjustment was calculated, no significant fair value movement was determined for the other investments.          
    (i) Dimopoint                            
    Methodology                                                                                                                             
    The value of the Group�s share in Dimopoint was determined on the basis of the underlying long-term contractual rental streams. 
    The fair value was determined based on the most appropriate methodology applicable to the underlying investment property portfolio. 
    Methodologies include the market comparable approach that reflects recent transaction prices for similar properties and discounted 
    cash flows. The valuation takes into consideration the selling price escalations per year, rental income escalation per year and 
    risk-adjusted discount rates.

    Valuation parameters and assumptions                          
    The following parameters and assumptions were considered in arriving at the valuation:                      
    - In estimating the fair value of the properties, the highest and best use of the properties is taken into account;                                 
    - Free cash flows based on the underlying long-term contractual rentals streams; and     
    - Market comparable yields applicable to the underlying investment property portfolio.   

    (ii) Foreign exchange contracts (FEC) liabilities   
    Valuation methodology                 
    Fair value of FECs is determined using mark-to-market rates. Market prices are based on actively traded similar contracts and 
    is obtained from the financial institution with which the contracts are held.

    The Group�s fair value hierarchy of the carrying amounts of assets and liabilities comprises Infrastructure investments and 
    forward exchange contracts. For the current period, the carrying amounts of these assets and liabilities equal its fair value.                        
    The valuation of the Infrastructure investments is based on unobservable inputs and is therefore a Level 3, while FECs are
    valued using observable inputs (Level 2). 

    The Group uses Level 2 valuation techniques to measure foreign exchange contract and Level�3 valuation techniques to measure 
    Infrastructure investments. Valuation techniques used are appropriate in the circumstances and for which sufficient data was 
    available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.                      
    There were no transfers between the different levels during the six month period.  

    Total gains and losses included in the statement of comprehensive earnings attributable to changes in unrealised gains or losses                         
    There have been no gains and losses recognised attributable to changes in unrealised gains or losses during the period.                                 
                                                                                               
    Sensitivity analysis: Financial assets valuations, using unobservable inputs                                                       
    The following table shows the sensitivity of significant unobservable inputs used in measuring the fair value 
    of Infrastructure investments:                                                                                                
                                                                                       Reasonably       
                                                                                         possible
                                                                                       changes to                                
                                                                     Significant      significant     Potential effect recorded        
                                                                    unobservable     unobservable    directly in profit and loss         
                                                                           input           inputs      Increase       Decrease     
                                                                               %                %            Rm             Rm    
    Infrastructure investments                                                                                                                   
    Risk-adjusted discount rate:                                                                                                   
    - N3 Toll Concession                                                    18,0              0,5            (8)             8    
    - Windfall 59 Proprietary Limited                                       20,0              0,5            (8)             8    
    - Blue Falcon 140 Trading Proprietary Limited                           20,0              0,5            (8)             8    
    - Imvelo Concession Company Proprietary Limited                         21,0              0,5            (1)             1    
    - Dimopoint Proprietary Limited                                         15,0              0,5            (6)             6    
    Internal rate of return:                                                                                                       
    - GoldlinQ Holdings Proprietary Limited                                 10,0              0,5            (2)             2    
    The estimated fair value would increase / (decrease) if:            
    - the risk-adjusted discount rate was lower / (higher)                      
    - the internal rate of return was lower / (higher)                                                       

20. EVENTS AFTER THE REPORTING PERIOD                                                                                                          
    The directors are not aware of any significant matter or circumstance arising after the reporting period up to the 
    date of this report.    

COMMENTARY

OVERVIEW
Salient features
- Strong improvement in the safety performance
- Revenue declined by 25% to R18,0 billion (2014: R23,9 billion)
- Headline loss of R231 million (2014: Headline earnings of R138 million)
- Property transaction concluded in September 2015 of R1,1 billion offset by the settlement of the QCLNG advance 
  of R1,1 billion
- Aveng Grinaker-LTA advances towards break-even with strong cash generation of R277 million in the six months
- Continuous focused restructuring is yielding results, most notably relating to Aveng Grinaker-LTA and Aveng Mining
- Net cash of R331 million compared to R393�million in June 2015
- Board�s strategic review outcomes:
  - Aveng Steel divestment
  - Aveng Capital Partners monetisation
  - Aveng Grinaker-LTA empowerment

Aveng Limited (�Aveng�, the �Group�) reported a headline loss of R231 million or a headline loss per share of 58,0 cents
for the six months ended 31 December 2015, relative to a headline profit of R138 million or 34,5 cents per share for
the comparative period, and a headline loss of R716 million for the preceding six months (second half of 2015 financial
year). The Group�s�revenue declined by 25% to R18,0�billion (2014: R23,9 billion) in line with management�s
expectations, notably in McConnell Dowell and Aveng Grinaker-LTA. Net�operating earnings decreased by 87% to R52 million.

The Group generated basic earnings of R230�million (December 2014: R358 million). The continued global economic
slowdown and consequent weak demand for infrastructure projects, a generally weak local trading environment for steel 
and cost pressures in the mining sector were key contributors to the financial loss. This was partially mitigated by the
substantially improved performance in Aveng Grinaker-LTA, the solid underlying results from Aveng Mining and Aveng
Manufacturing, albeit at lower volumes, as well as successful cost saving initiatives. The conclusion of the property 
transaction contributed R577 million to basic earnings. 

The interim results have been reviewed by the Company�s external auditors, Ernst & Young Inc. and the unmodified
review conclusion is available for inspection at the Company�s registered office.

Safety
Safety remains a core value of Aveng and is integral to the way the Group conducts its business. The Group remains
fully committed to driving its safety vision �Home without harm, Everyone, Everyday�.

In the period the All Injury Frequency Rate (�AIFR�) improved by 20% to 2,8 from 3,5. This indicator includes all
types of injuries and principally indicates broad personal injury trends. Aveng continues to see strong year-on-year
improvement in safety performance as well as an increase in the reporting of high risk, near-miss incidents as a leading
indicator in its safety strategy. It is anticipated that reporting thresholds for total injuries will continue to improve
across operations.

Our Board and management are concerned with current levels of road traffic safety and believe a renewed emphasis is
required across our South African operations. We work on various public road projects where our people are exposed to the
poor road safety behaviour on public roads and have noted a resultant increase in road traffic instances and near-misses
attributable to poor road safety by road users. We will be engaging with relevant roads agencies and law enforcement
authorities to improve the situations through closer collaboration. 

STRATEGY 
Aveng continues to execute its strategy in three distinct phases. The initial �recover and stabilise� phase is well
advanced as evidenced by the continued improved performance at Aveng Grinaker-LTA, the overall fixed cost reduction across
the Group, improved liquidity and cash generation in South Africa and improved project execution through improved risk
management. While McConnell Dowell made good progress in finalising various large projects, financial performance
remains disappointing and is receiving ongoing attention. The first phase of the strategy has been executed by a management
team that is now stable, with no unexpected changes within key positions and the attraction of new talent into the Group.

The next phase of our strategy �position for growth� will require us to further strengthen our businesses in our key
domestic markets of South Africa and Australia, to optimise our portfolio through improved capital allocation and to
enhance our strategy into the rest of Africa. This will position Aveng for the medium term phase to �generate growth and
enhance profitability and cash flow�. To achieve this we will leverage our client and industry delivery model, using our
platforms in South Africa and Australia to access the key growth markets of Africa and Southeast Asia.

Despite the progress made in the implementation of this strategy and noticeable improvements in project performance
and cost reductions, the Group is faced with continued weak markets. Management continues to evaluate and execute
additional steps that are required to respond to these market conditions to ensure optimal performance and cash preservation. 

The Board is cognisant of Aveng�s poor share price performance, particularly relative to the sector and in addition to
a sharp focus on operational performance, has undertaken a strategic review of the business in order to accelerate the
unlocking of value to shareholders.

Details around the activities undertaken during the period are as follows:
- Aveng Grinaker-LTA turnaround
The improved performance by Aveng Grinaker-LTA in a number of areas is evidence of the operational turnaround.
Loss-making contracts have been closed out, including the Grootegeluk project, while the Mokolo Pipeline is well into the 
final stages of remote operations commissioning. The ratio of projects executed at or better than tender margin has
substantially improved. This ratio will continue to be closely monitored. Whilst not at optimal levels, the achieved margin 
has significantly improved. The overhead reduction programme was completed during the period under review resulting in a
lower overall cost base but incurring once-off restructuring costs during the period. Current market expectations imply that
further cost reductions will be required albeit at lower levels. Strong cash generation in the period has been
supplemented by the resolution of various claims and receivables most notably, in the power sector. This was brought about 
by a stable management team and considerable improvements in the core skills base. 

Aveng Engineering, now under the management of Aveng Grinaker-LTA, was restructured during the period. Loss-making
contracts have been completed with the exception of one remaining water project that is currently in the commissioning
phase. Aveng has retained both the Water and the broader Operate and Maintain businesses, both of which are now managed as
part of the Mechanical and Electrical business unit. The retention of these businesses is supported by both the expected
water infrastructure improvements projects that should be announced in the future and the competitive advantage that Aveng
is secured in this market by virtue of its hard-won experience and breadth of products and services offered. 

- Liquidity
The Group ended the first half of the year with net cash of R331 million, following the repayment of the QCLNG
advance, the successful conclusion of the property transaction, strong operational cash generation from all South African
operations offset by a AUD74 million cash utilisation by McConnell Dowell. During the period several cash consumptive
projects were completed and combined with the net cash position and available facilities, the Board believes that the Group 
is well placed to manage through what is likely to remain a difficult medium term trading environment. The Group had free
liquidity headroom of R2,5 billion at 31 December 2015.

- Claims
Following the repayment of the advance payment linked to the QCLNG project, the arbitration process has now moved to
the hearing stage with the first round of hearings completed in December 2015. The second round of hearings will take
place during February and March 2016 and Aveng has been advised to expect the findings during September/October 2016. 
The claims relating to the GCRT project were lodged during the period. However, the process remains protracted with
conclusion anticipated in late 2017. Excluding these two projects the Group�s uncertified claims position is R1.3 billion. 

Good commercial and technical progress has been achieved on the Chuquicamata contract in Chile with a commercial
settlement being reached for outstanding claims during the period. The project is progressing well and the relationship 
with the client is satisfactory. 

Total Amounts Due From Contract Customers have reduced by R1,3 billion, excluding foreign exchange movements, due to
an intensified focus on claims settlements in all business units combined with continuous collection of receivables.

Strategic review and cautionary announcement
Following the previously announced strategic refocus initiated by the Board for the Steel operating group, amongst
other actions, Aveng has received various non-binding offers from numerous parties, to acquire or partner with Aveng, for
both the entire operating group and/ or for certain of its individual business units. Confidential discussions are
ongoing though there can be no certainty that these discussions will result in any transactions. Accordingly, shareholders 
in Aveng should exercise caution when trading in their securities. Aveng will make further announcements, if and when
appropriate. It is important to note that the disinvestment decision is based on longer-term strategic objectives. In the
near term, the outlook for the steel business is improving and given our liquidity position, we are comfortable that any
disposal will therefore only occur at an acceptable value.

The turnaround process of Aveng Grinaker-LTA has reached a stage where consideration can be given to position the
business for future growth in terms of Aveng�s existing strategy. The transformation of the construction and engineering
sector in South Africa received increased focus over the past year. In order to remain relevant to a transforming South
African economy, the Board has concluded that it is a business imperative to introduce a B-BBEE partner or partners who
will hold a significant equity interest in the business. Advisors have been appointed to assist Aveng in this process and
stakeholders will be updated as this transaction progresses.

Consistent with the strategy of recycling the capital invested within the portfolio of Aveng Capital Partners once the
underlying projects have reached an appropriate level of maturity, the Board has approved the monetisation of the
existing portfolio. Assets currently under management will be disposed of in the market or seeded into a fund. An
independently obtained valuation indicates substantial cash value to be realised through such transactions. 
The Board is of the view that executing these transactions will aid an improved return on invested capital in the
medium term. Combined with the existing robust liquidity position, this will provide the Group with greater flexibility 
and optionality in its capital allocation.

MARKET REVIEW
Aveng operates mainly in the South African, SADC, Australasian and Southeast Asian markets. These markets remain weak
but opportunities still exist specifically in the South African building sector and in New Zealand and Southeast Asia.

The Australian market has remained subdued with tender conversion rates not meeting expectations. Continued declines
in heavy industrial infrastructure investment in Australia will continue to negatively impact the results of McConnell
Dowell. The softening of commodity prices has negatively impacted the Group�s resource and energy clients. McConnell
Dowell is therefore actively pursuing cross-border opportunities in the social and transport infrastructure market in 
New Zealand and Southeast Asia.

The South African building industry is fairly strong in residential building and selective commercial building
opportunities in the municipal, commercial and industrial markets. However, opportunities in the Civils and Mechanical and
Electrical businesses remain constrained with ongoing delays in the public sector infrastructure roll out and the depressed
resources sector.

The continuing demand for concrete products in the construction sector and rail products and services, albeit at lower
levels, remains favourable for Aveng Manufacturing.

The mining industry in South Africa is expected to remain under considerable pressure in the medium term, which has
resulted in numerous mining contract cancellations, scope reductions and requests for margin discounts. Careful
consideration has been given to new mining opportunities and the extension of the business� international footprint. 
Further details will be announced once additional progress is made.

The South African domestic steel market was adversely impacted by lower priced imports, poor domestic demand and
excess capacity in international markets. However, volumes have stabilised in more recent months and some recovery has been
noted. These latest developments, including those supportive of the South Africa upstream steel industry, are reassuring
of Board�s position that the disposal of Aveng Steel must be at an acceptable value 

FINANCIAL PERFORMANCE
Statement of comprehensive earnings
Revenue decreased by 25% to R18,0 billion against the comparative period�s R23,9 billion. This is largely attributed
to the continued weak demand for infrastructure in our key markets of South Africa and Australia, which was partially
offset by opportunities in Southeast Asia and New Zealand. Four of the key sectors namely, mining, Oil & Gas, steel 
and publicly funded infrastructure projects in South Africa remained subdued. Gross margin for the Group improved to 
7,2% compared to 6,5% in the comparative period.

Net operating earnings decreased by 87% to R52 million, from R413 million in 2014, as a result of:
- Reduced earnings at McConnell Dowell, due to lower activity levels, combined with a disappointingly low margin
  performance within Australian Operations;
- Severe weakness in steel demand and pricing, resulting in an operating loss at Aveng Steel;
- Lower margins due to commodity price pressure in the mining business;
- The inclusion of four months of results of the Electrix business in the prior period; and
- Lower fair value gains in Aveng Capital Partners due to most renewable energy projects reaching market maturity 
  in the prior period.

  This was partially mitigated by:
- A substantially improved performance at Aveng Grinaker-LTA;
- Solid underlying results from Aveng Mining and Aveng Manufacturing, albeit at lower volumes; and
- Decreased operating expenses.

EBITDA decreased by 46% to R496 million from R928 million in 2014.

Gain on property transaction of R577 million relates to the sale and leaseback of the majority of the Group�s property
portfolio.

An impairment charge of R23 million was recognised against abandoned plant and equipment in the Mining segment. 

Net finance charges of R156 million decreased by 6% in relation to the comparative period, as a result of larger
average cash balances, offset by lower convertible bond costs in the comparative period (R52 million).

The taxation expense amounts to R218 million compared to R125 million for December 2014. This represents an effective
tax rate of 48,4%, versus 25,7% in the comparative period. This is mainly attributable to withholding tax of 
R103 million payable on profit expatriated from Guinea following the completion of a project.

Headline earnings decreased to a loss of R231�million from an earnings of R138 million. Items excluded from the
calculation of headline earnings include impairment charges and the gains on the property transaction.

Earnings per share of 57,8 cents (2014:�89,3�cents) decreased by 35,3% and headline loss per share (�HEPS loss�) 
of 58,0�cents reduced compared to HEPS of 34,5�cents in the comparative period. 

Statement of financial position
The Group reduced its capital expenditure to R171 million (2014: R583 million): applying R89�million 
(2014: R456 million) to replace and R82 million (2014: R101 million) to expand property, plant and equipment
and intangibles. 
The majority of the amount was spent as follows:
- R41 million at McConnell Dowell, relating to specific contracts; and
- R63 million at Aveng Manufacturing to increase the capacity and optimise efficiencies in its factories.

The reduced capital expenditure is in line with the Group�s current requirements.
Equity-accounted investments decreased by 10% compared to 30 June 2015. This was primarily due to additional losses on
the Gouda renewable energy project.

Infrastructure investments of R877 million increased by R99 million compared to 30�June�2015, after recognising the
Group�s 30% investment in the property portfolio.

Amounts due from contract customers (non-current and current), remained relatively flat at R10,2 billion when compared
to December 2014 and June 2015. There was an underlying decrease in this balance of R1,3 billion which was offset by
R1,2 billion of foreign exchange translation movement. Operationally the receivables at McConnell Dowell decreased in line
with contracting revenue and settlements, while uncertified claims, variations and receivables decreased at Aveng
Grinaker-LTA as a result of various settlements specifically in the power sector.

Amounts due to contract customers decreased by 24% to R1,8 billion against the comparative period and decreased by 
30% compared to R2,6 billion at 30 June 2015, as a result of the utilisation of advance payments at McConnell Dowell. 

Inventories decreased by 22% to R2,4 billion against the comparative period and decreased by 5% compared to 
30 June 2015 as a result of inventory management to align to the current market demand. 

Trade and other receivables of R2,0 billion decreased by 18% against the comparative period and decreased by 17%
compared to 30�June 2015 due to improved collections at Aveng Manufacturing and Aveng Steel, combined with lower 
revenue at Aveng Steel.

Borrowings and other liabilities of R3,1 billion increased by R658 million against the comparative period due to a
AUD60 million facility drawn to repay a portion of the QCLNG�advance.

Trade and other payables decreased by R1,4�billion or 18% to R 6,6 billion against 30�June 2015. Excluding the foreign
exchange impact, the underlying reduction of R1,9 billion was primarily due to the repayment of the QCLNG advance
payment of AUD112,5 million as well as lower activity levels at McConnell Dowell and Aveng Steel. 

Operating free cash flow for the period amounted to a R295 million outflow after including: 
- The repayment of the AUD112,5 million on the QCLNG contract; 
- Offset by R1,1 billion proceeds on the disposal of the properties portfolio; 
- Significant cash outflows for McConnell Dowell associated with the utilisation of advance payments, the completion
  of large projects such as Perth Airport and additional remedial work on the GCRT contract;
- Strong cash generation in all South African operations most notably at Aveng Steel and Aveng Grinaker-LTA;
- Net capital expenditure of R126 million; and
- The final payment of R102 million to the Competition Commission.

Cash and bank balances increased to R3,5�billion (June 2015: R2,9 billion), resulting in a net cash position of 
R331 million (June 2015: R393 million). The foreign currency revaluation amounted to R314 million.

OPERATING REVIEW
Construction and Engineering: Australasia and Asia
This operating segment comprises Australian Operations, Overseas Operations, Pipelines, Tunnels and Built Environs.

Revenue decreased by 40% to AUD726 million (2014: AUD1,2 billion) or R7,0 billion (2014: R11,8 billion). This is
reflective of the completion of multi-year pipeline and infrastructure contracts, and the sale of Electrix in the prior
financial year. Net operating earnings decreased from R183 million to R8 million due to the weaker Australian construction
market and a disappointing performance from Australian Operations, partially offset by a solid performance in Overseas
Operations and Pipelines. The results were negatively impacted by costs associated with additional tender expenses for
significant EPC contracts that were not secured in a fiercely competitive Australian market.

As was expected, cash flow was negative during the period, and will continue to be negative for the next six months
due to additional utilisation of advance payments, coupled with a slow uptake of new work. Cash�flow should be impacted
positively by the resolution of claims.

Australian Operations
Australian Operations reported a decrease in revenue of 58% to R2,5 billion (AUD255 million) compared to R6 billion
(AUD516 million) in 2014, mainly due to the completion of large projects in the prior year and the continued weakness 
in the Australian market. The Australian market is challenging and competition for larger projects is very aggressive,
resulting in tender costs incurred on contracts not won negatively impacting the operating margin. Earnings for the 
period ended December 2015 are considerably lower than the comparable period due to lower levels of new work won in 
the last 18 months.

Remedial work and demobilisation actions associated with the GCRT contract are substantially complete with close-out
awarded and achieved on 23 December 2015. Given the technical and legal complexities, it is expected that the commercial
negotiations will be protracted, and thus the final outcome remains uncertain and a material risk to the Group. The
process of finalising and resolving claims continues to receive considerable attention.

During the period Built Environs completed the expansion on Perth Airport Terminal 1, the terminal was operational in
November 2015 and has been successfully handed over to the client. 

In response to ongoing declines in available work and a challenging outlook for the Australian construction and
engineering market, steps were taken in the prior period to reduce costs by 20%. Given an expectation that market conditions
are likely to persist in the near term, McConnell Dowell will continue to review its overheads.

Overseas Operations 
Overseas Operations comprise our operations in Singapore, Malaysia, Thailand, Indonesia, Philippines, Hong Kong, the
Middle East, and New Zealand. Due to excellent project execution, performance was strong despite challenging market
conditions. Revenue increased by 37% to R2,5 billion (AUD257�million) with good margins above 8,5% and positive cash flow. 

Pipelines
The Pipelines business unit reported a decrease�in revenue of 26% to R886 million (AUD90�million) from R1,2 billion
(AUD119�million) in 2014, as a result of the completion of large pipeline projects in the prior year. With limited
opportunities in the Oil & Gas sector, the recent win of the Northern Gas Pipeline and ongoing work for APLNG are 
pleasing results.

Tunnels
Revenue declined by 14% to R800 million (AUD81 million) from R900 million (AUD95�million). The Land Transit Authority
contracts in Singapore are nearing completion and both have been a technical success, with the project opening on
schedule in December. The Waterview project, the largest infrastructure development ever undertaken in New Zealand, is on
schedule for completion in late 2016. Earnings declined as a result of large tender costs of AUD3 million on major projects
that were not awarded to the business unit. 

Construction and Engineering: South Africa and rest of Africa
This operating segment comprises Aveng Grinaker-LTA, Aveng Engineering and Aveng Capital Partners. Aveng Engineering
has been discontinued with the remaining portions of Water and Operate & Maintain merging with Mechanical and Electrical
within Aveng Grinaker-LTA.

Revenue decreased by 9% to R3,9 billion (December 2014: R4,3 billion) primarily due to lower civil engineering and
mechanical and electrical work. 
Net operating losses for the segment decreased by 45% to R125 million (2014: R229 million) due to a substantial
turnaround from Aveng Grinaker-LTA, with a small loss of R48 million against R299 million in the comparable period. 

Civil Engineering
Revenue decreased by 25% to R1,2 billion (December 2014: R1,6 billion) reflecting lower activity in the Civil
Infrastructure business. The operating profit increased to R33 million compared to the operating loss of R195 million 
incurred in 2014.

Significant progress was made on improving the margin on specific contracts in the power programme, specifically
relating to Medupi. Cost�reduction will continue proactively as the short term outlook is constrained. The Majuba contract 
is well into the final stages of construction, with large sections handed over to�Aveng Rail. Various commercial matters,
including claims and variations, remain outstanding and are being negotiated.

Mechanical and Electrical
Revenue decreased by 13% to R835 million (December 2014: R954 million) due to lower activity in the industrial and Oil
& Gas sectors combined with project delays and cancellations in mining. Higher revenues were achieved on the Kusile BOP
project compared to the six months ended 31 December 2014, as a result of the acceleration measures taken in order to
meet the power utility�s client milestone dates. The operating margin was negatively affected by losses incurred in
closing out the Sasol MT7 project and the ongoing Alstom power programme partnership. The operating loss marginally 
decreased to R29 million (December 2014: R32 million).

Buildings & Coastal            
Revenue increased by 25% to R1,5 billion (December 2014: R1,2 billion) with the net operating earnings reflecting a
significant improvement to R65 million, from a loss of R5�million. The improvement in revenue is due to the growing order
book, the ramp-up on the Mall of the South project, that was successfully handed over in September 2015 and peak
production to complete the Sasol Corporate Head Office superstructure, which is well on track. Projects on the Ekurhuleni
municipal infrastructure programme are progressing well. Cost reduction initiatives and greater operational efficiencies 
were realised during the period. The short term outlook for Building is positive with the order book having grown
significantly by 67% in the second quarter, and an attractive pipeline of further projects in the short term.

The activity level in the Coastal operations is on target with major contracts, Dr Pixley Ka Isaka Seme Memorial
hospital in KwaZulu-Natal, extensions to the Cape Town International Convention Centre and Aspen Pharmacare�s manufacturing
facilities in Port Elizabeth, all in progress. There has been significant progress made in the Western Cape Education
Department�s infrastructure programme management contract, with the first project completed and handed over and a pipeline
of new work in planning phases.

Aveng Engineering
Aveng Engineering revenue decreased by 69% to R149 million (December 2014: R477 million) largely due to the completion
of the construction works on the water and power plants and the move to commissioning and operations. The Gouda wind
farm final construction has been completed along with technical hand-over. Final operational hand-over is anticipated at
the end of March 2016. The construction of the eMalahleni project has now been completed and commissioning is underway.
Additional costs and liquidated damages on these two contracts impacted the operating earnings negatively, resulting in 
a net operating loss of R83 million. 

The focus remains on leveraging the significant advantage held within the Aveng Water business in acid mine drainage
and desalination technology. The South African mining and municipal water sectors offer various attractive opportunities
for growth. The remaining portion of Aveng Engineering will merge with Mechanical and Electrical, which will lead to
efficiencies.

Aveng Capital Partners
Aveng Capital Partners is responsible for managing the Group�s investments in South African toll roads, real estate
and renewable energy concessions.

Net operating earnings decreased by 94% against the comparative period to R6 million (2014: R97 million) primarily due
to the majority of the renewable energy investments achieving marketable maturity in the prior period.

Mining
This operating segment comprises the merged business of Aveng Moolmans and Aveng Mining Shafts & Underground.
The segment reported consistent revenue of R3,0 billion against the comparative period. Net operating earnings
decreased by 18% to R198�million (2014: R241 million). The operating margin declined to 7% (2014: 8%) largely as a result 
of discounts awarded to clients on various contracts. Existing mining contracts are under cost pressure from clients
operating in a difficult commodities environment. The Mining operating group is working closely with clients to assist in
reducing overall mining costs and to regain some of the margins lost due to discounts through various productivity 
improvement and cost efficiency initiatives. 

The mining industry continues to be under extreme pressure which is affecting the contracts in hand and the
opportunities being presented. This impact is likely to be evident in the remaining six months of this financial year. 
The Mining team will pursue opportunities to revise and better balance the geographic and commodity mix in its client 
portfolio in order to strengthen its order book and improve shareholder returns. Details will be announced once further 
progress is made. Given usual project lead times, Aveng does not expect this to materially change in the next 12 to 18�months.

Aveng Moolmans 
The revenue of Aveng Moolmans remained flat at R2,2 billion. The pressures being experienced by clients due to the
downturn in the commodity cycle will most likely be evident during the next six months, as a number of clients have
indicated that there will be reduced production volumes, particularly on the Tshipi � Ntle, Nkomati Nickel and Sishen
contracts. This will place strain on the order book going forward. However, opportunities are being pursued to mitigate 
this impact. 

Despite the current market conditions Aveng Moolmans continued to record good results, strong performances were
achieved on other domestic and international mining contracts. Contract extensions were granted at Klipbankfontein and
Sadiola.

Aveng Mining Shafts & Underground 
The revenue of Aveng Mining Shafts & Underground increased by 11% to R811 million (2014: R730 million) due to
development work that was commenced on the new Black Rock contract. In addition, although the Styldrift and Eland contracts 
were cancelled, revenue was generated prior to the contract cancellations.

In comparison to the prior period, Shafts and Underground has reduced its net operating loss. This is largely
attributable to cost saving initiatives as a result of the merger of the Aveng Mining business units and improved discipline 
in commercial processes. The general downturn in the mining industry has resulted in a more selective approach to bidding
for new work in order to strengthen the quality of the business unit�s earnings, and mitigate the risk by securing longer
term contracts. Shafts & Underground finalised claims on the Chuquicamata contract with the cash being received in
December 2015. The Platreef Platinum Mine and Black Rock contracts continue to progress to plan and the Kalagadi contract
was completed during the period. Good progress was made on the Bakubang project and commercial discussions continue on the
resolution of claims.

Manufacturing and Processing
This operating segment comprises Aveng Manufacturing and Aveng Steel.
Revenue decreased by 17% to R4,4 billion (2014: R5,3 billion). Net operating earnings decreased significantly to a
loss of R48 million (2014: R79 million profit). Aveng Steel was negatively impacted by weak demand, reduced international
steel prices, increased competition from cheaper imports and significant restructuring costs to re-align the fixed cost
base. Despite lower gross profit margins, the operating segment contributed strongly to positive cash flows.

Aveng Manufacturing
This operating group consists of Aveng Automation & Control Solutions (ACS), Aveng Dynamic Fluid Control (DFC), 
Aveng Duraset, Aveng Infraset and Aveng Rail.
Revenue decreased by 11% to R1,6 billion (2014: R1,8 billion). Net operating earnings decreased by 31% to R99 million
(2014: R144�million). Despite tough market conditions, the operating group continues to perform well although the impact
from the slowdown in the mining sector and lower sleeper volumes have negatively impacted its financial performance. 

Aveng ACS - Aveng Control Solutions performed well despite lower activity in the traditional Oil & Gas market.
Revenue, has increased by 7% to R237 million (2014: R222�million), which is due to the timing of current projects relative 
to last year, as well as diversification into non-traditional markets.

Aveng DFC - revenue has increased by 9% to�R246 million (2014: R225 million), mainly due to growth in the US and
Australian markets. Local volume demand was lower and subsequently negatively impacted profitability.

Aveng Duraset - revenue decreased by 1% to�R263 million (2014: R265 million) driven by lower demand from the local
mining sector. 

Aveng Infraset - revenue decreased by 37% to�R464 million (2014: R734 million) due to large sleeper supplies in the
prior period, both locally and across border. The decline in the international commodity prices has resulted in a slowdown
in the international sleeper revenue and general rail construction projects. Construction products continue to enjoy
solid demand locally and are performing as expected. 

Aveng Rail - revenue increased by 10% to R437 million (2014: R396 million), mainly due to Majuba, Rosmead and Black
Rock construction projects. 

Despite the challenging environment, the outlook for Aveng Manufacturing is encouraging. Transport infrastructure
remains a key growth market. Although mining in South Africa is expected to remain subdued, this is mitigated by mining 
in the rest of Africa, Russia and South�America; which could drive demand for many of the product lines. 

Building on the cash flow discipline introduced some time ago, the Manufacturing operating group remains cash
generative. 

Aveng Steel
This operating group consists of Aveng Trident Steel, Aveng Steeledale and Aveng Steel Fabrication.
Revenue decreased by 18% to R2,8 billion (2014: R3,4 billion), severely impacted by reduced international steel prices
and lower local demand. Profitability declined to a loss of R147 million compared to a loss of R65 million in the prior
period, in line with revenue and was further impacted by restructuring costs. Cost savings were driven by improved
efficiencies across the operating group and continue to be realised. Despite poor trading conditions, the operating group
was a significant contributor to positive cash flow. This was achieved through the reduction in working capital, most
notably reduced inventory. It is expected that the market conditions will be positively impacted by the implementation of
custom duties and anti-dumping duties in the second half of the financial year. 

Other and Eliminations
Included in Other and Eliminations is the Group�s Corporate Office and Properties. In September 2015 the Group began
paying operating lease payments to the property venture, Dimopoint for the use of the properties sold in the sale and
lease back transaction.

Two-year order book
The Group�s two-year order book amounts to R29,3 billion at 31 December 2015, remaining relatively flat on the 
R28,9 billion reported at 30�June 2015. 
The focus remains on securing quality work at targeted margins. While the Group has adopted a portfolio approach
within the respective disciplines at McConnell Dowell and Aveng Grinaker-LTA, current market conditions resulted in
a move towards lower margin disciplines. This is particularly notable in South Africa with a strong swing towards 
building work. While the Aveng model seeks to optimise the balance across the core disciplines to achieve targeted 
margins and diversify revenue streams, this remains challenging in current conditions.

Over the last six months, the Mining operating group�s order book has decreased by 20% from R7,9 billion to 
R6,3 billion as a result of contract cancellations and a reduction in the scope of work, while the Construction and 
Engineering: Australia and Asia operating group�s order book increased by 8% in Australian Dollar terms from 
AUD1,2 billion  to AUD1,3 billion (R11,6 billion to R14,1 billion). Construction and Engineering: South Africa and 
rest of Africa�s order book increased by 5% from R7,3 billion in June to R7,7 billion in December. 

Recent significant project awards include the 129 Rivonia development in Sandton (situated on the site of the previous
Village Walk), the first phase of the Leonardo Towers in Sandton and the Hilton Hotel in Swaziland. In Australia 
and Asia, recent awards include the Waitaki Bridges Replacement and O-Bahn City Access projects, the Northern Gas 
Pipeline in Northern Territory, Christchurch in New Zealand, the Barangaroo Ferry in New South Wales and the 
Rapid SCC project in Malaysia. Mining contracts were also extended at Kolomela (Klipbankfontein) and Sadiola. 

The geographic split of the order book at 31�December 2015 was 51% Australasia and Asia (June 2015:40%), 
43% South Africa (June 2015: 56%) and 6% Other (June 2015: 4%).

OUTLOOK AND PROSPECTS 
Aveng is expecting the market to remain subdued in the short to medium term with limited evidence of large
infrastructure contracts. There are attractive opportunities in Australia, New Zealand and Southeast Asia in particular. 
Our key markets are expected to remain tough and management will continue to take the necessary actions to manage the 
business within the constraints of the current economy.

Aveng will continue to focus on cash generation, cost efficiencies and preserving the balance sheet for the remainder
of the financial year. In addition, notable attention will be given to the strategic initiatives described above, the
disinvestment from Steel, the monetisation of Aveng Capital Partners and the empowerment of Aveng Grinaker-LTA.

DIRECTORS
Mr Sean Flanagan was appointed as an independent non-executive director of the Aveng Board with effect from 
1 November 2015.

DISCLAIMER
The financial information on which any outlook statements are based has not been reviewed or reported on by the
external auditors. These forward looking statements are based on management�s current belief and expectations and are 
subject to uncertainty and changes in circumstances. The forward looking statements involve risks that may affect the 
Groups operations, markets, products, services and prices.

By order of the Board

M Seedat
Chairman

HJ Verster
Chief executive officer

23 February 2016

CORPORATE INFORMATION

Directors
MI Seedat*# (Chairman)
EK Diack*# 
HJ Verster (Chief Executive Director) 
AWB Band*# 
PJ Erasmus*# 
S Flanagan*# 
MA Hermanus*# 
P Hourquebie*# 
MJ Kilbride*#
AH Macartney (Group Finance Director) 
JJA Mashaba (Group Executive Director)
T Mokgosi-Mwantembe*# 
KW Mzondeki*# 
PK Ward*#
(*non-executive)(#independent)

Company Secretary
Michelle Nana

Business address and registered office
Aveng Park
1 Jurgens Street, Jet Park Boksburg, 1469
South Africa
Telephone +27 (0) 11 779 2800
Telefax +27 (0) 11 784 5030

Auditors
Ernst & Young Inc.
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 plc
Commonwealth Bank of Australia Limited
FirstRand Bank Limited
HSBC Bank plc
Investec Bank Limited
Nedbank Limited
Standard Chartered Bank plc
The Standard Bank of South Africa Limited

Corporate legal advisers
Baker & McKenzie
Cliffe Dekker Hofmeyr
Norton Rose Fulbright
Webber Wentzel

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) 11 688 5200

Website
https://protect-za.mimecast.com/s/6185Bks7N5NXtb

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