GROUP SEGMENTAL ANALYSIS

for the year ended 30 June 2011

Segment information

Operating segments reflect the management structure of the group and the manner in which performance is evaluated and resources allocated as managed by the group’s chief operating decision maker, defined as the executive committee members (exco) of the group.

These operating segments are defined as

	Operating segment	Revenue source
	Investments and Concessions
	– Infrastructure Concessions	– Equipment supply, operations and maintenance revenue in concession contract developments in the transport, power and real estate sectors
	– Property Developments	– Rental and development sales of A-grade Group Five branded property assets generating development and investment returns
	Manufacturing	– Manufacture and sale of fibre cement products – exterior and interior walling, ceiling boards, roof tiles and pipes, fibre cement-clad, steel-framed modular housing systems – Manufacture and sale of steel products, including scaffolding, formwork and steel reinforcing for use in concrete structures, fabricated steel structures and large bore steel pipes
	Construction Materials	– Supplier of high-specification materials used in the construction supply chain, including aggregates, readymix concrete and mining services
	Construction
	– Buidling and Housing	– Building and housing contractor for large real estate and related infrastructure contracts
	– Civil Engineering	– Civil engineering contractor for roads, ports, airports, pipelines and large structures in the mining and industrial sectors
	– Engineering	– Engineering projects contractor for structural, mechanical, piping and electrical engineering, as well as complete plant construction solutions – Multi-disciplinary project delivery from feasibility through to supporting bankability and front-end design, as well as project management of contracts during execution to completion – Industrial services contractor

The group is focused by discipline and each discipline is lead by an executive committee member.

The role of exco is to drive the strategic intent of the group per segment. The executive committee members meet monthly to review the group’s performance. Of primary focus to exco is the revenue, operating profit, capital expenditure and current assets per segment. Exco assesses the performance of the operating segments based on a measure of adjusted operating profit before fair value adjustments and impairments. This measurement basis excludes the effects of non-operational income and expenditure from the operating segments such as pension fund valuation assets and deficits and profit or losses on sale of subsidiaries. Gains or losses on disposal of property, plant and equipment as well as investment property are not adjusted as these are deemed to be in the segments’ core operational control. The adjusted operating profit does not include any impairment adjustments. As exco reviews adjusted operating profit the results of discontinued operations are not included in the measure of
adjusted operating profit before fair value adjustments and impairments.

Management do not believe that there are any additional segments that are required to be separately reported.

The reportable operating segments derive their revenue as described above.

The group is also considered by geographical segment due to the extensive geographic footprint maintained by the group. The geographies are grouped into regions for reporting purposes as the group moves towards establishing operational hubs for management of regions.

The segmental information presented below includes the reconciliation of IFRS measures presented on the face of the income statement to non-IFRS measures which are used by management to analyse the group’s performance.

Financial performance: Group revenue and operating profit

	Revenue				Operating profit
Note: Graphs represent F2011 values only.
2011	Gross revenue		Internal revenue		External revenue		Operating profit
R’000
Operational segments
Investments and Concessions	554 659		–		554 659		62 624
Infrastructure Concessions	522 870		–		522 870		73 176
Property Developments	31 789		–		31 789		(10 552)
Manufacturing	997 375		(129 852)		867 523		23 342
Construction Materials	514 858		(80 625)		434 233		(68 157)
Construction	7 404 220		(53 637)		7 350 583		480 318
Building and Housing	2 174 074		(31 070)		2 143 004		136 900
Civil Engineering	3 550 849		(2 488)		3 548 361		231 904
Engineering	1 679 297		(20 079)		1 659 218		111 514
Total	9 471 112		(264 114)		9 206 998		501 127
Adjustment for non-operational items
Pension fund valuation defic							(2 000)
Loss on disposal of subsidiary							(299)
Operating profit before fair value and impairment adjustments per income statement							501 127

2010	Gross revenue		Internal revenue		External revenue		Operating profit
R’000
Investments and Concessions	591 871		–		591 871		75 928
Infrastructure Concessions	557 227		–		557 227		83 974
Property Developments	34 644		–		34 644		(8 046)
Manufacturing	1 016 224		(150 003)		866 221		82 300
Construction Materials	626 824		(134 964)		491 860		17 624
Construction	9 553 896		(166 260)		9 387 636		649 967
Building and Housing	3 262 252		(76 110)		3 186 142		220 022
Civil Engineering	4 784 482		(70 995)		4 713 487		290 001
Engineering	1 507 162		(19 155)		1 488 007		139 944
	11 788 815		(451 227)		11 337 588		825 819
Adjustment for non-operational items
Pension fund valuation surplus							55 161
Loss on disposal of subsidiary							(4 085)
Operating profit before fair value and impairment adjustments per income statement							876 895

Sales between segments are carried out at arm’s length and are reflected above.

Financial position: Current assets and capital expenditure

	Current assets				Capital expenditure
Note: Graphs represent F2011 values only.
R'000	2011		2010		2011		2010
Investments and Concessions	231 280		148 800		6 376		9 706
Infrastructure Concessions	147 205		63 815		6 081		8 287
Property Developments	84 075		84 985		295		1 419
Manufacturing	402 767		411 673		32 020		23 302
Construction Materials	168 731		169 745		15 616		41 747
Construction	2 760 195		3 366 681		96 340		135 271
Building and Housing	650 514		775 751		3 745		6 622
Civil Engineering	1 649 477		2 009 224		57 596		109 052
Engineering	460 204		581 706		34 999		19 597
	3 562 973		4 096 899		150 352		210 026
Bank balances and cash	2 234 779		3 129 990		–		–
Total current assets per statement of financial position	5 797 752		7 226 889
Property, plant and equipment – additions (note 8)					150 352		210 026

The measures of current assets and capital expenditure have been disclosed for each reportable segment as these are regularly provided to exco.

Geographical information

South Africa is regarded as the group’s country of domicile. As described, the various geographies are monitored via operational hubs and thus disclosed as such below.

	Revenue
Note: Graphs represent F2011 values only.
R'000	2011		2010
Eastern Europe	300 358		370 946
Middle East	405 2011		768 143
Eastern Africa	25 550		177 600
Southern Africa	7 216 252		9 335 238
Central Africa	1 030 594		447 879
Western Africa	229 033		237 782
	9 206 998		11 337 588
Per income statement	9 206 998		11 337 588

An additional group segmental analysis has been included as Annexure 1 as, although exco does not review this information on a monthly basis in order to take strategic decisions, management deems this information to provide additional value added disclosure to stakeholders. Refer to pages 244 to 247 for details.