NOTES

Basis of preparation

These condensed consolidated annual financial statements for the year ended 30 June 2011 have been prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”), the AC 500 standards as issued by the Accounting Practices Board or its successor, IAS 34: Interim Financial Reporting and in compliance with the requirements of the Companies Act, No. 71 of 2008 of South Africa. This report was compiled under the supervision of AJ Bester (CA) SA, group financial director.

The accounting policies used in the preparation of these results are in accordance with IFRS and are consistent in all material respects with those used in the audited annual financial statements for the year ended 30 June 2010.

The auditors, Deloitte & Touche, have issued their opinion on the Group’s annual financial statements for the year ended 30 June 2011. The audit was conducted in accordance with International Standards on Auditing. They have issued an unmodified audit opinion. This preliminary report has been derived from the Group’s annual financial statements and is consistent in all material respects. A copy of their audit report is available for inspection at the company’s registered office. Any reference to future financial performance included in this announcement has not been reviewed or reported on by the Group’s auditors.

(Loss)/profit from discontinued operations

Discontinued operations include the Group’s property divisions, interests in steel reinforcing bar manufacture and trading operations, Johnson Arabia crane hire and Clough’s marine operations.

Prior to 30 June 2011, the Group received conditional offers for Johnson Arabia crane hire and the steel reinforcing bar roof bolt division.

Post-30 June 2011, Clough Limited received a conditional offer for the sale of its marine operations.

R millions	30 June 2011	30 June 2010
Revenue	2 646	4 656
(Loss)/profit before interest, depreciation and amortisation	(641)	463
Depreciation and amortisation	(69)	(117)
(Loss)/profit before interest and taxation	(710)	346
Net interest expense	(58)	(74)
Taxation credit/(expense)	118	(56)
Loss from equity accounted investments	(16)	(1)
(Loss)/profit from discontinued operations	(666)	215
Non-controlling interest relating to discontinued operations	79	(57)
Cash flows from discontinued operations include the following:
Cash flow from operating activities	(129)	335
Cash flow from investing activities	574	(357)
Cash flow from financing activities	(466)	(103)
Net decrease in cash and cash equivalents	(21)	(125)

Reconciliation of headline (loss)/earnings

R millions	30 June 2011	30 June 2010
(Loss)/profit attributable to owners of Murray & Roberts Holdings Limited	(1 735)	1 098
Investment property fair value adjustments	5	(101)
Profit on disposal of subsidiaries	(17)	(10)
Profit on disposal of property, plant and equipment	(49)	(6)
Impairment of goodwill and other assets	398	7
Fair value adjustment and (profit)/loss on disposal of assets held-for-sale	32	–
Adjustments relating to business acquisitions	(62)	–
Other	1	1
Non-controlling interest effects on adjustments	(5)	4
Taxation effects on adjustments	(61)	13
Headline (loss)/earnings	(1 493)	1 006
Adjustments for discontinued operations:
Loss/(profit) from discontinued operations	666	(215)
Non-controlling interests	(79)	57
Investment property fair value adjustments	(5)	97
Profit on disposal of subsidiaries	17	–
Profit on disposal of property, plant and equipment	1	–
Impairment of goodwill and other assets	(324)	–
Fair value adjustment and profit/(loss) on disposal of assets held-for-sale	(34)	–
Adjustments relating to business acquisitions	1	–
Non-controlling interest effects on adjustments	6	–
Taxation effects on adjustments	74	(13)
Headline (loss)/earnings from continuing operations	(1 170)	932

Contracts-in-progress and contract receivables

R millions	30 June 2011	30 June⁴ 2010
Contracts-in-progress (cost incurred plus recognised profits, less
recognised losses)	557	884
Uncertified claims and variations less payments received on account
(recognised in terms of IAS 11: Construction Contracts)	1 968	1 966
Uncertified claims and variations	2 302	1 966
Less: Payments received on account	(334)	–
Amounts receivable on contracts (net of impairment provisions)	2 340	2 543
Retentions receivable (net of impairment provisions)	425	394
	5 290	5 787
Amounts received in excess of work completed	(2 244)	(2 446)
	3 046	3 341
Disclosed as:
Amounts due from contract customers	5 290	5 787
Amounts due to contract customers	(2 244)	(2 446)
	3 046	3 341

⁴ Amounts due from and to contract customers have been reclassified in the prior year, to provide more meaningful disclosure.
The net amounts due from and due to contract customers remained unchanged.

Contingent liabilities

Contingent liabilities are related to disputes, claims and legal proceedings in the ordinary course of business.

Events after reporting date

On 8 August 2011, Clough Limited announced the disposal of its marine construction business for a cash consideration of AUD127 million. The financial effects of the transaction have not been brought into account at 30 June 2011. The results of the marine construction business have been disclosed as a discontinued operation with the assets and liabilities being recorded as held-for-sale.

The directors are not aware of any other matter or circumstance arising since the end of the financial year, not otherwise dealt with in the Group and company annual financial statements, which significantly affects the financial position at 30 June 2011 or the results of its operations or cash flows for the year then ended.