Notes to annual financial statements

for the year ended 28 February 2011

Financial instruments (continued)

Liquidity risk management

Liquidity risk is the risk that the group will on due date be unable to meet a financial commitment. The cash requirements of the group are managed according to its needs from time to time. The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash resources and unutilised borrowing facilities are maintained.

The following tables detail the group’s remaining contractual maturity for its financial liabilities based on the expected repayment profile. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the group can be expected to pay. The tables include both interest and principal cash flows.

		Plant andequipment	Motor vehicles	Computer and office equipment	Land and leasehold improvements	Total
		R’000	R’000	R’000	R’000	R’000

2.	Property, plant and equipment
	Group – at 28 February 2011
	Cost	1 302 476	85 679	18 907	17 436	1 424 498
	Accumulated depreciation and impairments	(745 444)	(49 263)	(12 358)	(3 518)	(810 583)

	Net carrying value	557 032	36 416	6 549	13 918	613 915


	Movement summary
	Carrying value 1 March 2010	812 237	66 061	9 578	14 121	901 997
	Additions	82 016	3 711	2 973	1 250	89 950
	Disposals	(69 555)	(8 219)	(1 610)	–	(79 384)
	Depreciation	(181 292)	(19 733)	(4 258)	(1 412)	(206 695)
	Impairments	(37 766)	(2 074)	(1)	(32)	(39 873)
	Transfer to assets held for sale	(47 890)	(4 182)	–	(8)	(52 080)
	Transfer between categories	(718)	852	(133)	(1)	–

	Net carrying value	557 032	36 416	6 549	13 918	613 915


	Group – at 28 February 2010
	Cost	1 670 424	108 098	18 839	16 247	1 813 608
	Accumulated depreciation and impairments	(858 187)	(42 037)	(9 261)	(2 126)	(911 611)

	Net carrying value	812 237	66 061	9 578	14 121	901 997


	*Movement summary*
	Carrying value 1 March 2009	1 223 307	84 142	6 948	10 218	1 324 615
	Additions	169 148	17 752	5 809	4 280	196 989
	Disposals	(15 461)	(5 718)	(224)	–	(21 403)
	Depreciation	(162 288)	(10 049)	(3 252)	(501)	(176 090)
	Impairments	(402 691)	(19 157)	(30)	–	(421 878)
	Derecognised on disposal of business unit	(97)	(135)	(4)	–	(236)
	Transfer between categories	319	(774)	331	124	–

	Net carrying value	812 237	66 061	9 578	14 121	901 997


	Property, plant and equipment with a carrying value of R312,0 million (2010: R649,6 million) is encumbered by certain interest-bearing liabilities and banking facilities. Notarial bonds of R200,0 million (2010: R320,0 million) have been registered against movable assets of the group (refer notes 15 and 21).
	Management has assessed the basis of determining the useful life of certain items of plant and equipment and have determined that an hourly rate of depreciation is more applicable than a monthly rate. The new basis was applied from the beginning of the 2011 financial year. In addition management has reviewed the residual values of all items of plant and equipment and adjusted them where necessary. This has resulted in an additional depreciation charge of R62,8 million in the current financial year. It is impracticable to estimate the financial effect for future periods.

	GROUP
	2011	2010
	R’000	R’000

Details of properties
Farm being Portion 20 (a portion of Portion 3) and the remaining portion of Portion 3 of the farm Rietvlei 518, Bronkhorstspruit.
Acquired as part of business combination	4 840	4 840
Additions at cost – 2009	16	16
Additions at cost – 2010	90	90

	4 946	4 946


Portion 7 (a portion of Portion 1) of the farm Puntlyf 520 Registration division IR Gauteng Province.
Acquired as part of business combination	1 400	1 400
Additions at cost – 2009	28	28
Additions at cost – 2010	1 598	1 598
Additions at cost – 2011	405	–

	3 431	3 026


Portion of Portion 5 (a portion of Portion 2) of the farm Rietvlei 518, Bronkhorstspruit.
Acquired as part of business combination	2 182	2 182


Erf 27, Portion 106 of the farm Zestfontein.
Purchase price – 2009	1 093	1 093


The company has no property, plant and equipment.

		GROUP
		2011	2010
		R’000	R’000

3.	Goodwill
	Movement summary
	Carrying value at the beginning of the year	190 848	810 578
	Impairments	(163 737)	(619 730)

	Net carrying value at the end of the year	27 111	190 848


	Carrying value of goodwill arising as a result of business combinations on 2 April 2008 are as follows:
	Residual goodwill related to the Buildco group	27 111	126 090
	Residual goodwill related to Diesel Power	–	64 758

		27 111	190 848

3.1	Impairment review
	In accordance with IAS 36 impairment of assets, goodwill and intangible assets with indefinite useful lives are reviewed annually for impairment, or more frequently if there is an indication that goodwill might be impaired.
	The recoverable amount of each cash-generating unit was based on its value in use and was determined with the assistance of independent valuers. The carrying amount of each cash-generating unit was compared to the recoverable amount. The carrying amount of certain cash-generating units in the group was determined to be higher than its recoverable amount and an impairment loss was recognised. The impairment loss was first allocated to goodwill and then to intangible assets and property, plant and equipment on a proportionate basis. Refer note 25 for allocation of the loss.
	The value in use of each cash-generating unit was determined by discounting the future cash flow generated from the continuing use of the unit and was based on the following key assumptions:
	• Cash flows were projected based on actual operating results and the 2012 budgets for each cash-generating unit. Cash flows for a further four years were extrapolated using average revenue growth rates of 10% matching the internal inflation of the major businesses in the group and a terminal rate of 5%, which does not exceed the long-term average growth rate for the industry. The Board believes that this forecast was justified due to the long-term nature of each business.
	• A discount rate of between 16,68% and 17,30% was applied in determining the recoverable amount of each cash-generating unit. The discount rate was estimated based on a cash-generating unit’s specific weighted average cost of capital, which was based on a possible range of debt leveraging of between zero and 25% at respective long-term borrowing rates.
	The values assigned to key assumptions represent management’s assessment of the business of each cash-generating unit and are based on both external sources and internal sources of historical data. At the time of this report the Board believes that changes in any of these key assumptions would not cause any significant additional impairment losses.
	The reasons for the impairment recognised on goodwill, intangible assets and property, plant and equipment are a combination of the following:
	• The continued decline in the value of secondhand equipment and the scarcity of bank finance for new equipment;
	• The Mining Services business unit having to extend the life of its yellow metal fleet, resulting in an increased investment in maintenance and related resources to improve sustainable plant availability and productivity; and
	• The continued erosion of margins in the construction industry.
	In addition to the impairment review performed on the abovementioned cash-generating units, additional impairment test were performed on items of plant and equipment where the carrying amounts were higher than the respective recoverable amounts. With the assistance of an independent valuator the recoverable amounts were based on fair market value less cost to sell adjusted for current market constraints. Further impairment losses were recognised as a result of these tests. Refer to note 2 for the total impairment recognised in respect of property, plant and equipment.
	The Buildco group was acquired on 2 April 2008 for shares on a relative earnings basis. The majority of goodwill raised was based on a price per share of R1,80 at the date the shares were issued, notwithstanding that the share price had been substantially lower at the time of negotiations. The subsequent deterioration in trading conditions in the construction sector, particularly in the residential market, resulted in goodwill and intangible assets relating to certain acquired construction materials businesses being impaired by R575,5 million during 2010. Further impairments of R131,9 million was recognised in 2011 against these businesses.

		Mining	Marketing	Customer
		rights	related	related	Total
		R’000	R’000	R’000	R’000

4.	Other intangible assets
	Group – at 28 February 2011
	Cost as result of business combinations	135 885	55 892	52 285	244 062
	Accumulated amortisation and impairments	(64 492)	(55 892)	(52 285)	(172 669)

	Net carrying value at the end of the year	71 393	–	–	71 393


	Movement summary
	Carrying value at the beginning of the year	111 063	33 920	29 818	174 801
	Amortisation for the year	(6 749)	(2 098)	(2 451)	(11 298)

	Carrying value of intangible assets before impairments	104 314	31 822	27 367	163 503
	Impairment	(32 921)	(31 822)	(27 367)	(92 110)

	Net carrying value at the end of the year	71 393	–	–	71 393


	Estimated remaining useful life (years)	12 – 19
	Group – at 28 February 2010
	Cost as result of business combinations	135 885	55 892	52 285	244 062
	Accumulated amortisation and impairments	(24 822)	(21 972)	(22 467)	(69 261)

	Net carrying value at the end of the year	111 063	33 920	29 818	174 801


	Movement summary
	Carrying value at the beginning of the year	128 501	50 221	45 395	224 117
	Amortisation for the year	(8 056)	(6 186)	(7 516)	(21 758)

	Carrying value of intangible assets before impairments	120 445	44 035	37 879	202 359
	Impairment	(9 382)	(10 115)	(8 061)	(27 558)

		111 063	33 920	29 818	174 801

	GROUP
	2011	2010
	R’000	R’000

The carrying value of the intangible assets allocated to the cash-generating units for the purpose of the impairment review prior to impairment were as follows:
The Buildco group	104 314	138 621
Diesel Power	59 189	63 738

	163 503	202 359

Refer note 3.1 for details of impairment review.
The company has no intangible assets.

		COMPANY
		Gross investment	Impairment provision	Net investment
		R’000	R’000	R’000

5.	Investment in subsidiaries
	Company – at 28 February 2011
	Buildmax Aggregates and Quarries (Pty) Limited	665 526	(394 219)	271 307
	Buildmax Bricks and Blocks (Pty) Limited	126 127	(107 931)	18 196
	Buildmax Equipment and Services (Pty) Limited	151 431	(151 431)	–
	Buildmax Industries (Pty) Limited	3 100	(3 100)	–
	Cast Industries (Pty) Limited	69 699	(69 699)	–
	Diesel Power Open Cast Mining (Pty) Limited	388 980	(191 043)	197 937

		1 404 863	(917 423)	487 440

	Company – at 28 February 2010
	Buildmax Aggregates and Quarries (Pty) Limited	665 526	(394 219)	271 307
	Buildmax Bricks and Blocks (Pty) Limited	126 127	(107 931)	18 196
	Buildmax Equipment and Services (Pty) Limited	151 431	(151 431)	–
	Buildmax Industries (Pty) Limited	3 100	–	3 100
	Cast Industries (Pty) Limited	69 699	(69 699)	–
	Diesel Power Open Cast Mining (Pty) Limited	388 980	(191 043)	197 937

		1 404 863	(914 323)	490 540

			COMPANY
			Effective shareholding
			2011	2010
	Companies controlled by Buildmax Limited	Segment	%	%

5.	Investment in subsidiaries (continued)
	Directly held
	Buildmax Equipment and Services (Pty) Limited ⁽¹⁾	Mining services	100	100
	Diesel Power Open Cast Mining (Pty) Limited	Mining services	100	100
	Buildmax Aggregates and Quarries (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Buildmax Bricks and Blocks (Pty) Limited	Construction materials	100	100
	Buildmax Industries (Pty) Limited	Construction materials	100	100
	Cast Industries (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Indirectly held
	Buildmax Equipment (Pty) Limited ⁽¹⁾	Mining services	100	100
	Alfa Sand Works (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Benoni Sand and Buildware (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Bridport Properties (Pty ) Limited	Construction materials	100	100
	Columbia DBL (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Crushco (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Pentonville Properties (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Thanda Kwakho Holdings (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Verlesha Investments (Pty) Limited ⁽¹⁾	Construction materials	74	74
	Watertite Guttering (Pty) Limited	Construction materials	100	100
	Wit Deep Sand and Stone (Pty) Limited ⁽¹⁾	Construction materials	100	100
	Buildmax Management Services (Pty) Limited ⁽¹⁾	Corporate	100	100

	¹The company pledged and ceded these investments to the group’s bankers.

		COMPANY
		Gross amount	Impairment provision	Net amount
		2011	2011	2011	2010
		R’000	R’000	R’000	R’000

6.	Amounts owing by subsidiaries
	Interest-bearing
	Buildmax Aggregates and Quarries (Pty) Limited	–	–	–	16 819
	Cast Industries (Pty) Limited	2 482	(2 482)	–	14 581
	Columbia DBL (Pty) Limited	–	–	–	2 000
	Diesel Power Open Cast Mining (Pty) Limited	–	–	–	82 135
	Pentonville Properties (Pty) Limited	–	–	–	2
	Thanda Kwakho Holdings (Pty) Limited	–	–	–	139

		2 482	(2 482)	–	115 676


	Interest-free
	Benoni Sand and Buildware (Pty) Limited ⁽¹⁾	2 346	–	2 346	–
	Buildmax Aggregates and Quarries (Pty) Limited ⁽¹⁾	70 029	–	70 029	52 635
	Buildmax Equipment and Services (Pty) Limited ⁽¹⁾	143 360	(143 360)	–	–
	Buildmax Industries (Pty) Limited	25 637	(22 137)	3 500	25 637
	Cast Industries (Pty) Limited ⁽¹⁾	58 649	(58 649)	–	–
	Columbia DBL (Pty) Limited ⁽¹⁾	7 000	–	7 000	–
	Diesel Power Open Cast Mining (Pty) Limited ⁽¹⁾	241 215	–	241 215	2 215
	Pentonville Properties (Pty) Limited ⁽¹⁾	7	–	7	–
	Thanda Kwakho Holdings (Pty) Limited ⁽¹⁾	143	–	143	–
	Buildmax Equipment (Pty) Limited ⁽¹⁾	35 000	(35 000)	–	–
	Wit Deep Sand and Stone (Pty) Limited ⁽¹⁾	500	–	500	–

		583 886	(259 146)	324 740	80 487

		586 368	(261 628)	324 740	196 163


	Disclosed on the statements of financial position as follows:
	Non-current assets			293 850	133 812
	Current assets			30 890	62 351

				324 740	196 163

6.	Amounts owing by subsidiaries (continued)
	These loans to subsidiary companies are unsecured with no fixed terms of repayment. The interest-bearing loans bear interest at rates linked to the prime lending rate.
	The directors consider the carrying amounts owing by subsidiaries to approximate their fair value.
	Amounts owing by certain subsidiaries have been subordinated and/or ceded in favour of the group’s bankers. Due to certain terms and conditions of the banking facility agreements and the forecasted cash flows of these subsidiaries for the next 12 months, the company unconditionally deferred its rights to payments for the next 12 months.
	¹Amounts owing by subsidiaries of R558,3 million (2010: R347,0 million) have been encumbered by certain banking facility and funding agreements.

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

7.	Deferred taxation
	The balance consists of:
	Accrual for leave pay and bonuses	9 791	7 873	–	–
	Calculated tax losses	94 209	84 676	–	–
	Capital allowances	(110 907)	(118 438)	–	–
	Contract work in progress	(397)	(3 985)	–	–
	Derivative instruments	955	1 688	–	–
	Impairment provisions against receivables	3 752	5 130	–	–
	Intangible assets	(19 990)	(48 944)	–	–
	Lease obligations	394	1 379	–	–
	Onerous contract provision	4 200	4 500	–	–
	Prepaid expenses	(121)	(189)	–	–
	Rehabilitation provision	1 330	2 088	–	–
	Retention debtors	(1 283)	(1 184)	–	–
	Other	1 243	6	–	–

		(16 824)	(65 400)	–	–


	Disclosed on the statements of financial position as follows:
	Non-current assets	12 124	20 087	–	–
	Non-current liabilities	(28 948)	(85 487)	–	–

		(16 824)	(65 400)	–	–


	Movement summary
	Balance at the beginning of the year	(65 400)	(192 091)	–	–
	Temporary differences for the year	49 125	127 170	–	–
	Accrual for leave pay and bonuses	1 998	3 069	–	–
	Calculated tax losses utilised during the year	9 642	56 871	–	–
	Capital allowances	7 070	44 386	–	–
	Contract work in progress	3 588	(2 766)	–	–
	Impairment provisions against receivables	(1 300)	4 376	–	–
	Intangible assets	28 954	13 809	–	–
	Lease obligations	(971)	(39)	–	–
	Onerous contract provision	(300)	4 500	–	–
	Prepaid expenses	64	(7)	–	–
	Rehabilitation provision	(758)	981	–	–
	Retention debtors	(99)	1 984	–	–
	Other	1 237	6	–	–
	Deferred tax on the fair value of derivative instruments	(733)	(479)	–	–
	Transfer to liabilities directly associated with assets classified as held for sale	184	–	–	–

	Balance at the end of the year	(16 824)	(65 400)	–	–


	Calculated tax losses
	Calculated tax losses at the end of the year	494 302	387 489	–	–
	Utilised to raise deferred tax asset	(336 461)	(302 414)	–	–

	Available to reduce future taxable income	157 481	85 075	–	–

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

8.	Inventories
	Finished goods	25 760	29 156	–	–
	Consumables	13 182	21 494	–	–
	Raw materials	6 858	7 858	–	–
	Contract work in progress	1 417	14 232	–	–
	Manufacturing work in progress	1 297	2 053	–	–

	Gross inventories	48 514	74 793	–	–
	Impairment provisions raised against inventories	(3 682)	(2 744)	–	–

		44 832	72 049	–	–


	Inventories with a carrying value of R5,5 million (2010: R5,5 million) have been encumbered to secure certain financing facilities. (Refer note 21.)
	Movement in impairment provisions raised against inventories
	Balance at the beginning of the year	2 744	3 545	–	–
	Derecognised on disposal of business unit	–	(1 488)	–	–
	Impairment provisions raised	1 997	1 293	–	–
	Impairment provisions utilised	(1 059)	(606)	–	–

		3 682	2 744	–	–


9.	Trade and other receivables
	Gross trade receivables	152 860	270 445	–	–
	Impairment provisions raised against trade receivables	(5 936)	(22 656)	–	–

	Net trade receivables	146 924	247 789	–	–
	Prepayments	421	1 087	–	51
	Deposits	808	4 375	–	–
	Vendor loan receivable	1 786	3 286	–	–
	VAT receivable	860	1 447	–	–
	Other receivables	4 202	11 300	288	95

		155 001	269 284	288	146


	Trade and other receivables of R144,1 million (2010: R139,3 million) have been encumbered by banking facility and funding agreements. (Refer to note 21)
	Trade receivables are stated at cost less impairment provisions which approximate their fair value due to short-term maturity.
	Movement in impairment provisions raised against receivables
	Balance at the beginning of the year	22 656	5 566	–	–
	Derecognised on disposal of business unit	–	(149)	–	–
	Transfer to assets held for sale	(372)	–	–	–
	Impairment provisions raised	2 742	22 170	–	–
	Impairment provisions utilised/reversed	(19 090)	(4 931)	–	–

		5 936	22 656	–	–

Basis of impairment provisions against receivables

All trade and other receivables are continuously reviewed on an individual basis for recoverability. When all reasonable measures have been taken, without success, in recovering a receivable amount and when reasonable doubt exists as to the recoverability of any such individual receivable amount, a provision for impairment is raised. Provisions for impairment raised against receivables are reversed when a receivable amount is either written off as irrecoverable, or when an amount previously provided against it is received.

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

10.	Bank and cash balances
	Bank balances	126 894	136 265	52 467	20 008
	Cash balances	135	182	–	–

		127 029	136 447	52 467	20 008


	Refer to note 21 regarding encumbrances against bank and cash balances with a book value of R63,5 million (2010: R108,9 million).

		Mining services			Construction materials Watertite Guttering 2011 R’000
		Continuing operations 2011 R’000	Discontinued operations 2011 R’000	Total 2011 R’000	Construction materials Watertite Guttering 2011 R’000	Total 2011 R’000

11.	Assets classified as held for sale
	Property, plant and equipment	32 460	19 114	51 574	506	52 080
	Inventories	495	–	495	491	986
	Trade and other receivables	–	–	–	430	430
	Taxation receivable	–	–	–	47	47

	Assets classified as held for sale	32 955	19 114	52 069	1 474	53 543


	Trade and other payables	–	–	–	(290)	(290)
	Deferred taxation	–	–	–	(184)	(184)
	Interest-bearing liabilities	(5 965)	(12 858)	(18 823)	–	(18 823)

	Liabilities directly associated with assets classified as held for sale	(5 965)	(12 858)	(18 823)	(474)	(19 297)


	Remeasurement loss	–	–	–	(2 487)	(2 487)

	Property, plant and equipment with a carrying value of R26,2 million is encumbered by certain interest-bearing liabilities and banking facilities. The group’s bankers have agreed to the sale of these items. The proceeds from the sale will be used to reduce the above encumbrances.
	The group has classified certain items of property, plant and equipment and associated liabilities in the mining services business unit as held for sale following a decision to dispose of these assets in the 2012 financial year.
	The assets and liabilities related to Watertite Guttering (Pty) Limited, a subsidiary in the construction materials business unit, have been classified as held for sale following the approval of the sale of the business by management. The completion date of the transaction is expected by 20 July 2011.

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

12.	Share capital
	Authorised
	6 000 000 000 ordinary shares (2010: 2 000 000 000) of R0,01 each	60 000	20 000	60 000	20 000


	Issued
	3 444 715 941 ordinary shares (2010: 1 040 699 680) of R0,01 each	34 447	10 407	34 447	10 407


		Shares	Shares	Shares	Shares
		‘000	‘000	‘000	‘000

	Movement summary
	Issued at the beginning of the year	1 040 700	1 040 700	1 040 700	1 040 700
	Issued on 15 November 2010 at 12,5 cents	2 404 016	–	2 404 016	–

		3 444 716	1 040 700	3 444 716	1 040 700

All unissued shares are under the control of the directors until the next Annual General Meeting, subject to the provisions of the Companies Act as amended.

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

13.	Share premium
	Share premium on issued ordinary shares – legal value	1 864 972	1 588 510	1 864 972	1 588 510
	Fair value adjustments	147 952	147 952	147 952	147 952

	Share premium on issued ordinary shares – fair value	2 012 924	1 736 462	2 012 924	1 736 462
	Issue expenses written off against share premium	(24 165)	(14 487)	(24 165)	(14 487)

		1 988 759	1 721 975	1 988 759	1 721 975


14.	Cash flow hedging reserve
	Unrealised interest rate hedging loss	(3 408)	(6 028)	–	–
	Deferred taxation thereon	955	1 688	–	–

		(2 453)	(4 340)	–	–


	The hedging reserve represents hedging losses recognised on the effective portion of cash flow hedges.


15.	Interest-bearing liabilities
	Non-current portion
	Term loans	9 931	33 796	–	–
	Instalment sale liabilities	91 530	280 823	–	–
	Other	425	418	–	–

		101 886	315 037	–	–
	Current portion	174 764	307 522	–	–
	Term loans	22 551	23 801	–	–
	Instalment sale liabilities	152 006	283 619	–	–
	Other	207	102	–	–

		276 650	622 559	–	–


			Repayable within
			1 year	2 - 5 years	Total
	Repayment of interest-bearing liabilities		R’000	R’000	R’000

	Group – at 28 February 2011
	Future minimum payments		189 662	107 964	297 626
	Finance costs		(14 898)	(6 078)	(20 976)

			174 764	101 886	276 650


	Group – at 28 February 2010
	Future minimum payments		348 304	343 653	691 957
	Finance costs		(40 782)	(28 616)	(69 398)

			307 522	315 037	622 559

	The interest-bearing liabilities bear interest at various rates linked to the prime lending rate and are repayable in average monthly instalments of R15,8 million (2010: R29,0 million). Details of securities provided are disclosed in note 21. The group hedges a portion of the borrowings for interest rate risk via an interest rate swap agreement allowing the group to swap floating interest rates into fixed interest rates (refer note 16).
	All interest-bearing borrowings are denominated in South African Rand.
	The directors consider the carrying amount of interest-bearing borrowings to approximate its fair value.

16.	Derivative instruments
	A subsidiary company has entered into interest rate swap contracts that obliges it to pay interest at a fixed interest rate on notional principal amounts and entitles it to receive interest at floating interest rates on the same notional principal amounts. The interest rate contracts allow the subsidiary to swap interest-bearing liabilities from floating interest rates into fixed interest rates that are lower, or higher, than those available if it had borrowed at fixed interest rates directly. Under the interest rate swaps, the subsidiary agrees with counter parties to exchange, at specified intervals, the difference between fixed interest rates and floating interest rates, interest amounts calculated by reference to the agreed notional principal amounts.

Interest rate swaps are fair valued according to forward rates and discount rates determined from a yield curve derived from similar market traded instruments as follows:

Interest rate swaps are fair valued according to forward rates and discount rates determined from a yield curve derived from similar market traded instruments as follows:
Derivatives designated and effective as hedging instruments carried at fair value	Notional amount R’000	Fixed interest rate %	Floating interest rate %	Maturity date	Fair value 2011 R’000	Fair value 2011 R’000

Contract 1	76 343	12,75% nacm	Prime –0,7%	November 2011	1 076	1 971
Contract 2	156 061	11,62% nacm	Prime –2%	August 2012	2 332	4 057

	232 404				3 408	6 028

	GROUP
	2011	2010
	R’000	R’000

Disclosed on the statements of financial position as follows:
Non-current liabilities	290	1 940
Current liabilities	3 118	4 088

	3 408	6 028

The fair value of the derivative instruments was determined with reference to inputs other than quoted market prices, by obtaining valuations from the group’s bankers (Level 2 valuation).

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

17.	Vendor loan payable
	Current portion	–	47 000	–	47 000

		–	47 000	–	47 000

This liability was settled from the proceeds received from the rights issue after receiving a discount of R3,5 million.

		COMPANY
		2011	2010
		R’000	R’000

18.	Amounts owing to subsidiaries
	Interest-bearing
	Buildmax Industries (Pty) Limited	–	2 000
	Buildmax Management Services (Pty) Limited	563	–
	Crushco (Pty) Limited	200	–
	Watertite Guttering (Pty) Limited	1 055	2 000

		1 818	4 000

	These loans to subsidiary companies are unsecured with no fixed terms of repayment. The interest-bearing loans bear interest at rates linked to the prime lending rate.
	The directors consider the carrying amount of amounts owing to subsidiaries to approximate their fair value.

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

19.	Trade and other payables
	Trade payables	104 475	254 748	–	–
	Accruals	54 960	24 727	552	499
	Payroll accruals	19 508	36 590	–	–
	Amounts payable to taxation authorities	6 473	7 856	200	14
	Other	5 123	1 292	–	–

		190 539	325 213	752	513


	The directors consider the carrying amount of trade payables and accruals to approximate their fair value.

		Rehabilitation provisions	Onerous contract provisions	Insurance provisions	Other provisions	Total
		R’000	R’000	R’000	R’000	R’000

20.	Provisions
	Group – at 28 February 2011
	Balance at the beginning of the year	7 456	16 071	–	–	23 527
	Provisions raised	1 045	15 000	6 841	3 380	26 266
	Provisions utilised/reversed	(3 500)	(16 071)	–	–	(19 571)

	Balance at the end of year	5 001	15 000	6 841	3 380	30 222


	Group – at 28 February 2010
	Balance at the beginning of the year	3 956	–	–	–	3 956
	Provisions raised	3 500	16 071	–	–	19 571

	Balance at the end of year	7 456	16 071	–	–	23 527


					GROUP
					2011	2010
					R’000	R’000

	Disclosed on the statements of financial position as follows:
	Non-current liabilities				4 751	3 956
	Current liabilities				25 471	19 571

					30 222	23 527

	Rehabilitation provisions The group’s mining activities are subject to various laws and regulations governing the protection of the environment. Management estimates the group’s expected expenditure for the rehabilitation, management and remediation of negative environmental impacts on closure at the end of the lives of the mines. The estimation of future costs on environmental obligations relating to decommissioning and rehabilitation is particularly complex and requires management to make estimates, assumptions and judgements. These estimates are dependent on a number of factors including assumptions around current environmental legislation, life of mine estimates and discount rates. The cash flows for rehabilitation are expected to occur in 10 and 15 years.
	Onerous contract provisions An opencast mining contract in Diesel Power Open Cast Mining (Pty) Limited, a subsidiary in the mining services business unit, has become unprofitable largely as a result of unforeseen conditions adversely affecting the company’s ability to perform in terms of the contract. Since the outcome of ongoing initiatives and planned remedies to return the contract to profitability, remained uncertain at the date of this report, management has considered it prudent to raise a provision against this onerous contract for estimated future losses.
	An onerous contract provision was created at the end of the previous financial period relating to loss-making contracts in Buildmax Equipment (Pty) Limited (previously Vukuza Earth Works (Pty) Limited) that were terminated during the period as part of the restructuring of the company. This provision was fully released in the current year.
	Insurance provisions During July 2010 certain of the group’s insurance policies were renewed on a burning costs basis. Under the burning costs basis the companies in the group paid reduced insurance premiums based on the assumption that the agreed annual insurance claim limits will not be exceeded. Management provided for the probable increase in insurance premiums if the claim limits were to be exceeded.
	Other provisions uring the controlled wind-down of Buildmax Equipment (Pty) Limited (previously Vukuza Earth Works (Pty) Limited) certain customers raised disputes on invoices for opencast mining services delivered. Management is of the opinion that the recoverability of these amounts remains doubtful and raised the appropriate provisions.
	The group is currently involved in a historical labour dispute. The information required by IAS 37 Provisions, Contingent liabilities and Contingent Assets is not disclosed on the grounds that it can be expected to seriously prejudice the outcome of the litigation.
	The company has no provisions.

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

21.	Banking facilities
	Available facilities
	General banking facilities	44 300	79 000	–	–
	Asset-based facilities	425 472	622 559	–	–

		469 772	701 559	–	–


	Utilised facilities
	General banking facilities	9 261	33 014	–	–
	Asset-based facilities	295 473	622 559	–	–

		304 734	655 573	–	–


	Security provided
	Carrying value of property, plant and equipment (refer note 2)	347 243	649 560	–	–
	General and special notarial bonds (refer note 2)	200 000	320 000	–	–
	Inventories (refer note 8)	5 500	5 500	–	–
	Trade and other receivables (refer note 9)	144 123	139 341	–	–
	Investment in subsidiaries (refer note 5)	–	–	558 249	347 008
	Bank deposits (refer note 10)	63 519	108 880	–	–

		760 385	1 223 281	558 249	347 008


	In addition to specific cessions and securities disclosed above, some entities in the group are bound under certain terms and conditions, by cross suretyship agreements and/or banking facility agreements with ABSA Bank, Nedbank Limited and The Standard Bank of South Africa Limited.


22.	Revenue
	Services rendered	979 427	1 375 820	–	–
	Sale of goods	389 787	429 764	–	–

		1 369 214	1 805 584	–	–


23.	Amortisation of intangible assets
	Mining rights	(6 749)	(8 056)	–	–
	Marketing-related	(2 098)	(6 186)	–	–
	Customer-related	(2 451)	(7 516)	–	–

		(11 298)	(21 758)	–	–

24.	Loss on disposal of business unit
	During June 2009 the company sold its entire timber business unit operating in the Western Cape. Management committed to a plan to sell this business unit following a strategic decision to place greater focus on the company’s core competencies.

	GROUP
	2011	2010
	R’000	R’000

Results of the disposed business unit included in the statement of comprehensive income
Revenue	–	2 293
Cost of sales	–	(2 354)

Gross profit	–	(61)
Other income	–	93
Operating expenses	–	(648)

Operating loss before depreciation	–	(616)
Depreciation	–	(17)

Loss before interest and taxation	–	(633)
Interest paid	–	(65)

Loss before taxation	–	(698)
Taxation	–	195

Loss for the period	–	(503)

Loss on disposal of business unit
Net asset value of disposed assets
– Property, plant and equipment	–	(236)
– Inventory	–	(3 299)

	–	(3 535)
Proceeds on disposal receivable	–	1 500

	–	(2 035)
Other restructuring costs and cost of disposal	–	(432)

	–	(2 467)

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

25.	Impairment losses
	Investments in subsidiaries	–	–	(3 100)	(762 853)
	Amounts owing by subsidiaries	–	–	(85 146)	(176 482)
	Goodwill	(163 737)	(619 730)	–	–
	Intangible assets	(92 110)	(27 558)	–	–
	Property, plant and equipment	(39 873)	(421 878)	–	–

		(295 720)	(1 069 166)	(88 246)	(939 335)


	Refer note 3.1 for details of impairment review.


26.	(Loss)/profit before interest and taxation
	(Loss)/profit before interest and taxation is stated after taking into account the following items:
	Income
	Government grants	303	939	–	–
	Foreign exchange gains	1	75	–	–
	Management and administration fees received from related parties (refer note 41)	42	42	–	1 690
	Profit on disposal of property, plant and equipment	13 913	9	–	–
	Expenses
	Auditors’ remuneration
	Current year	(2 974)	(2 624)	(669)	(409)
	Prior year underprovision	(534)	(422)	(7)	(27)
	Non-audit services	(59)	(129)	(11)	–

		(3 567)	(3 175)	(687)	(436)

	Depreciation
	Plant and equipment	(181 292)	(162 288)	–	–
	Motor vehicles	(19 733)	(10 049)	–	–
	Computer and office equipment	(4 258)	(3 252)	–	–
	Land and leasehold improvements	(1 412)	(501)	–	–

		(206 695)	(176 090)	–	–


	Directors’ emoluments
	Board and committee fees	(1 523)	(1 408)	(1 523)	(1 408)
	Salaries	(5 350)	(3 291)	–	–
	Contributions to medical aid and retirement funds	(152)	(269)	–	–
	Bonus	(2 261)	(320)	–	–
	Expense allowances	(110)	(83)	–	–

		(9 396)	(5 371)	(1 523)	(1 408)
	Paid by subsidiaries	7 873	3 963	–	–

		(1 523)	(1 408)	(1 523)	(1 408)


	Details of directors’ emoluments and shareholding have been provided in the directors’ report.


	Employees
	Salaries	(305 232)	(316 090)	–	–
	Contributions to medical aid and retirement funds	(14 528)	(15 012)	–	–

		(319 760)	(331 102)	–	–


	Foreign exchange losses	(1)	(99)	–	–
	Inventories written off	(1 288)	–	–	–
	Loss on disposal of property, plant and equipment	(1 098)	(6 211)	–	–
	Management and administration fees paid to related parties (refer note 41)	(150)	(1 200)	(930)	–
	Operating lease charges
	Plant and equipment	(38 636)	(40 901)	–	–
	Computer and office equipment	(69)	(62)	–	–
	Premises	(16 569)	(16 455)	–	–

		(55 274)	(57 418)	–	–


	Remeasurement loss	(2 487)	–	–	–
	Research and development	–	(20)	–	–
	Royalties paid	(5 294)	(4 992)	–	–


27.	Interest received
	Derivative instruments	–	24	–	–
	Funds and deposits with banks	3 782	10 363	2 179	4 978
	Related parties (refer note 41)	–	–	7 450	16 672
	Taxation authorities	33	–	–	–
	Other	2 981	5 043	–	–

		6 796	15 430	9 629	21 650


28.	Interest paid
	Bank overdrafts	(3 074)	(4 332)	–	(53)
	Deemed interest incurred on vendor loan	–	(474)	–	(474)
	Derivative instruments	(4 884)	(4 139)	–	–
	Interest-bearing liabilities	(32 021)	(87 217)	–	–
	Related parties (refer note 41)	–	–	(308)	(246)
	Taxation authorities	(161)	(12)	(83)	–
	Vendor loans	–	(5 646)	–	(5 646)
	Other	(1 619)	(36)	(1 285)	–

		(41 759)	(101 856)	(1 676)	(6 419)


29.	Taxation
	South African normal taxation
	Current year	(4 854)	(9 626)	(1 915)	(4 162)
	Prior year underprovision	(27)	(26)	–	–

		(4 881)	(9 652)	(1 915)	(4 162)


	Deferred taxation
	Current year	48 978	127 025	–	–
	Prior year overprovision	147	145	–	–

		49 125	127 170	–	–


		44 244	117 518	(1 915)	(4 162)


		%	%	%	%

	Reconciliation of rate of taxation
	South African normal taxation rate	28,0	28,0	28,0	28,0
	Impairment losses (refer note 25)	(11,0)	(15,4)	(30,3)	(28,4)
	Other permanent differences	(1,2)	(0,1)	–	–
	Calculated tax losses	(5,2)	(2,1)	–	–

	Effective rate	10,6	10,4	(2,3)	(0,4)

30.	Loss per share
	The calculation of basic loss from continuing and discontinued operations per share for the group is based on a loss of R364,4 million (2010: R1 007,2 million) and a weighted average of 2 546 426 037 (2010: 1 040 699 681, restated 2 183 655 114) shares in issue during the year under review.

	GROUP
		Restated as a result of the rights issue	Originally reported
	2011	2010	2010
	R’000	R’000	R’000

Headline loss per ordinary share (cents)
Continuing and discontinued operations	(4,4)	(2,8)	(5,9)
– Continuing operations	(3,7)	(1,1)	(2,3)
– Discontinued operations	(0,7)	(1,7)	(3,6)
Basic loss per ordinary share (cents)
Continuing and discontinued operations	(14,3)	(46,1)	(96,8)
– Continuing operations	(12,8)	(34,1)	(71,5)
– Discontinued operations	(1,5)	(12,0)	(25,3)
Continuing and discontinued operations
Reconciliation of loss to headline loss
Loss attributable to equity holders of the company	(364 403)	(1 007 245)	(1 007 245)
Adjusted for:
(Profit)/loss on disposal of property, plant and equipment	(9 227)	4 465	4 465
– Gross	(12 815)	6 202	6 202
– Taxation	3 588	(1 737)	(1 737)
Loss on disposal of business unit	–	2 467	2 467
Remeasurement of assets held for sale	2 487	–	–
Impairment of goodwill and other intangible assets	223 893	635 459	635 459
– Gross	255 847	647 288	647 288
– Taxation	(25 791)	(7 716)	(7 716)
– Outside shareholders’ interest	(6 163)	(4 113)	(4 113)
Impairment of property, plant and equipment	35 232	303 752	303 752
– Gross	39 873	421 878	421 878
– Taxation	(4 641)	(118 126)	(118 126)


Headline loss	(112 018)	(61 102)	(61 102)


Continued operations
Reconciliation of loss to headline and core headline (loss)/earnings
Loss attributable to equity holders of the company	(325 967)	(744 545)	(744 545)
Adjusted for:
(Profit)/loss on disposal of property, plant and equipment	(7 948)	2 805	2 805
– Gross	(11 039)	3 897	3 897
– Taxation	3 091	(1 092)	(1 092)
Loss on disposal of business unit	–	2 467	2 467
Remeasurement of assets held for sale	2 487	–	–
Impairment of goodwill and other intangible assets	223 893	513 455	513 455
– Gross	255 847	525 284	525 284
– Taxation	(25 791)	(7 716)	(7 716)
– Outside shareholders’ interest	(6 163)	(4 113)	(4 113)
Impairment of property, plant and equipment	13 919	201 837	201 837
– Gross	18 560	280 329	280 329
– Taxation	(4 641)	(78 492)	(78 492)

Headline loss	(93 616)	(23 981)	(23 981)


Weighted average shares in issue (‘000)	2 546 426	2 183 655	1 040 700

The group does not have any contingent issuable instruments that could potentially dilute earnings per share and headline earnings per share.

		GROUP
			Restated as result of rights issue	Originally reported
		2011	2010	2010
		R’000	R’000	R’000

31.	Net asset value per share
	Total assets	1 109 373	1 771 015	1 771 015
	Non-current liabilities	(135 875)	(406 420)	(406 420)
	Current liabilities	(404 077)	(735 451)	(735 451)
	Liabilities directly associated with assets classified as held for sale	(19 297)	–	–
	Outside shareholders’ interest	7 328	–	–

	Net asset value	557 452	629 144	629 144


	Ordinary shares in issue at year-end (‘000)	3 444 716	3 444 716	1 040 700


	Net asset value per ordinary share in issue (cents)	16,2	18,3	60,5

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

32.	Cash generated from/(utilised in) operations
	Loss before taxation	(415 975)	(1 128 367)	(81 565)	(925 089)
	Adjusted for:
	Depreciation, amortisation and impairments	513 713	1 267 014	88 246	939 335
	Foreign exchange losses	–	24	–	–
	(Profit)/loss on disposal of property, plant and equipment	(12 815)	6 202	–	–
	Net interest paid/(received)	34 963	86 426	(7 953)	(15 231)
	Remeasurement of vendor loan payable	(3 500)	–	(3 500)	–
	Remeasurement of assets classified as held for sale	(2 487)	–	–	–
	Loss on disposal of business unit	–	2 467	–	–
	Impairment provision against inventories raised (refer note 8)	938	687	–	–
	Impairment provision against trade and other receivables raised (refer note 9)	(16 348)	17 239	–	–

	Operating profit/(loss) before working capital changes	98 489	251 692	(4 772)	(985)
	Decrease/(increase) in working capital	29 547	130 898	(648)	(1 073)
	Decrease in inventories	27 224	14 876	–	–
	Decrease/(increase) in trade and other receivables	131 151	31 757	(887)	(51)
	(Decrease)/increase in trade and other payables	(135 523)	64 694	239	(1 022)
	Increase in provisions	6 695	19 571	–	–

	Cash generated from/(utilised in) operations	128 036	382 590	(5 420)	(2 058)


33.	Interest received in cash
	Interest received (refer note 27)	6 796	15 430	9 629	21 650
	Interest receivable (included in trade and other receivables)	745	1 033	745	1 033

		7 541	16 463	10 374	22 683


34.	Interest paid in cash
	Interest paid (refer note 28)	(41 759)	(101 856)	(1 676)	(6 419)
	Deemed interest incurred on vendor loan	–	474	–	474

		(41 759)	(101 382)	(1 676)	(5 945)


35.	Taxation paid
	Taxation receivable/(payable) at the beginning of the year	5 158	(14 578)	(87)	(1 326)
	Current taxation per statements of comprehensive income	(4 881)	(9 652)	(1 915)	(4 162)
	Transfer to assets held for sale	(47)	–	–	–
	Taxation payable/(receivable) at the end of the year	(3 542)	(5 158)	(236)	87

		(3 312)	(29 388)	(2 238)	(5 401)

		GROUP		COMPANY
		2011	2010	2011	2010
		R’000	R’000	R’000	R’000

36.	Proceeds from disposal of property, plant and equipment
	Book value of assets disposed	79 384	21 403	–	–
	Profit/(loss) on disposal	12 815	(6 202)	–	–

		92 199	15 201	–	–


37.	Commitments and contingencies
	Capital commitments
	Commitments in respect of acquisition of property, plant and equipment
	Contracted for	239 468	–	–	–
	Not contracted for	90 778	92 778	–	–

		330 246	92 778	–	–


	Operating leases commitments
	Plant and equipment	470	12 017	–	–
	Computer and office equipment	84	78	–	–
	Premises	31 397	48 178	–	–

		31 951	60 273	–	–


	These commitments accrue within:
	One year	343 457	26 282	–	–
	Two to five years	18 740	33 991	–	–

		362 197	60 273	–	–

The group has contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from contingent liabilities other than those provided for.

38.	Events after reporting date
	The group is in an advanced stage of concluding a transaction whereby it will dispose of its entire shareholding in Benoni Sand and Buildware (Pty) Limited to a consortium led by Paul de Klerk. This disposal is in line with stated group strategy.


39.	Retirement benefits
	All contributions on behalf of employees are charged to the statement of comprehensive income as they are made. The company and group have no liability towards any pension or provident fund, apart from normal recurring monthly contributions deducted from employees to be paid to relevant funds.

			Held for trading	Loans and receivables	Financial liabilities at amortised cost	Non-financial assets and liabilities	Equity	Total
			R’000	R’000	R’000	R’000	R’000	R’000

40.	Financial instruments
	40.1	Categories of financial instruments
		Group – at 28 February 2011
		ASSETS
		Property, plant and equipment	–	–	–	613 915	–	613 915
		Goodwill	–	–	–	27 111	–	27 111
		Other intangible assets	–	–	–	71 393	–	71 393
		Deferred taxation	–	–	–	12 124	–	12 124
		Inventories	–	–	–	44 832	–	44 832
		Trade and other receivables	–	152 912	–	2 089	–	155 001
		Taxation receivable	–	–	–	4 425	–	4 425
		Bank and cash balances	–	127 029	–	–	–	127 029
		Assets classified as held for sale	–	–	–	53 543	–	53 543

		Total assets	–	279 941	–	829 432	–	1 109 373


		EQUITY AND LIABILITIES
		Share capital	–	–	–	–	34 447	34 447
		Share premium	–	–	–	–	1 988 759	1 988 759
		Cash flow hedging reserve	–	–	–	–	(2 453)	(2 453)
		Accumulated loss	–	–	–	–	(1 463 301)	(1 463 301)
		Outside shareholders’ interest	–	–	–	–	(7 328)	(7 328)
		Interest-bearing liabilities	–	–	276 650	–	–	276 650
		Derivative instruments	3 408	–	–	–	–	3 408
		Deferred taxation	–	–	–	28 948	–	28 948
		Trade and other payables	–	–	184 066	6 473	–	190 539
		Provisions	–	–	–	30 222	–	30 222
		Taxation payable	–	–	–	883	–	883
		Shareholders for dividends	–	–	41	–	–	41
		Bank overdrafts	–	–	9 261	–	–	9 261
		Liabilities directly associated with assets classified as held for sale	–	–	–	19 297	–	19 297

		Total equity and liabilities	3 408	–	470 018	85 823	550 124	1 109 373


		Group – at 28 February 2010
		ASSETS
		Property, plant and equipment	–	–	–	901 997	–	901 997
		Goodwill	–	–	–	190 848	–	190 848
		Other intangible assets	–	–	–	174 801	–	174 801
		Deferred taxation	–	–	–	20 087	–	20 087
		Inventories	–	–	–	72 049	–	72 049
		Trade and other receivables	–	262 375	–	6 909	–	269 284
		Taxation receivable	–	–	–	5 502	–	5 502
		Bank and cash balances	–	136 447	–	–	–	136 447

		Total assets	–	398 822	–	1 372 193	–	1 771 015


		EQUITY AND LIABILITIES
		Share capital	–	–	–	–	10 407	10 407
		Share premium	–	–	–	–	1 721 975	1 721 975
		Cash flow hedging reserve	–	–	–	–	(4 340)	(4 340)
		Accumulated loss	–	–	–	–	(1 098 898)	(1 098 898)
		Interest-bearing liabilities	–	–	622 559	–	–	622 559
		Derivative instruments	6 028	–	–	–	–	6 028
		Vendor loan payable	–	–	47 000	–	–	47 000
		Deferred taxation	–	–	–	85 487	–	85 487
		Trade and other payables	–	–	317 357	7 856	–	325 213
		Provisions	–	–	–	23 527	–	23 527
		Taxation payable	–	–	–	344	–	344
		Shareholders for dividends	–	–	41	–	–	41
		Bank overdrafts	–	–	31 672	–	–	31 672

		Total equity and liabilities	6 028	–	1 018 629	117 214	629 144	1 771 015

40.	Financial instruments (continued)
	40.2	Interest rate risk management
		Interest rate risk refers to the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk exposures are measured using sensitivity analysis. A sensitivity analysis shows how profit before taxation and equity would have been affected by changes in the interest rate that were reasonably possible at the reporting date.

	GROUP
	2011	2010
	R’000	R’000

The group’s interest rate profile consists of fixed and floating rate loans and bank balances which exposes the group to fair value interest rate risk and cash flow interest rate risk and can be summarised as follows:
Financial assets
Loans and receivables granted at no interest	153 047	262 557
Loans granted and bank deposits linked to South African money market rates	126 894	136 265

	279 941	398 822


Financial liabilities
Derivative instruments	3 408	6 028
Trade payables and other financing received at no interest	184 107	317 398
Financing received and banking facilities linked to South African prime rates	285 911	701 231

	473 426	1 024 657


The risk is managed by the group by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest rate swap contracts by a subsidiary detailed in note 16. Interest rate sensitivity analysis

	Carrying value at reporting date	Reasonable possible change	Pre-tax income statement impact
	R’000	%	R’000

Group – at 28 February 2011
Loans granted and bank deposits linked to South African money market rates	126 894	0,5	634
Financing received and banking facilities linked to South African prime rates	(285 911)	0,5	(1 430)
Notional amount on interest rate swap	(232 404)	0,5	(1 162)

			(1 958)


Group – at 28 February 2010
Loans granted and bank deposits linked to South African money market rates	136 265	0,5%	681
Financing received and banking facilities linked to South African prime rates	(701 231)	0,5%	(3 506)
Notional amount on interest rate swap	(232 404)	0,5%	(1 162)

			(3 987)

40.	Financial instruments (continued)
	40.3	Credit risk management
		Credit risk refers to the risk that a counterparty will default in its contractual obligations resulting in financial loss to the group. The group minimised its risk by ensuring that counterparties are creditworthy institutions.
		Financial assets, which potentially subject the group to concentrations of credit risk, consists principally of cash and cash equivalents, short-term deposits, derivative contracts including interest rate swaps, loans and receivables and trade and other receivables.
		The group’s cash and cash equivalents and short-term deposits are placed with major banks and financial institutions with strong credit ratings.
		The group minimises credit risk relating to interest rate swaps by limiting counterparties to major banks, and does not expect to incur any losses as a result of non-performance by these counterparties.
		The carrying amounts of financial assets and liabilities, excluding interest rate swaps, included in the consolidated statements of financial position represent the group’s maximum exposure to credit risk in relation to these assets. The maximum credit exposure of interest rate swaps is represented by the fair value of these contracts.

	Government / parastatals	Major corporates	Small and medium enterprises	Other	Total
	R’000	R’000	R’000	R’000	R’000

28 February 2011
Financial assets that are neither past due nor impaired	1 925	138 876	28 339	55 409	224 549
Financial assets that are past due but not yet impaired
*Secured*	204	11 529	12 656	92	24 481
Overdue less than 30 days	21	9 647	8 338	3	18 009
Between 30 and 60 days	183	896	2 591	1	3 671
Between 60 and 90 days	–	961	951	–	1 912
90 days and more	–	25	776	88	889
*Unsecured*	–	21 915	7 673	247	29 835
Overdue less than 30 days	–	1 852	2 957	86	4 895
Between 30 and 60 days	–	13 229	2 410	56	15 695
Between 60 and 90 days	–	2 031	473	87	2 591
90 days and more	–	4 803	1 833	18	6 654
Financial assets that are impaired	–	165	911	–	1 076
Carrying amount	–	1 429	5 583	–	7 012
Provision for impairment	–	(1 264)	(4 672)	–	(5 936)


Total credit exposure	2 129	172 485	49 579	55 748	279 941


28 February 2010
Financial assets that are neither past due nor impaired	58	165 486	16 194	54 845	236 583
Financial assets that are past due but not yet impaired
*Secured*	30	86 003	15 271	51	101 355
Overdue less than 30 days	5	46 160	8 920	36	55 121
Between 30 and 60 days	25	16 669	4 203	6	20 903
Between 60 and 90 days	–	17 062	918	–	17 980
90 days and more	–	6 112	1 230	9	7 351
Unsecured	166	37 658	12 954	111	50 889
Overdue less than 30 days	14	1 745	5 727	14	7 500
Between 30 and 60 days	38	15 325	3 703	50	19 116
Between 60 and 90 days	30	688	1 434	48	2 200
90 days and more	84	19 900	2 090	(1)	22 073
Financial assets that are impaired	–	9 014	981	–	9 995
Carrying amount	–	26 909	5 542	200	32 651
Provision for impairment	–	(17 895)	(4 561)	(200)	(22 656)


Total credit exposure	254	298 161	45 400	55 007	398 822

As a rule no collateral is held on trade and other receivables, apart from insurance and normal personal suretyships provided by individuals and/or legal entities on behalf of certain trade debtors. Suretyships are not a prerequisite for the group to grant credit terms to its customers and are obtained when it is normal industry practice and/or deemed prudent to do so.

	Repayable on demand	1 year	2 - 5 years	Total
	R’000	R’000	R’000	R’000

Maturity analysis – Non-derivative instruments:
Group – at 28 February 2011
Interest-bearing liabilities	–	189 662	107 964	297 626
Trade and other payables	–	184 066	–	184 066
Shareholders for dividends	41	–	–	41
Bank overdrafts	9 261	–	–	9 261

	9 302	373 728	107 964	490 994


Group – at 28 February 2010
Interest-bearing liabilities	–	348 304	343 653	691 957
Vendor loan payable	–	51 512	–	51 512
Trade and other payables	–	317 357	–	317 357
Shareholders for dividends	41	–	–	41
Bank overdrafts	31 672	–	–	31 672

	31 713	717 173	343 653	1 092 539

			GROUP		COMPANY
			2011	2010	2011	2010
			R’000	R’000	R’000	R’000

41.	Related party transactions and balances
	41.1	Related party transactions
		Revenue earned from directors of subsidiaries or entities, directly or indirectly, controlled by those directors
		Bezuidenhoutshoek Farm (Pty) Limited	–	56	–	–
		DBL Projects (Pty) Limited	1 078	1 696	–	–
		Fairpark Centre Investments CC	–	28	–	–
		Imbali Props 16 (Pty) Limited	–	62	–	–
		Nekiap Property No 4 CC	–	211	–	–
		Simvest 40 CC	–	3	–	–
		The Sidersky Family Trust	–	8	–	–
		Progressive Storage Investments CC	–	243	–	–
			1 078	2 307	–	–
		Purchases from and expenses paid to directors of subsidiaries or entities, directly or indirectly, controlled by those directors
		DBL Projects (Pty) Limited	(750)	–	–	–
		Kaleka Development Solutions Inc.	(300)	(275)	–	–
		Western Granite (Pty) Limited	(1 504)	(1 476)	–	–

			(2 554)	(1 751)	–	–


		Management fees received from group companies
		Buildmax Management Services (Pty) Limited	–	–	–	1 690
		Mystic Blue Trading 135 (Pty) Limited (refer directors’ report)	42	42	–	–

			42	42	–	1 690


		Management fees paid to group companies
		Buildmax Management Services (Pty) Limited	–	–	(930)	–


		Management and administration fees paid to major shareholders
		Interactive	–	(600)	–	–
		Westbrooke	–	(600)	–	–

			–	(1 200)	–	–


		Rent paid to directors of subsidiaries or entities, directly or indirectly, controlled by those directors
		Fairpark Centre Investments CC	–	(1 337)	–	–
		Falconville Investments (Pty) Limited	(2 909)	(3 277)	–	–
		FGN Properties (Pty) Limited	(432)	(432)	–	–
		Nekiab Properties (Pty) Limited	–	(38)	–	–
		Sider Properties (Pty) Limited	–	(510)	–	–
		Sprenzel Properties CC	–	(182)	–	–
		Valleylight Investments (Pty) Limited	(935)	(1 154)	–	–
		Progressive Storage Investments CC	–	(290)	–	–

			(4 276)	(7 220)	–	–


		Interest received from group companies
		Buildmax Aggregates and Quarries (Pty) Limited	–	–	575	1 627
		Buildmax Equipment and Services (Pty) Limited	–	–	2 967	7 076
		Buildmax Management Services (Pty) Limited	–	–	–	112
		Cast Industries (Pty) Limited	–	–	906	1 632
		Columbia DBL (Pty) Limited	–	–	61	204
		Diesel Power Open Cast Mining (Pty) Limited	–	–	2 936	6 016
		Thanda Kwakho Holdings (Pty) Limited	–	–	5	5

			–	–	7 450	16 672


		Interest paid to group companies
		Buildmax Industries (Pty) Limited	–	–	(59)	(123)
		Buildmax Management Services (Pty) Limited	–	–	(115)	–
		Watertite Guttering (Pty) Limited	–	–	(134)	(123)

			–	–	(308)	(246)


	41.2	Related party balances
		Amounts receivable from group companies
		Benoni Sand and Buildware (Pty) Limited	–	–	2 346	–
		Buildmax Aggregates and Quarries (Pty) Limited	–	–	70 029	69 454
		Buildmax Industries (Pty) Limited	–	–	3 500	25 637
		Cast Industries (Pty) Limited	–	–	–	14 581
		Columbia DBL (Pty) Limited	–	–	7 000	2 000
		Diesel Power Open Cast Mining (Pty) Limited	–	–	241 215	84 350
		Mystic Blue Trading 135 (Pty) Limited (refer directors’ report)	144	96	–	–
		Pentonville Properties (Pty) Limited	–	–	7	2
		Thanda Kwakho Holdings (Pty) Limited	–	–	143	139
		Wit Deep Sand and Stone (Pty) Limited	–	–	500	–

			144	96	324 740	196 163


		Amounts receivable from directors of subsidiaries or entities, directly or indirectly, controlled by those directors
		DBL Projects (Pty) Limited	–	254	–	–
		Imbali Props 16 (Pty) Limited	–	21	–	–
		Nekiap Property No 4 CC	–	2	–	–
		Progressive Storage Investments CC	–	6	–	–
		CN Masondo	1 786	1 786	–	–

			1 786	2 069	–	–


		Amounts payable to group companies
		Buildmax Industries (Pty) Limited	–	–	–	(2 000)
		Buildmax Management Services (Pty) Limited	–	–	(563)	–
		Crushco (Pty) Limited	–	–	(200)	–
		Watertite Guttering (Pty) Limited	–	–	(1 055)	(2 000)

			–	–	(1 818)	(4 000)


		Amounts payable to directors of subsidiaries or entities, directly or indirectly, controlled by those directors and major shareholders
		GD Gregory	–	(803)	–	–
		K Sidersky	–	(310)	–	–
		ME Watson	–	(47 000)	–	(47 000)
		Western Granite (Pty) Limited	–	(496)	–	–

			–	(48 609)	–	(47 000)


		All transactions with related parties were priced on an arm’s length basis. The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.


42.	Remuneration and benefits of key executives
	Salaries		41 021	39 572	–	–
	Bonus		6 655	5 016	–	–
	Company benefits		2 846	3 414	–	–
	Expense allowances		2 346	1 487	–	–

			52 868	49 489	–	–