NOTES TO THE ANNUAL FINANCIAL STATEMENTS  
for the year ended 31 December 2005

Notes 2-15 | Notes 16-31 | Notes 32-41 | Notes 42-47 

    Land and Plant and Other Land and Plant and Other  
    buildings machinery assets buildings machinery assets  
    owned owned owned leased leased leased  
    Total                
    Rm   Rm Rm Rm Rm Rm Rm  

2.

PROPERTY, PLANT AND EQUIPMENT

                  
  GROUP 2005                  
  COST                  
  Balance at the beginning                  
     of the year 498,9   77,0 379,1 36,5 0,2 2,5 3,6  
  Additions 165,2   54,8 94,3 12,8 – 1,9 1,4  
  Subsidiaries acquired 1,0   – 1,0 – – – –  
  Disposals (28,8)   – (26,4) (2,4) – – –  
  Transfers (out)/in (2,1)   (2,1) (1,4) 1,4 – – –  
  Balance at the end of the year 634,2   129,7 446,6 48,3 0,2 4,4 5,0  
                     
                     
  ACCUMULATED DEPRECIATION                  
  Balance at the beginning                  
     of the year (105,5)   (5,2) (84,1) (14,8) (0,1) (1,0) (0,3)  
  Transfers out/(in) 1,8   1,8 0,6 (0,6) – – –  
  Depreciation (42,2)   (0,8) (31,6) (8,8) – (0,1) (0,9)  
  Disposals 33,8   – 32,1 1,7 – – –  
  Balance at the end of the year (112,1)   (4,2) (83,0) (22,5) (0,1) (1,1) (1,2)  
  Book value 522,1   125,5 363,6 25,8 0,1 3,3 3,8  
The buildings of the group, including investment properties, are insured for R462,6 million. Plant and machinery is insured for a total of R1 756,2 million.
COMPANY 2005
COST                  
Balance at the beginning                  
   of the year 1,0   1,0 – – – – –  
Additions 1,8   – – 1,5 – – 0,3  
Disposals (1,0)   (1,0) – – – – –  
Balance at the end of the year 1,8   – – 1,5 – – 0,3  
ACCUMULATED DEPRECIATION                  
Balance at the beginning                  
   of the year –   – – – – – –  
Depreciation (0,3)   – – (0,3) – – –  
Disposals –   – – – – – –  
Balance at the end of the year (0,3)   – – (0,3) – – –  
Book value 1,5   – – 1,2 – – 0,3  
 
     Land and Plant and Other Land and Plant and Other  
    buildings machinery assets buildings machinery assets  
    owned owned owned leased leased leased  
    Total                
    Rm   Rm Rm Rm Rm Rm Rm  
  GROUP 2004 – RESTATED                  
                     
  COST                  
  Balance at the beginning                  
     of the year 171,8   29,9 117,9 20,1 – 3,9 –  
  Additions 62,9   4,8 49,7 4,5 – 1,2 2,7  
  Subsidiaries acquired 278,6   47,2 214,1 16,1 – 0,3 0,9  
  Subsidiaries sold (1,4)   (0,2) (0,1) (0,9) (0,2) – –  
  Disposals (9,1)   (0,3) (5,4) (3,3) (0,1) – –  
  Transfers (out)/in (3,9)   (4,4) 2,9 – 0,5 (2,9) –  
  Balance at the end of the year 498,9   77,0 379,1 36,5 0,2 2,5 3,6  
                     
                     
  ACCUMULATED DEPRECIATION                  
  Balance at the beginning                  
     of the year (93,5)   (8,8) (66,7) (14,9) – (3,1) –  
  Transfers out/(in) 4,2   4,3 (2,1) – (0,1) 2,1 –  
  Depreciation (23,3)   (0,7) (18,1) (4,2) – – (0,3)  
  Subsidiaries sold 1,0   – 0,1 0,9 – – –  
  Disposals 6,1   – 2,7 3,4 – – –  
  Balance at the end of the year (105,5)   (5,2) (84,1) (14,8) (0,1) (1,0) (0,3)  
  Book value 393,4   71,8 295,0 21,7 0,1 1,5 3,3  
                     
                     
  COMPANY 2004 – RESTATED                  
                     
  COST                  
  Balance at the beginning                  
     of the year 2,5   1,0 – 1,5 – – –  
  Disposals (1,5)   – – (1,5) – – –  
  Balance at the end of the year 1,0   1,0 – – – – –  
                     
                     
  ACCUMULATED DEPRECIATION                  
  Balance at the beginning                  
     of the year (1,5)   – – (1,5) – – –  
  Depreciation –   – – – – – –  
  Disposals 1,5   – – 1,5 – – –  
  Balance at the end of the year –   – – – – – –  
  Book value 1,0   1,0 – – – – –  
Details of the freehold land and buildings of the group are recorded in a register which may be inspected by the members or their duly authorised agents, at the various group companies’ registered offices. Certain items of plant and machinery and other assets are encumbered as security for liabilities of the company and the group as set out in note 22.
 
         GROUP   COMPANY  
      2005   2004 2005   2004  
          Restated     Restated  
        Rm   Rm    Rm   Rm  

3.

INVESTMENT PROPERTY

                
  Cost                
  Balance at the beginning of the year   17,0   14,8 1,8   4,0  
  Additions   –   – 0,3   –  
  Subsidiaries acquired   –   5,9 –   –  
  Disposals   (9,0)   (3,4) –   (2,5)  
  Transfers in/(out)   1,3   (0,3)   –   –  
  Balance at the end of the year   9,3   17,0   2,1   1,8  
  Accumulated depreciation and impairments                  
  Balance at the beginning of the year   (0,1)   –   –   –  
  Depreciation   –   (0,1)   –   –  
  Impairment   (0,8)   –   –   –  
  Disposals   0,1   –   –   –  
  Transfers in   (1,1)   –   –   –  
  Balance at the end of the year   (1,9)   (0,1)   –   –  
  Book value   7,4   16,9   2,1   1,8  
Details of the freehold land and buildings of the group are recorded in a register which may be inspected by the members or their duly authorised agents, at the various group companies’ registered offices.
There are no material restrictions on realising the value of investment property. There are no material contractual obligations to acquire or develop investment property.
Rental income of R1,9 million (2004: R2,7 million) was received in respect of investment property.
Certain investment properties have been earmarked for sale, as they are considered non–core assets. It is estimated that these properties will be sold by mid–2006.
The directors consider the fair value of the investment property to approximate its book value.
 
         GROUP   COMPANY  
             2005          2004              2005          2004  
            Restated         Restated  
        Rm   Rm    Rm   Rm  

4.

INTERESTS IN SUBSIDIARIES

                  
  Investments in subsidiaries   –   –   419,7   398,0  
  Shares at cost        –   –    501,2   501,2  
  Provisions against investments   –   –   (81,5)   (103,2)  
  Net loans to subsidiaries   –   –   553,5   427,1  
  Net loans to subsidiaries at cost   –   –   774,4   709,6  
  Provisions against loans   –   –   (220,9)   (282,5)  
                     
  Interests in subsidiaries   –   –   973,2   825,1  
The details of the subsidiaries are noted in Annexure A. The company has deferred its right to claim repayments of loans owing to it by a number of subsidiary companies in favour of creditors for as long as the net liabilities of the subsidiaries exceed their net assets.                  
 
         GROUP   COMPANY  
             2005          2004              2005          2004  
        Rm   Rm    Rm   Rm  

5.

INTERESTS IN JOINT VENTURES

                  
  Unlisted                  
  Shares at cost   16,7   10,8   0,7   0,7  
  Add: Post-acquisition equity accounted earnings   1,9   1,2   –   –  
  Carrying value of investments   18,6   12,0   0,7   0,7  
  Unsecured loan from joint venture   –   (1,0)   –   –  
  Carrying value including loan from joint venture   18,6   11,0   0,7   0,7  
  Directors' valuation   18,6   11,0   1,3   1,6  
  The loan from the joint venture (Rieter Feltex Automotive Manufacturing (Pty) Limited) bore interest at 8,38% per annum floating rate. The loan was repaid during the year.
 
                           Post-   Net  
           Percentage   Cost      acquisition   carrying  
           holding           reserves   amount  
      2005   2004   2005   2004   2005   2004   2005   2004  
        %   %   Rm   Rm   Rm   Rm   Rm   Rm  
GROUP                                  
Rieter Feltex Automotive                                  
  Manufacturing (Pty) Limited (1)   49   49   9,6   9,6   1,8   1,5   11,4   11,1  
Rieter Feltex (Pty) Limited (1)   49   –   5,9   –   –   –   5,9   –  
Cell Captive Number 22 of Guardrisk                                  
  Insurance Company Limited (2)   50   50   1,2   1,2   0,1   (0,3)   1,3   0,9  
Kolosus Bayern Leder GmbH                                  
  (in liquidation)   50   50   –   –   –   –   –   –  
            16,7   10,8   1,9   1,2   18,6   12,0  
COMPANY                                  
Cell Captive Number 22 of Guardrisk                                  
   Insurance Company Limited (2)   50   50   0,7   0,7   –   –   0,7   0,7  
Rieter Feltex Automotive Manufacturing (Proprietary) Limited and Rieter Feltex (Pty) Ltd have a 31 December year end, and unaudited but reviewed results are included.
    Cell Captive Number 22 of Guardrisk Insurance Company Limited has a 31 March year end, and unaudited but reviewed results for the year to 31 December are included.
Nature of business of the associate:
1 = Automotive
2 = Insurance captive
  
      GROUP  
    2005   2004  
    Rm   Rm  
             
  Summarised financial information        
  The group’s share of assets, liabilities and results of operations of significant joint venture companies are summarised as follows:        
  Income statement        
  Revenue 22,3   34,2  
  Net profit before taxation 0,1   3,3  
  Taxation (0,1)   (1,2)  
  Net profit after taxation –   2,1  
  Equity and liabilities        
  Share capital and premium 2,2   2,2  
  Non-distributable reserves 0,2   0,1  
  Distributable reserves 10,3   10,4  
  Long-term liabilities 13,8   –  
  Deferred tax 0,3   0,1  
  Current liabilities 8,5   3,6  
    35,3   16,4  
  Assets        
  Property, plant and equipment 14,5   2,1  
  Loans to group companies –   0,5  
  Other current assets 17,5   11,0  
  Cash and cash equivalents 3,3   2,8  
    35,3   16,4  
 
      GROUP