Chairman’s Statement

Unitrans Limited also achieved growth in earnings in excess of internal budgets in a challenging environment.

Shareholders are referred to the Unitrans Limited published results and annual report for detailed information.

BUSINESS ENVIRONMENT

The World Economy
The world’s largest economy, the USA, has continued to weaken. Industrial production has plunged and business sentiment is gloomy. The US economy and its people are at a crossroad after the terror attacks on New York and Washington. It is our hope that a consequence
of these tragic events will be a determined effort to reinvigorate the US economy.

The Japanese economy has been languishing for a decade and seems to be deteriorating further with a sharp year-on-year drop in industrial production. Political developments there provide the only hope for future improvements.

In Europe, the high rate of unemployment in Germany is causing concern and business confidence in France has declined. The UK economy is delicately balanced between accelerating retail sales and slumping manufacturing output and although business confidence has turned down, household expenditure is up and disposable incomes
will be helped by the March tax cuts. The consensus for growth in the European Union over the next year is 2,7%.

The Asian economies are still suffering from the effect of the 1998 contagion and weakness in Japan. Other emerging economies, including those in South America, have a range of financial and other problems.

The Domestic Economy
In contrast to the above, the South African economy has demonstrated a remarkable robustness which appears to be a dividend arising from the sound macro-economic management of our economy over a number of years.

South Africa has been blessed with its strongest political leadership in many years, supported by sound macro-economic and financial leadership. Although the economic miracle still eludes us, the achievements in our young democracy have provided a solid foundation and, thereby, viable options for the future. South Africans still yearn for a prosperous, fast growing
economy which will provide sustainable employment opportunities and rising living standards for all of its people.

There is a growing shared analysis in South Africa of what is needed to achieve this vision. First and foremost is growth in domestic and foreign direct investment followed by rapid human development (particularly skills development), the freeing up of trade, both regionally and globally, rapid infrastructure development and appropriate maintenance.

The economic debate in South Africa has matured and been tempered by invaluable inputs from abroad, leaving us equipped and hopefully poised for action. Our state president, Mr Thabo Mbeki, is to be congratulated on the substantial progress made with the New Africa Initiative which provides a new political will for African leaders to follow a programme of action, committed to peace, security, democracy, good governance and regional co-operation.
Our government deserves the full support and encouragement of the private sector and all South Africans to proceed apace with the South African component of this inspired programme which should include:

Corporate Governance
We are appreciative and supportive of the strenuous efforts made by the King Committee and its five task teams in revising and building on the King Report on corporate governance. We
are studying the draft King II report and look forward to the completed report becoming effective from 1 January 2002.

It is imperative that the South African corporate sector adheres to best international practice if we wish to attract high levels of investment. The new ‘triple bottom line’ approach addressing economic, environmental and social aspects of governance is to be applauded as is the more onerous accountability of directors to the company and responsibility to the stakeholders.

Employment Equity
The Murray & Roberts group has for several years subscribed to a dynamic affirmative action programme which has focused primarily on development and training. Both internal and external sources of education and advancement have been utilised with a great deal of success. The advent of the Employment Equity Act formalised much of what was already in place and the company has fully embraced the principles and requirements of this legislation.

Comprehensive and viable plans have been developed and agreed throughout the organisation, based on a code of good practice, and aimed at achieving realistic goals. Consultative committees, which include all stakeholders, have been established, many of which received the benefit of outside professional guidance and tuition. Committees meet on a regular basis, are active at all levels and are instrumental in communicating objectives, creating awareness and achieving consensus.

Plans are assessed and evaluated on an ongoing basis, by the operational companies, as is progress towards the attainment of agreed objectives and goals. The overall process is monitored and reviewed by the board of directors.

Corporate Social Investment (CSI)
Murray & Roberts’ CSI has been reviewed in order to improve its effectiveness and align its activities with issues of priority on the national agenda. CSI activities are now focused on four key areas: mathematics, science and technology education; environmental education; early childhood development and the development of women.

To leverage its spending within these key areas and co-ordinate its funding activities, CSI continues to seek opportunities for partnerships with other funders.

The success and popularity of the Murray & Roberts interactive exhibition, ‘Building Africa’,
at the MTN Science Centre in Cape Town, has resulted in CSI providing additional funding for the development of a similar interactive stand at the new MTN Science Centre at Menlyn Shopping Centre in Pretoria.

CSI is supporting a research project by the Centre for Development and Enterprise to generate comprehensive data on maths and science education. The research findings will be used to develop recommendations on educational policies and will also provide CSI with a baseline for effective practical interventions in mathematics, science and technology projects.

The Murray & Roberts Chair of Environmental Education at Rhodes University continues to be one of the leading institutions in developing environmental education through applied academic research.

New Appointments
We are pleased to welcome Saki Macozoma as an independent non-executive director, as well as Keith Smith and John Stanbury, as executive directors, with effect from 28 February 2001. Saki brings extensive business and political experience and wisdom and will reinforce the capable group of independent directors on the board. Keith and John both have impressive records in operational and strategic management and will enhance the board with their skills
and inputs.

Departures
Three Murray & Roberts executives departed in recent months, Lionel Bird and Carlo Di Nicola
on retirement and Rohan Sheppard to further his career elsewhere. Lionel joined RUC Mining on transfer from Union Corporation in 1981 and transferred to Murray & Roberts Holdings
as group financial director in 1988. Lionel’s financial leadership through a spectrum of
phases from buoyant conglomerate growth to disposal, focus and contraction has been invaluable. We wish him a long and happy retirement. Carlo Di Nicola and Rohan Sheppard joined Murray & Roberts after the group purchased a controlling interest in Gillis-Mason in 1983. They soon proved their mettle in Murray & Roberts taking progressively more important roles until Rohan headed the Construction operations and Carlo the Industrial operations as executive directors of Murray & Roberts Holdings. Carlo will be remembered for his trading skills and Rohan for his development of an international construction capability. We wish them both well in their future endeavours.

Prospects
Your group is sufficiently well positioned to continue to play an important role in the development of the South African economy and infrastructure as well as chosen foreign markets in such a way as to add value to shareholders by way of improved earnings and returns on shareholders’ funds. Achievement of performance objectives will enable the resumption of dividends in 2002.

Dave Brink
Chairman